April 4, 2014
There is a storm coming for every small business in America – for your health insurance policies renewing for 2015. Aetna CEO Mark Bertolini was among the first to sound the alarm about the potential for rate shock on the Obamacare exchanges. In December 2012, he told investors that “in some markets,” individual-market premium increases “could go as high as 100 percent.” This past January, in an interview with CNBC, he asked, “are we going to get beat up because [next year’s premium increases will be] double-digit or are we just going to have to pull out of the program?”
WellPoint CEO Joseph Swedish has also recently stated that he would “not be surprised” to see “double digit” increases for 2015 rates. Insurers will begin filing their 2015 rates late this spring.
Other health industry officials tell the media that “Obamacare-related premiums will double in some parts of the country, countering claims made by the administration.” One insurer indicated that “his company expects to triple its rates next year on the Obamacare exchange.” Other insurers expect to see rate increases of about 20 to 40 percent, on average, throughout the country.
These developments point to another reason why associations turn to private health insurance and employee benefit marketplaces for their members. Employers need to rethink their approach to offering benefits, expand their benefits choices NOT limit them, and empower employees to make choices and become informed consumers.
What is an Association Private Health Insurance and Employee Benefits Marketplace?
It is an accident of World War II that we get insurance coverage from our employer, where the employer picks the one policy we all live with. That is called defined benefits, where the employer has defined what employees get for benefits.
The modern alternative is where employers create a budget that’s affordable for them — the employer creates a strategy — and allocates that budget among employees and lets the employees pick whatever they want in this robust marketplace that allows them to have control, personal accountability and the ability to make their own decisions. That is called defined contribution, where the employer defines the contribution to each employee and then the employee decides what benefits to buy. To enable an employee to make their own decisions they need a place in which to make their decisions – the Association Marketplace. Hence, your local broker needs to know how to transition an employer from the WWII defined benefits era to the 21st century defined contribution era using a marketplace.
Having a great marketplace for employers and employees starts with great technology to help people make those choices about their benefits with the help of an insurance professional. The private association health insurance and employee benefits marketplace has tremendous technology that compares plans, asks employees questions about their needs and advises them of their choices. In addition to the support of your broker in making these decisions, the marketplace has a 24 hr a day, 7 day a week, 365 day a year support for the marketplace itself.
In the insurance world the only constant is – change. Whether from the Affordable Care Act, state laws, tax issues like the new Health Insurance Tax that will add an average of $475 to the cost of your policies, ERISA and more, change is constant. A private, association health insurance and employee benefits marketplace puts the compliance tools and plan choices in your member’s hands to remove many of the burdens of managing a benefits program and empowers your employees to become informed consumers of their benefits.
Great employee benefit plans are not commodities, they are carefully planned with a professional using the powerful tools of a great private association marketplace.