HPA has been predicting it for years, and now some of the country’s largest insurance companies are admitting that it’s happening: a growing number of small employers are dropping their group health coverage as a result of the Affordable Care Act and sending their employees to the individual marketplace.
Yesterday’s Wall Street Journal reports on this trend, explaining that Wellpoint, the nation’s second-largest insurer, has already lost about 300,000 small group members since the start of the year and is predicting a significant dropoff in the next two years, which is much more quick than the company originally expected. Aetna is also reporting “some erosion at the bottom of the market,” and Kaiser Permanente has seen similar decisions in the 2-10 market.
Bloomberg News also reports on the trend in an article titled “Obamacare’s Success Has Small Business Dropping Coverage“. The shift from group to individual coverage is driving many of the nations largest insurance companies to expand their offerings in the individual market.
This trend is also causing insurance agents to change their business strategy. An increasing number of agents who took the “wait and see” approach during last year’s open enrollment period have realized that there’s a huge opportunity for brokers with a private exchange solution. HPA’s online shopping portal paired with a call center that offers live agent assistance allows brokers to spend their time talking with employers and generating leads instead of enrolling individuals one person at a time. If you haven’t yet set up your private exchange, you can learn more here.