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Rising Health Insurance Costs Spark Alarm In Texas


Out of frying pan and into the fryer.

That’s what many Texans are feeling this week after reading a recent article published in the Houston Chronicle reporting that many providers in the individual health insurance market have proposed rate increases of between 20 and 30 percent for their 2016 plans. 

As part of the Affordable Care Act, any insurer who is seeking rate increases of more than ten percent for small group and/or individual plans is required to submit a public request on the Centers for Medicare and Medicaid Services agency website by June each year. 

According to the Centers for Medicare and Medicaid Services, several large insurers, in Texas and across the country, have reported seeking rate increases of up to 32 percent for 2016. 

These proposed rate increases have largely caught Texans off guard, coming on the heels of the US Supreme Court’s decision last month regarding the legality of subsidies under the Affordable Care Act

The article goes on to list out several of the largest rate increases Texans may see in 2016 for exchange-based plans:

  • Scott & White Health Plan is seeking a 32.4% increase on average for its individual silver plan.
  • Humana is seeking a 29.73% on average for one of its individual plans.
  • BlueCross BlueShield of Texas is seeking a 19.97% increase on average for its Blue Advantage HMO individual plan.

The insurance companies have cited initial uncertainty of health care costs under the Affordable Care Act and rising medical and drug costs among the reasons for the significantly increased rate proposals. With more concrete information and data now available about the actual cost of insuring thousands of additional Americans, providers believe the rate increases are justified.

While not all available exchange-based plans are experiencing double-digit increases, the rate increases listed above have many experts concerned that the subsequent increased consumer costs will discourage many of those who are uninsured from seeking coverage through an exchange. 

What this means for employers

Rising health insurance costs have employers worried as well. 

Under the Employer Shared Responsibility provisions of the Affordable Care Act, applicable large employers (those with 50 or more full-time or full-time equivalent employees) may be subject to an ESR payment if at least one of their full-time employees receives a premium tax credit for purchasing individual coverage through an exchange. 

Such significant rate increases as the ones mentioned above could make many more people eligible for subsidies (premium tax credits) to cover the cost of purchasing individual coverage through an exchange, and therefore put more employers at risk of becoming liable for an assessed payment under the Employer Shared Responsibility provisions.

Employers should continue to stay vigilant in regards to the rising health care costs, and make every effort to ensure they remain compliant with the Affordable Care Act. 

G&A Partners, a leading national professional organization (PEO) and human resources outsourcing provider, employs a team of specialists who understand the ins and outs of human resources and employer-related laws, including the Affordable Care Act. G&A offers a lifeline to organizations who are overwhelmed by and unequipped to handle all of the paperwork and extensive reporting required as a result the health care law, which are estimated to cost businesses over $15,000 a year, by providing proven solutions and technology that take the guesswork out of complying with health care reform.

Learn how G&A’s highly trained staff can help your business navigate the Affordable Care Act by calling 1-866-634-6713 or visiting today to schedule your free business consultation.

This article is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel for legal advice.

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