ACA Costs: Can Employer Groups Expect Increased Premiums, Deductibles?

Chances are, you or your clients have recently read the Manhattan Institute analysis of the individual market premiums. This report purports that medical premiums in the individual space will increase significantly— to the tune of 41 percent.

As an insurance broker, you’re likely wondering what this means to your business. And with these reported increased premiums for the individual ACA shopper, your clients and employer groups might be asking you what the impact will look like when they go to enroll their employees in SHOP products. Unfortunately, there isn’t a data-rich report available for the SHOP market at this stage, just a lot of speculation. Since we lack hard data, let’s take a look into the fictitious ACA crystal ball and weigh out the scenarios of a similar SHOP increase, as well as play out a few possible solutions.

What if SHOP products experience a similar price increase to the individual market? What can insurance brokers do to offer employer groups affordable options?

• SHOP products must be offered on – as well as off – exchange. If you’re finding unaffordable SHOP options for your group clients, try leveraging your relationships with the carriers you’ve worked closely with in the past. They may have an ACA certified small group plan that keeps your clients in compliance and keeps costs down. Use your negotiating power to pass on savings to your customers. Keep in mind: Effective 2014, small businesses must purchase their insurance through the SHOP in order to receive the small business tax credit (available for groups with less than 25 employees).
• Leverage the buying power of private exchanges. Many private exchanges have ACA compliant plans and certified qualified dental plans (QDPs) for individual and small groups. Since private exchanges are gaining meteoric momentum in the market, they have some big buying power with insurance carriers. Shop around and see if private exchanges and health marketplaces offer more aggressive pricing for your SHOP clients. Plus, unlike the SHOP, employees can have more than one plan option. Not sure what to look for in a private exchange? We’ve got you covered.
• Negotiating rate guarantees for group policies can help keep costs at bay down the road.
• In 2015, you can offer multiple SHOP plans to your clients through the Health Insurance Exchange (HIX). Spreading the plan options can create more affordable options that appeal to the various needs of the employee group.

We cannot predict the Affordable Care Act’s future but as an insurance broker you can prepare for potential issues that could impact your clients and their employees. The best way to approach future impacts to the Affordable Care Act is to prepare, prepare, prepare. Think about the needs of your clients and consider how changes in the health reform might positively – or negatively – impact your employer groups. Create an action plan and strategize options to alleviate issues your groups and your business may face.