30 Second Insurance Tips©

Tip #335- Where Did They Get Those Numbers?

I just read an article in a local business publication that reported small (i.e., 2-50 employees) group health insurance premium increases have been averaging 4.9%.
Time for a reality check.
Approximately two thirds of all small groups are considered “grand-mothered’ health plans under the Affordable Care Act “transitional relief” rules. Most of those groups renew December 1 or January 1.
As I look at a block of December 1 renewals, I see one for +2.8%. Another for +3.4%. But then there’s a +25.9% and a +27.8%.
The average is closer to 15%.
We expect insurers will start releasing their January 1 premium increases later this week. Will they be < 5%?
Only if you believe everything you read in the papers!
Here’s a little quiz. Say you have 35 full time employees but only 19 are covered under your health plan. You also have 16 part time (< 30 hrs/wk) employees. Are you considered a small group? Answer: No, because your Average Total Number of Employees (ATNE) is greater than 50. That’s important if you got one of those +20% increases because “large” groups hoping to switch carriers are subject to medical underwriting.