Background

According to the Arkansas Center for Health Improvement’s 2005 Arkansas Fact Book: A Profile of the Uninsured, over 70 percent of Arkansas’ small businesses (50 or less employees) do not offer health insurance.  Over 378,000 Arkansans between the ages of 19 and 64 do not have health insurance – primarily because of high premium costs. 

History

In 2000, recognizing the detrimental effects of uninsurance on Arkansas families in every community across the state, the Arkansas Center for Health Improvement (ACHI) took on the challenge of assessing the state’s health insurance status.  To develop informed policy recommendations for expanding health care coverage and innovative health care financing strategies, ACHI formed the Arkansas Health Insurance Roundtable. 

One of the Roundtable’s recommendations, endorsed by the governor, legislature and Arkansas Department of Human Services (ADHS), was a safety net program that provide small businesses the opportunity to offer an affordable, limited benefit health package for all their employees, regardless of income. 

The innovative program, called ARHealthNetworks, represents one of the first true partnerships between state and federal government, private businesses, and families to make affordable health care coverage available to uninsured workers.

State, Federal Partnership

ARHealthNetworks' premium subsidies come from existing state and federal funds.  Arkansas’s share comes from tobacco settlement funds.  The federal matching funds utilize dollars allocated to Arkansas through Title XXI (SCHIP [State Children’s Health Insurance Plan]  for adults with children) and Title XIX (Medicaid – for adults without children). ARHealthNetworks Funding Diagram

Authority to use federal matching funds for ARHealthNetworks is the result of a section 1115 demonstration waiver through the Health Insurance Flexibility and Accountability (HIFA) office of the U.S. Secretary of the Department of Health and Human Services. 

Cost Containment 

In exchange for flexibility achieved through the HIFA waiver, the Arkansas Medicaid program has committed to working to reduce tobacco use and obesity levels among the state’s Medicaid population.  As a first step, Medicaid recipients have been asked to complete a health risk assessment, similar to the one in place for state government and public school employees.  Like state employees, Medicaid beneficiaries will be provided with information regarding health risk behavior and resources for tobacco cessation and weight management. 

Basic ARHealthNetworks Program Features

ARHealthNetworks is available only through businesses with between 2 and 500 full-time employees, who have not offered health care coverage as a group benefit in the past 12 or more months.

Enrollment will be provided on a first-come-first-serve basis to employers, with a maximum of 15,000 individual enrollees during the first 18 months.  Based on available funding, this limit will likely be increased.

Participation by eligible employers is voluntary.  If an eligible employer decides to participate, all employees are eligible for the coverage and must participate unless they provide evidence of other group health coverage.  Spouses of participating employees may also be eligible.

The benefit package differs from a traditional comprehensive health insurance plan by providing only the following benefits:

·   Six physician visits per year

·   Seven inpatient hospital days per year (acute care hospital days)

·   Two outpatient hospital services per year

·   Two prescription drugs per month (using a tiered formulary)

Cost

The cost to participating employers for ARHealthNetworks coverage will vary for each employee, based on employee income, age, gender, and number of dependents. Federal and state subsidies will result in the lowest cost made available for those workers with an income of less than 200 percent of the federal poverty level (FPL), e.g. in 2008, a family of four with an annual income of less than $42,400.  ARHealthNetworks Premium Price Example Chart

Administration

ADHS has contracted with NovaSys Health to administer the ARHealthNetworks program.  Enrollment began December 20, 2006, with coverage beginning January 2007.

Interested employers should contact NovaSys at  (800) 540-7566, (800) 285-1131 TTY, or visit their website at www.ARHealthNetworks.com