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


Weighing the costs

For some, renewing coverage in 2013 comes with a higher cost than they’d been paying, said David Ackerman, a client executive with the Marsh & McLennan Agency.

“But it is not as much of an increase as they may be seeing if they renew at their …regular time in 2014,” he said.

Roger Steward, president of Northwoods Bank in Park Rapids, said the 3 percent cost increase his firm will incur to renew its policy this year is a much better deal than the expected 35 percent increase the bank would have seen if it renewed its policy on Jan 1.

Steward said he’s frustrated with the new rules because they penalize his staff.

“When they take care of themselves, when they watch what they eat, when they watch their weight, when they control things that you can control, why shouldn’t you get a break for that?” he asked.

When banker Brian Nicklason learned that his company’s insurance plan would cost 50 percent more – or about $52,000 -- in 2014, he considered switching plans.

But he couldn’t find anything that offered enough savings to give up the customer service he and his employees enjoyed with their current insurer.

With 26 full-time employees, Nicklason’s operation is too big to quality for tax credits available to eligible small businesses that buy through MNsure.

So Nicklason opted to renew Woodland’s current policy on Dec. 1 and incur a relatively modest 5.4 percent cost increase instead.

Nicklason said that saves him money and gives him time to readjust the bank’s contribution to his employer’s plans.

Right now, Woodlands Bank pays 80 percent of their employee’s premium costs. The plans come with a $3,000 per person and $6,000 per family deductible, but the bank covers most of those costs, too.

Nicklason wants to continue offering coverage to his employees, but community rating will force him to make some changes, whether it be limiting who can be on the employee plan or rethinking coverage options.

“Here’s my fear,” Nicklason said. “Under the new plan are we going to have the same level of health quality that we have now? Can I still go to the Mayo Clinic if I want? Are we going to have those options for the quality of health care for our children and our spouses and ourselves? I don’t know.”

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