By Jerry Geisel, Crain News Service
SALT LAKE CITY (May 15, 2013) — Utah will continue to operate its two-year-old health insurance exchange for small employers, while the federal government will start one for individuals under an agreement reached by federal and Utah officials.
Referring to the U.S. Department of Health and Human Services (HHS), Utah Gov. Gary Herbert said in a statement last week that the "new model clearly outlines what Utah will do and what HHS will do. We are sticking with our exchange and moving forward."
The agreement opens the door to a fourth approach for other states to expand coverage, as required under the healthcare reform law.
A description of Utah's program is on the governor's website.
Until last week's agreement, states had the option to set up their health insurance exchanges to provide coverage to individuals and to small employers or let the federal government set up exchanges. A third option has been so-called partnership arrangements in which states will perform certain exchange functions and HHS will be responsible for others.
Utah's "Avenue H" program is offered to employers with up to 50 eligible full-time employees—those working at least 30 hours a week.
Avenue H uses a defined contribution model in which employers allocate a flat amount of money for employees to use to purchase coverage from the three insurers that participate in the exchange: Regence BlueCross BlueShield of Utah, SelectHealth Inc. and United Healthcare Services Inc. The average employer contribution is $437 per month per employee, accoding to Avenue H.
If an employee selects a high-deductible health plan that costs less than the employer's contribution, the employee could, for example, put the difference in a health savings account and later withdraw HSA contributions to pay for uncovered healthcare expenses.
As of May 1, 344 employers had policies written by insurers participating in Avenue H to cover 2,867 employees and a total of 8,035 lives.
This report appeared in Business Insurance magazine, a Chicago-based sister publication of Tire Business.