Early plan renewal helped firms delay premium increases, ACA compliance
The Affordable Care Act (ACA) is often credited with contributing to the recent slowdown in healthcare cost increases by helping millions of Americans obtain health insurance. A recent United Benefit Advisors (UBA) survey found that delaying the impact of the ACA might also be part of the reason why.
UBA surveyed nearly 10,000 employers who sponsor more than 16,000 health plans. The group saw a 322 percent increase in the number of plans that offered early renewal at the end of 2013 compared to 2012. Early renewal allowed these companies to delay the onset of many provisions of the ACA until Dec. 1, 2014.
The vast majority of the firms that did this were businesses with fewer than 100 employees; these are also the companies now coping with the employer mandate to provide insurance to all employees as of Jan. 1, FierceHealthPayer previously reported.
It remains to be seen how the delayed onset of the ACA will affect rate trends, UBA said. In states that did not allow this type of renewal, though, small employers face premium rate increases of 30 to 160 percent.
The UBA survey included three other points worth noting:
- Government health insurance plans are the least expensive for employees, while those in the construction and service industries are most costly for employees. A UBA statement pointed out that workers in these industries tend to be younger and value higher wages over lower healthcare costs.
- UBA also found that insurance coverage for part-timers is rare. Less than 10 percent of companies provide coverage to those working fewer than 30 hours per week, and nearly one in four insurance plans require employees to work more than 30 hours per week to qualify for medical coverage. The latter type of plan does not comply with the ACA, which defines the full-time work week as 30 hours, though the majority of Americans support a Republican effort to change this definition to 40 hours.
- Finally, plans are most costly in the Northeast region of the United States, at nearly $11,000 per employee. These plans typically have lower deductibles and higher in-network coinsurance, UBA said. In this region, employers need to be wary of the Cadillac tax, which kicks in when individual plans $10,200 and family plans exceed $27,500.
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