For the first time since 2014, some downstate NY small group health insurance premiums will be considerably less expensive than non-subsidized individual health insurance premiums effective January 1st, 2018.

When the Affordable Care Act (“Obamacare”) first kicked in back on 1/1/14, many small business owners canceled their group health insurance policies to take advantage of the much lower premiums that were available in the newly-created/revamped individual market (via the NYSOH Marketplace). Although the provider networks being utilized in the individual market were much smaller than those in the small group market (which remains the same today), most business owners were more concerned with cost cutting, even though they had to sacrifice access to many hospitals and doctors to accomplish this. However, because Marketplace premiums have been skyrocketing every year since 2014, some Marketplace non-subsidized premiums will now overtake small group market premiums starting next year.

Here are three examples of how it will no longer pay for small employers on Long Island to choose non-subsidized individual market health coverage over small group health coverage:

Empire

-Marketplace individual EPO platinum plan (one option available), single-rate monthly premium: $1120. Utilizes the “Pathway” provider network, which is a “narrow” network (local to downstate NY only)
-Small group platinum EPO plans (four options available), single-rate monthly premiums: $971, $987, $1034, and $1044. All plans utilize the “BlueCard” network…the largest provider network in the United States (national and world-wide network access).
-You can even get a small group platinum PPO plan for only $17 more per month! ($1136)

Oxford (Owned by United Healthcare)

-UHC: Marketplace individual HMO platinum plan (one option available), single-rate monthly premium: $1179. Utilizes the “Compass” provider network, which is a “narrow” network (local to downstate NY only)
-Oxford: Small group platinum EPO plans (three options available), single-rate monthly premiums: $998, $1031, and $1047. All plans utilize the “Freedom” network in downstate NY, and which also utilize the United Healthcare “Choice Plus” (national) network outside of New York
-You can even get a small group Freedom platinum PPO plan for less money! ($1113 per month)

And even in the narrow network space…

Oscar

-”Classic” plan prices are identical in both the individual Marketplace, and the small group market (but where it’s cheaper in the small group market due to the tax advantages you get, which do not exist in the individual market). Single rate monthly premium for their “Classic” platinum plan: $834.

*Note* Since small group premiums can be paid for via pre-tax payroll deduction, the small group prices listed above are effectively lower for employers and employees (lowers payroll tax for employers, while lowering taxable income for employees). Conversely, Marketplace health insurance plans are paid for with after-tax dollars (no tax advantages).

So long as the Affordable Care Act remains the law of the land, this pricing trend will continue. Therefore (and as predicted), it is likely that additional employers will continue to move back to small group plans from Marketplace individual plans in 2018.

For more information regarding group health insurance options for your business, contact an insurance broker.