Okla. Program to Help Small Businesses Provide Insurance

An Oklahoma program that begins Nov. 1 will use tobacco taxes and federal funds to subsidize small businesses wanting to provide insurance to their employees.

Officials estimate the program will help 50,000 to 70,000 Oklahomans who do not have insurance. It was approved by the federal government three weeks ago.

“This is a public-private partnership to help working Oklahomans,” Gov. Brad Henry said at a recent news conference.

Henry urged small business owners to take advantage of the program, saying having more people insured will help lower insurance costs for everyone.

“This is a pro-business, pro-health initiative that’s good for the state of Oklahoma,” he said. “It will provide a great shot in the arm to small businesses across Oklahoma and provide much-needed health insurance to thousands of citizens.”

Oklahomans with salaries up to 185 percent of the federal poverty level will be eligible. Qualifying would be a single person making up to $18,000 and a family of four with a household income of up to about $36,000.

Employers would pay 25 percent of the cost of health insurance premiums and employees would pay 15 percent or a maximum of 3 percent of their monthly income.

Under the program, tobacco tax revenue will be used to obtain federal matching dollars. The result is that the federal government will pay about 50 percent of the total monthly insurance premium.

The state has designated $50 million for the program, which will produce $100 million in federal matching funds.

“The more companies that can participate, the better for Oklahoma,” Henry said. “Health care costs are a major drag on business and the economy, but if we can increase the number of insured Oklahomans, we can start bringing those costs under control. That will help everyone’s bottom line.”

Henry proposed the program last year and voters approved a state question that raised tobacco taxes and authorized the venture.

At least 650,000, or about 20 percent of Oklahomans, do not have health insurance, said Mike Fogarty, executive director of the Oklahoma Health Care Authority, which will administer the program.

“If we can take a 10 percent bite out of that, we really we have done something, in my opinion,” Fogarty said.

Fogarty said the Oklahoma program is unique because it works through employers and employees and does not entail a government-designed benefit package.

State Treasurer Scott Meacham said about $65 million in extra tobacco revenue has been collected for health care there is about $22 million in reserve for the program.

Tobacco collections are running 10 to 15 percent below estimates this year, mainly because of compliance problems in the northeastern part of the state, Meacham said. He said he expects that problem to be resolved.

At Henry’s request, Meacham helped develop the health care initiative, along with former Health Secretary Tom Adelson, now a state senator from Tulsa.

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Topics Commercial Lines Business Insurance Oklahoma