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Colorado Exchange Chief Sees Some Small Employers Dumping Benefits

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What You Need to Know

  • About 56% of small U.S. employers went into the COVID-19 pandemic offering health coverage.
  • Kevin Patterson's exchange has an affiliate that's marketing ICHRAs.
  • He says one key to courting hourly workers is to simplify the math.

A man who has helped about 184,000 Colorado residents get health coverage this year said Wednesday that he believes the COVID-19 pandemic is causing a noticeable number of small employers to drop their health benefits.

Kevin Patterson, executive director of the Connect for Health Colorado Affordable Care Act public health insurance exchange, talked about Colorado’s small-group health insurance market briefly, during a panel discussion that was part of America’s Health Insurance Plans’ National Health Policy Conference.

AHIP presented the 2021 version of the conference through the web.

“In terms of what’s happening in Colorado, we’re really hearing from a lot of companies, especially those that are less than 50 employees, and, really, they’re mostly less than 10 employees, that are just literally eliminating all of their health insurance,” Patterson said.

“I’ve had one company that was actually a little bit larger, won’t say their name, that got rid of everything every insurance covers,” Patterson added.

Patterson said the company eliminated its benefit plans to avoid having to pay any costs associated with COBRA benefits continuation rules.

“They were just trying to keep the doors open,” Patterson said.

In addition to the effects of the pandemic, one reason for weakness in the small-group market is that a state reinsurance program that’s helping to hold down costs in Colorado’s individual market is leading to strain in the small-group market, Patterson said.

About 56% of all small U.S. employers offered health coverage in early 2020, before the COVID-19 pandemic began getting much attention in the United States, according to the Kaiser Family Foundation.

Colorado’s ACA Exchange

Connect for Health Colorado is set up as a stand-alone nonprofit organization, not as a government agency. It gets about half of its signups from agents and brokers, and it’s setting up a for-profit, public benefit corporation subsidiary that will market products such as individual coverage health reimbursement arrangement programs, or programs that let employers help employees pay for their own individual major medical coverage.

A Financial Communication Strategy

Patterson also told AHIP event attendees about one of his ideas for explaining health coverage prices to low-income workers: Express the coverage eligibility levels in terms of hourly wage levels and average number of hours worked per week, rather than in terms of annual earnings.

“We talk a lot in the exchange world about what people will make annually in the future, but a lot of folks that we serve don’t really work that way,” Patterson said. “They know how much they make an hour. They can’t tell you how much they make annually.”

Kevin Patterson (Photo: America’s Health Insurance Plans)