The Affordable Care Act (ACA) is close to full implementations for employer-sponsored group health plans.
The ACA has had mostly negative impacts on the small group market for Indiana and the rest of the country. Any group under 50 lives, now has no underwriting for fully insured coverage. This has created large rate increases for small groups. Most small groups that had coverage in place prior to 2014, chose to “grandmother” the policy. This is where the group can keep the plan, without the plan meeting all the requirements of the ACA.
Grandmothering/transitional policy is a good option to try to control group health insurance premiums. Anthem is moving all of the renewal dates on this block of business to 10-1. Make sure you accept that renewal date or you will lose the plan.
Last year this block of business renewed at very low rate increases, this year we have seen that rate increase spike up to double digits. This is still a better option than taking a 50% rate increase under an ACA group plan.
Groups 50-99 employees
This size business has been up in the air under the ACA. Originally, the ACA was going to move this segment into the small group division. This would have led to no underwritten group health plans or pooled rating. There is a lot of fear from business owners and carriers on what pooled rates are going to look like. Recently, there were legislations passed that will allow the state to determine the definition of small group.
Insurance Options
As we enter 2016, there are a couple of carriers participating in the Indiana small and mid-size group market. Anthem and UnitedHealthcare are the main 2 carriers offering fully insured plans. There are few other companies but there is a huge lack of competition in this market. The lack of carrier choices has a lot to do with the passing of the ACA. We were losing carriers before the passing of the ACA, but that was because they could not compete.
Plan designs
The industry is starting to offer different insurance vehicles for group coverage. These options revert back to underwriting the case. This allows for more competitive pricing for lower risk groups. There is now Associations plans, PEO options and the Self-funded options.
There are few associations out there and most of the health insurance is through Anthem. If you are already insured with Anthem, I would not expect them to give a large amount of savings through the association. It can happen, especially if Nefouse & Associates is representing you.
PEO option is a professional employer organization
In this arrangement, a company will lease their employees to the PEO to receive a decrease in pricing on financial services. Health Insurance, Property & Casualty Insurance, Pay role, Worker comp and shift ACA reporting liabilities onto the PEO. This is a serious option if the company can afford the admin fee of the PEO. Anthem & UHC have PEO arrangements in place along with regional PEO’s self-funding the plan.
Self-Funded Option
There are now a handful of carriers that will offer groups a self-funded or partially self-funded plan. UHC has a division called Allsavers that has this option. Other companies like Trustmark and Cigna also have similar arrangements. The companies are designing these plans where a portion of the premium is going into a “claims bucket”. If the group does use the entire claims bucket then they may be entitled to a refund or credit. These plans have now been around for a couple of years, they are changing quickly. This arrangement is not offering a large upfront savings vs a fully insured product. The savings is about 10%-12%.
Large group
Large group has the same options as they had before the ACA. Now there are more fees on the insurance and additional admin that has to be done. Large Self-Funded groups still come down to fixed costs and claims.
