This is possibly the most interesting time in small group health history locally, not to mention the rest of the country.
Anthem releases 4th quarter renewals
Small group health insurance renewals have been released for the 4th quarter from Anthem. “WOW” is all I can say!
The renewals that are being released are all “grandmothered.” This means that the group can keep the current plan, even though it does not meet ACA compliance. In Indianapolis this block of business is renewing at low rate increases. In fact, we are seeing single digit rate increase on most groups. This is because these groups are running very well from a claims standpoint. Some groups are getting hit with double-digit rate increases and this has a lot to do with claims.
As I understand it, you may be able to keep that group plan through 2016. This can be a great option for the next two years because your premium will much lower than a ACA-compliant group plan. It’s important for any owner to also request numbers on a ACA plan just in case. This can be provided to you very easily, though this is where the premiums get very ugly. If your broker has been working for you, then they should have reduced your rate increase over the years with Anthem. Those years of constant negotiations with underwriting has saved small group thousands. This is a service Nefouse & Associates has always provided to even our smallest groups. Under the ACA plan, be prepared to see very large rate increases.
Anthem groups can keep their current plans through 2016.
Small groups affected most
Small groups that are going to be hit the hardest are small-group plans that have run single digit rate increases and have composite rates in place.
An example would be a group of 22 employees electing coverage. There is one premium rate for each tier. So if you’re 62 or 22 years old, the employee-only premium is the same. Now under the ACA, there will be no more composite rating for small groups — it will be all age based. The 62-year-old employee that was running $435 a month, might see a new premium of $1,400 a month. On groups like this, we are seeing 85% rate increases on a ACA compliant plan.
Groups that have age-based rates in place right now are not seeing as large rate increases. If you have 15 employees on the plan and have had low rate increases you may a see a 37% rate increase with an ACA plan.
Among the grandmothering block in Indianapolis, the lowest ACA increase I have seen is 23%. This was on a case of 40 employees that had age-based rates in place.
You need to know what the impact of healthcare reform is going to have on your group benefits. We are being told groups will be able to keep the plans through 2016, but anything can happen. If the Indianapolis Department of Insurance decides not to allow non-compliant plans to stay in place next year, then you may be faced with these kinds of rate increases.
What to Do:
First, find out what kind of ACA rate increase you are looking at, then contact Nefouse & Associates, or call us at (800) 846-8615.
We may be seeing the beginning of the end of traditional small group plans. So let’s think outside the box!