Terry Gardiner

Originally featured in The Huffington Post:

If you’re a hardworking small business owner who provides health benefits to your employees, there’s a chance your insurance carrier owes you money. And if it does, you can start looking for a check in the mail. Thanks to the Affordable Care Act, insurance companies are being held accountable to their customers in a brand new way — which means they’re expected to owe businesses and individuals a whopping $1.3 billion this year, according to a new report from the Kaiser Family Foundation.

The chances your business will get a piece of that are greater than one in four. Twenty-eight percent of small employers offering benefits in 42 states will receive a rebate for part of their 2011 coverage expenses by August 1, thanks to the Medical Loss Ratio (MLR) provision of the health care reform law.

The rule, effective since 2011, requires insurance companies to spend at least 80 percent of small groups’ premium expenses on patient care and quality improvement. That limits what they’re allowed to spend on administrative costs to 20 percent of premium contributions. If carriers exceed that limit, they must make up for it by handing out rebates for the difference.

This provision is meant not only to put hard-earned money back in Americans’ pockets, but to help make the health coverage market more efficient by eliminating superfluous expenses. And a more efficient marketplace means coverage can be offered at more affordable prices. Walt Rowen, owner of Susquehanna Glass Co. in Philadelphia, Penn., has already seen dramatically lower premium increases directly related to the rule’s impact.

As the third-generation owner of his family’s 102-year-old glass decorating business, Walt has experienced a number of huge rate increases to his small group policy. Several years ago he was even quoted a 130 percent increase. But since the passage of health care reform, he has seen savings he’s been able to reinvest in his business. Last year, his insurance company told him that because it had exceeded the Affordable Care Act’s cap on administrative spending, he would only face a 4 percent rate increase. “That was by far the lowest increase we’ve had in years,” Walt said. “In fact, over the past decade, we faced 10 to 15 percent increases each year. Without this provision, health insurance would be out of our grasp, which is unacceptable.”

Walt is right — it is unacceptable that small businesses’ premium costs have spiraled so far out of control over the past decade that more and more of them are being robbed of their ability to afford coverage for deserving employees. It’s a problem of great magnitude, and not just for small businesses, but for the economy at large. Small firms create the majority of net new jobs in the United States. But when health coverage costs are bleeding them dry, how are they going to keep up that trend?

A nationwide average of $76 per enrollee are projected to go to over a quarter of small businesses, with the biggest average refunds in Alaska ($517), Alabama ($203) and Oregon ($172). Insurers in eight states including Hawaii, Minnesota and North Dakota met their spending targets and won’t be issuing rebates.

By holding insurance companies accountable for how they spend Americans’ premium dollars, the Affordable Care Act is improving upon the coverage market as we know it. And that’s something small employers have to be thankful for.

Terry Gardiner

Original statement issued on April 5, 2012:

Small Business Majority and the Trust for America’s Health recently wrapped up a report with recommendations for ensuring small businesses have the resources they need to implement workplace wellness programs, which can minimize their coverage expenses by helping them maintain a healthy workforce. The report reflects a convening of business leaders, government officials, insurers, brokers and small business owners. Participants discussed provisions of the Affordable Care Act designed to help small business owners carry out wellness initiatives.

The group identified common challenges and opportunities that arise when advocating for and designing wellness programs for small businesses. They reviewed existing policies designed around wellness programs and also looked at new ones created under the federal healthcare law that have the potential to boost their effectiveness—specifically in the small business community.

Workplace wellness initiatives aren’t a new topic of discussion, and neither are the cost-saving opportunities they give employers. The real news is that the Affordable Care Act aims to boost incentives for small businesses to participate in wellness programs, through new policy avenues specifically suited to employers on the smaller end of the spectrum.

Below are the five sections of the report, with highlights from each.

1. The current landscape: Wellness programs for big businesses have a successful track record, but in the small business arena there’s a lack of data, awareness, resources and financial incentives that limits their presence.

2. Opportunities to improve uptake: The healthcare reform law provides opportunities to encourage small businesses to create wellness programs. For example, the state health insurance exchanges, or marketplaces, will expand coverage to more small businesses and feature workplace wellness incentives.

