The commissioner of the Minnesota State Department of Commerce announced a plan in January that could seriously weaken the rules governing the health insurance that small employers provide for their workers. Advocates say the new rules could devastate existing mandated health insurance coverage.

Employers who offer health insurance to their workers in Minnesota may offer any package that is on the market, as long as it meets certain minimum standards of coverage. Until now, small employers wanting to provide the minimum coverage could choose between two different insurance plans. Under the new guidelines, small employers can now choose from a set of three new insurance packages, and all offer substantially less coverage than the previous two minimal plans did.

The costs of providing health care are more difficult to bear for small businesses than for large ones. As of 1995, ninety-five percent of large employers (50 or more employees) offered health insurance to their workers; only 64% of small employers did so. Acknowledging the rapidly-rising cost of health insurance, the 1999 Legislature passed a law called the Small Employer Alternative Benefit Plans; Pilot Project. Unfortunately, rather than attempt to address the root cause of health-care inflation, the legislature chose instead to simply shift some of the costs of necessary care onto individual workers.

The law directed the Commissioner of Commerce to develop guidelines that would allow health plans in Minnesota to alter or eliminate coverages that would otherwise be required by law, in order to enable employers and covered persons to better manage costs and coverage options.Despite the legislature’s stated intent, the actual process of developing the guidelines included no input from covered persons or their advocates. Instead, the Commerce Department invited representatives from business and the insurance industry to participate in deciding what benefits to incorporate into each plan.

As developed by the industry, the proposal is that the health insurance offered by small employers no longer need cover such things as: Chemical dependency and mental health services; Pre-natal care; Coverage for lymes disease; Reconstructive surgery of any sort, including breast reconstruction following mastectomy (chosen by one-third of mastectomy patients); Anesthesia & for children under five and people with disabilities Of particular concern to readers of Access Press is that the new policy would allow insurers to deny coverage to infants and other dependents who have disabilities, dependents who use ventilators to breathe and require private duty nursing or personal care assistance services, and children who have emotional disorders and need residential treatment services.

The weakening of requirements has drawn protests from women’s groups, nurses, psychologists, advocates for people with disabilities, and the Cancer Society, among others. Sue Stout, a registered nurse and member of the Minnesota Nurses Association, says the new rules would put employees health at risk due to glaring omissions in coverage.

The list of non-covered items under the new plans, which includes more cuts than we have space to list here, comes from a disclosure notice drawn up by the Commerce Department. The disclosure notice tells employers that you have purchased a health benefit plan that does not include many of Minnesota’s health care mandates, [emphasis in original] and then lists the services not covered. Perhaps reflecting the lack of input from consumer advocates, the disclosure notice will be made available only to the employers who purchase the plans, and not to the workers who will be covered by them. Workers thus run the risk of being surprised by unexpected bills for uncovered health care services which had been previously covered and of which they had not been notified.

While the intent of the law appears to be to increase the availability of employer-provided insurance, the new rules may have some unintended negative effects. Health care consumer advocates point out that workers who cannot afford to pay out-of-pocket for previously-covered services may simply go without needed care. Such under-insurance serves to degrade the quality of health care that workers receive, and may not actually save money. As an example, the Minnesota Women’s Consortium stated when voicing its opposition to the new rules, The consequences of medical neglect during pregnancy could result in far more expenses in the long term. Since these expenses will not be covered by the private insurance industry, the increased costs will ultimately be born by the taxpayer.

Before any new reduced-benefit policies can be offered to small employers, eligible insurance companies will have to develop specific plans, attach a price to them, and submit the plans to the Commerce Department for approval. To date, no companies have done so. A spokesman in the Commerce Department stressed that it is possible that none will, as the entire set of guidelines is simply a new minimum standard, with no requirements for participation. Advocates expressed surprise that the guidelines, which were developed to save money, were issued before any estimates were done as to how much money might be saved, thus making it impossible to relate the value of the terminated services with any hoped-for savings.

The Legislature charged the Commerce Department with devising new health care insurance rules that would enable employers and covered persons to better manage costs and coverage options. Instead, what the new rules issued by the Commerce Department appear to have done is to shift some costs of necessary health care from employers onto their workers and, ultimately, onto state taxpayers. While we may end up with more insured workers, many of those workers may end up joining the ranks of the under-insured, resulting in decreased quality of care and increased costs. And, after all is said and done, half-a-million Minnesotans will still have no insurance at all.