This is shaping up to be an interesting year for the group health market. For as long as I have been in the health insurance business, plans that were purchased individually were always more competitively priced than group plans.
However, this year, group insurance has better pricing than individual plans. Individual plans are required to be compliant with the Affordable Care Act covering all pre-existing conditions. This has lead health insurers to claim they’re losing money by providing these plans. The premiums they’re charging apparently are not covering the claims they’re paying out.
We were quite surprised to see the magnitude of rate increases for individual plans compared to group plans. Group rate increases are trending from a low of 2% up to 12%. The trend for individual plans is from a low of 25% to 30%. Not only are group rates better but the plan designs and deductibles are lower.
If you work for a company that does not offer an employee health plan, it may be time to ask management to take a second look at group insurance. The benefit and price difference may be well worth it.
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