The Affordable Care Act (ACA) has created a new hero – the small group insurance broker. He or she is one of the few who has complete familiarity with the various plans under Obamacare. These new plans —which are radically different from the old ones— will probably raise your premiums.
Now is the time to research these plans, if you haven’t already converted to one of them. If you have a company with 50 to 99 employees, you are lucky, since the deadline for these companies was just moved back once again in April. Your employees don’t have to be enrolled in an ACA-compliant plan until 2016. But larger companies must move faster. They must sign up this year to enroll employees in 2014. Companies with under 50 full time equivalent employees don’t have to conform to the “employer mandate,” but their new plans must still be ACA-compliant.
It’s a temptation to try to structure your new plan yourself from all the information you have read. That may not be a good idea.
Why shouldn’t you select your plan yourself? It’s really a question of making sure you select from a full range of options and get the best plan possible. You may have access to plenty of information. For instance, the Federal Government’s company portal for small businesses, called SHOP, is now up online. But it may not have as many choices for you as you would find going straight to a broker.
A number of brokers found this out last fall. At that time, the federal portal call SHOP was open, but you had to sign up by mail if you used it. What brokers found out researching plans in New Jersey through SHOP was surprising. Adam Wax, a broker with KRA Insurance Agency in Springfield, NJ, was taken aback to find that NJ group insurers were offering far fewer options through SHOP than they were when clients bought directly. So he knew where to find the most options for his clients — by going directly to the three NJ insurers with group plans.
With Premiums Rising, ACA Knowledge Is Key
Last fall Wax made another discovery. In the past, NJ companies could expect annual increases of 8% to 10%. But with ObamaCare on the horizon, his clients were getting hit with 35% to 50% increases. The only companies with smaller increases were those that already had benefits-rich programs with high deductibles. Although he was researching small group plans, he suspected that larger companies will experience the same challenges when they convert.
Though your broker has the expertise, it doesn’t mean you shouldn’t inform yourself about the ACA. Here’s how to gain a deeper understanding of the various plan choices, given your particular workforce, even before you start the conversation with your broker:
Get an early start. Start the evaluation process four or five months before your renewal date, so you will not be faced with time pressures or surprises.
Check out online resources. Most state banking and/or insurance departments have posted Questions and Answers on how the ACA works. In New Jersey, you can find an online Small Employer Health Benefits Program Buyers Guide. If you run a larger company, with 50 or more employees, your company is subject to the "employer mandate". A good resource for you is the Obamacare Facts website.
Review insurers’ ACA web pages. Each state has a certain number of insurers that offer both large and small-group medical plans. In New Jersey, for instance, there are three. These companies have gone to great lengths to provide accurate information for customers, and much it is on the web. One of the best information sources isthe Horizon Blue Cross/Blue Shield website.
Talk to a qualified broker. Finally, talk to your broker about specific plans. Before you begin, make sure your broker is familiar with ACA compliance for your type of plan - small group or large. Not every broker handles both markets. So if you fall into the small group category, ask how many small group clients he or she handles and has converted. You need to work with someone who understands ACA’s impact on various aspects of your business.
Difficult Choices for Employers
Even after all this research, you may still be puzzled by choices. The ACA does not automatically lower premiums and expand benefits for small-group employers. In fact, the opposite seems to be true. In many cases the increase in premiums is large, forcing you to make difficult choices. As one of my clients commented recently, “Now I may have to choose between offering medical insurance or giving my employees raises.”
Though CEOs know that a good medical plan is a strong enticement when it comes to hiring and keeping good workers – and no one has reported medium-sized companies rushing to drop their medical plans – sooner or later, something’s got to give. In the end, ACA may affect how you structure your compensation plans.