COVID-19 is crippling small businesses, and insurance companies aren't listening

Small business owners trying to maintain health coverage for employees in the middle of a pandemic are getting no help from insurance companies.

Small business owners trying to maintain health coverage for employees in the middle of a pandemic are getting no help from insurance companies.

Amol Dixit, the owner of Hot Indian Foods—a popular restaurant with locations in the Minneapolis skyway and the Mall of America, among others—is determined to provide health insurance for employees he had to let go after Minnesota suspended dining out this week.

He had 35 workers across five stores. They’ve all been let go. Dixit now must scrounge up the cash to compensate them for the hours they worked last week. He’s been calling food vendors, suppliers, and utilities—everyone he owes money to—for temporary postponement so he could make payroll. Almost everyone has been understanding, he says.

Just as urgently, Dixit wants to continue providing health insurance to the employees who were covered through Hot Indian Foods, at least through April. Next month’s premiums are due to Blue Cross Blue Shield on March 20. He asked the health insurance carrier for an extension, any kind of flexibility at all. It was a nonstarter.

“There’s obviously zero income coming in, zero revenue. And for the most part, vendors and suppliers have been cooperative and willing to work with us on payment deferral and delays. It’s surprising that health insurance providers are not willing to be flexible,” he says.

Talking with other restaurant owners, Dixit says it seems like no one’s been able to get so much as a discussion with the four insurance carriers that provide small group plans: Blue Cross Blue Shield, HealthPartners, Medica, and UnitedHealthcare.

Minneapolis’s Grant Rockwood, an independent health insurance broker, has been calling those companies repeatedly on behalf of many small businesses. None would move premium due dates.

“It would be such a blessing, such a huge favor, it they would extend the due date two weeks. Even something like that would be so, so valuable,” says Rockwood. “They’re not asking for free insurance or for carriers to waive the premiums. In my mind, it’s an extremely reasonable request.”

On average, a monthly premium is about $400, split between the employee and employer, according to Rockwood. That’s $200 from the employee who’s no longer getting paid, and $200 per employee for an owner with mounting bills and no revenue.

“I was hoping for some kind of dialogue to start, and it’s not happening, not by a long shot.”

Blue Cross Blue Shield, HealthPartners, Medica, and UnitedHealthcare did not respond to requests for comment. Each carrier has promised to make COVID-19 testing free for members who meet CDC guidelines.

Gov. Tim Walz’s moratorium on people gathering in restaurants, bars, gyms, and other businesses will last until March 27 at least, but is likely to extend longer.

The Minnesota Department of Revenue announced Wednesday it would give business owners until April 20 to pay sales taxes that would have been due Friday. It’s an important reprieve for restaurants and other businesses that scrape by on thin profit margins.

Lawyer Davis Senseman says they've been working with small businesses all week to help triage their debts. It mostly involves listing out everything they owe, and when, and tackling them one at a time.

“The first thought is, ‘How do I take care of my employees, how do I make sure they have income, and how do I make sure they have health insurance?’ So for a lot of them, the decision was made, ‘I’ll lay these folks off, but I will kind of just keep paying the health insurance.’”

Businesses are willing to do that because they hope closure will be temporary, and they don’t know if MNsure will let every employee jump on, Senseman says.

“Just as we saw a huge influx in unemployment applications, I think we’re going to see a huge influx of MNsure applications from people whose income has been drastically slashed.”

Danny Schwartzman, owner of Common Roots Café, says stressed small businesses need a wide array of short-term relief. He wants to see unemployment pay out more, banks offer emergency loans, MNsure pick up everyone who’s been laid off.

As Common Roots continues to do catering and delivery with a skeletal staff, Schwartzman has a handful of employees he’s still offering insurance.

“I think it would be great if insurance companies would be willing to negotiate things down,” he says.
“My reality is, we’re having to lay people off. If there’s no jobs, there’s no premiums for the people who aren’t working. We need to make sure MNsure comes faster. It would be great to have universal healthcare right now.”

MNsure’s 2020 open enrollment window closed December 2019. Those who lost their jobs and lost "minimum essential coverage" due to COVID-19 could qualify for special enrollment, which is recognized on a case-by-case basis. Find information here

Additionally, if they’re a member of a Native American tribe, or if their income falls into the MinnesotaCare or Medical Assistance range, they could enroll at any time