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For All Your Insurance Needs...Think BIG!

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The "handwriting on the wall" is painfully clear now, as 4th quarter and 2015 renewals are disclosed. Those of you, who put off community rating by changing to a 12-1 medical renewal last year, are facing the drama this year. It has not been welcomed news for the groups with historically good health ratings; some renewals have been as high as 50%! The good news for groups that had been rated at the higher risk end is that they may actually see a decrease in rates, and that is welcomed relief for them. The Affordable Care Act (ACA) requires that the premium rates for small groups (< 50 employees) be set at a community standard so that everyone gets charged the same premium for that plan, age, and geography. Insurers can no longer tweak the pricing for healthy versus high risk. Many people celebrate this change and believe it should be the same for everyone. While it may seem fairer, it does play havoc with assessing the cost risk for insurance actuaries, which is critical for long term stability. Adding to the aftermath is Preferred One's decision to totally pull out of MNsure, our State medical Exchange. "This was the first year of a new market, so no one knew what they were bidding on", said Gary Claxton, a vice president with the California Kaiser Family Foundation. "That meant it was hard to create the rates, and it was hard to review them". This has also upset the balance of competition and instead of offering 22 plans on MNsure, in 2015 Blue Cross will now offer 7 plans to small group businesses on the Exchange. HealthPartners will again not offer any group plans on the Exchange. To be honest and from personal experience, it was an administrative nightmare to work last year with our State Exchange. Hopefully things will improve.

What we don't want to encourage is panic and extreme measures. Businesses offering attractive benefits are still an important part of the equation when candidates are considering your employment. Individual plan premiums are less expensive right now, but the subsidy from the government to insurers is ending in 2015, and guess where those individual rates will go. If you give your employees money to buy their own insurance, that is taxable income to the employee and additional expense for FICA, unemployment tax and workers compensation for you the employer. Your premium payments to your group plan are fully tax deductible. We are here to help, and perhaps we all need to think outside the box and look at different plan designs, cost sharing, and adding more plans for employee choice. Maybe it's time to consider increasing your HSA deductible (lowers premium) and adding a HRA wrap around. We have to be creative and make the best of this situation. Remember, when life throws you lemons, we make lemonade! And please also remember, we are here to help you through these challenging times.

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