Apples To Oranges? Try Rotten Bananas

Fourth quarter GRANDMOTHERED small employer health insurance renewals have been rolling out. Many of them here in Ohio are in the 7%-15% range with few exceptions. These aren't easy for employers to swallow. Until I show them the ACA compliant alternatives.

Benefits are Apples to Oranges

Strict actuarial value guidelines are causing plans to be canceled. The plans replacing them must have a more cookie cutter benefit structure. There is little to no room for creativity or innovation from the insurance companies as they are bound by these new rules. The new benefits have different copays, deductibles, maximum out-of-pocket limits (MOOP), prescription drug coverage, and provider networks.

For most ESI plans the benefits are a reduction from what they were. Supporters won't tell us this. Instead they point to the fact that plans must now cover a few "new" benefits that impact a small portion of our population.

Rates, well...they are Rotten Bananas

Whoever believes that "rate shock" isn't going to occur hasn't spent a day in the trenches of health insurance. This is because ACA compliant plans must follow community rating guidelines. Regardless of health status everyone's rates must be the same (exceptions: age, tobacco use, location). If you have a vibrant healthy workforce congratulations. You are now subsidizing the unhealthy workforce.

Kudos to the companies who found savings through community rating. These folks all made the transition last year when they had an advantage. Note that we didn't hear very much cheerleading from this group because it was extremely small. How many small businesses do you know who went to ACA compliant plans and said "This is GREAT!!!"?

Fortunately here in Ohio the Legislature, Department of Insurance, and insurance companies took advantage of our weak-kneed President's "If you like your current plan" transitional relief gesture. For the short term my clients and other small businesses have the ability to renew their old plans for a couple more years. This is comparable to putting a Band-Aid on a jugular wound.

When the ACA option is looking at lesser benefits and a 50% or more increase it doesn't matter if my client likes their current plan or not, they are definitely keeping it.