Health care reform brings significant changes to small employers

Michael Karegeannes, owner of Freedom Physical Therapy Services, was given a choice in October: He could renew the health insurance policy for his employees in December, locking in a 7 percent increase, or he could wait until next June and face a 25 percent to 30 percent increase in the premium.

Wisconsin-based Freedom Physical Therapy’s premiums already had increased 10 percent last June when it renewed its policy, and Karegeannes was skeptical.
“How could they possibly know what the rates would go to in June?” he asked.

Karegeannes played it safe and renewed his existing policy.

The Affordable Care Act brings significant changes to the health insurance market for small employers, and Karegeannes’ experience is common, according to insurance brokers.
Many small employers _ those with fewer than 50 employees _ face significant increases in rates, and many have opted to renew their existing policies early, buying time to see how the law affects the market.

“The fortunate group of my clients are staying about par, but I would say that fortunate group is very small,” said Jeff Anderson, a small-business account executive with M3, an insurance broker.
A few clients, he said, face increases in the range of 50 percent to 60 percent.

The employers most affected have younger workforces, and the increases stem largely from provisions in the Affordable Care Act.

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