When the Affordable Care Act was put into motion, many small Indiana companies chose to drop their group health plan. At that time, it was the right decision for multiple of reasons.
To start with, individual plans were no guaranteed issues under the ACA. One of the biggest benefits to group health plans is they are guaranteed issue. This means that an enrollee cannot be denied for preexisting conditions.
The next reason to drop the group health plan was government tax credits. If an employee qualified for tax credits, those credits may be far more than what the employer could give in premium contributions. This lead to huge saving for small companies.
The other benefit was the employee to could an elect a plan design that best fit their needs. The employer was no longer making that healthcare decision for the employee.
Now going into 2017, the benefits of the individual plans are not as bright as they once were.
Individual plans are still guaranteed issue but the out of pocket max has increased significantly. For 2017, the OOPM is going to be $7,150 for a single & $14,300 for a family. Individual policy holder is having a hard time keeping up with the financial burden of the OOPM.
Tax credit have steadily decreased in Indiana. From the first year of tax credits, we have seen a steady decline of tax credits around 30% a year. That family that was benefiting from the large tax credits are now starting to pay much higher amounts. It’s getting closer to what the group health plan use to cost them.
People in general no longer want to deal with the federal marketplace. If any problems occur with the federal exchange, it can take years to resolve. There are plenty of horror stories of policy holders getting hit with extreme situations where the market place changes plan design on them and they have claims. These employees are starting to miss the days when their employer made the health care decision for them.
Owner & key employees, no longer have the option of health plans that offer a large network. In 2017, there will be no individual health coverage that offers a PPO plan. All of the plans being offered will have narrow networks. This can create a disruption in care.
Increased premiums for middle and upper class, for those Hoosiers that are not eligible for tax credits on the exchange, they have experienced large rate increase every year. Now they are still going to have a large rate increase but now they don’t have access to a PPO plan. Along with this, they are being faced with huge out of pocket maxes.
Now we come full circle back to the small group health plans. Owner and decision makers are being faced with putting a group health plan back in place. They may choose to do for their own coverage or the health plan can once again create some level of benefit morale. It’s fair to say at this point, the individual health plan under the ACA, cannot replace a group health plan.