Companies acting to avoid uncertainties of health law costs, benefits
With the start of what promises to be a historic enrollment season as 2014 health plans are rolled out in compliance with health care reform, brokers in the North Bay said scores of employers are resorting to early renewal, in an attempt to partially delay possible impacts of ObamaCare for at least a year.
Employers with 50 or fewer workers who enroll before 2014 can expect less significant changes in their rates, which by some estimates could increase between 5 percent and 30 percent, versus around 10 percent for those who enroll with carriers earlier for plans that take effect on Dec. 1, rather than Jan. 1, according to Victor McKnight, principle with EPIC Insurance Brokers in Petaluma.
“A lot of groups are choosing to renew early,” he said. “Most of the carriers have given the option to renew early, and many have taken advantage of that and will avoid the increases.”
The cut-off dates for early renewal vary from one carrier to the next.
Shane Rogers, of Rogers & Young Insurance Services in Windsor, said his entire team has been working on early renewals for several weeks.
“We basically had to quote our entire book of business for 12/1 because, for most carriers, if [the client] renewed on July 1 and afterword, there’s not as big of a rate impact,” he said.
Michael Parr, an employee benefits broker for Northwest Insurance Agency, similarly said clients are rushing to renew early.
“Most of my clients are taking advantage of the early 12/1 group health insurance renewal for a zero percent or minimal increase to add months onto their contract, and to keep their current plan longer as all of the carrier’s plans are changing next year” due to the Affordable Care Act, he said.
On Oct. 1, the state’s online health benefits exchange established under the Affordable Care Act, called Covered California, will unveil full rates for its much-anticipated Small Business Health Options Program, or SHOP, for employers with 50 or fewer workers. While federally run SHOP programs across states that chose not to set up exchange have been delayed for a month, officials from Covered California have repeatedly assured both small business and individuals that it would be ready to enroll consumers beginning Tuesday for coverage effective Jan. 1, 2014.
In late August, Covered California released some preliminary rates for the SHOP program. For the North Bay, region 2 out of 19, four carriers will offer both SHOP plans and individual plans: Kaiser Permanente, Health Net of California, Western Health Advantage and Blue Shield of California.
But many small employers with fewer than 50 workers are opting for renewal to take effect on Dec. 1, thereby avoiding the plan changes and cost increases that will arrive at their renewal in 2014. Comparing the plans may be difficult because they differ in co-pays, deductibles and out-of-pocket maximums, but employers are nevertheless finding it advantageous to renew early, according to brokers.
“It’s not just the rate increases; it’s also the benefits are going to be different,” said Bud Martin, senior vice president of employee benefits for Wells Fargo Insurance Services in Petaluma.
Employers taking advantage of early renewals will have a slight respite this year, but come renewal time in 2014, all plans will have to meet new guidelines under the Affordable Care Act.
“I’d say it’s the uncertainty and that some of the employers liked the plans they currently have and wanted to keep them,” Mr. McKnight said on why smaller employers view early renewal as an attractive option. ”The first year, there won’t be as many pains and they get to see how well this thing plays out.”
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