California insurance companies are engaged in a price war for small business health insurance.  I never thought that I would ever write that sentence. However, it’s true.

As I previously reported on this blog, Health Net started the war in January 2013 when they offered ANY group with 6 or more employees the lowest rate (RAF 0.90). Now, Anthem Blue Cross, Blue Shield of California, United HealthCare and Aetna have just announced that they will give groups the lowest rates.

Blue Shield offers the lowest rates to groups with only 5 EEs, all of the others require 6 or more EEs to qualify.  Also, Health Net extended their RAF special until 12/31/2013.

Previously, all of the California health insurance companies offered the lowest RAF (Risk Adjustment Factor) to groups with 10 or more employees and whose previous RAF was less than 1.06.  This left many groups stuck paying higher rates.

All of this has changed.  The RAF goes away beginning 1/1/2014 because of health care reform (the Affordable Care Act, ACA.)    So, Health NetBlue Shield of California, United HealthCare, Anthem Blue Cross and Aetna will give groups with 5 or 6 enrolling employees a 0.90 RAF – regardless of their prior RAF (there are a few limitations – call us for more info.)

I assume that the “carriers” (an insider, industry term for an insurance company) want to increase their membership (“market share” in the vernacular) as much as they can before 1/1/2014.  All small groups (2-50 EEs) will get the same rates beginning 1/1/2014 – only 9 months from now.  The insurance companies must figure that this is their last opportunity to use this tool to lower rates and get more customers.

WHAT THIS MEANS FOR YOU:  if you offer small group health insurance to your employees and you have 5 or 6 or more employees enrolled in your plan, you should evaluate changing companies NOW – even if you just renewed your plan or your plan doesn’t renew for a few months – because you may be able to save a lot of money.

You will get a 12 month rate guarantee if you change now, so you will get the lower rate for a full year (i.e., your rates won’t change 1/1/2014 – they’ll change on next year’s renewal date.)

Contact me, Bruce Jugan, at – I’m the president and very knowledgable about what’s going on.  My staff and I can help you get the very lowest rates for your company.

Again, don’t wait until your renewal date to get the low rates.  You may be able to save a lot of money between now and then. And this may be your last opportunity to lower the price of your health insurance because many of the tools we use to reduce the premium will go away 1/1/2014.

Our toll free phone number is 800-746-0045.  Call me.