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By Richard Asinof
PROVIDENCE – Three health insurers – Blue Cross & Blue Shield of Rhode Island, UnitedHealthcare of New England, and Neighborhood Health Plan of Rhode Island – will offer a total of 28 health plans on the R.I. Health Benefits Exchange for the individual and small group markets beginning on Oct. 1, according to exchange officials.
The details, presented at a meeting of the exchange’s advisory board on Wednesday afternoon, revealed that, initially, there will be 12 plans available in the individual market and 16 plans for businesses with fewer than 50 employees.
Tufts Health Plan, given that most of its business is located in Massachusetts, will not plan to offer any health insurance products on Rhode Island’s exchange until 2015, according to Christine Ferguson, executive director of the R.I. Health Benefits Exchange.
The actual details of the pricing of the health insurance plans will not be available until after July 1, when the R.I. Office of the Health Insurance Commissioner approves the plan rates and the exchange certifies that the plans meet both federal and state criteria.
“I am thrilled that Rhode Islanders and Rhode Island small businesses will be able to select from more than 28 plans when the exchange launches on Oct. 1,” Ferguson said. She warned that she expected that there may be “some bumps” in the process as the exchange ramps up. Open enrollment will begin on Oct. 1, with insurance coverage beginning on Jan. 1, 2014.
Rhode Island will be one of the few states to offer full employee choice to employees of small businesses, enabling them to shop on the exchange, according to Ferguson.
“We are leading the charge to give small businesses full employee choice. This option will benefit employees by allowing them to select the plan that is right for them, while also reducing the administrative burden on small businesses and providing businesses with more predictability about the cost of health care,” Ferguson said.
The way it will work is that employees of businesses that have fewer than 50 employees can choose their health plan coverage on the exchange, if the employer opts to participate, Ferguson explained. The employer will determine how much it will contribute toward the coverage of each employee, who will then shop on the exchange for the plan that is right for them. If the worker picks a plan that costs more than what the company contribution is, he will be charged the difference through a payroll deduction (the employer will be billed for the agreed-upon contribution by the exchange). The HR functions that are required to administer the various plans will be conducted by the exchange, Ferguson continued.
The exchange’s initial primary target audience is small businesses in Rhode Island. Currently, about 50 percent of Rhode Island businesses with fewer than 50 employees offer health insurance, with about 80,000 covered lives, according to Ian Lang, spokesman for the exchange. The exchange hopes to be able to attract a large majority of both those businesses that currently offer health insurance to employees, and those that don’t.
In addition, insurance health plans for individuals will be offered. There are currently about 15,000 covered lives in Blue Cross’s Direct Pay program, the only insurance product now available to individuals and families who do not have health insurance through their workplace. There also are a number of individuals who do not have any health insurance who are expected to purchase health insurance on the exchange, with tax rebates offered up to 400 percent of federal poverty levels. The tax rebates will provide an immediate discount on the cost of health insurance, Ferguson said.
Ferguson praised all the insurance carriers for their hard work to make this innovative concept a reality.
Peter Andruszkiewicz, president and CEO of Blue Cross, said the health insurer was committed to offering innovative products for both individuals and small businesses on the exchange, including a new network product called SelectRI, which will feature online tools to allow consumers to compare costs, track wellness incentives and receive coaching.
James A. Hooley, the CEO of Neighborhood Health Plan, said that his firm’s focus would be “on people who have usually been left behind by the health care system.” It marks the first time that Neighborhood Health Plan has offered commercial products, with two plans for the individual market and two plans for small businesses.