The highly anticipated U.S. Supreme Court decision on the Affordable Care Act created certainty around the law. The issue under question was one of financing, regarding the 36 states that have opted to forgo setting up their own state health insurance exchanges and using the federal exchanges. The ruling clarifies that the residents of those states are entitled to take advantage of the available premium tax credit if they qualify. The subsidy structure already in place was affirmed, therefore the law has not changed, but the future has become clearer.
Within a day or two of the Supreme Court’s ACA decision, Aetna announced its plans to purchase Humana for $37 billion. Centene announced it is buying HealthNet, and Aetna and Cigna are in merger-related talks. It seems evident that in the wake of the Supreme Court decision comes consolidation. The health insurance marketplace is shrinking to fewer providers, leaving less choice for individuals and organizations. The industry is lining up toward a two-tiered system: programs with funding coming from the Federal government and programs for those fortunate to have a job that offers group health benefits. The private sector will have a role in this new world, but it will change.
As an employer, what does this changing landscape mean to you? According to a recent New York Times article, health care insurance providers will be seeking a double-digit rate increase for 2016, possibly between 20% and 40%. Federal mandates requiring companies who employ 50 or more full-time workers to provide group health insurance will kick in January 1, 2016. These mandates and associated penalties are already in affect for 100+ employers.
1) Join the BAGI Group Health Insurance Program
The BAGI program takes advantage of the power of pooling resources. Joining together the employees of other BAGI builder members allows an even spread of risk, less rate volatility, and a potentially more affordable option to the double-digit rate increases we expect for 2016. As the sole administrator of the program, Wharton Insurance is in a unique position to help you take advantage of this option. Click here for more information on the BAGI program.
2) Continue with Your Current Group Health Benefits Plan
As long as you do not make any changes to your current plans, the federal government is allowing a “Transition” renewal year in which employers can keep their current group health insurance plan. Electing this course of action means accepting your provider’s rate increase. A knowledgeable insurance broker can help guide you through your options, helping you weigh the pros and cons of keeping your plan.
3) Eliminate Your Group Health Benefits
If you employ under 50 full-time workers, you can elect to not offer group health insurance benefits and send your employees to the marketplace. Individuals must have insurance or be subject to a penalty, so many employers who take this option often gross up employees wages to help offset the costs of health insurance. For these situations, Wharton Insurance and Financial Services offers access to GRAVIE, a private healthcare exchange that makes the process of finding individual plans less painful.
If you employ over 50 full-time employees you can also choose to eliminate your group health benefits, however you will be subject to a fine in 2016. Click here to read more about the 2015 formulas set for 100+ employers to get a gauge of what the fines could look like.
We at Wharton Insurance and Financial Services monitor the health insurance industry closely, and can offer helpful insights on the best option for your business. Send us an email or give us a call at 317.663.4138 to schedule an appointment.