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Background & History

The West Virginia Small Business Plan is intended to help more uninsured working adults obtain comprehensive health insurance coverage through employer-sponsored plans that are priced lower than the usual rate for comparable coverage. It is one component in an overall commitment by West Virginia state government to provide access to health insurance and medical care for all citizens.

Helping uninsured small businesses cover their employees is also a key economic development factor. The small employer can successfully compete against larger companies by offering a more competitive health insurance plan, thereby keeping a stable employee base.

The large and growing number of uninsured employees evidences the need for new ideas. A 2001 survey, compiled by the West Virginia University Institute for Health Policy Research, found that on any given day, 18.3 percent (133,030 persons) of working West Virginians were uninsured. For some part or all of that year, the number of uninsured rose to 25 percent (180,684 persons). Among uninsured workers, only 27.1 percent worked for an employer that offered health insurance.

The Small Business Plan’s guiding principle is that all entities involved—health care providers, private insurance companies, state government, small business owners and their employees—must all share in the responsibility of increasing access to care by having insurance. Through the Plan’s partnership structure, none of those groups will bear an undue portion of that responsibility, including the State of West Virginia. No state budget funds have been, or will be, dedicated to underwriting the costs of the Small Business Plan.

Grant Support

The Robert Wood Johnson Foundation awarded the State of West Virginia a multi-year $1.3 million grant that supports all the work done to create and promote the Small Business Plan. The grant is part of the Foundation’s State Coverage Initiatives program which is aimed at helping states improve the availability and affordability of private and public health insurance. Originally managed by the WV Public Employees Insurance Agency (PEIA), the grant is now under the guidance of the WV Health Care Authority.

Original Concept

In 2002, a different idea for lower cost small business health insurance was being pursued. The major points of that concept were:

bullet PEIA would open its Local Pool to small business owners for purchase of policies;
bullet PEIA would underwrite and administer the program; and,
bullet Lower cost of policies would be achieved through the buying power of the State and the stability of an existing pool. PEIA covers one in eight West Virginia workers.

To assess the viability of this concept, a Policy Advisory Committee was assembled. It was comprised of uninsured workers, small business owners, legislators, state government officials, PEIA enrollees, private insurance carriers and health care providers. Governor Bob Wise and PEIA Director Tom Susman also hosted a series of town hall meetings across the state to get input from interested people.

By December 2003, the original idea had grown into the private/public partnership concept that is the basis of the WV Small Business Plan. This innovative proposal was part of Governor Wise’s 2004 legislative package.

Passage of key legislation – Senate Bill 143

Companion bills in both the House and the Senate proposed the idea of the Small Business Plan. It was Senate Bill 143 that finally passed and was signed into law by Governor Wise.

In summary, SB143 encouraged a private/public partnership, among insurance carriers, health care providers and PEIA in order to bring commercially comparable coverage plans to qualifying uninsured small businesses at a premium cost reduction up to 25 percent. This is primarily accomplished by allowing the participating carriers to access PEIA’s provider reimbursement rates which average 20-25 percent lower than those of private insurance companies.

Other key components of SB143, and the related rules and regulations, are:

bullet the Plan is available for businesses having 2 – 50 employees;
bullet the small business must have been without a company-sponsored health plan for the prior 12 consecutive calendar months;
bullet the employer must pay at least 50 percent of the individual premium costs;
bullet 75 percent of eligible employees must participate, and
bullet the business must have been in existence for at least the past 12 consecutive months.


Insurance Carriers

Any private insurance carriers that are licensed under the standard procedures of the West Virginia Offices of the Insurance Commissioner can offer health benefit policies under the provisions of SB 143. Participating carriers assume all underwriting risks and administrative functions. Carriers also agree to accept lower administrative income for coverage sold under the Small Business Plan.

Small Business Plan policies must mirror the carrier’s commercially available ones. This is an assurance that a broad array of services, including mandated ones, are included in all policies.

WV Public Employees Insurance Agency (PEIA)

The primary role of PEIA is allowing participating insurance carriers to use the Agency’s lower reimbursement rates as payment in full to physicians and providers that choose to be part of the Small Business Plan network. PEIA is also responsible for annually surveying all in-state health care providers to assess whether they want to be part of the Plan’s network.

Physicians and Health Care Providers

Each year, doctors, hospitals, primary care clinics and all known in-state health care providers can choose whether or not to be part of the Small Business Plan network. Participating providers agree to accept the PEIA reimbursement rates as payment in full for services. Lists of providers can be obtained from the insurance carrier(s) offering coverage under the Small Business Plan.

Future of the Small Business Plan

Oversight of the Small Business Plan will continue under the West Virginia Offices of the Insurance Commissioner. SB 143 mandates that a policy advisory committee be appointed by the West Virginia Offices of the Insurance Commissioner to further monitor and guide the Plan. The committee's membership includes representatives from labor, hospitals, physicians, business, local government, insurance carriers and uninsured persons. The West Virginia Offices of the Insurance Commissioner conducts meetings on a periodic basis as deemed necessary.

As the Robert Wood Johnson Foundation grant funds conclude in 2007, the work done to create the Small Business Plan and to alert the uninsured workers about this new option will set the conditions necessary for its continuance.


More Information

For more information about the West Virginia Small Business Plan, please contact the West Virginia Offices of the Insurance Commissioner Consumer Information line at 1-888-879-9842. For assistance in locating a participating Mountain State BlueCross BlueShield agent, email Terri Jerrome or call her in the Wheeling BCBS office, 1-877-866-2583.