Many Business Owners Overpaying for Health Insurance by 40% - 60% (Small Business)

Written by Peg Reid.

Robert Slayton, of Robert Slayton & Associates, Naperville, reports, “My small business clients regularly report premium savings of 40-60%.”  For the same or better plan.  With additional savings and benefits to the business.

How do I save 40% - 60% on my Health Insurance Premiums?

His small business owner clients opened up a group health insurance plan.

Along with the lower premiums, small employee groups enjoy more choices, better choices and broader networks. 

If You’ve Ever Run Into one of these Problems? The Solution is Simple.

• ·         My employee said she would have to resign so she could get a job with health benefits.
• ·         I make too much to get a subsidy so my premiums are outrageous.
• ·         My employee would prefer to work for me full-time (and I’d love to have him) but he has to keep his other job because it offers a health plan.
• ·         My personal premiums are more than my mortgage payment!
• ·         My wife can’t see her doctor at Northwestern without being in an HMO (we want a PPO) with a PCP out of Winfield or St Charles.  We live in the city, a few blocks from Northwestern!
• ·         My twenty years of mammogram films are at Rush and now I have to go to someone who doesn’t know my history.

Can’t See Your Doctor? Can’t Go to the Hospital of Your Choice?

Were you frustrated that you couldn’t get access to the providers you wanted?  Small group PPO options include hospital systems such as Northwestern Medicine and NorthShore University Health System not widely available in the individual market or in the case of Rush University Medical Center, not at all. 

I Thought I Couldn’t Qualify?

The old rules around plan sponsorship which had caused small business owners to reject the idea out of hand have become more accommodating.   Participation requirements have largely been eliminated; businesses with as few as one employee are eligible with certain carriers, even if only the owner opts into the plan.  In a few cases, businesses with no employees can qualify to open a plan.  And the contribution requirement (which varies by carrier) is often dwarfed by the small business owner’s personal savings, savings to the business and gain in competitive advantage.  Corporation, S-Corp, LLC or sole proprietor can all be eligible.

Slayton himself was on an individual family health insurance plan paying $880/month.  His renewal was $1543/month - over $600/month more for the same coverage.  He opened a small group health insurance plan for his business covering only his family (his two employees aren't eligible as part-timers but even if they were, they would have waived group coverage as they have their own coverage) and the new cost was $839/month – less than his 2016 cost!  If he had wanted the larger network that included all of the doctors and hospitals, it would have been $1100/month, still significantly less than his current plan renewal.

I Thought I could only sign up during open enrollment?

You can start a group health plan at any time during the year.  You and your employees can drop your current plan if the group plan makes more sense.  The best part is that when you are looking for quality hires, you will be on a more level playing field with larger companies when it comes to recruitment and retention.   If you start your plan May 1^st, your rates are fixed until May of next year.  If you decide not to renew the plan next year, you will qualify for a special enrollment to return to individual coverage.

Contact Peg Reid at peg@slaytonins.com, 630-779-1144 x103, for a worksheet to estimate your savings. If Peg is out of the office, contact Robert Slayton at x101

Individual Health Insurance Rates Skyrocket for Health Exchange Market (healthcare.gov) for Illinois

I just got back from a professional association meeting where a person from the department of insurance was presenting. What he presented is grim at best (slides are from that presentation). Below is a preliminary cut. I don't have the actual rates available to quote (they are coming any day), but by the look of the items below, it will be worse than bad. See my analysis at the end.

1. Selection of insurance companies available is less. Seven counties have one company available.

2. Rates for the LOWEST Bronze Level plan are going up 10% - 60%.

3. Rates for the second lowest silver plan (for which subsidies are based upon) are going up 25% - 60%

4. Rates for the lowest Gold are going up 40% - 70% with several counties not offering any gold plans at all.

What does this mean?

1. If you receive a subsidy, you will be protected for a majority of the increase due to your subsidy being dramatically increased. You may still pay more money.

2. Your choices are dramatically curtailed. Your best option will most likely be an HMO plan. Most carriers are driving towards that eventuality as it is the only way that they feel they can break even. Pretty much BCBS of Illinois (in my opinion) will be the only game in town as a quality carrier with decent rates. Cigna is joining the market in a few areas, but I don't have specifics.

3. If you need multiple specialists from multiple medical groups or the teaching hospitals (e.g. Northwestern Memorial, or a Northshore Hospital). You may not be able to access them via the exchange and would have to consider either a direct policy or if you have your own business, you may qualify for coverage (you no longer need two employees on the plan, but you do either need to have a husband/wife partnership that filed that way last year or at least one W2 employee - whether full or part time) that will give you access to the larger PPO networks. Contact me for specific details.

