Small-business owners will soon have another option when it comes to providing health insurance for employees. Filling what insurance agents term “a void in coverage,” the soon-to-be launched Benefitbay platform will function as a national health insurance exchange designed exclusively to help employers with less than 50 employees implement the federal Affordable Care Act. Offered by the 144 members of United Benefit Advisors LLC, the exchange will be the first of it’s kind in Missouri for small businesses, an alternative to the public health insurance exchanges in each state and to other private exchanges targeting large corporations.
“Small-business owners are wrestling with the federal changes in health insurance. They consider health insurance important to attracting and keeping good employees,” said Dan Ruggeri, a member of Springfield-based Employee Benefit Design LLC and president of the new EBD Benefitbay LLC. “The exchange will give employees leverage to get the best policy and employers more control over benefit costs.”
While small businesses are not required to provide coverage, most do. With uncertainly in 2014, local officials say things are shaping up for potential steep benefit cost increases.
“Insurance companies haven’t released health care premiums for employer groups for the coming year yet, but everyone is in fear mode with ‘Obamacare,’ so you can bet there is going to be an increase,” said Darren Coffman, president of Springfield-based Benefits Unlimited Inc. “Providers have to plan for the unexpected. The unexpected for them translates into more dollars for you.”
BenefitbayAccording to Indianapolis, Ind.-based UBA, Benefitbay will allow small and mid-size businesses to offer large company plan designs by pulling together national insurance carriers for medical and ancillary benefits, including dental and life insurance.
As the only local member firm of UBA, EBD has exclusive marketing rights to the new exchange in Missouri, outside of St. Louis and Kansas City, when it launches Nov. 1.
“Benefitbay will be single-source billing for employers, but offer multiple exchange options for employees,” Ruggeri said. “Rather than offer one plan for employees, there is a choice. Theoretically, each employee can be on a different plan, a plan that fits him or her, one could be with Cox, another with Mercy.”
Ruggeri said employers that take part in Benefitbay will drop group health insurance and pay each worker an amount of money to be used toward the employee’s personal benefit plan. Employees then register with Benefitbay, answer questions about their health and medical situation, and the online system provides three plan options. The system also will allow employees to visit the federal exchange to compare policies and determine if they qualify for a federal subsidy.
“Employees can accept a plan and pay monthly premiums with pretax dollars, the same as on their current group plan,” Ruggeri said. “A plan will cost X amount, the employer will pay Y amount and the remainder of the balance will automatically be divided up over the employees’ paychecks as before.”
The exchange will operate similar to Fortune 1000 company exchanges, leveraging the power of group purchasing for better rates, Ruggeri said. Currently, carriers such as Humana, Anthem, UnitedHealthcare and Coventry Health are signed on with Benefitbay, which Ruggeri said has taken about 18 months and $3 million to set up. He declined to disclose EBD’s investment in the new system.
“Big companies have similar options for employees, but there was a void for small-business owners,” he said. “This fills that void.”
Ruggeri said EBD has about 400 potential business clients that can take advantage of the new system when enrollment begins Nov. 1. Those clients would join hundreds of thousands of UBA clients nationwide, he said.
Early renewalWith open enrollment on the federal exchange beginning Oct. 1, employers are already looking toward 2014 plans and beginning to calculate potential premium increases.
Annual premiums for employer-sponsored family health coverage reached $16,351 this year, up 4 percent from last year, with workers on average paying $4,565 toward the cost of their coverage, according to the Kaiser Family Foundation/Health Research & Educational Trust 2013 Employer Health Benefits Survey released Aug. 20. During the same period, workers’ wages and general inflation were up 1.8 percent and 1.1 percent, respectively.
According to the survey, 2013’s rise in premiums remains moderate by historical standards. Since 2003, premiums have increased 80 percent, nearly three times as fast as wages, up 31 percent, and inflation, up 27 percent, during the same period.
Benefits Unlimited’s Coffman said fear of the unknown is a motivating factor in potential premium increases for 2014, prompting agencies to offer early renewals for clients.
“It’s really a multifaceted approach that will allow carriers to keep clients for another year and allow employers to avoid the mess coming down the pike,” he said. “Renewing now allows you to lock in rates for 2014, a big motivator for people who fear a sizable rate increase.”
Coffman said most small-group early renewal offers have been in the zero to 20 percent premium increase range, noting UnitedHealthcare seems to be the leader in zero-percent early renewal offers. Anyone without health insurance as of Jan. 1, 2014, will incur a fine.
“I have heard all sorts of rumors about plans jumping 50 percent or even doubling,” he said. “For most, that is not going to be the case, but for some it is highly possible.”
Coffman said under the ACA, in any given group the oldest person can only be charged three times more than the youngest. With no restrictions for pre-existing conditions, senior citizen’s plans are high, causing health insurance plans for younger residents to jump.
“In theory, it should balance each other out and eliminate very expensive plans. However, for a young male, he could see premiums double because of that balancing effect,” he said.[[In-content Ad]]
