Providing competitive benefits to employees is a great way to attract and retain talent to run your business and health insurance is often the cornerstone of the benefits mix. However, the cost of providing health insurance to employees often seems beyond the budget of small group employers.
As you may have read in the news or in our recent blog, Maine’s small group and individual health insurance markets are merging. With this merger, health insurance premiums are expected to decline in the first year or two, which may open the door for small group employers to consider offering health insurance for their employees.
This article explores what you need to know as you work with your broker to consider health insurance coverage for your employees.
Lower premiums and “Clear Choice” plan designs
With the pooling of the small group and individual markets, the Maine Bureau of Insurance projects the average change in premiums from 2022 to 2023 will be reduced by 6% for small employers in 2023 and by 3.9% in 2024. That’s pretty awesome considering that consumer inflation reached a 40-year high of 9% in June.
Additionally, the merged market will offer small group employers (fewer than 50 employees) what is referred to as “Clear Choice Plans,” introduced in 2022 to Maine’s individual health insurance market. The intention behind Clear Choice is to standardize offerings among carriers so 2023 individuals (and now small groups) can evaluate plans on an “apples to apples” basis. Pending plan approvals, carriers will release pricing in mid-late September.
With Clear Choice, buyers can choose between high deductible Bronze plans, lower deductible Silver and Gold plans or very low deductible Platinum plans. Each plan offers standardized levels of coinsurance across carriers (how much a participant needs to pay beyond the deductible), doctor and behavioral health visits, specialist visits, emergency care, prescription drug benefits, and more. Some plans also offer a Health Savings Account (HSA) option, which enables individuals to save up to $3,850 and families as much as $7,750 in tax-advantaged accounts used to pay 2023 healthcare expenses. Anyone over the age of 55 can save an additional $1,000 with catch-up contributions.
Small group employers will be able to comparison shop between health insurance carriers offering Clear Choice plans and a limited number of alternative or non-Clear Choice plans. Subjective decisions between the carriers will come down to the provider network (i.e., including such key providers as primary care physicians in their networks), along with value-added care management services like chronic illness support programs, wellness programs and robust customer service, backed by the overall brand reputation of the provider. Employers may even consider whether the insurer is for profit or a nonprofit like Community Health Options.
Small business health insurance premium relief program
As part of Governor Janet Mills’ Maine Jobs and Recovery Plan, the Small Business Health Insurance Premium Relief Program provides premium payment relief in the form of credits to Maine small groups enrolled in a fully insured, community-rated small group comprehensive health insurance plan. The program, launched in November 2021, runs until April 30, 2023, depending upon the continued availability of funding. Ask your broker how to take advantage of this program while it lasts.
Factors that Influence health insurance premiums
Beyond the plan you select for your small group (high deductibles equate with lower premium cost), health insurance premiums are determined by a variety of factors. While small group health insurance plans are “community rated”—that is, premiums are determined by the overall expected costs of insuring participants within the risk pool of individuals and small group participants—the premium your small group pays may be higher or lower depending upon the age of your participants. Some carriers may also consider whether participants use tobacco products. Generally, small groups with younger non-tobacco users should pay a lower premium. While employers cannot discriminate based upon the age of the employee, implementing a smoking cessation program may help reduce your premium costs as you lower the overall risks of the group.
Maine is divided into four geographic rating areas by the Centers for Medicare & Medicaid Services (CMS), with ascending costs to deliver care, respectively. Rating Area 1, with the lowest costs, includes Cumberland, Sagadahoc and York counties. Rating Area 2, and second lowest, includes Kennebec, Lincoln, and Oxford counties, while next is Rating Area 3 (Androscoggin, Waldo, Franklin, Penobscot, Somerset, and Piscataquis counties). It’s most expensive to deliver care in Rating Area 4 (Hancock, Aroostook, and Washington counties). Per the Affordable Care Act, all insurance carriers in the state must uniformly use these rating areas to set their premium rates, but not all offer plans in every rating area. Some carriers may commit only to Rating Area 1 and price themselves out of other rating areas. Community Health Options, meanwhile, remains committed to building provider networks for all four rating areas in Maine in the most cost-efficient way possible. So, it pays to check with your broker to see which carriers are committed to your area of the state.
Generally, small group employers cover some portion of the premium cost for employees, while assigning the balance to the employee. One question that inevitably emerges is whether to cover an employee’s spouse/partner and/or dependents. Knowing that employee-only coverage is more affordable than covering family members, most groups offset the additional cost by asking employees to pick up the premium cost for dependents.
Resources for small groups and their brokers
Community Health Options, a Maine-based, nonprofit health insurer, is committed to the Small Group health insurance market and to providing an easy purchasing experience for small groups and their brokers to navigate the changes of the merged market. For example, Community Health Options’ top three small group plans have been deliberately mapped over to similar Clear Choice plans to mirror similar benefits. Benefits have been carefully evaluated to ensure Clear Choice requirements are being met, while at simultaneously offering popular benefits like our chronic illness support program (CISP), acupuncture, adult vision exams, and a new digital wellness platform and app in certain plans. Additionally, Community Health Options will be offering an alternative plan to Clear Choice to the small group at a very competitive price that offers many benefits with a co-pay and no deductible similarly to Clear Choice plans.
Small group brokers may access Community Health Options’ broker portal, which provides a tool known as “decision pathway support” to prioritize important benefits and to suggest plans that meet those criteria. Community Health Options has partnered with Northeast Delta Dental and UNUM to offer “one-stop shopping” to include supplemental plans for adult dental, life and disability insurance, improving the efficiency for small groups in benefit planning.
Additionally, the Community Health Options team has been reaching out to brokers and small group employers to educate them about the upcoming changes of the merged markets. To that end, the team will be hosting webinars this fall to help brokers and small group employers prepare for the 2023 enrollment period. Those interested are encouraged to call Business Development at 207-402-3353.
Employees are struggling right now. Even after the most painful effects of the pandemic resulting from lockdowns, social isolation and fear have abated, incidences of depression, burnout and anxiety have risen markedly. The rising cost of living has added even more strain as employees grapple with balancing household budgets amid demanding workloads—and for remote workers—struggling to set boundaries as the lines blur between long hours of work and enjoying life at home.
