COD E R E D

EligibilityIn 2004, 1,000 small businesses were a part of Health Pass and 9,111 persons werecovered through the cooperative. In Health Pass, there is no minimum payment requirement foremployers, and the employer may also provide commercial coverage. Adverse selection isaddressed by a 75% participation requirement for employers with at least two employees inHealth Pass.Benefits and ServicesThe cooperative offers a variety of plans that range from limited to comprehensivecoverage. The plans are operated by four insurers: Group Health Incorporated, HealthInsurance Plan of New York, Horizon Healthcare and HealthNet. Initially, each of these fourcarriers offered five identical benefit packages, for a total of 20 plans that differed from carrier tocarrier according to the size and perceived quality of the participating physician networks. AsHealthPass evolved, the plans offered by the four carriers have diverged somewhat. Inaddition, six new plans have been added by the four original insurers.Ultimately, there is no price advantage over the regular market as a consequence ofjoining Health Pass. Though the cooperative has worked with the participating insurers todevelop leaner benefit packages, the benefit packages are constrained by state mandatedbenefit requirements. However, small businesses have been attracted by the choice of healthplans afforded through the program and simplicity of shopping for health insurance.In 2004, the average employer contribution for individual coverage was $197 per month,and for family coverage, $383 per month. The percent of the premium that these amountsrepresent varies based on family size and choice of benefit plan. The average contributions inHealthPass are considerably lower than the average New York employer contributions reportedin a 2001 statewide Commonwealth Fund survey of small employers ($242 for individualcoverage and $467 for family coverage).FinancingDuring the program’s planning phase and first two years of operation, $2.7 million instart-up funding was provided from the New York City Department of Health and the EconomicDevelopment Corporation. In addition, participating insurers and general agents contributed$129,000 plus significant in-kind contribution. By 2004, the program had not yet achievedfinancial self-sufficiency.MarketingHealthPass leadership devoted extensive efforts and resources to the development ofan active network of brokers and general agents. HealthPass maintains strong person-topersonrelationships with brokers, provides brokers with support services, and allocatesincreasing proportions of their marketing budget to outreach to the broker community. Thebroker community has been the main source of enrollment for HealthPass. The cooperativedoes not exceed the market commission but provides sales promotion support to the brokersand agents. Overall, marketing costs have been high.D-25