The biggest changes prescribed by the Affordable Care Act have already taken place, but many small employers are still struggling to make sense of the new world of health insurance.

In the past, Washington’s landscape has been dominated by associations and trusts that act as middlemen between small businesses and insurance companies, selling health coverage at cheaper rates. But new regulations have shuttered some of the trusts and forced others to drop some customers, depending on their area of work.

The Affordable Care Act (ACA) also requires insurance companies to cover a wider range of benefits and forbids them from denying coverage to sick people. As a result, insurance companies are scrambling to reduce costs, which they’re doing, in part, by limiting which hospitals and doctors — or “networks” — their plans will cover.

The changes require small employers to sift through complicated trade-offs among premium costs, out-of-pocket expenses and who’s included in a network.

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“It has been very disruptive for sure,” said Sean Corry, president of Sprague Israel Giles, a Seattle insurance brokerage. “It’s very confusing. Employers are being forced to face choices they haven’t had before.”

And the situation with the associations and trusts could remain unsettled for some time.

The state has yet to finish reviewing any of the 52 associations and trusts that have submitted their insurance rates and applied to do business in compliance with new regulations that started Jan. 1. Some have been working with the Office of the Insurance Commissioner (OIC) to make sure they will meet the new rules, but the office hasn’t signed off on any of them.

“There may be winners and losers and we want to make sure we do it right,” said Stephanie Marquis, spokeswoman for the OIC.

In the meantime, the state is allowing associations and trusts to serve about 480,000 employees and their families.

It’s unclear what will happen to the trusts that don’t make the cut, including whether they’ll be able to keep insuring their customers until their plans are up for renewal.

This month brought
some good news for businesses buying insurance outside of the associations and trusts.

Eleven insurance companies are submitting plans to the OIC for approval for next year’s small-group market, with two new insurers joining the mix.

Plus, the nine renewing companies are asking to decrease their rates by 1 percent on average.

State officials suggest that the lower rates are due, in part, to healthy, younger workers moving from trusts to plans sold directly to small employers.

Lori Comer, a Sammamish insurance broker who has worked in the industry for a decade, said the rate changes this year vary dramatically, but generally she has seen smaller increases for small businesses both inside and outside of trusts. But she warns that there’s a potential downside, with insurance companies keeping costs lower by dropping more expensive hospitals and clinics from their networks.

“Is it a true savings in cost,” Comer asked, “when you can’t go to the doctor you want?”

Big community

In Washington, there are roughly 340,000 registered small businesses with fewer than 50 workers, according to the state’s Department of Revenue.

Small businesses are not required to provide health insurance for their workers. But nationwide roughly 40 percent do so out of a sense of obligation or to attract and retain the best employees, said Patrick Connor, the Washington state director of the National Federation of Independent Business.

Insurance brokers say it appears that few small businesses providing insurance for their employees have canceled their plans and sent their employees to the individual market — mainly the online insurance exchanges established under the ACA — to buy insurance on their own.

As the ACA was being implemented, fears that small employers would do this were widely discussed.

In an effort to entice small businesses to insure their workers, the ACA includes a tax benefit for employers that paid at least half the cost of their workers’ premiums, and employed fewer than 25 people making on average $50,000 a year.

Special exchange

In most states, the benefit was available only to employers who bought insurance through an exchange called the Small Business Health Options Program, or SHOP. These plans differ from those sold on the exchange open to individuals.

In Washington, SHOP is available in only two counties this year, so the government temporarily extended the tax benefit to plans sold outside of SHOP as well. One additional carrier has applied to sell on SHOP next year, with coverage available statewide.

U.S. Rep Suzan DelBene, D-Medina, has proposed legislation making it easier for more businesses to claim the SHOP tax break.

If the bill is approved, the changes would include increasing the eligible business size to 50 employees, raising the earnings limit, and increasing the number of times a business can claim the credit to three consecutive years, up from two years.

“Meeting with the small businesses in my district, they want to make sure they have options,” DelBene said. “They want something that is streamlined, simple and provides a great solution for their employees, and SHOP is part of that.”

In Washington, only eight businesses so far have bought insurance for 2014 through SHOP, and it’s unknown how many will apply for the tax break.

Tax breaks

Connor, of the National Federation of Independent Business, said the tax breaks aren’t a big draw because it’s a complicated process,
often not worth much money and available for a limited time. He said it would help small businesses more to repeal the federal health-insurance tax levied against insurance companies based on plans sold primarily to small employers and individuals.

“There’s still a lot of frustration and uncertainty out there about the Affordable Care Act and how to comply with it,” Connor said.

Lisa Stiffler, a freelance writer in Seattle, can be reached at story was produced through a partnership with Kaiser Health News, an editorially independent part of the Kaiser Family Foundation.