4. If you don't receive a subsidy, going outside of the exchange may give you more choices. Harken is leaving the Exchange market, but is still around if you go directly to them.

5. Some of you reading this won't be able to afford ANYTHING. If you fall into this category, I have several non-insurance programs that will avoid the penalty and typically cost significantly less (1/2 to 1/5 the cost of insurance). They do cover your bills, but you need to agree to their principals. Some have holes in the plan that need to be filled with another product, but overall, something is better than nothing.

Use this link to schedule a 15 minute call to discuss your situation.

https://www.timetrade.com/book/XLKVK+

Robert Slayton

Options Limited for Health Insurance in 2017

If you buy individual health insurance (especially via healthcare.gov), your options WILL be limited this upcoming year.

Right now DuPage County (IL) has 4 options. Aetna, BCBS of IL, Coventry, and United Healthcare. BCBS and Coventry have PPO networks. In 2017, you will have BCBS and Cigna only as Aetna, Coventry, and United Healthcare pull out. Cigna will be an HMO. This means the ONLY PPO network available will be the Blue Choice PPO network via BCBS of IL (assuming they continue this plan, which I think they will). If you need a variety of specialists who are not in the same medical group, you will either have to pay out of pocket or change doctors.

Cook County won't be much better. You have 7 options, but 3 will be going away (see above). Harken Health (who currently has the best PPO network) will be changing the network to either a smaller PPO network or HMO (they haven't told me yet). In 2017, you will probably have Ambetter, BCBS of IL, Harken Health, Humana, and newcomer Cigna. The only two that would possibly have a PPO is BCBS of IL and Harken Health (see above).

Downstate will at least have Health Alliance (as of my writing this article) who offers a POS plan (less restrictive than an HMO, but not quite as flexible as a PPO) in addition to BCBS of IL.

BTW, I didn’t mention the premiums. Go to https://ratereview.healthcare.gov/ if you want to see how bad it is going to be.

To help people who can’t afford the cost, I have a new plan that is NOT insurance but is a cost sharing ministry that will be available to those who just can’t afford the new premiums. It avoids the penalty and has some holes, but something is better than going with nothing. If you want more information on this, contact me. The good news is that you can sign up at any time, but it does NOT cover any pre-existing conditions or medications other than generics. View this as a “last resort” plan.

http://www.bloomberg.com/news/articles/2016-08-19/choices-may-be-limited-for-obamacare-shoppers-avalere-says

Predicting Health Insurance Rates for 2016 in Illinois

Predicting Health Insurance Rates for 2016 in Illinois

By Robert Slayton

One good thing that came out of the Affordable Care Act is that any insurance company that is going to raise premiums more than 10 percent for individual or small group medical plans is required to file with the Federal Government. This information is made public so we can review it.
Unlike other states, Illinois has no authority to prevent the increases from being implemented as requested (this isn’t necessarily a bad thing, but just the way it is in Illinois). Based upon those rate increase requests, we have a pretty good idea of who will be the competitive players in the market for 2016.

BCBS of IL has requested increases from 12.83% to 38.24% for ACA plans. As a result, BCBS of IL is eliminating the Blue PPO (large PPO network) option in 2016 for ACA plans. All members on this plan will be migrated to the smaller Blue Choice network (which has about 40% of the doctors/hospitals as the larger network). This will impact approximately 173,000 people. Also expect BCBS to eliminate other plans that have been unprofitable.

If you are on a transitional plan, (plans written after 3/23/2010 to 12/31/2014) you may see increases of over 46%.

Coventry, Humana, and Health Alliance have also requested increases. If you look at the table below, it shows, generally, which increase impacts which plan. If you are on a subsidized plan, you will not see as dramatic of an increase if your income has stayed the same. Subsidies are based upon the second lowest silver plan. The assumption is that this plan will be more expensive in 2016 therefore providing you with a bigger subsidy. For everyone else, it will be a choice of paying the increase or keeping cable.

Aetna (who owns Coventry), Land of Lincoln Health, and IlliniCare are not listed as requesting a rate increase even though I’ve heard rumblings that some have. If we go with the assumption that they will increase rates less than 10%, then these will be some of the players who will win business away from BCBS.

One unknown is Land of Lincoln Health. I’ve had conversations with a board member who says the financials look good (doesn’t mean that they made a profit as it is difficult for any start up to make a profit in the first several years). If they continue to perform as they have, I’d say they will be the company most move to.

Expect all insurance companies to modify the plans they offer. We probably won’t know what these will look like until open enrollment begins on 11/1.

Below are the rates increase requests for ACA compliant plans.

For Transitional plans, here’s the rate table.