In preparation for President Barack Obama's signature healthcare law to roll out in full next year, health insurers and the employers they sell plans to are making adjustments to reduce costs, avoid penalties and engage patients and employees in their care.
1. Early plan renewal. Health plans typically renew on Jan. 1 each year, but next year's changes in essential minimum benefits and anticipated enrollment will lead many small employers to large spikes in plan prices, according to a report by Humana cited by the Wall Street Journal. To lessen the shock, Aetna, Humana and UnitedHealth Group will allow such companies to renew before the start of next year, which could allow for much smaller rate increases.
2. Self-insured plans for small employers. Humana and UnitedHealth Group announced they'll sell risky-but-cheaper "self-insurance" plans to small employers this year, according to a report by the Wall Street Journal. In such plans, employers pay their workers' medical bills directly through contracts traditional payors or benefits firms negotiate with providers.
Big employers tend to opt for this because they can share risk across a broader range of employees with greater control over benefits and less overhead. Small businesses may find the option attractive by allowing them to skirt changes to minimum benefit levels and large health plan price increases expected starting next year, although even healthy workplaces can be risky in case of accidents or major disease diagnoses.
3. Eliminating more generous "Cadillac" plans. To promote greater cost-sharing onto patients and reduce costly unnecessary care, the president's health law imposes a tax on generous "Cadillac" health plans that have low deductibles, premiums, copays and out-of-pocket spending caps. That has more employers who used to offer such plans retooling them to share more costs with workers in order to avoid the penalty, according to a report by the New York Times. C-suite executives may also shoulder more of their healthcare costs in order for companies to protect themselves from penalties in the law for offering better plans for higher-paid workers.
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1. Early plan renewal. Health plans typically renew on Jan. 1 each year, but next year's changes in essential minimum benefits and anticipated enrollment will lead many small employers to large spikes in plan prices, according to a report by Humana cited by the Wall Street Journal. To lessen the shock, Aetna, Humana and UnitedHealth Group will allow such companies to renew before the start of next year, which could allow for much smaller rate increases.
2. Self-insured plans for small employers. Humana and UnitedHealth Group announced they'll sell risky-but-cheaper "self-insurance" plans to small employers this year, according to a report by the Wall Street Journal. In such plans, employers pay their workers' medical bills directly through contracts traditional payors or benefits firms negotiate with providers.
Big employers tend to opt for this because they can share risk across a broader range of employees with greater control over benefits and less overhead. Small businesses may find the option attractive by allowing them to skirt changes to minimum benefit levels and large health plan price increases expected starting next year, although even healthy workplaces can be risky in case of accidents or major disease diagnoses.
3. Eliminating more generous "Cadillac" plans. To promote greater cost-sharing onto patients and reduce costly unnecessary care, the president's health law imposes a tax on generous "Cadillac" health plans that have low deductibles, premiums, copays and out-of-pocket spending caps. That has more employers who used to offer such plans retooling them to share more costs with workers in order to avoid the penalty, according to a report by the New York Times. C-suite executives may also shoulder more of their healthcare costs in order for companies to protect themselves from penalties in the law for offering better plans for higher-paid workers.
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