There’s some potentially good news and much-needed relief in sight when it comes to health insurance premiums for startups and small businesses in Ohio.
Eric O’Brien of Mosaic Employee Benefits explains that with the Advent of the Affordable Care Act, set rates were introduced because insurers can’t deny risk.
“That’s why everything has been expensive the last three years,” he says.
As of May 1, 2016 underwriting is back. Underwriting considers a policyholder’s health – which is good news for younger, healthy workers.
Small businesses with two to 50 employees are eligible for the underwritten plans that often see a 20 – 30 percent cost savings. O’Brien explains that while the percentage may not look like a lot, it shows significant cost savings in the long run. For example, a policy that was $300/month would be down to $210 – $240/month. Even at a 20 percent lower rate, over 12 months that adds up to a cost savings of $720 per employee.
“If your group qualifies, you’re going to pay a lot less and everyone is going to save a lot of money together,” O’Brien says.
He adds that there is one caveat to accessing the underwritten rates.
“To qualify for the underwritten rates you have to have a Chamber relationship,” he says.
And one that’s in good standing, meaning a business is paid up on its membership.
To begin the process and access the rates, each of a business’ employees must fill out an online form with about 15 questions that ask about an individual’s health over the last seven years. Confidential, neither the employer nor the broker have access to the health information, but it is instead sent directly to an insurer who determines rates for the group.
“It’s a streamlined online enrollment process,” O’Brien says.
Employees age 21-64 are eligible, but O’Brien says that since the plans have rates determined by health, they are better for healthy, younger groups with the average age under about 40. Too many health issues within a group and an employer can get priced out – meaning rates similar to what is already available on the exchange.
That young, healthy company profile – that’s many of Columbus’ startups.
“Essentially this is just a perfect world for our early-stage startup community,” O’Brien says.
Because of costs, many small employers have struggled with benefits, both for their employees and as a retention tool, but O’Brien believes these rates will make health insurance more accessible again.
Even if a small business or startup is in a financial position to offer benefits, these unwritten plans could help individuals access better insurance. O’Brien says many employees have gotten used to a high-deductible plan and will likely move forward with a similar option and take the cost savings. But, it also opens the door for individuals to pay the same premium but access better insurance – something that could be especially helpful for young families.
To learn more contact Mosaic Employee benefits, or call them at (614) 323-4494.