Health insurers Oscar Health and Cigna Corp. said Tuesday they plan to offer co-branded, small business insurance coverage in Atlanta, San Francisco and four cities in Tennessee starting in the fourth quarter of this year.
The plans will include certain benefits that are featured in other Oscar plans, such as a concierge team, including a nurse, to help members navigate their coverage and set up doctor's appointments. Members will also have access to telemedicine at no cost and some will benefit from $3 prescriptions drug co-payments. The plans primarily will be available to companies with 50 or fewer employees but will be offered to companies with up to 100 workers in some states.
While Oscar has built its individual business segment around narrow provider networks, the new small group plans will allow customers the choice of either Cigna's broad national network or a local, narrower Cigna network.
"For Oscar, in a partner like Cigna, we get an experienced and seasoned insurance partner and with that, those deep and rich relationships they've built over time with providers on the medical and behavioral health side," said Chelsea Cooper, vice president of small group business at Oscar.
Historically, Cigna hasn't focused on the small group market. Most of its membership comes from large employers that contract with the insurer to administer health benefits and process claims. According to Cigna's most recent quarterly financial report, its small business membership totaled just 1,000 enrollees. Its total membership was 17.2 million as of March 31.
Oscar and Cigna first announced their partnership in January. Since then, COVID-19 pandemic has prompted an economic downturn that has threatened the viability of hundreds of thousands of small businesses across the country. A recent survey by researchers at various universities showed that 41% of small businesses temporarily closed and almost 2% permanently shut their doors amid the pandemic. Some have sought to cut costs through layoffs.
Cooper said Cigna and Oscar's research shows that while small businesses are hurting, small business owners still want to offer their employees coverage while being mindful of costs. Businesses with 50 full-time workers or less are not required to offer health coverage under the Affordable Care Act.
According to a survey of about 1,000 small businesses that the insurers commissioned, 70% of the small businesses with 50 employees or less had seen a decline in revenue and a little more than half laid off or furloughed workers. About 66% said providing health insurance to employees is a higher priority in their budgets as a result of COVID-19.
Few of Oscar's current small business customers have pulled the plug on health insurance for their workers, Cooper said. Oscar provides small group coverage to 17,000 members as of June. Since January, its small group enrollment has decreased a "relatively immaterial" amount, according to Cooper.
"They want to offer coverage, offer coverage that's affordable, and they also want to offer coverage where they are getting more value for their employees," she said.
Cooper declined to disclose the cost of the Cigna-Oscar small group coverage and how it compares with competitors' prices, because the plans have not yet received regulatory approval.
In Tennessee, the Cigna-Oscar plans will be available in Chattanooga, Knoxville, Memphis and Nashville. Because Oscar sells Oscar-only small business plans in Nashville already, Cooper said the company plans to stop selling those and encourage its clients to move over to the Cigna-Oscar plans.
Oscar in 2017 struck up a partnership with Humana to sell coverage to small business plans in Nashville, but that partnership is no longer in effect.