Tuesday, January 7, 2014

Budget Buster

Every business wants to plan for their future. Budgets, forecasts, sales projections, expenses, and hopefully profits. For a small insurance agency whose focus is on employee benefits this is a challenge. Especially with PPACA constantly changing.

After wages, health insurance is my second highest cost for employee compensation. We have two employees and this year I will pay $22,000 for a plan with an 87.1% actuarial value. We are very close to a Platinum plan but not close enough according to the law. Come next year I can't keep the plan that we like. Instead we must either purchase better benefits or reduce the benefits we currently offer. This means raising deductibles, copays, coinsurance, and out of pocket maximums. I don't want to offer a lesser plan, so I have been leaning towards the better insurance.

That all changed when I ran new premiums last week. Losing our plan is peanuts compared to the new premiums that we are going to see.

Because of the new rules Obamacare forces upon us I will see my rates go up in 2015 by a minimum of $16,000. Let me repeat that, starting next year my group rates will go up by a minimum of $16,000. All because of Obamacare.

According to the US Census Bureau (latest data - 2008) there are 5.3 million businesses with less than 20 employees. In total they have payroll for 21.5 million people. Many who offer health insurance to employees as a part of their compensation package will face the same dilemma that is highlighted above.

We haven't heard about it in the MSM yet. Just wait, though: before long small businesses will start getting these outrageously high renewals. For most they will see these renewals between September and November. Just in time for a reminder as to who voted for this law right before elections.

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