HELENA - Nearly 1,000 Montana small businesses and their employees will be getting a late Christmas present early next year: affordable health insurance.
The insurance, or help in paying for it, comes courtesy of a $13 million state program approved by Montana voters and the 2005 Legislature.
Now, it's on the verge of reality, as the state is enrolling the first of 25 small businesses in a new health insurance pool that offers them affordable group coverage.
Small businesses that already provide health insurance for their workers also can apply for tax credits, effective next year, to help offset the cost. They must have two to five employees to qualify for either aspect of the program, which is dubbed Insure Montana.
State Auditor John Morrison, whose office is implementing the program, said Tuesday the response from businesses has been heavy.
"Business people across Montana are starving for affordable health insurance," he said. "It's the No. 1 pocketbook issue for small businesses in Montana.
"This program is not going to solve the whole problem. But it's a step in the right direction."
In the past few weeks, more than 1,000 businesses have applied to participate. It's a first-come, first-served program, based on available money, and initial funds will pay for about 900 businesses, Morrison's office estimates.
The program has two parts:
A state income-tax credit offered to small businesses that already provide health insurance to employees. The credit will be $100 to $125 per employee per month. As many as 600 businesses will be approved to take part, starting next year.
Small businesses that don't offer health insurance to their employees now can buy it from a health insurance pool. Blue Cross and Blue Shield of Montana will offer two policies through the pool. Companies must enroll in the pool through the state.
The state also will offer premium subsidies to businesses and their workers who get insurance through the pool. Twenty-five businesses already are enrolling, and another 125 applications will be sent out within the week, Morrison said.
By next March, his office hopes to have 300 businesses signed up and buying insurance through the pool.
Employees who get insurance through the pool will get subsidies from the state for 20 percent to 90 percent of their individual coverage costs, depending on their personal income.
The program is financed by increased state tobacco taxes, which were approved by Montana voters in November 2004. Montanans voted then to increase the tax on cigarettes by $1 a pack to $1.70 a pack.
Initiative 149 directed that part of the higher taxes pay for tax credits to subsidize health insurance for small businesses. Morrison said Gov. Brian Schweitzer proposed expanding the program to include the health insurance pool.
State Rep. Alan Olson, R-Roundup, a co-sponsor of the bill that put the program into law, said it will give many small businesses the chance to provide health insurance to their employees.
The measure had bipartisan support during the Legislature, he said.
House Democratic Leader Dave Wanzenried of Missoula, the bill's chief sponsor, said that although it will provide insurance to "admittedly a small number of businesses," it's still a good start at reducing the number of uninsured Montanans, estimated to be 165,000.
The precise number of businesses and employees affected by the program won't be known until early next year. It depends on the number of each business enrolled, how many employees choose to buy insurance and whether they choose to place any of their dependents on the policy.
The program will be expanded if more money becomes available, Morrison said. The state also is applying to the federal government for additional money that could help cover workers whose income is at or below 200 percent of the federal poverty level ($25,600 for a family of two).
Morrison said the plan could be a "successful precedent" of the state teaming up with the private sector to make health insurance more affordable and get more people covered.
"Insure Montana is a concept that needs to be developed much more widely at the state and national level," he said.