It’s no surprise that many business owners are responding to continued rate increases with their feet.
San Francisco, CA (PRWEB) November 14, 2014
An unprecedented number of employers stopped offering group health benefits this year, according to a recent survey of over 1,000 insurance brokers conducted by Benefitter. In 2014 alone, more than 3 out of 4 brokers had employer clients who dropped health coverage and instructed their employees to purchase their own insurance on the public exchange. Early signs indicate this trend may only accelerate in 2015, as 17% of brokers expect at least 25% of their clients to drop coverage in the coming year.
"As we enter open enrollment for the public market, it's becoming more apparent that individual rates are often much more affordable than group rates. It’s no surprise that many business owners are responding to continued group rate increases with their feet," says Benefitter CEO, Brian Poger.
Most employers received their premium increases for 2015 group plans in the last few weeks. For brokers, delivering these rate increases often meant being the bearer of bad news. In some cases, premium costs more the doubled for employers, and more than 1/3 of brokers observed at least one rate increases that surpassed 60%.
In years past, increases of this magnitude were unheard of, but in today’s turbulent market, they seem to have become commonplace. Nearly three-quarters of brokers saw premium increases for small and mid-sized businesses that on average were in the "double-digits", that is, more than 10% higher than 2014’s rates. These rate increases contrast sharply with individual market rates, which are seeing a nominal rise of 3-5%, according to a recent analysis by PricewaterhouseCoopers.
"Double digit rate increases will severely impact small businesses. With the economy in its current state, most of my clients are already struggling to get by," explained one broker who took the survey. Another said, "Every small employer I work with is scared to death about their healthcare costs. They are running out of options."
Poger explained that there may indeed be hope for some small businesses. "For employers fed-up with their group premiums, the individual market can be a great option. It’s a win-win for both employers and employees, since premium-tax-credits are so generous." Benefitter supports employers who wish to make a transition from group to individual health insurance by helping to quantify the financial opportunity, by creating a compensation model to help employees maintain health insurance, and by supporting a seamless employee transition and enrollment process.