Health insurance carriers have been exiting the Federal Exchange in unanticipated numbers, leaving many Obamacare participants concerned about the future. This opens the door for small businesses to attract and retain key employees with a competitive benefits package more than ever.
Why are insurance companies exiting Obamacare?
To understand how this is an opportunity for small businesses, let’s first explain why so many insurance companies are leaving the marketplace. Because Obamacare eliminates the opportunity for health insurance companies to discriminate (or deny coverage altogether) based on a health assessment, they have covered a higher percentage of people who are sicker, many of whom have been seeking out immediate health services once they’re enrolled.
The idea behind mandating coverage was to have healthy enrollees offset potential losses, but not as many healthy participants have enrolled as was anticipated. There have also been policy concerns with people entering and exiting health plans outside of the appropriate windows, which the HHS has been addressing. Overall, many insurance companies are scaling back from the individual market and focusing on the more profitable areas and plans that actually help their bottom line.
What will happen to individuals needing coverage?
Although health insurance companies are pulling out of the individual market, the individual mandate for each person to have insurance isn’t going away. This means that applicants are seeking an attractive benefits package at a higher priority more than ever because of their slim options elsewhere. Although the market is narrowing for individual coverage (it’s projected that 31% of U.S. counties will have only one insurance company participating in the Marketplace in 2017), many insurance companies still provide small and large group insurance coverage throughout the nation. These plans are not projected to go away because they spread the health risk among the entire workgroup, sustaining their profitability.
How can a small business benefit from insurance companies leaving Obamacare?
The exodus from Obamacare gives small businesses two options: go through the selection process of obtaining their own group health insurance policy, or partner with a Professional Employer Organization (PEO) such as Stratus.hr to provide all the employee benefits the PEO offers. Partnering with a PEO simplifies an employer’s life not only with benefit plan options, but also by handling all the critical administrative tasks that are necessary for a company to function but don’t really add to the core business, such as payroll, risk management, HR consulting, and benefits administration.
Because a PEO represents thousands of employees nationwide, it pools those employees together to get economies of scale pricing on health insurance, then passes along this “volume savings” to its smaller business clients. Those small businesses are then able to offer lower-cost, higher-quality, greater variety benefit plans to their employees, evening the playing field for small businesses to compete with large businesses in attracting and retaining key talent. Often a PEO offers far more benefit plan options than a small business can provide on its own, due simply to volume restrictions.
However, small businesses are encouraged to perform due diligence when selecting a PEO. Many PEOs provide large group health insurance plans and offer varying services, but no two PEOs have the same offerings and products. Like any business service, it’s a good idea to shop around.
Stratus.hr is a PEO that provides several large group health insurance options that are both affordable and Obamacare-compliant. Stratus.hr can also administer and broker whatever options in the market appeal most to the company, and offers creative benefits solutions to cater to individual employees’ needs. This includes college savings plans, supplemental plan options, retirement plans, flexible spending, dental, vision, and more. For more information about any insurance offering, please contact firstname.lastname@example.org.
- Aetna's Exit From Obamacare Constricts Insurance Choices – usnews.com
- Insurance Startup Oscar Quits Two Markets, Rethinks Obamacare Plans – Bloomberg.com
- United Healthcare to exit Obamacare exchanges in all but a ‘handful’ of states – washingtonpost.com
- Another blow to health care as Humana exits Utah individual marketplace – deseretnews.com
- Blue Cross, Health Net drop Affordable Care Act marketplace plans – azcentral.com