Open enrollment for 2017 began Nov 1, giving small business owners and employees the chance to add, drop, or make changes to their health insurance plans.
But this year is unusual for open enrollment—it will mark the end of the transitional policy that allowed small businesses to keep their pre-Obamacare insurance plans, whether or not they comply with new regulations. Published 2017 rates show that costs have risen significantly, spurring anxiety among business owners. Kevin Kuhlman, NFIB’s legislative director, chimed in on what small business owners need to know about open enrollment for 2017.
Options are decreasing. In the years since the launch of the Affordable Care Act, many consumers have seen their insurance options dwindle—even, in some rural areas, to a single insurer’s plans.
“Some major health insurance companies pulled out of health insurance exchange marketplaces in many states, and more than half of the taxpayer-funded health insurance cooperatives have gone belly up,” Kuhlman says. “That lack of competition also means fewer choices and increased premiums for small business owners.”
Costs are rising. The 2017 rates have been announced, and small business owners are anxious about their increasing health insurance costs.
Rate hikes vary from state to state. Some business owners have reported facing a 38-percent increase in insurance costs, and Tennessee’s insurance commissioner declared the state’s marketplace exchange to be “very near collapse” after insurers proposed and received rate hikes of up to 62 percent.
Noncompliant plans are still an option. The rate increases for marketplace plans may be daunting, but small businesses have one more year to offer non-Obamacare-compliant plans to their employees. Available in most states, these plans cost less for employers while offering employees lower deductibles and out-of-pocket limits. “Many small business owners continue to renew their noncompliant plans,” Kuhlman says. “They can continue to do so through 2017, so long as states and insurance carriers permit the extensions.”
These non-Obamcare-compliant plans are available for as little as 30 days or for up to one year and offer coverage for doctors, office visits, hospital stays, surgeries, and prescription drugs up to $2 million a year, according to NFIB. Non-Obamacare plans can also cost significantly less than Obamacare plans. “These plans are less expensive because they can have underwriting requirements, whereas Obamacare plans are open to all people, regardless of health condition,” says Alan Shenman, NFIB’s director of Affinity Insurance Programs.
Already bought an Obamacare plan? Not a problem—you can cancel it and purchase a non-Obamacare plan during open enrollment.
Watch out for tax penalties. Small business owners who choose to offer noncompliant plans will not meet the Affordable Care Act’s mandate, so businesses may face fees for purchasing one. NFIB recommends checking with a tax advisor about the potential tax impact of choosing a noncompliant plan. NFIB’s Health Insurance Exchange also offers insights into the potential tax implications and how to navigate them,
Self-funded plans are another option. Businesses pay a plan administrator monthly, then receive a refund at the end of the year for the unused funds. The refund averages 42 percent, says Todd Page, senior vice president of sales and marketing at JLBG Health in Chicago.
Help is available. Not sure what option is right for your small business? NFIB members can take advantage of free advice from licensed NFIB Health Insurance Exchange representatives on choosing the best healthcare plan.