USA Today: Small businesses scrambling to renew health plans ahead of more cost hikes
posted at 3:21 pm on November 4, 2013 by Erika Johnsen
The Obama administration has been generally and glibly adamant in their talking point insisting that the “Affordable” Care Act’s is in fact a major boon to the economy and not the uncertainty-inducing scourge of jobs and small businesses that critics claim it is — but they might want to tell that to these guys. Last week, the National Federation of Independent Businesses released a study reporting that a full two-thirds of small businesses are already paying more for insurance premiums per employee between 2012 and 2013, and owners’ attempts to shield their workers from the effects are not coming cheaply. The Washington Times reports:
The pro-business nonprofit group found in a survey of almost 1,000 small businesses that owners pay an average of $6,721 a month, or $80,652 a year, to provide health care insurance to their employees. …
Two-thirds of employees pay the same price for deductibles as they did last year, but 28 percent pay more, and only four percent pay less.
Owners are also covering higher insurance premiums, with 66 percent of small businesses cutting into profits to pay for cost increases, while 40 percent delayed, postponed or eliminated business investment to make room for health insurance. Nearly half of employers also sought to increase productivity to pay for the costs.
The authors of the study say the Obama administration’s flawed rollout of the Affordable Care Act is part of the problem.
“The law’s authors were primarily focused on increasing insurance coverage and expanding benefits — they gave little or no consideration to concerns about cost or who would foot the bill,” said William J. Dennis, the author of the study and a senior fellow at the NFIB Research Foundation.
And in the meantime, companies are bracing for impact and scrambling to re-up their current health plans before the January 1st deadline after which new premium prices are bound to start going up even more — although many companies are still waiting to hear what rates they’ll be facing in 2014, because their concerns are getting put on the back-burner while state insurance commissioners are still scrambling with tasks related to ACA compliance. Via USA Today:
Thousands of small businesses around the U.S. are racing to renew their health insurance policies Dec. 1 to beat large premium increases their brokers say will hit them Jan. 1 when the Affordable Care Act takes full effect.
Some health insurance brokers also say 2014 may be the last year many of the companies even offer health insurance.
Insurance brokers from several states told USA TODAY that 60% to 80% of their small-business clients — those with 50 employees or fewer — are renewing their policies early to skirt the law. Companies with more than 50 employees aren’t allowed to adjust their renewal dates.
Some “anecdotal” examples, ahem:
–In Louisville, Ky., broker Matt Schwartz says about 60% of his small-business clients are renewing Dec. 1. He estimates the new insurance rating rules will increase healthy younger companies’ group rates anywhere from 30% to 100%. His early-renewal clients hope at least to delay that for up to 11 months, he says. After that, “clearly, some of these small businesses will drop their insurance,” he says. .
–In Hampstead, N.H., Tom Harte says it would benefit about half of his approximately 200 small-business clients to renew on Dec. 1. It was an easy decision for one company that was facing a 3% premium increase in December vs. a 20% one in January. “I’m 100% confident some healthy young groups’ premiums in other states are doubling,” he says. …
And etcetera. But don’t worry — I’m sure this will all turn out to be for Americans’ economic benefit in the long run. …Er, somehow. Maybe. Probably not.