Medical insurance renewal season is usually considered a “necessary evil” in the grand scheme of medical insurance. We want the coverage, but we hate anxiously waiting for the renewal rates. I had the opportunity to sit down with Founder and President of Servant HR, Jeff Leffew, and talk about this topic. During our discussion, Jeff shared his perspective on three key areas’ the Servant HR team gets asked this time of year.
1.) What’s different this year?
Healthcare and medical insurance is ever evolving, which makes renewal seasons unique every year. And this year is no exception. According to Leffew, the biggest distinction is the length of time this renewal season covers. In fact, the renewal season for small groups that are not currently on an Affordable Care Act (ACA) qualified plan will extend until the end of 2017.
What does that mean?
As an example, a company has an Oct. 1st, 2016 renewal date. Instead of renewing Oct. 1st, 2017 (or 12 months from the last renewal) their plan would actually go to the end of 2017 (or a 15 month period). If their renewal date was Dec. 1st, 2016, it would go to the end of December 2017 (or 13 months).
Why is the renewal season length different this year?
When the ACA was established, there were serval provisions given that delayed the ACA from being fully implemented. Because these provisions will be gone by January 1st, 2018, it doesn’t make sense for companies who renew on October 1 to turn around and renew again for only three months.
Why is this important to you?
When you get your renewal percentages, they might be a tad higher than normal because they could be covering 13 or 15 months. It all depends on your renewal date.
2.) Options are dwindling
For small groups in Indiana, the options for medical insurance coverage are beginning to dwindle. According to Leffew, groups with fewer than 50 employees realistically have only three or four providers that will offer quotes.
The environment for an insurance company is so complex that it’s difficult and costly for new companies to break into the market. As a result, they barely get off the starting line because looming regulations and complexities make profitability quite stingy for these companies.
3.) Judgement calls are gone
There was a time when the requirements to obtain medical insurance were less formal—less controlled. Those days are over. Now that companies are being held accountable by the federal government, the standards are black and white.
While the intentions may be good, Leffew believes it has taken away the ability for medical insurance companies to make judgement calls. He says, “Not all businesses look alike. There are unique situations, but the human element has been taken out.” With the reality that everyone has to look the “same”, judgement calls become less of a viable option for companies to make.
If you have questions about our top 3 list or need help this renewal season, we’d love to talk with you.