Though it doesn't explicitly address rates for employee benefits, new reports suggests that health plan premiums are on the rise – the main reason being the changes that the Patient Protection and Affordable Care Act has created.
In a survey of approximately 148 insurance brokers, average premium increases in the small group market through the first three months of 2014 were 11 percent for the small group market and 12 percent for the individual market, investment firm Morgan Stanley found. Additionally, at the state level, the uptick in rates were sometimes a great deal higher than the national average – reaching up to 50 times more in some cases, Forbes reported.
The rationale for the surge in rates, the report found, likely has to do with some of the provisions put in place from the ACA. Forbes noted that because the health law mandate prevents insurers from offering differing rates depending on pre-existing conditions and age, costs went up for everyone. Additionally, the health care overhaul calls for new excise taxes that insurers are responsible for.
Some of the sharpest increases in the individual market have been primarily in the East, including Michigan, Connecticut, New Hampshire, Pennsylvania and Delaware, according to the Morgan Stanley brokers survey.
Most people who are insured in the U.S. are covered through their employer. The ACA requires large companies – those who have a staff of 50 or more working at least 30 hours per week – to provide employee benefits, but companies aren't obligated to do this until 2016. A recent study from the American Health Policy Institute found that premiums for business owners could rise by as much $5,000 per employee under the ACA.
