Nearly One-Third Of Companies Delayed Health Plan Renewal Date To December 2014


Thirty-two percent of employers delayed their health plan renewal date until December 1 to avoid rate increases, according to a recent survey from United Benefits Advisors (UBA). The number of employers delaying their renewal date until December 1 increased 322 percent from 2013 to 2014. Of the employers delaying the renewal date, 94 percent were small businesses with less than 100 employees.

The 2014 United Benefit Advisors Health Plan Survey, containing responses from nearly 10,000 employers, noted that based on current renewal rates coming in from carriers, in the states that did not allow renewal of pre-Patient Protection and Affordable Care Act (ACA) plans, many small employers are facing rate increases of 30 percent to 160 percent. Given that a number of states allowed pre-ACA plans to renew, delaying the effects even further, the full impact of the ACA is still largely unknown.

“We’re seeing little change in premium rates and employee benefit plans, and that’s because many employers renewed twice in 2013 to delay the effects of ACA,” said Carol Taylor, chairwoman of the UBA Client Compliance Solutions Committee. “In the category of employers with 50 or fewer employees, the results are staggering: in 2012, there were 507 employers with a December 1st renewal date. In December 2013, that number was over five times (412.4 percent) higher at 2,598 employers. This is going to have a ripple effect for years to come in the small group market.”

Les McPhearson, CEO of UBA noted, “This trend shows overwhelmingly that the full impact of ACA compliance and its effect on health insurance costs is still unknown, but paints a gray picture of what’s ahead for employers.”

Employee cost-sharing grows. UBA found that while employers have experienced modest cost increases recently (average annual cost per employee was $9,302 in 2013 versus $9,504 in 2014), employers continue to increase cost-sharing for employees. Out-of-pocket maximums increased more than 6 percent in 2014.

While deductibles remained fairly level at $1,901, UBA found that more employees are facing annual deductibles. The percentage of plans without an in-network deductible decreased from 21 percent for individual coverage in 2013 to 20 percent in 2014, and from 22.5 percent for family coverage in 2013 to 20.8 percent in 2014. The number of plans without an out-of-network deductible also decreased from 8 percent for individuals in 2013 to 6.9 percent in 2014, and from 9.8 percent for a family in 2013 to 8.1 percent in 2014.

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