Issue at Hand - January/February 2010

Another Missed Opportunity

by Denny Dennis

Bad ideas, contradictions and disjointed parts characterized the healthcare furor that engaged Congress over the last few months. Still, a good idea occasionally appeared. Though the good ideas usually got lost among the bad ones, they should not be discarded. With healthcare prices about to take another sharp turn upward, millions of Americans still without insurance and a growing public dissatisfaction with the current plans, the healthcare debate will continue. An inventory of good ideas should be ready when the time comes. Here’s one--vouchers.

Most small employers, even if they provide health insurance, often feel like they are running a health insurance business, rather than their own business. Health insurance is not what they do; it is not their expertise. They find the continual shopping for and administration of health plans a time-consuming frustration that diverts them from getting customers in the door and growing their business. Then those employers often field employee questions and complaints because they would prefer a different plan than the one the employer provides.

Little wonder that 70 percent of small business owners who offer health insurance would prefer not to be involved with it. Those not offering health insurance typically feel the same way. Yet, to give employees the advantage of guaranteed coverage and premiums purchased with pre-tax dollars, small employers have no choice but to sponsor the traditional health insurance plan.

One good idea that has emerged is to allow small employers, on a voluntary basis, to help employees pay their health insurance premiums, while eliminating the administrative hassles of buying and administering a plan. Imagine no shopping, no paperwork and no acting as the mediator between employees and the insurance company on employee insurance claims! And, small employers can still voluntarily provide employees competitive health insurance benefits. That’s a win for small employers.

Better yet, employees win, too. They not only receive tax-free healthcare dollars just as if they were in an employer-sponsored plan, but they can choose from among several plans. Since more than 80 percent of small employers can offer only a single plan, employees must accept that plan or nothing. The voucher option lets them keep the advantages of employer-sponsored insurance, as well as adds plan choices.

How do vouchers work? Employers who currently offer health insurance decide either to keep their plan or to offer employees a voucher for the employer’s share of the premium. If an employer chooses to keep the company’s plan, nothing changes. But employers who choose to give vouchers could instead simply send the employer’s share of the premium to an insurance exchange program. They write one check in the amount they wish to contribute instead of shopping and administering a plan.

The employee chooses the insurance plan from the exchange he or she would like, whether that’s a PPO or an HMO, a richer benefit package or not. Choices! The voucher is credited to the employee’s premium, and the employee pays the remainder.

The voucher idea means more choices for employers and employees, all taking advantage of group rates and tax-favored dollars. It is a good idea that did not even get a fair hearing the last time around, but NFIB will continue to push as the fight for affordable healthcare continues.