More Changes Coming for Small Group Health Insurance in 2016
Employers’ Coalition for Healthcare Inc.
June 02, 2015
By Brian Thede
In today’s complex and ever-changing health care climate, each year seems to bring about new regulatory and market challenges for the business owner … and, 2016 will be no different.
The definition of “small group” in regard to business health insurance is changing next year, affecting many employers and employees. Prior to 2016, groups with up to 50 employees were considered small, requiring them to follow a certain set of rules and regulations, including those related to essential health benefits, actuarial value and premium rating restrictions.
For 2016, the maximum number of employees for a small group will increase to 100. As businesses with 51-100 employees renew or purchase new coverage, they will face more restrictive rating rules than before. This will have an effect on relative premiums for groups, increasing for those that are younger/healthier and reducing for older/sicker workers.
Companies with 51-100 employees will also be subject to the shared responsibility provisions in 2016 that already apply to large groups with over 100 employees. Under these rules, employers will face penalties if they have employees who obtain subsidized coverage in an exchange or don’t offer coverage that meets certain value and affordability requirements.
Insurance providers are preparing for the next renewal cycle with products that are designed to help keep costs down with networks that are tiered or narrower, private exchange options, defined contribution models, health savings options, and more.
Many employers are also considering new plans that will be coming on the market in 2016 to self-insure. Since self-insured health plans are not subject to ACA health insurance fees or state premium taxes and are exempt from rating rules and benefit requirements, they can be more flexible regarding coverage and design, and their costs can more directly reflect their actual claims.
Typically, self-insurance has been more prevalent among larger firms, but the availability of new plans with level premiums and “stop-loss” provisions are expected to become a more viable and less risky option for small employers.
For businesses that are concerned or unsure of how to proceed regarding group health insurance, whether it’s fully insured or self-funded, help is available. Insurance brokers are able to provide the assistance necessary to determine the best employee benefit options for large and small businesses.
For more information about group health insurance for businesses, please contact your licensed, local insurance broker or the Employers’ Coalition for Healthcare Inc. (ECHI), at 309-829-1185. ECHI is located in the McLean County Chamber of Commerce office at 2203 East Empire St. in Bloomington.
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