The Group vs. Individual
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Before the Affordable Care Act, individual plans were lower in premium and offered the same benefits as an employer plan. However, the changing terrain of the individual market has made for a bumpy ride.
Over the last 10-15 years, many small employers’ alternative or solution to the rising premiums of their small group health plan was to stop offering the benefit to their employees. In 2016, after the first few years of the Affordable Care Act, this has changed significantly. In fact, the trend in 2016 is for many of these small employers to once again offer this benefit.
Why did the market do a 180 on January 1? The answer is simple: affordability and access to care. As the individual market continues to experience higher than average claims along with an alarming number of policies being terminated mid-year for non-payments, insurers will need to adjust plans to stabilize premiums.
One trend occurring in Illinois and across the country is individual plans are now offering more narrow networks and eliminating the broad ones in an attempt to control costs and level premiums. Consumers are more likely to keep their doctor than keep their insurance company and will find the lowest cost plan that allows them to see their provider. For many small employers, the option for an employer health plan once again becomes very attractive.
Once more expensive, the employer group market is now the same cost or lower than equivalent individual plans. Employer plans haven’t experienced the drastic increase in claims occurring in the individual market so their rates are expected to be more stable. Unfortunately, this doesn’t mean premiums will go down. Today, the plans offered by insurers to small groups haven’t changed. An employer can choose to offer a narrower local network and/or the broad nationwide network desired by many.
To learn more about which plan will work best for your company, contact a member of the Assurance 'A' Team today.
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