Larry Kline
Havre Daily News
lkline@havredailynews.com
Montana Auditor John Morrison visited with about two dozen Havre small-business owners Friday at Northern Montana Hospital to brief them on health insurance assistance and tax credits that will become available at the beginning of next year.
After a request of Morrison and Gov. Brian Schweitzer, state legislators last session approved House Bill 667, the Small Business Health Care Affordability Act, which provides $13 million in tobacco tax funds to give tax credits to small businesses that offer health insurance to employees and provide assistance to those that cannot afford to do so. Schweitzer signed the bill into law in May, and Morrison and his staff have been working to implement the program.
Montana has a higher percentage of people working in small businesses than any other state, Morrison said. One in five Montanans, or about 165,000 people, are without health insurance.
"If one in five didn't have a job, it would clearly be an employment crisis," he said. "If one in five didn't have food, it would be a hunger crisis. When people don't have health insurance, it's bad for their health and it's bad for everybody's pocketbooks."
Hospitals must provide emergency medical care to the uninsured, which results in larger premiums for people who have insurance, Morrison said.
"Small businesses are the backbone of our economy," he added. "There are several thousand businesses, certainly, that would potentially benefit from this."
The Legislature authorized the funding to be used to help businesses with two to nine employees, but Morrison said he wants to open the door to the smallest businesses first. In January, companies with two to four or two to five employees will be eligible for the assistance or tax credits. Businesses with more employees will be added depending on the available funding, Morrison said.
The smallest businesses are where the largest impact will be, he said.
"We don't want to open the door too wide at the beginning, because we'll have a huge, long waiting list," Morrison added.
About 40 percent of the funding, or $5.2 million, is allocated to the Employer Tax Credit. Eligible business owners who already provide health insurance to their employees will receive a tax credit of up to $100 per month for each employee, along with another $100 per month for spouses and $40 per month for dependents. The credit for employees can go up to $125 if the average age of the workplace is more than 45.
The tax credit cannot be more than half of the premiums paid, and businesses that pay any employee, excluding the owner, more than $75,000 annually cannot receive the credits.
The rest of the money, or about $7.8 million, is allocated for monthly assistance for uninsured small businesses. The assistance will be offered to businesses that are new or have not provided insurance for at least two years, but begin to do so through the new State Health Insurance Purchasing Pool created by HB 667 or through a qualified association plan.
One to three insurance companies will provide up to two different plans through the purchasing pool, which means companies will be competing within the pool, Morrison said. A seven-member administrative board was recently appointed to run it. Board members will work to hammer out many of the details of the programs, such as whether to make seasonal employees eligible, Morrison said. He would like to see about 5,000 Montanans in the purchasing pool in the beginning, he said.
The purchasing pool will help those businesses that can afford to pay something, even though they can't cover the total cost of health insurance, Morrison said.
"The biggest problem in Montana is the uninsured," he said. "There are thousands of businesses in Montana that can afford to pay something for health insurance. Not only are they uninsured, but we're leaving their contribution on the table. Now we're building a bridge to get them from what they can afford to pay over to being insured."
To meet the criteria for either assistance or tax credits, business owners can list or exclude themselves as employees. Employers must first include employees who work more than 30 hours per week. At the owners' discretion, employees who work between 20 and 30 hours per week can also be included.
All full-time employees must be counted to determine the size of the employer's group. If the employer decides to include part-time employees, all must be counted toward the total. All eligible employees must be counted regardless of whether they want to have insurance.
Businesses will be included in the programs on a first-come, first-served basis, Morrison said. Application forms will become available in September and his office will begin accepting forms Oct. 1.
Morrison's health policy adviser, Erin McGowan, encouraged business owners to fill out the applications as soon as they are received.
Business owners will have to reapply to either part of the program each year. Employers who qualify for the purchasing pool will be able to continue applying to that side of the program and won't have to switch to the tax credit program in subsequent years, Morrison said.
Town Taxi Inc. owner Sue Markley, whose business meets the criteria for the purchasing pool, said the pool will be a perfect fit for her business. She employs two people and plans to hire two more by winter. Her decision will still rest on the cost of the premiums, but Markley said everything Morrison presented looks good.
"I think it's a wonderful program," Markley said. "I have never heard of a program that's this good for small businesses."
Insurance salesman and businessman Steve Mariani said the program is being put together in good faith, but wondered about the practicality of some of the details.
"I think the purchasing pool is a great idea," Mariani said. "If it gets new people on the rolls of insurance, it's a great thing. I hope that the insurance industry doesn't mess it up. Somehow, they have to underwrite risk. I know (the state has) done their homework, but it's a complicated thing."
Mariani said he's worried the pool could eventually cost the same for businesses as it does to go on their own now. Many organizations, including the Montana Chamber of Commerce, the Montana Association of Counties and public schools across the state, are considering the creation of insurance pools in order to lower costs, Mariani said.
Morrison said the pool is being designed by experts who will work to ensure that it remains a viable, low-cost option for Montana businesses.
Morrison and Senate President Jon Tester, D-Big Sandy, who co-sponsored HB 667, are among four Democratic candidates in the race to unseat U.S. Sen. Conrad Burns in the 2006 election.
For more information about the program, contact Morrison's office at (406) 444-2040 or (800) 332-6148.
On the Web: www.sao.mt.gov
