Thousands of small businesses will be offered discounts of at least 20 percent on health insurance rates under a new group purchasing cooperative, formed by the Retailers Association of Massachusetts, that will begin enrolling members this week.
The co-op is the first permitted to do business under a 2010 Massachusetts law that allows small employers to band together in large groups and negotiate for better-priced health coverage. On Friday, the state Division of Insurance authorized it to offer about 4,000 small businesses a half-dozen health plans that are far less expensive than what the businesses had been paying on their own.
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In addition to about 3,500 members from the retailers association, ranging from restaurants to hardware stores to dry cleaners, the co-op also can cover about 500 members of the Massachusetts Package Stores Association.
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The co-op’s alliance with Steward and Fallon, if successful, would drive more patients to the 10 community hospitals in Eastern Massachusetts run by Boston-based Steward, which already operates another limited network for small employers in collaboration with Tufts Health Plan. In such plans, members are restricted to Steward’s hospitals and its 2,200 affiliated doctors, but pay significantly less than those enrolled in broader-network plans.
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The state’s insurance commissioner, Joseph G. Murphy, said his office is reviewing applications from other potential co-ops and has certified a second one, the Massachusetts Association of Chamber of Commerce Executives.
The 2010 law restricts total enrollment in all co-ops to 85,000. Extending the lower-cost insurance to all small businesses, which together employ about 500,000 people, would require legislative action.
http://www.bostonglobe.com/metro/2012/02/14/small-business-health-will-slash-rates/ZTUTfgxMLEOaOcg0KxxkkJ/story.html
Hat tip: Boston Globe
Editorial Note: This legal framework was created outside the provisions in the ACA.
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