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CIA helping small businesses with insurance exchanges

Richard Lawson
Tuesday, Apr 2, 2013

Small businesses have been grappling with ever increasing healthcare costs for a long time.

On average, small businesses pay about 18 percent higher premiums for health insurance than larger companies, according to the Commonwealth Fund, a private foundation that promotes a high performing healthcare system. The National Federation of Independent of Business has noted that while the cost is higher, the benefits aren’t even as generous as with larger firms.

Because of rising costs, many small businesses have stopped offering health insurance to their employees or have raised deductibles, co-pays and out-of-pocket expenses to offset the higher price.

Later this year, government-operated Health Insurance Marketplaces, also known as exchanges, will begin enrollment. Through exchanges, small businesses are supposed to have access to more affordable plans.

But there’s still a question of whether or not it will help small businesses with the overall cost of offering employees health insurance. Instead of going to the exchanges for health insurance, small businesses may choose to share costs with employees on other benefits and let the employees get their own health insurance through the exchanges.

“Businesses could turn to providing customized group supplemental benefit plans specifically tailored to meet each employer’s or employee’s needs,” said Eric Matheson, broker with Cumberland Insurance Agency’s Group Benefits Division. “They could share costs with employees on many different benefits options that will still provide a competitive benefits package for their employees and the best part is that every employee qualifies.”

Cumberland Insurance Agency recently took a major step in that direction by adding new products to their group benefits division that now includes voluntary life, short and long term disability, critical illness and accident plans that are geared toward small and large businesses.

The insurance agency has partnered with some leaders in the employee benefits industry that will allow them to write “guaranteed-issue” policies for businesses with as few as two employees, regardless of the past or current health conditions of the employee. Matheson said he believes Cumberland Insurance Agency is the only firm offering this type of benefits package in the Upper Cumberland region.

Only time will tell how the government insurance exchanges shake out for small businesses. Many industry experts don’t have a lot of confidence that the exchanges will lower health insurance costs enough to convince businesses to take advantage of the exchange plans and tax credits.

Matheson encourages small businesses to utilize licensed health care insurance brokers to ensure the best and most affordable benefits packages are secured for employees.

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