Small Business Employee Benefits and HR Blog The State of Health Insurance Cost in 2017 - Capstone Brokerage

By: Lindsay Wissman (Zane Benefits) January 2017

Health insurance costs have increased sharply in 2017. The effects of the increases have been widespread, reaching both group health policies and affecting costs on the individual market. If you didn’t encounter rate hikes yourself, you probably know someone who did.

The Kaiser Family Foundation (KFF) and the National Conference of State Legislatures (NCSL) released reports in the fourth quarter detailing the 2017 rate increases on the Affordable Care Act (ACA) Marketplace and their effect on American households.

Rising Health Insurance Costs

Health insurance costs have increased steadily for the past ten years. In 2016, insurance premiums for family policies reached an average of $18,142, up about 3 percent from 2015. In 2017, the average increase was a whopping 25 percent. Those qualified for subsidies through the Marketplace were more fortunate, experiencing about a 4 percent increase.

Variants Across the Country

The ACA Marketplace is broken down into county, allowing insurance companies to offer policies only in portions of states rather than the entire area. Because of the 2017 decrease in the number of policies offered by Aetna, Humana, and UnitedHealth, many counties across the United States have limited options—as few as one, while others have upwards of five companies to choose from.

Health insurance cost varied as greatly as the number of insurance carriers did. While the average increase may have been 25 percent, the outliers were extreme. Marketplace enrollees in Indianapolis, Indiana saw a 4 percent decrease in their premiums (down about $8/month), while those in Phoenix, Arizona, suffered a shocking 145 percent increase (up about $300/month).

The Small Business HRA

If you own a small business with employees who are suffering from these 2017 rate increases, there is still time to help. As of January 1, businesses with fewer than 50 full-time-equivalent employees can now offer Small Business Health Reimbursement Arrangements (HRAs) to help offset health insurance costs.

The Small Business HRA provides your employees with flexibility to choose a health insurance policy that fits their needs, while you get to fix your monthly insurance costs without fear of unexpected price hikes. In addition, allocated funds that go unused do not roll over, which means you get to keep what’s left. By providing employees with tax-free money toward their health insurance costs through a Small Business HRA, you help protect them against rising costs.


Many people are experiencing increases in their health insurance costs in 2017, but small businesses have a new option to help cushion the blow to their employees. A Small Business HRA is a cost-effective way to provide benefits without carrying insurance. Be sure to remind your employees that there is still time to sign up for 2017 coverage. Open enrollment ends on Tuesday, January 31.

Zane Benefits