Small Businesses Sick Of Delay Of Florida Insurance Exchange

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March 15, 2010 Monday FINAL EDITION

A SECTION; Pg. 1A

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SMALL BUSINESSES SICK OF DELAY OF FLORIDA INSURANCE EXCHANGE

By SUSAN SALISBURY Palm Beach Post Staff Writer

Almost two years after lawmakers created it, a program to provide affordable health insurance to small businesses has yet to enroll its first client.

The goal of the initiative, Florida Health Choices, signed by Gov. Charlie Crist in May 2008, was to provide employees a marketplace of offerings in what's known as an insurance exchange.

"Nobody is more frustrated and in a hurry than I am," said Aaron Bean, a former state legislator who serves as the corporation's board chairman. "We are building this exchange from scratch. As we build the highway, we have to build it like a major thoroughfare. We expect hundreds of thousands of people to jump on board."

But it's unlikely that will happen until late in the year.

Business owners are frustrated: "Our state government dragged its proverbial feet for two years during dire economic times while small businesses, the economic engines of Florida, further cut benefits and even jobs due to skyrocketing health care premiums," said Bobra Bush, president of Telcom Corp. and Telcare Corp. in Boca Raton.

"What could have been a true leg up for small employers and their employees is now just a squandered opportunity. The Florida Legislature should demand immediate action from FHC to get up and running within 90 days."

Not likely.

"It's going to be at the beginning of the fourth quarter, October," said Richard Tuten, a Vero Beach-based business consultant brought on board in November by Florida Health Choices. "This is a very, very complex business model in a very complex industry. We have very little experience anywhere we can call on."

The $1.5 million in funding has to last until the program starts. So far, $112,826 has been spent, with the biggest amount -- $90,653 -- for consultants and expenses:

* Tuten is on a $7,500-a-month retainer on a six-month contract and works three days a week.

* Lauren McCarthy, a Tallahassee-based independent contractor who manages Florida Health Choices, is being paid $5,000 a month to work about 20 hours a week.

* Wilbur Brewton, a Tallahassee attorney, receives a $3,000 monthly retainer, according to information provided by McCarthy.

Once Florida Health Choices starts, funding will come from a 2.5 percent fee collected on premiums written through the exchange, Tuten said.

"We are going to pull small employers together into one pool so that the cost is the same as it would be for a large employer," Tuten said. "We are the good guys. We are trying to get everybody health insurance without it being mandated."

Initially, about 20,000 people are expected to participate, with the potential for 3.7 million subscribers. In addition to employees of small businesses, those eligible to enroll will include employees of municipalities with populations of less than 50,000, as well as employees of fiscally constrained counties, fiscally constrained school districts and rural hospitals.

Sen. Durell Peaden Jr., R-Crestview, who sponsored the original bill and serves on the corporation's board, said part of the holdup has been uncertainty about federal health legislation.

"The board has been working on this for a year. We are waiting for the U.S. Senate to enact something," Peaden said. "Every state will have an exchange."

Peaden said that before a chief financial officer is hired, the board must make sure that his or her qualifications meet whatever the federal guidelines require. "We must coordinate it with the federal government. (It) will subsidize these policies as we sell them to employees," Peaden said.

A 14-member board oversees Florida Health Choices, a nonprofit corporation. One spot is vacant, but Peaden said he would like the board to have fewer members, which would be more efficient and less expensive, as far as travel costs to meetings.

Sen. Don Gaetz, R-Destin, who co-sponsored the bill, said he did not anticipate such a lengthy start-up.

"When you consider that access and affordability of health care is the dominant issue in the United States, one would have hoped this modest but potentially useful program would have been implemented long before now," he said.

Gaetz said the blame cannot be placed on waiting for federal action because those proposals did not exist until a few months ago.

"This is why people, rightfully, are frustrated with government. It's slow, awkward and too ineffective," Gaetz said.

He'd like to see the program start sooner than projected.

"It's possible," Gaetz said. "The question is whether you can move a bureaucratic entity."

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About Florida Health Choices

ZWill serve incorporated companies withoneto 50 employees.Employees of certain municipalities, counties and school districtsalso can enroll.

ZEmployees of businessesthatregister can select from a centralized marketplace of insurance companies.

ZPrices are expected to be lower because of the large pool of participants.

ZA portion of the premiums, 2.5 percent, will fund the exchange.

ZExpected to begin offeringpolicies by October.

Source: Florida Health Choices Corp.

March 16, 2010