The Free Press, Mankato, MN

Health & Fitness

November 17, 2013

Small businesses locking in rates for one more year

Higher rates for insurancecould kick in next year

Earlier this year, Brian Nicklason, president of Woodlands Bank in Deer River, Minn., had lunch with his insurance broker to ask about insurance options for the coming year.

Nicklason was eager to find out if he’d be able to keep the policy he’s been providing to his 26 full-time employees.

Not exactly. Nicklason’s broker told him that new Affordable Care Act rules that take effect in 2014 would change the cost of his plan significantly.

However, he said Nicklason could lock-in his current employee health plan for another year if he were to renew early.

That would postpone a nearly 50-percent increase in the cost of the plan until late 2014.

So, Nicklason joined the ranks of Minnesota’s small group policy holders who are renewing their insurance early to avoid higher insurance rates designed to make insurance more affordable for companies with unhealthy workers.

According to the Minnesota Department of Commerce, the state has roughly 324,000 small group policy holders -- organizations with fewer than 50 employees.

No one has a precise count of how many are renewing their policies early to avoid inevitable cost increases stemming from the new federal health care law. But clearly there’s demand.

Medica officials say about half of their 7,500 small group policies are renewing early in 2013. “What we were hearing was a demand from the market to allow employers to potentially change the effective date of their plans to Dec. 1,” said John Naylor, senior vice president of commercial markets for Medica.

Small group policy holders can change the effective date of their health plan at any time, so moving the renewal date to Dec. 1 of this year maximizes the amount of time they can hold on to their current plan.

Clients of Blue Cross and Blue Shield of Minnesota and HealthPartners are renewing their plans this year, too.

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