A drop-in workspace next to the coffee counter at Office Evolution in Cedar Rapids. PHOTO SARAH BANOWETZ
By Dave DeWitte
A new office rental and coworking space that opened this spring in Cedar Rapids’ NewBo district is hoping to help fill the health insurance affordability gap for entrepreneurs and small businesses.
Office Evolution plans to offer Affordable Care Act-compliant group health insurance plans and other benefit programs to its clients next month through human resources consultancy TriNet.
TriNet is a Professional Employer Organization (PEO), which provides outsourced HR consulting services such as payroll, employee benefits and even regulatory compliance to businesses. It’s able to offer competitive group rates because it has the buying power of a large employee group of about 30,000, according to Office Evolution franchisees Tom and Melissa Miller.
Even without the large group, premiums on group insurance tend to be lower than individual policies. The major provider of ACA-compliant individual health plans in Iowa, Medica, raised its rates by an average of 57 percent for 2018. That has left many individuals and small businesses who have enough income that they don’t qualify for ACA subsidies looking for alternatives.
Mr. Miller said he expects health insurance and other benefits through TriNet to bring more office renters and co-workers to Office Evolution, which opened in April at The Depot, a mixed-use development east of NewBo City Market. However, even clients who only sign up for mailing address service and don’t work onsite will be eligible, he said.
“Buy a post office box for $90 a month and save thousands on health insurance – there’s a lot of upside,” Mr. Miller said. He expects the program to appeal to individuals in various occupations that lack access to group health insurance, including farmers and some real estate professionals.
TriNet works with eight different health insurance providers. A Skype presentation by TriNet covering the insurance offerings will be part of a happy hour event at Office Evolution scheduled for 4-6 p.m. on Sept. 6.
Already licensed through the states where it provides services, TriNet announced in July that it has received IRS certification as a Certified PEO, meaning it meets federal standards that include operational, financial and bonding requirements. The company offers a variety of other HR benefits and services to businesses through its relationship with Office Evolution, the Millers said. They include payroll services, technology services, 401(k) retirement plans, dental insurance and vision insurance, and employee assistance programs.
Many small businesses and individual proprietors who can’t afford individual health insurance are also looking forward to the availability of a new “health benefit plan” to be offered later this year by the Iowa Farm Bureau and administered by Wellmark Blue Cross-Blue Shield, according to Tom Hoffman, executive vice president of marketing for Benefit Solutions in Cedar Rapids.
Mr. Hoffman expects the Farm Bureau’s plan to be significantly more affordable than ACA-compliant individual plans for those who don’t qualify for subsidies because of their income, and to be widely available. The plan is considered a contract between the Farm Bureau and its members, and won’t be subject to ACA restrictions that prevent rejection of applicants because of pre-existing conditions. Individuals may not be able to qualify if they are eligible for group health insurance through an employer – even though it may be significantly more expensive – or because they qualify for Medicare or Medicaid.
Interest in association health plans is high among those who don’t have affordable group insurance, Mr. Hoffman said, but potential applicants will have to wait for details on eligibility, coverages, costs and other issues.
New federal rules are expected to be issued soon for two other types of plans that will help fill the affordability gap in ACA-compliant individual plans, according to Chance McElhaney, communications director for the Iowa Insurance Commissioner’s office. They are Multiple Employer Welfare Arrangements (MEWAs) and Association Health Plans (AHPs).
MEWA consist of groups of employers pooling their contributions into a self-contributing benefits plan for their employees, improving the economics and accessibility of health insurance. AHPs are group health insurance plans created by associations to pool the purchasing power of their members in the insurance market in order to boost affordability.
Because of rising individual rates on the ACA market, “24,000 Iowans just left the market last year,” Mr. McElhaney said. “These are intended to provide a place for those folks priced out of the ACA market.”
When seeking insurance, consumers should always read the documents carefully, Mr. McElhaney noted, taking time to understand what their risks are and what coverages they are getting for their money.