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Forsaken funding: Small businesses passing up health insurance aid

April 16, 2007|TRACY HANEY

With $20 million in state funding, ICARE was supposed to have a significant impact on small business owners struggling to provide health insurance to their employees.

Instead, Gov. Ernie Fletcher's initiative, short for the Insurance Coverage, Affordability and Relief to small Employers program, is having a hard time finding participants months after its inception in January.

Julie Mix McPeak, executive director of the Kentucky Office of Insurance, which supervises the program, thinks she knows why.

For one, ICARE has its restrictions. To be eligible, businesses must employee two to 25 employees, pay at least 50 percent of the employee's premium for single coverage, be located in Kentucky with at least one Kentucky employee, and pay employees a gross salary of no more than 300 percent of the federal poverty level.

ICARE was given enough funding by the 2006 General Assembly to help 4,000 employers and 20,000 employees.

As of April 5, the program had received 166 applications, and approved 82 - none from Boyle County.

"We really expected we were going to be inundated with applications," she said. "We thought we would have the money spent by February of this year."

Other than its restrictions, ICARE's two-year funding limit also could be a reason for the small number of applicants, Mix McPeak speculated.

"(Employers) are afraid if they start offering health insurance to their employees they'll have to take it away" if the program loses funding, she said.

Two program options

ICARE has two program options. For employers who have not offered health-care coverage in the past 12 months, ICARE would pay $40 per eligible employee per month. For employers of individuals with high-cost conditions, like cancer, ICARE would cover $60 per eligible employee per month. In the second year of coverage, the amount ICARE would cover would decrease by $10 and $15 per month, respectively.

If the number of improved applicants doesn't increase, the program could be eliminated and the remainder of the money would return to the general fund.

"I would like to spend all of the $20 million," Mix McPeak said, adding the program benefits everyone because uninsured Kentuckians cost taxpayers money.

"ICARE really benefits the commonwealth as a whole," she said. For small business owners, offering employees health insurance can help them to attract and retain qualified employees, she said. "We think it's vital for people to have the ability to purchase health insurance in Kentucky," Mix McPeak said. "The ability of a small employer to offer that would be a huge benefit for employees in the state."

For more information on ICARE, visit here or call the Office of Insurance at (800) 595-6053.

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