New health insurance plan available to Michigan small businesses

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By JEREMY WAHR
Capital News Service

LANSING — Would a new health care plan reduce the price of premiums for small businesses in Michigan?

Jennifer Kluge, president of the Michigan Business and Professional Association, says it will.

The plan, called Transcend AHP, will be offered as of Oct. 8 by small business advocacy  groups to businesses with 50 employees or fewer. The plan was created by the Michigan Business and Professional Association and the Small Business Association of Michigan. It will include insurance options from Blue Cross and Blue Shield. The plan will reduce premiums because it’s not subject to the same rules that Affordable Care Act plans are.

Due to a federal executive order saying that association health plans like Transcend AHP don’t have to follow the same rules as ACA plans, this plan doesn’t have to offer any of these 10 essential health benefits: access to ambulances, the ER, hospitals, maternity care, mental health and substance abuse treatment, prescriptions, rehabilitative services, lab services, preventive care and pediatric care.

Kluge said that doesn’t mean that the plan won’t include any of those benefits.

“The myth is that these kind of plans won’t have any of the essential health benefits,” Kluge said. “The one we didn’t select is pediatric dental, and that’s the only thing different with our plan. Honestly, many plans already carried these benefits before the ACA called them essential.”

Pediatric dental is a benefit that is very specific, said Rob Fowler, the president of the Small Business Association of Michigan. Otherwise, he said, the insurance plan will be robust with many options.

Under Transcend AHP, small businesses will have access to insurance plans that are usually available only to larger businesses, Kluge said. Insurance rates will also be calculated differently than Affordable Care Act rates, with a primary goal of reducing rates.

By reducing rates, small businesses would spend less on health care. Some businesses, like NuWave Technology Partners in Kalamazoo, would be able to provide coverage similar to what they had before the Affordable Care Act, said Chad Paalman, the CEO and co-founder of NuWave Technologies.

Under the Affordable Care Act, NuWave spent twice as much on family health care plans, Paalman said. During the first year NuWave was affected by the Affordable Care Act, the company spent $75,000 more on health care.

“$75,000 is a lot for a small business,” Paalman said. “That’s the cost of one employee.”

Under the new plan, insurers rates will be able to adjust pricing in ways that were not possible under the Affordable Care Act, Paalman said. This includes industry banding, or adjusting rates to employees in a certain field.

Premiums are expected to come down by 3 to 5 percent during the first year of the plan, Fowler said.

NuWave Technologies could save at least 5 percent on health care under the new plan, Paalman said. But until the final rates are released, NuWave is not dead set on enrolling in Transcend AHP.

Not every business will be able to save money under the plan, Fowler said. Some parts of the state will spend more on health care than others, and the demographic makeup of the company’s employees would also affect savings.

This plan may also lead to more plans like it, said Dominick Pallone, executive director of the Michigan Association of Health Plans.

If there is an opportunity to offer more competition and competitive prices within the health care market, the 13 health insurance companies represented by the Association of Health Plans could get involved, Pallone said. This would mean that more insurers, aside from Blue Cross and Blue Shield, would begin to produce similar plans.

Fowler said: “We’ve never been able to access the health care market before. By putting together a new buying group, we’ve got some negotiating power that we’ve never had before, and it is a game changer, in that regard.”