On March 7, the Centers for Medicare and Medicaid Services (CMS) approved a waiver to allow Arkansas to receive federal Medicaid funds for a program that will provide low-cost health coverage to small businesses. The Arkansas Center for Health Improvement, working with the Arkansas Department of Health and Human Services, designed the waiver, which will provide small businesses with 500 or fewer employees an affordable health coverage option.

The new program requires employers who participate to guarantee coverage for all workers, regardless of income. Employees who can show proof of insurance coverage that exceeds the benefit program from outside of their employer may be exempt. In addition, only small employers that have not offered health insurance during the preceding 12 months may qualify for the program.

The benefit plan will include six clinician visits, seven hospital days, two outpatient procedures/ER visits per year, and two prescriptions per month. No catastrophic coverage is provided under this program.

Federal funding includes an 82 percent match of state dollars for employees with children and a 73 percent match for those without children. The plan will be marketed to small employers by one or more private sector health insurance companies that will be chosen through a competitive Request-for-Proposal process in the summer of 2006. Potential enrollment in the new program is estimated to be up to 80,000 Arkansans per year.