INSURANCE
Hispanic workers.
“There is this expectation that we are going to see big losses in employer-based coverage,” Collins said.
Many businesses have tried to keep their workers insured during the pandemic. Employers relied on government aid, including the Paycheck Protection Program authorized by Congress to ease the economic fallout, to pay for premiums through the spring and summer.
Government funding appears to have “prevented the economic crisis from becoming a coverage crisis right away,” said Leemore S. Dafny, a professor at Harvard Business School and one of the authors of a report last month looking at the pandemic’s effect on small business.
Describing those employers as “the proverbial canary in the coal mine,” the researchers say there could be significant coverage losses if insurers and lawmakers fail to act in the coming months. Nearly a third of small businesses surveyed in late June said they were not sure they could keep paying premiums beyond August, according to the report.
“We will probably really start to see it during renewal time, November and December,” said Mark Hall, the director of health law and policy at Wake Forest University. “That will be when the money really dries up.”
Aaron Seyedian closed his housecleaning business, Well-Paid Maids in Washington, D.C., for 41⁄ months be
2 fore reopening in early August.
Even when his employees were not working, he paid $5,000 a month toward their health insurance, including vision and dental. “I didn’t think the right thing to do was to kick my employees off the plan during a pandemic,” he said.
He used some federal aid to cover those expenses, but he still owes nearly $14,000 in back premiums to the company’s insurer, CareFirst. He had been given a small discount off one month’s premiums.
The District of Columbia’s insurance department, and some states, have provided some relief to businesses in situations like Seyedian’s. It permits them to defer missed payments for up to a year during the coronavirus public health emergency. “I don’t know how we’re going to pay them next summer,” he said of back premiums.
Health insurers, whose profits have soared as people stayed away from hospitals and doctors, have been stingy in offering businesses much in the way of breaks, according to the Harvard report. Just 14 percent of the companies said they received premium credits or a longer grace period.
The insurance companies insist they are providing refunds to their customers, but some business owners say they have had more luck with their landlords or the electric company than their health insurer. “When I contacted our insurance agencies, you can negotiate a lot, but you really can’t negotiate health insurance,” said Gary Novotny, who owns Gary Michaels Clothiers in Lincoln, Neb., a small retailer whose sales are down by about half. “No matter what it costs, you have to have it.”
The first check Neil Abramson wrote after receiving his federal loan was to his local Blue Cross plan. Although he furloughed the people working at his group of consignment stores in Leominster, Mass., he continued their insurance.
“You don’t need not to have your health insurance in the middle of the pandemic,” he said, likening his employees to family. “Are you going to tell your sister that you are going to cancel your insurance because you don’t have the money?”
Small businesses are traditionally the least able to afford health benefits for their employees. While nearly all large companies offer insurance to their employees, only 56 percent of firms with fewer than 200 employees provide coverage, according to the most recent survey by the Kaiser Family Foundation.
“Health insurance is an enormous cost for small businesses,” said Amanda Ballantyne, executive director of the Main Street Alliance, an advocacy group for small businesses. “It continues to be even after the passage of the Affordable Care Act.”
Many businesses say they need Congress to provide more money, and health insurers say they support federal efforts to help employers continue their coverage. “We believe Congress should provide temporary subsidies or direct financial assistance for employers to protect the health and financial stability of hardworking Americans,” said Justine Handelman, a senior vice president at the Blue Cross Blue Shield Association, which represents the nation’s Blue Cross plans.
Under the Affordable Care Act, insurers must return the excess profits if they do not spend at least 80 or 85 cents out of every dollar in premiums on customers’ health care. But even that provision strikes some as inadequate, given the current circumstances and the timing of the potential rebates.
“We are in the middle of a once-in-a-century health and economic crisis, and it will take everyone stepping up to do their part to get us past it — including health insurance companies,” said Rep. Lauren Underwood, DIll.
Abelson writes for The New York Times.