Will small employers opt out of health care reform and drive up premiums?
February 17, 2012
The ACA allows small employers to self-insure or maintain grandfathered policies – but a new RAND analysis shows that most small employers won’t self-insure because it exposes them to too much financial risk if employee medical expenses increase unexpectedly. In addition, federal agencies estimate that small employers won’t be able to meet the requirements to grandfather existing plans after 2014. However, if the regulations were changed to allow more employers to maintain grandfathered plans, the study says premiums would increase significantly and reduce enrollment through the Small Business Health Options Program exchanges by as much as 50% – which would have a negative impact on the price of plans in the SHOP exchanges as a result of fewer, more unhealthy populations comprising the bulk of exchange enrollments.
Visit Extend Health — the nation’s largest private Medicare exchange.