Escaping the ACA marketplace – It’s possible
The mainstream press is now touting stories that sign-ups for health insurance during the ACA annual open enrollment are going strong. With the exception of the Wall Street Journal, most media is not mentioning the fact the higher income people, those making more than $48,000/year become ineligible for a rate subsidy and those people are seeing MASSIVE price increases for health insurance.
The New York Times is breathlessly reporting that:
“The number of new customers signing up for insurance is a closely watched indicator of public interest in the marketplace. The number of new customers selecting health plans on HealthCare.gov averaged 34,300 a day last week, up from 26,400 in the first week of open enrollment in 2015 and 20,500 last fall.” Of course the NYT article uses the enrollment surge as an opportunity to bash President Trump, without mentioning a word about those not eligible for an ACA subsidy being crushed due to massive price increases.
What kind of ACA price increases are we talking about?
At StaffMarket we recently worked with a small business client who is getting health insurance coverage through the ACA marketplace and has a current plan with Florida Blue. This client runs a small business and in 2017 was purchasing family coverage through the ACA for himself, his wife and one child under 26 years old. In the letter from Florida Blue, the subscriber was informed that his plan price was increasing from $1,687 per month to $2,104 per month; a 25% price increase. This is even with a $12,000 per year family deductible.
It’s a tax!
As the Supreme Court ruled, the amount of additional premium being paid by unsubsidized ACA subscribers is essentially a massive tax. Successful small business owners who are too small to warrant a group health plan for their companies have been forced to subsidize everyone else in the ACA. It has now gotten so ridiculous that lower income people pay little or nothing for their coverage but higher income ($48K?) are getting smashed.
Escape the ACA and access a Group Health Plan
The bottom line is that business owners need to consider a way to escape the ACA marketplace and get access to a group health care plan. One method is to consider joining a Professional Employer Organization (PEO). Many PEOs offer their members access to their group health plan. Historically most PEOs would not consider offering health insurance to prospective PEO clients unless the client had at least 10 employees coming in to the PEOs health insurance plan. This was primarily to prevent adverse selection (only the sick folks signing up). Since ACA rates have escalated out of control, that has all changed. Now in November, 2017 many PEOs are offering access to their group health plans for groups as small as one or two employees. And the cost savings over ACA plans are significant. By joining a Professional Employer Organization the client above has received quotes for PEO services including health insurance offering equivalent coverage at $900-1,000 per month per employee. This is a substantial cost savings over the health insurance rates being paid in the ACA marketplace at healthcare.gov.
PEOs offer a suite of HR related services and access to affordable health insurance plans can be a component of their services. Contact us for more information about the PEO marketplace options for your company.