Vermont businesses that benefited from a health insurance plan offered through chambers of commerce around the state will no longer have that option when the federal Affordable Health Care Act launches in earnest next year.
After more than 20 years, the Vermont Association of Chamber Executives insurance plan, better known as VACE, will end next January when Vermont launches a portal for small businesses and individuals to purchase insurance through a health benefit exchange.
VACE offers health and dental insurance to chamber members, their employees and dependents through Blue Cross and Blue Shield of Vermont, and dental coverage through Delta Dental.
Betsy Bishop, president of the Vermont Chamber of Commerce, said 4,500 businesses across the state participate in the VACE program. She said it’s just one direct benefit the 35 local chambers of commerce offer their members.
She said VACE has proved popular because it allows small businesses with 50 or fewer employees to purchase health insurance at “competitive prices.”
Bishop couldn’t put a dollar figure on VACE savings to members but said “it’s fair to say that the experience rating of the VACE insurance pool has helped businesses to keep their insurance costs down.”
Starting next January, Bishop said a business with 50 or fewer employees will have to decide whether to offer health insurance or let employees purchase private insurance on their own through the exchange, with the premiums offset by a government subsidy.
(In 2016, the exchange will cover companies with 100 or fewer workers).
Under the Affordable Health Care Act, she said, health insurance plans like the one offered by the local chambers are not allowed. (The dental plan offered by VACE will continue).
Bishop said there are indications that small businesses opting to offer employees insurance through the state exchange will wind up paying more than under the current VACE program.
“We’re anticipating that anyone who’s on VACE insurance now will see their insurance rates increase under the exchange program,” she said.
Starting next year, the Vermont Chamber of Commerce will offer insurance benefits, other than health insurance, as part of its new Chamber Preferred program.
Business members can participate and offer insurance including life, dental, vision and critical care. Health insurance will be available, as well, through a defined contribution plan, but only for companies with more than 50 employees.
That will change again in 2016 when companies with 100 or fewer employees will have to purchase insurance through the state exchange.
Darcie McCann, executive director of the 375-member Northeast Kingdom Chamber of Commerce, said VACE is an important benefit with about 25 percent of her members on the plan.
“I think we’ve tried to be ahead of the curve in looking at benefits and that’s resulted in lower premiums,” said McCann, who serves on a chamber committee that reviews premium costs for the chambers around the state.
She said 18,000 people statewide are covered by VACE with annual premiums of $60 million to $70 million, depending on the year.
With VACE coming to an end, McCann said her members remain concerned about the escalating cost of health insurance.
She said until the cost of the plans offered through the state exchange are known, businesses will be left to speculate what it will mean for their bottom line.
Approximately 30 percent of the Lake Champlain Region Chamber of Commerce members participate in the VACE program, said Tom Torti, president of the 2,600-member organization.
Torti said through VACE local chambers of commerce around the state were able to offer less expensive insurance coverage through their collective purchasing power.
“We were hearing the types of increases were unsustainable,” Torti said. “Not only were costs going up, but the quality of the plans they were offering their employees were going down.”
But for the costs associated with health care, he said, employers would have been in a position to offer their employees more benefits.
He said he’s hoping the state’s health insurance exchange, along with changes in the delivery of health care by providers, will eventually drive down the cost of medical care.
At the Rutland Region Chamber of Commerce, approximately 25 percent of the 600 member businesses have signed up for VACE, said Thomas Donahue, the chamber’s executive vice president.
“It’s been a great program,” he said. “We’re sorry to see it go.”
Donahue hasn’t received a lot of feedback from members about the program being terminated, but he speculated that’s because businesses don’t yet know the cost when the state exchange, called Vermont Health Connect, kicks in January.
Because VACE has been so popular, Bishop said some of the local chambers in the state may lose members.
She said offering health or dental insurance is not the primary function of a chamber of commerce.
“The true work of any chamber of commerce is to help private-sector businesses thrive and we all do that in a variety of different ways,” Bishop said.
Torti of the Lake Champlain Chamber agreed that the end of VACE will likely mean the loss of members. But he also said the chamber offers a return on investment for its members that goes far beyond the health insurance benefit.
McCann of the Northeast Kingdom Chamber said her organization provides a range of benefits to members with the focus on promoting the business interests of its members, including marketing, networking and legislative issues.
“Over the many years, we’ve really tried to add many valuated benefits so we’re not just a one-hit wonder,’ McCann said. “That people aren’t just coming to us for the health insurance.”
VACE is also important because it contributes a portion of the premiums to local chambers. In the case of the Rutland Chamber that amounts to $25,000 a year, Donahue said.
“We just use it for operations, marketing, etcetera,” he said. “Just basically, keeping the lights on.”
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