Rising premiums and changing availability of plans are causing many small businesses to push their employees toward the healthcare marketplace instead of offering plans for the coming year – which could be a win-win situation.
Small businesses, those with fewer than 50 full-time employees, are not required to provide insurance coverage for their workers though many do. However, with the successful implementation of the online health marketplaces, a large number of employees choose to forego employer-provided insurance in favor of subsidized individual plans. Individuals with pre-existing conditions are now able to access affordable coverage without paying more for a plan through their job.
Employers are also beginning to see the benefit of directing their employees to the exchanges. While many small businesses were able to offer grandfathered policies for 2014 (and some for 2015 as well), plans that are non-compliant with ACA provisions will be phased out no later than 2016 – and their replacements may be prohibitively expensive. Some employers may reimburse their employees for part of their individual premiums, while others trust that federal subsidies will make the cost of individual insurance comparable.
Insurers, for their part, hope to recapture losses in their small business plans by attracting individuals to enroll in other plans with their company. Many are working directly with some of their smallest employers to ease the transition.
A recent drop in small business enrollment numbers led insurer Wellpoint Inc. to predict that small-employer plans would significantly contract within the next two years – a revision from their earlier five-year prediction.