Navigating Small Business Health Insurance in Vermont

As a small business owner in Vermont, providing quality health insurance for your employees is important – but can also be confusing and complicated. With various plan options, carriers, regulations and costs, it’s key to understand the landscape when choosing the right coverage.

This comprehensive guide breaks down everything small companies in Vermont need to know about obtaining affordable and compliant health insurance,

Overview of Small Business Health Insurance in Vermont

Vermont defines “small businesses” as those with 1-100 employees These companies have the option to purchase group health plans through Vermont Health Connect’s SHOP exchange

To be eligible to enroll in SHOP plans, the business must

• Have a physical location in Vermont
• Have 1-100 full-time equivalent employees
• Offer coverage to all full-time employees working 30+ hours per week

Small businesses can buy certified health plans from either Blue Cross Blue Shield of Vermont or MVP Health Care on Vermont Health Connect.

These SHOP plans must abide by Affordable Care Act regulations in areas like:

• Plan actuarial values (metal tiers)
• Essential health benefits offered
• No denial of coverage for pre-existing conditions
• Dependent coverage until age 26

Businesses with 50 or fewer full-time equivalent employees may also qualify for the Small Business Health Care Tax Credit.

Deciding Where to Purchase Group Health Insurance

Small Vermont companies have a few options when securing group health plans:

Vermont Health Connect SHOP – Offers certified ACA-compliant plans from BCBS Vermont and MVP Health Care.

Direct through insurance carriers – Can buy slightly different “off-exchange” group plans directly from BCBS, MVP or other insurers.

Through brokers/agents – An insurance broker can help compare and enroll in group plans on or off the SHOP exchange.

There are pros and cons to each approach. The SHOP exchange provides employee tax credits and standardized plans. Buying direct may offer more flexibility. Brokers provide expertise to navigate options.

When evaluating where to purchase group coverage, consider plan availability, regulations, tax implications, employee demographics, budget and other factors unique to your small business.

Comparing Plan Options on Vermont Health Connect

Vermont Health Connect’s SHOP exchange allows small businesses to select from a range of group health plans offered by BCBS Vermont and MVP Health Care.

These carriers provide all “metal tier” plan options:

• Bronze – Lowest premiums, higher out-of-pocket costs
• Silver – Balanced premiums and out-of-pocket costs
• Gold – Higher premiums, lower out-of-pocket costs
• Platinum – Highest premiums, lowest out-of-pocket costs

In addition to medical insurance, small business can enroll employees in supplemental dental plans through Northeast Delta Dental.

When comparing SHOP options, look closely at premiums, deductibles, copays, coinsurance, provider networks, prescription drug coverage and benefits specific to your workforce like maternity or vision care.

The Vermont Health Connect website provides an online tool to easily compare certified SHOP plan details side-by-side. Brokers can also help analyze the differences.

Employee Eligibility and Enrollment Requirements

Small businesses participating in the SHOP exchange must enroll all full-time employees working 30+ hours per week.

Eligible staff can also enroll dependents like:

• Legal spouses
• Dependent children under 26 years old
• Disabled children of any age

There is no mandated waiting period in Vermont – employees can enroll immediately upon being hired.

Open enrollment for small groups is November 1 through December 15 each year. Outside open enrollment, new hires and those experiencing qualifying events can be enrolled within 60 days.

Vermont Health Connect facilitates employee enrollment through their online portal. Insurers and brokers can also assist with the signup process.

Factors That Impact Small Business Insurance Costs

In Vermont’s small group market, health insurance rates are based on the employer’s zip code, employee demographics, and coverage/plan selected. Specific factors impacting premium costs include:

Location – Premiums are higher in regions of Vermont with higher medical costs.

Age – Older employee groups will have higher average premiums.

Gender – Men often have somewhat higher rates than women in the same age group.

Plan tier – Platinum plans have the highest premiums, followed by gold, silver and bronze.

Family tier – Family coverage is more expensive than employee-only policies.

Plan selection – Rates can vary significantly between carriers and plans even within the same metal tier.

Group size – Oddly enough, smaller groups with under 10 employees often get higher rates.

Industry – Some industries have higher claims and will pay more for coverage.

While premiums are a big cost factor, also look at total out-of-pocket costs when comparing plan options.

Small Business Health Care Tax Credit

One way small Vermont employers can offset the cost of health insurance is by claiming the Small Business Health Care Tax Credit.

For 2023, this federal tax credit is worth up to 50% of premiums paid for employees. To qualify, the business must:

• Have fewer than 25 full-time equivalent employees

• Pay average annual wages below $55,600

• Pay at least 50% of employee premium costs

• Purchase a certified SHOP exchange plan

The credit percentages phase out as firm size and average wages rise above those thresholds. The credit is claimed on the business’s annual income tax return.

Using Brokers to Access Group Health Plans

Working with an independent insurance broker or agent can be beneficial when a small business is navigating health plan options. Experienced brokers can:

• Explain coverage choices in clear terms

• Compare plans across SHOP exchange, direct carriers, associations, etc.

• Help determine the optimal coverage level and tier

• Assist with enrollments and paperwork

• Provide ongoing service for changes, questions, claims etc.

• Ensure compliance with regulations

Brokers earn commissions from insurers, so their services are free for small businesses. They can simplify the process of researching, enrolling in and managing group health insurance.

Key Decisions and Next Steps for Business Owners

Choosing group health insurance as a small Vermont company involves a series of key decisions:

• Determining where to purchase: SHOP, direct or via a broker

• Comparing plan offerings and rates across carriers

• Selecting optimal metal tier based on budget and workforce demographics

• Choosing whether to cover families or employee-only

• Understanding tax implications like the Small Business Health Care Tax Credit

• Researching brokers if you want to outsource the process

Armed with the information in this guide, you are now equipped to make informed choices when securing affordable health insurance for your Vermont small business. Reach out to brokers and carriers to discuss your specific situation and get quotes on great coverage for your team.