2016 Healthcare Premium Increases, Are You Prepared?
By: Mary Thompson, Capstone Brokerage President, October 20, 2015
Many Small business and individuals are noticing a common occurrence for health insurance premiums for 2016. An overall increase in premium is expected. It has been speculated that rate increases were coming down across the board since the passing of the Affordable Care Act. In 2016 the speculation is proving to be a reality for many.
Nearly 90% of employers are facing premium increases this year, of that ¼ are seeing double digit rate increases. Many businesses are simply shocked by the increase. Our personal clients, on average, are experiencing rate increases of 8-12%. Many small businesses are forced to get creative with how to save money and remain in compliance with the Affordable Care Act because they simply can’t afford the rate increases. There are ways to help offset the increase in premium for 2016. It is important now more then ever to shop your group insurance needs to other carriers and plans at renewal. Stay in contact with your benefits consultant or insurance broker and be forthcoming with them about your concerns with your coverage.
Many small businesses are faced with another decision with how to contribute to their employee benefits package. There are two options; a fixed amount of contribution for each employee or a percentage of benefits contribution. There are benefits to both methods, for both the employees and the employers.
By setting a fixed amount of contribution, employers know exactly what their cost will be, however it can increase out of pocket cost more for employees. Especially those that are in a higher age bracket, as these policies tend to cost more due to the new rating system based on age under the Affordable Care Act. This may seem unfair to the employees.
Using a percentage of benefits contribution for each employee may seem fair to employees. However, it is harder to estimate employer cost. It may also increase the cost for employers and may be difficult to decide on a percentage to contribute.
Either way the employer will feel the increase although changing the contribution method is another way to help ease the cost of rate increases for the employer.
The state exchange and individual market can also expect premium increases across the board. Health insurance companies around the country are seeking rate increases of 20 to 40 percent, with some being even more. The reason many are citing is that customers who obtained insurance under the Affordable Care Act are “sicker” then expected. On Average, it is expected that the policies purchased from the public exchange under the Affordable Care Act will have some form of increased premium.
In Nevada, carriers have requested increases from 10-89%. One example is Humana Insurance Company which requested an increase of 10.11% and was granted that increase. Not all carriers, however, are gaining approval for the requested increase. For example Aetna Health Inc. (a PA Corp) requested an increase of 15.8% but was only granted 2.6%. In some cases the carriers are even receiving higher then requested increases; take Time Insurance Company which requested and increase of 22.98% but was instead granted a 24% increase.
Consumers can Visit Healthcare.gov to look up each carriers requested rate as well as check the status of the rate increase decision.
