As the end of 2014 is drawing closer, small businesses going to renew their insurance plans are feeling the first round of price hikes associated with the ACA. Some business are looking at cost increases of as much as 40 percent, leaving small business owners in a bind going forward.
The specific rules change that is spiking benefits costs for some is the elimination of premium discounts and premium surcharges based on the health of employees. With a move to “community rating,” groups that used to get discounts are seeing big premium increases, while those that were paying surcharges are seeing big savings.
“The move to community rating absolutely creates winners and losers,” said Scott Reid, a vice president with the Minnetonka-based insurer Medica, reports the Minnesota Star Tribune.
Going forward, premiums can only be effected by location, smoking habits and age–previous health history is off the table as grounds for consideration. Though some have lauded the move, particularly in regards to pre-existing conditions, others, like one small business owner in Minneapolis, thinks the system punishes good behavior
“We try to be healthy. We try to promote good health, and we were a healthy group as a result. It’s like: Where’s our incentive for being healthy?”
