How Can Employers Adjust to Small Group Health Plan Cuts?

Oct 19, 2017
| Dan Sheridan
Employers Adjust to Small Group Health Plan Cuts

Healthcare has been one of the most talked about and debated topics in the United States this year. Due to the uncertainty that has arisen, especially around the Affordable Care Act (ACA), health insurance providers have had to make decisions that will have widespread effects throughout the market.

One area that is starting to be the most impacted is the small group health plan market. With healthcare costs rising to record highs, insurance companies are starting to reduce the number of small group plans they offer, with some possibly even exiting the market all-together. This is causing a lot of disruption for small and medium sized businesses (SMBs).

With some of these changes already taking place and more on the horizon for 2018, small group employers will be forced (if they have not been so already) to seek alternative options if their insurance plans are changing. But even those who have yet to be impacted should be taking note and keeping up-to-date with the latest news from around the healthcare and health insurance industries.

What Should Employers Know as 2018 Approaches?

With all that is happening in the healthcare market, there is a lot for employers to keep up with. And while uncertainty surrounding the Affordable Care Act is getting the most news coverage, it’s critical for small employers to know what is happening with the small group health insurance market.

So far in 2017, we have already seen some large insurers exit the small group market in certain states. With more of these decisions on the horizon for 2018 and beyond, SMBs and their employees could be forced to switch health insurance providers.

Additionally, some insurers have instead decided to stay in the small group health market, but offer significantly less plan options than in the past. This, too, is forcing small employers to alter their health insurance offerings, as fewer plans are available to choose from when staying with a current provider.

Lastly, with some insurers exiting the small group market completely and others reducing their plan offerings, substantial health insurance premium increases are on the horizon for 2018. Rising insurance costs are causing employers to re-evaluate their healthcare benefits, with some even deciding to stop offering health insurance coverage to their employees.

This disruption presents small businesses an opportunity to seek out alternative, cost-effective solutions for their insurance benefits needs.

How Do These Changes Impact Small Businesses?

The elimination of small group health plans is a new challenge facing small businesses. Instead of just worrying about price increases, these companies now have to prepare in case their insurance plan gets eliminated or their carrier withdraws from the market, potentially leaving a small business without a healthcare plan.

One thing small businesses should do is stay on top of the latest news surrounding the healthcare industry and market. Understanding what is going on and any potential impacts can help a business leader make an action plan to avoid any major disruptions to the business.

In addition to the news, staying in contact with and speaking to your current health insurance broker can be extremely valuable. If upcoming changes may impact your health plans, speaking with your insurance broker can help you navigate through the decision-making process.

Another option available to employers is to speak with their broker about alternative solutions and healthcare providers. Some businesses want to avoid healthcare coverage disruptions for their employees and families, and are fearful of coverage and network changes. However, you may find cheaper alternatives that may make the most sense for your company.

Lastly, there are other HR alternatives for small and medium-sized businesses to explore. HR outsourcing companies (like a PEO for example) help their clients gain access to large-group level health insurance and employee benefits, all while saving money on HR administration costs. This may not be an option for every small business, but for some – especially companies in certain industries – it’s another option that can help overcome healthcare challenges.

Stay Informed About Changes for Small Group Health Plans

Over the last several months, a few big-name insurance providers have announced that they will eliminate some of their small group health plans in 2018. This a trend that appears to only be growing as we get closer to the end of the year and beyond. The uncertainty around health insurance can be stressful and frightening for small businesses, but staying up-to-date with the latest news and seeking help when needed can help your business stay prepared should a future change impact your company.

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