Mass. May Offer Cheaper Health Coverage To 'Mini' Businesses

The independent state agency that helps Massachusetts residents find health insurance is considering a new program that would offer cheaper health care to the state's smallest businesses.

The program would be targeted at the tiniest employers in Massachusetts: those with no more than five workers, including one-person operations.

Many of these small businesses are struggling with high health-care costs, and the state is holding a series of hearings with health insurance companies this month to investigate why small employers pay disproportionately high health insurance rates.

The proposed program would let so-called "mini" employers shop online for lower-cost health coverage through the Commonwealth Health Insurance Connector Authority, just as certain eligible individuals can now do. The Connector oversees Massachusetts health reform and offers a variety of subsidized and unsubsidized insurance plans.

"Sometimes we call it the Travelocity of health insurance," said Rosemarie Day, the Connector's deputy director, referring to the agency's online program that lets individuals select from a choice of health coverage policies.

If the Connector's program for small businesses is approved, Day said, "a very small employer could essentially do that same thing: come onto our Web site, look for insurance and make a selection that they would then offer to their couple of other employees."

Day said the program could save small businesses money because it would have lower administrative costs, primarily due to its online nature, than other insurance providers.

She also said it would be "cheaper and simpler to understand" than other coverage options because it would offer only nine different insurance plans, not the approximately 180 now available to small businesses from other insurers.

According to the Connector, there are at least 40,000 "mini" businesses in Massachusetts that employ at least 150,000 people. The Connector board will review the proposal in coming weeks and could vote on it as early as next month.