Affordable Care Act Requirements Driving Health Insurance Costs Up
February 22, 2013
WPS Health Insurance, Wisconsin’s leading not-for-profit health insurer and top provider of affordable individual health plans, is exploring new markets because of the Affordable Care Act (ACA), according to Tom Olson, WPS vice president of sales and marketing. Olson recently spoke to The Business Journal about what WPS is doing to help small business owners avoid sticker shock.
The ACA is changing health care and health insurance. Insurance companies in Wisconsin are grappling with increased costs as they work to develop plans that incorporate all of the new requirements for health plans.
Some plan premiums have increased dramatically over the past year while others will be increasing for next year, according to The Business Journal article. America's Health Insurance Plans (AHIP) listed three reasons why costs are increasing. They include a sales tax on health insurance, restrictions on age rating, and minimum essential health benefits.
Small employers are considering a variety of ways to pay for increased insurance costs. Some small businesses are considering self-funded insurance plans, The Business Journal states, which are exempt from many ACA requirements but shift the risk onto the business. Olson explained that WPS is preparing to introduce its own small-group, self-funded plan to help small businesses provide insurance to their workers for less. Other small businesses, like the two Brookfield companies in the story, will likely tap the insurance exchange to help ease their expenses.
Employees of a Brookfield law office quoted in the article are still adjusting to a 12% increase in health insurance rates for 2013. Another Brookfield employer raised deductibles for its employees this year to avoid a 30% rate hike, leaving the owners of that business wondering what next year will bring. Due to the age rating limitations, the biggest increases, the article states, will be for businesses with younger workers. Companies with older employees won't see as big of an increase, and in some cases might see decreases.
See original article from The Business Journal