Small businesses seeking to ward off key health-law provisions—at least for a while—are weighing offers by some large insurers to hit the reset button on their yearlong health plan contracts in December.
Many contracts normally restart at the beginning of January. But, pushing the date to December could allow small firms to delay the impact of key health-law provisions that broadly kick in once plans renew after Jan. 1.
Insurers including Aetna Inc., UnitedHealth Group Inc., and Humana Inc. are all offering companies the chance to do so. Under the law, small businesses' health plans would have to cover a range of required benefits and face pricing rules that spread the risk of costly medical bills. That can particularly raise prices for companies with younger, healthier workers but may lead to small increases, or even reductions, for businesses with less-healthy workers.
Companies with less-healthy workers would save money by waiting for the law to take effect before renewing, the document showed. In some cases, the less-healthy small groups listed in the document would even see their premium rates decrease under the law.
Humana said it "aims to be responsive to the needs of our customers" and that it is offering early renewals "upon request." Aetna said in a blog item that "helping individuals and small businesses who want to keep the plan they have, as allowed under the [health law], can help save on premiums and limit disruption." UnitedHealth said it has always offered the opportunity to renew plans early if an employer wants to.
Some regulators and benefits lawyers have questioned the tactic. The Illinois Department of Insurance warned health insurers late last month it wouldn't approve policies with "arbitrary" renewal dates meant to "delay compliance with the reforms." This month, Rhode Island regulators said they wouldn't allow early renewals of health plans for small businesses.
Hill House Products, a distributor of small industrial motors with 10 employees, plans to consider renewing its health plan early, said Lianne Hill, the San Clemente, Calif., firm's co-owner. If she can delay an increase in her coverage costs, she will likely start a new plan late this year, rather than next March, when her current plan runs out. "Everything helps," she said. "Even if it's short term, at least it's something."
A version of this article appeared May 28, 2013, on page B2 in the U.S. edition of The Wall Street Journal, with the headline: Some Small Firms Try Early Insurance Renewal to Blunt Health Law.
To determine if your small group health insurance plan would benefit from early renewal, please contact John Caris at 707-935-6294 x103 or Contact him.