3. The workplace wellness model: Participants developed a visual diagram that shows how all aspects of workplace wellness fit together and what stakeholders’ roles are in increasing using of these programs among small businesses.

4. Challenges ahead: To increase the number of small businesses using wellness programs, groups like local chambers of commerce, insurers and brokers can be helpful.

5. Conclusions and next steps: Overall, this is a complex issue but it’s well worth exploring in order to help our nation’s chief job creators. Making sure exchanges are implemented to include effective wellness initiatives will be key, as will participation from small business groups of every kind.

Read the report, “Striving for a Healthier America Through Availability and Uptake of Workplace Wellness Programs in the Small Business Community,” here.

Terry Gardiner

Original statement issued on February 21, 2012:

Small businesses in eight states received good news today with the announcement that organizations in their state will be receiving funds to help create new consumer-run health insurance plans that will lower their costs and increase their insurance choices.

These new plans, called Consumer Oriented and Operated Plans, will bring nonprofit insurers to the healthcare market, promoting competition that helps control the price of coverage. Created by the Affordable Care Act, nonprofit CO-OPs are required to use their profits to lower premiums, improve quality and expand benefits or enrollment.

CO-OPs can choose to offer plans through new competitive marketplaces—called health insurance exchanges—that are required to be running in all states by Jan. 1, 2014. Our national opinion polling found one-third of small employers who currently do not offer insurance would be more likely to do so because of the exchanges. CO-OPs will play a role in creating competition both inside and outside the exchanges, which is why the goal is to establish them in every state.

Small businesses that are struggling with soaring coverage costs and diminished plan choice need financial relief from these burdens. By pursing the establishment of health insurance CO-OPs, states can help bring down those costs for small businesses, better positioning them to grow and hire.

Terry Gardiner

While Congress and the White House go down to the wire over budget negotiations, I received an email yesterday that made the potential government shutdown hit close to home and the real-life consequences of the Feds closing their doors crystal clear.

My wife and I have a rafting trip in the Grand Canyon planned for next week. My inbox included a message from the owner of Arizona Raft Adventures & Grand Canyon Discovery informing us that if the government shutdown occurs, the Grand Canyon will be closed to the public. On the surface this might seem like just a mere inconvenience, but in reality it would hit the owners of the business, their employees and all of us planning a trip where it hurts the most: our pocketbooks.

Aside from the actual expense of our rafting trip, we’d lose the money we’ve spent on our airline tickets, if it’s too late to reschedule, the hotel we plan to stay at before and after we launch would charge us a cancellation fee and changing our vacation plans at the last minute is, simply, a major pain in the neck.

The same is true for all of the company’s clients—and they’re not just Yanks, either. Owner Fred Thevenin said one couple, scheduled to hit the rapids on Saturday, is coming all the way from England. Imagine their surprise if they get here ready to spend their two-and-a-half week vacation experiencing the wild beauty of one of our greatest national treasures and are told it’s closed because lawmakers in Washington couldn’t agree on a budget. That’s bloody disappointing.

But beyond our financial loss and the frustration over the demise of our vacation, the small business we’ve paid to take us down the Colorado River would ultimately pay the biggest price. If no agreement comes by April 9, Arizona Raft Adventures stands to lose around $60,000. While some customers may rebook, that’s money they’ll never make back. And things like food, truck driver salaries and other expenses they’ve paid for in anticipation of their tours are lost forever.

A shutdown would have a domino effect on everyone involved in this trip—all the way down to businesses like car rental companies and hotels—wasting money and time and creating unnecessary hardship. As the uncertain fate of my raft trip shows, a shutdown would have a wide-ranging impact on our nation’s small business community.

Small business owners sent their elected representatives to Washington to solve problems, not play political games with their livelihoods. I can withstand the personal and financial inconvenience a shutdown would cause, but can small employers who have to meet payroll and pay the bills survive such an event? Only time will tell, but I wholeheartedly agree with Fred when he says, “I’m hoping they figure it out.”