Experts estimate that 50 to 70 percent of the small businesses in California that offer employee medical insurance will renew their plans in December 2016. Many California small business medical insurance companies have begun to release their renewal rates for December 2016 and for many employers the renewal rates look very low.
Most Competitive Medical Insurance Companies
Blue Shield of California, United Health Care (UHC) and Anthem Blue Cross seem to be the most competitive. Each small employer’s rates are unique to the rating variables and the benefits that each employer offers. The Blue Shield increases are in the low single digits (2 to 5%) and many of the very small Anthem Blue Cross small group clients have received rate reductions.
Conversely, we have seen rate increases of 20% and more for our small group clients with coverage through Health Net. Aetna plans continue to not be competitive based on rates and benefits, particularly their PPO (POS) plans. We’ve learned that each group is unique and it pays to have a knowledgable agent/broker help you through the process. We, BenefitsCafe, can become your agent and assist you with comparing your options and helping you save money. Just give us a call at 800-746-0045.
Beware of Benefit Reductions
Some of the renewal rate reductions hide the fact that the insurance company has changed (reduced) the benefits on some of the plans. This means that patients will pay more for medical services when they receive care than they pay for those services on their current plan. As an example, the Anthem Gold HMO 35/20%/6600 (contract code 1K44) has changed to the Anthem Gold HMO 50/30%/6850 (contract code 1ZHR). The new 2016 plan is about the same monthly price (or “premium” in insurance-speak) as the old 2015 plan; however, the new plan requires a higher payment for doctor office visits ($50 vs. $35), higher co-insurance (30% vs. 20%) and a higher out-of-pocket maximum ($6,850 vs. $6,600). This means that while the monthly renewal premium increase is very little the amount people pay when they get medical care has increased. Accordingly, you should look closely at the renewal benefits in addition to the monthly rates.
Change in the Prescription Medicine (Rx) List of Approved Drugs for Anthem Blue Cross Small Groups
You should also be aware that beginning January 1, 2016, all of the Anthem California small business medical insurance plans will use the “Select” prescription medicine formulary vs. the “National” formulary that had been in place before. This change impacts all Anthem small groups when they renew in 2016. In a January 25, 2016 news release to insurance brokers and agents (see: sg-select-rx-news), Anthem wrote that “we expect that less than 5% of members will be impacted by the transition to the Select Drug List.” In that same news release, Anthem stated that “if a member’s doctor determines that an another option is not appropriate for treatment, the doctor can request an exception review.”
You can view the new Anthem Small Group Select Rx Formulary (List of Drugs) here: sg-select-rx-tier-4-2016
You can view the former Anthem National Rx Formulary (List of Drugs) here: rx-4-tier-natl-drug-list
Your Group’s Renewal Rates Could Be High or Low
California state law requires insurance companies to offer every small business with 1 to 100 employees the same rates and benefits for a plan in their small group portfolio. So, regardless of the health of your employees or whether you have only 2, 20 or 100 employees, you’ll get the same rate for each person enrolled. State and federal laws require California Small Business Medical Insurance companies to set the rates based on two factors:
- The age of the employees and enrolled dependents (e.g., spouse, children); and,
- The location of the employer. California has 19 different rating areas for small group health insurance including two separate regions for Los Angeles County.
So, while the State regulates the rates, your company may have a high renewal increase because of many factors including:
- the demographics (age) of your employees and dependents;
- the insurance company offering the benefits;
- the “richness” of the benefits that you offer (e.g., Platinum vs. Gold vs. Silver, etc.), or
- other reasons.
We can evaluate all of your options and help you determine whether you can offer similar benefits and save money. Just give us a call a 800-746-0045