Gov. Jay Nixon is proposing "Missouri Health Works" to Missouri small businesses with fewer than 150 employees, in an effort to offset costs in providing employees' health insurance.
"We believe it's going to be very beneficial to small businesses to attract and retain employees, and also help offset the cost of health insurance," said Mike Downing, director of Missouri's Department of Economic Development.
State Budget Director Linda Luebbering said the proposal seeks to help businesses of more than 50 employees with the Affordable Care Act's requirement of providing health coverage to employees.
"The opportunity we're talking about today is to use federal dollars to help pay a portion of the employer's cost of health care premiums, actually use dollars to help the employer reduce their costs," Luebbering said.
The proposal would require employees with incomes up to 138 percent of the federal poverty level to take employer health insurance, even if they otherwise would qualify for the state's Medicaid program.
"For example, for a family of three, that's $27,310 annually or about $13 an hour, working 40 hours a week," Luebbering said.
Luebbering said that right now, the state is estimating it could pay 60 percent of the costs of a premium using some federal dollars. But, she said it's possible the state might need to go below that.
"Obviously, any amount that the state and federal government would cover in this program would save small businesses money," Luebbering said. "We would require the employee to share in the cost as well. For employees, it would be the lesser of two amounts. Either 15 percent of the cost of the premium, or 2 percent of the income for those below 100 percent of the federal poverty level or 5 percent of their income if they're between 100 and 138 percent of the federal poverty level."
If an employee makes 95 percent of the federal poverty level:
Current share Missouri Health Works
Employer $300 $100
Employee $100 $30
Federal/state 0 $270
If an employee makes 125 percent of the federal poverty level:
Current share Missouri Health Works
Employer $300 $100
Employee $100 $60
Federal/state 0 $240
Luebbering said some states already are operating similar programs.
"It's an option that has been available to states for some time," she said. "The difference is that with Medicaid expansion and reform, the option is much more viable now than in the past.
"Another point is that because businesses will be subject to penalties under the Affordable Care Act, the timing of this option is much more critical."
Luebbering said the state has presented the idea to local chambers of commerce across the state, implying the state would need their help in signing businesses up for the Missouri Health Works program.
She said it would benefit Missouri and businesses by reducing costs for businesses, providing health coverage to employees, encouraging low-income Missourians to work, requiring cost-sharing for employers and employees, utilizing federal dollars, helping businesses avoid ACA penalties, requiring employees to use this cost-saving measure and reducing the number of uninsured Missourians.
The Missouri Legislature would need to pass legislation authorizing the Missouri Health Works program. Luebbering said it would need to include expanding Medicaid eligibility to 138 percent of the federal poverty level and authorizing the program in state statute.
"Once that happens, obviously we need small business participation and local chamber involvement," she said.