Plan C Is Innovative Option

January 10, 2003
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(Editor's note: One of 10 stories profiling the finalists for Thursday's Business Journal Newsmaker of the Year Award.)

GRAND RAPIDS — Kent Health Plan Corp. (KHPC) gave the county's small businesses a big shot in the arm in October with the introduction of Plan C, an employee health care insurance plan that may help boost the endurance of many locally based small firms.

"Our focus here is on those employers who are struggling to become strong businesses," said Chuck Zech, Kent Health Plan president.

"Our mission is to help them attract and retain employees so they can grow their businesses to be stronger, and then to graduate out of Kent Health Plan within six years into the commercial market."

Zech said hundreds of small businesses in Kent County have never been able to provide health insurance coverage to their employees and those that have simply can no longer afford to.

KHPC was formed in May 2001 to develop programs that would make health care accessible to thousands of the estimated 55,000 Kent County residents without health insurance.

The innovative and affordable Plan C health care option is designed for small businesses in Kent County with four to 15 low-wage employees.

To be eligible, an employer must have had no health care coverage for the last two consecutive years, and 80 percent of company employees must reside within the county.

Qualifying firms can carry Plan C coverage for up to six consecutive years.

Workers must earn an average of $10 per hour or less during the first year of coverage to qualify.

Plan C members have access to the PPOM Network, which includes 26,000 physicians and 200 hospitals throughout Michigan.

Employees' spouses are eligible for coverage, but not their children. Dependents may be eligible for health care coverage under other state or federal programs.

The plan covers doctor visits, diagnostic services and prescriptions, as well as inpatient hospital and emergency room services, urgent care, outpatient surgery, lab tests and radiology procedures.

Maximum benefits from the plan are $35,000 annually and $200,000 over a lifetime.

Members simply present their Plan C ID cards at the physician's office or hospital and the provider bills Plan C directly. KHPC began offering Plan C in early October. Mier Finish and Woodworks was the first employer to enroll.

"As a young company it was not possible to provide traditional insurance to our nine employees. The affordability of Plan C will help retain our current staff and will improve our ability to recruit good staff as we grow," owner Tom Kusmierski told the Business Journal.

The $165 monthly cost of Plan C is covered equally by eligible employers, enrolled employees and KHPC, with each party paying $55 per month. 

KHPC's share comes from its general fund, which is comprised of local, state and federal funds.

Federal matching dollars on local funds, such as contributions from foundations, the United Way and the county, are the primary source of Plan C funding, Zech said.

KHPC's initial enrollment target was 300 employees, or about 30 companies, by the end of 2002.

Although initial enrollment was limited to companies with four to 15 employees, Zech said at some point KHPC intends to expand the program to include companies with up to 199 employees.

The Grand Rapids Area Chamber of Commerce, the Alliance for Health, The Employers' Association and a few other organizations helped KHPC design Plan C.           

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