Employer Sponsored Group health likely to stick around...

August 04, 2017

In the wake of the turmoil re: the discussions to 'repeal and replace' the ACA law (still referred by some as Obamacare), it appears that getting benefits through your Employer is something that is here to stay. In fact, in light of the double-digit increases, reducing networks, and fewer carriers available for individual ACA plans, many small businesses are now offering their employees a group plan.

Most large employers realize that they need to offer good benefits in order to recruit and retain good employees. About half of all Americans get their coverage through their employer. After WWII is when the government allowed Employers to deduct the premiums for this benefit; so employees have been getting benefits through Employers for decades and many have come to expect it. The ACA requires companies with 50 full-time employees or more to provide health insurance coverage or pay a fine. However, the Kaiser Family Foundation points out that 96% of companies that size were already offering coverage before the mandate kicked in Jan 2014.
(Read more: Wash.Post.8.4.17. ER Group Health Ins )

While small Employers with under 50 full time employees are not required to offer coverage to employees, many of them are going back to or looking at offering group health insurance for the first time. Some owners have the need to get insurance for themselves and their families, and have found that the group premiums are much less. When the ACA plans first became available, many small business owners dropped their group coverage and sent employees to shop on the marketplace for a plan. Some gave money to do so. However, the past three years, carriers nationwide have been passing along 30%, 50% and 80% rate increases to individuals. (Just this week the marketplace published expected rate increases for carriers, and Illinoisans can expect another hefty increase from Blue Cross and Blue Shield of Illinois, some as much as 35%. More info to come on this topic.)

The interesting thing is that small group plans must abide by the same regulations as individual policies. They are required to offer the 10 essential health benefits, offer 'metal' level coverage, and are subject to the community ratings with the 3 to 1 age ratios. (From the youngest insured to the oldest, there cannot be more than a three- times premium difference. Proposed legislation is trying to make this 5 to 1 to allow younger people to pay less than under current rules.) Agents and industry consultants are hoping that the small group market is not going to be the next to suffer large increases as a result of this law. Time will tell! In the meantime, many small businesses are taking advantage of the much lower rates offered by groups (and in some cases for the IDENTICAL plan coverage as in the individual marketplace.)

If you would like a group quote, complete the request form or call our office - 630-279-1739!