Sole insurer on small-business exchange will leave

Arkansas Blue Cross and Blue Shield has notified state officials it will not offer plans next year on Arkansas’ health insurance exchange for small businesses, state Insurance Commissioner Allen Kerr said Tuesday.

At a meeting of the Arkansas Health Insurance Marketplace board of directors, Kerr also said Gov. Asa Hutchinson has asked the state Insurance Department to explore taking over the marketplace board’s functions “under a different structure” and have the federal government take over the small-business exchange.

Arkansas Blue Cross and Blue Shield is the only company offering plans through the small-business exchange, which is run by the Health Insurance Marketplace.

The plans cover 430 people from 79 businesses, marketplace spokesman Alicia McCoy said.

Hutchinson “looked at all sides of this — looked at the cost of [the marketplace] under its current operation, the prospects of it being able to do enough volume to cover its expenses — and the numbers just aren’t coming together,” Kerr said.

He said Hutchinson wants to address the issue during a special session of the Legislature planned for next month.

Hutchinson spokesman J.R. Davis said the governor is “looking at everything,” but hasn’t decided whether to ask lawmakers to scrap the state marketplace.

Lawmakers at the special session will also consider Hutchinson’s proposals for changes to the expanded part of the state’s Medicaid program known as Arkansas Works.

Businesses with up to 50 employees can enroll in coverage through the small-business exchange. The exchange makes a tax credit available to businesses that have fewer than 25 employees and that pay average annual wages of less than $50,000.

A federal regulation has required Blue Cross to offer plans on the small-business exchange as a requirement for the insurer’s participation in the exchange for individual consumers.

The regulation applies to insurers controlling at least 20 percent of the market for small-business health insurance. The requirement expires next year, however.

An Arkansas Blue Cross and Blue Shield spokesman didn’t return a call seeking comment Tuesday.

State Sen. David Sanders, R-Little Rock, and chairman of a legislative committee that monitors the marketplace, said scrapping the marketplace is “worth considering.”

“I think what we will discuss and engage in is look at numbers, look at facts, look at plans, look at proposals and try to make a decision that’s in the best interest of the state and the best interest of the ratepayers,” Sanders said.

The Legislature created the Health Insurance Marketplace in 2013 to set up state-based exchanges that Arkansans would use instead of healthcare.gov to sign up for subsidized coverage under the 2010 Patient Protection and Affordable Care Act.

Using money from a $99.9 million federal grant, the marketplace board set up the small-business exchange in 2015.