Small Business Sign-Ups Still a Problem for Health Insurance Exchanges

In the past few years, there has been a lot of attention paid to both getting the federally mandated health insurance exchanges up and running, and getting everyone that needs coverage to sign up for them in a timely fashion. And while millions of individuals across the country have tapped these marketplaces as a means of finding more affordable – and often subsidized – health insurance coverage, it seems that small businesses – which the exchanges were also designed to help – are apparently not so eager to get involved.

For example, in Minnesota – which is running its own exchange called MNSure – set up its small business marketplace to be capable of covering as much as 155,000 people across the state by 2016, according to a report from the Minneapolis Star-Tribune. However, as of the start of May, the actual number of people there receiving coverage through the marketplace was just 1,405. Experts say that this is related – in part – to how difficult the state’s system may be for small businesses to navigate.

However, the state also says it believes it can boost enrollment among independent businesses relatively easily, the report said. For the next open enrollment period, one of the key issues will be putting more effort into getting the word out about the small business exchange, as well as expanding it to cover companies with as many as 100 employees, instead of the current limit of 50.

A common problem
Of course, it’s not just Minnesota where small business exchange enrollment is sluggish to say the least, the report said. Many other states that opted to set up their own health insurance exchanges have run into similar issues in getting small businesses to sign up for what should be lower-cost coverage. However, experts say that there just isn’t enough of a push to get companies signed up, and that the deals available on these marketplaces aren’t necessarily as good as what might be available to them elsewhere.

“There’s been a broad concern about deterioration and declining participation among smaller employers, and it is fundamentally related to market leverage – they don’t have the market leverage to command the best deals in the marketplace,” Joel Ario, managing director with Manatt Health Solutions and previously the top Obama administration official for developing health exchanges, told the newspaper.

It hasn't been easy to get small businesses to sign up for government exchanges, but there hasn't been much incentive either.It hasn’t been easy to get small businesses to sign up for government exchanges, but there hasn’t been much incentive either.

What else is out there?
Meanwhile, small group plans covered nearly 290,000 people in the state through the end of last year, and even if enrollment in those plans actually dropped, the state’s rate of consumers going without insurance was down to just 5 percent, the report said. Consequently, it seems that owners will likely continue to be on the lookout for the best possible ways to both insure their employees and keep costs down.

That approach might also do well when applied to other types of small business insurance. For instance, it would often be beneficial for entrepreneurs to shop around for things like more affordable errors and omissions insurance to potentially save thousands annually.