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Health care reform is bringing new options for small and mid size group plans. Not just here locally, but for the entire country.
One of the benefits of having a group health plan, is being able to offer guaranteed issue to employees. This is where the group health plan will accept you, no matter what kind of health conditions are present. Group Health Plans have always been able to offer richer benefit to the insured’s. The business has always paid at least half of the employee only cost. When we add all of these benefits up, the group health plan has always been a better deal for most employees.
This is all going to change in 2014.
In 2014, the individual market is going to be guaranteed issue. This means no one can be declined an individual plan. The individual health plans will have to cover the essential benefits. Now things like maternity will be covered under the individual plans. The individual market is now going to be more like the group market from coverage standpoint and cost standpoint. With guaranteed issue and more coverage the cost is going to go up. Now if you qualify for subsidies inside the exchange, an individual could be paying less than what a group plan could offer.
Local business owners will have a decision make. If they are small group and the employees are not highly compensated then dropping the group benefits could look like a good idea. It very well may be the most cost effective decision. It will really depend on how the exchanges operate.
If an employer does choose to drop coverage there are options to still have employee benefits. There is the traditional Dental, Vision, Life, and Disability plans. There is also the option of a Health Reimbursement Account.
We are able to setup and HRA to reimburse for medical expenses. One of these medical expenses is Individual health insurance premium. So an employer could give each employee $250 a month to use toward medical expense they incur. If the employee pick up an Individual health insurance policy through the Federal Health insurance Exchange and qualifies for subsidies, then they could use the medical reimbursement to lower monthly medical expense.
Dropping group benefit does not mean you can’t offer any benefits to the employees. We just have to look at different options. We have those options!
