Well, the migration from group to individual coverage isn’t happening quite as quickly as we originally predicted, but it is definitely happening. As reported in the NAHU Newswire, a new report released by the Agency for Healthcare Research and Quality (part of the Department of Health and Human Services) and discussed in the Congressional Quarterly finds that “the percentage of employees working in an establishment where insurance was offered fell from 84.9 percent in 2013 to 83.2 percent in 2014, a decline of 1.7 percentage points.” Additionally, employees and their family members are being asked to pay a bigger share of the premiums and higher and higher deductibles, continuing a trend we’ve witnessed for the past several years.
As you might expect, “the biggest decline in coverage occurred among small firms with fewer than 50 workers.” These companies are not required to offer health insurance under the Affordable Care Act, and many are finding that their employees would actually do better in the individual market, where they may qualify for premium tax credits to help them purchase coverage.
There are also significant differences in coverage from state to state: “Nationwide, nearly half (49.8 percent) of employees of small firms (fewer than 50 workers) worked at establishments that offered insurance. Across States, the share of employees in small firms offered insurance ranged from about a third of small firm employees in South Carolina (33.2 percent) and New Mexico (34.3 percent) to more than two-thirds in Massachusetts (68.1 percent) and Hawaii (93.1 percent).” The chart below summarizes the findings.
The AHRQ’s report that employer-sponsored coverage is on the decline comes only days after another report released by the U.S. Centers for Disease Control and Prevention’s National Center for Health Statistics which finds the number of people without health insurance dropped by nearly 7 million people this year. Yes, some people gained coverage through government programs like Medicaid and CHIP, but individual market coverage is also growing significantly.
Both of these trends – a decline in group health insurance and a growing individual market – clearly show that brokers who have historically focused on employer-sponsored plans need to add individual health to their portfolio. If you’re a group agent, that doesn’t mean you need to stop what you’re doing or change your focus; on the contrary, investing in a private exchange site could allow you to continue to specialize in employee benefits while preparing your business for a fundamental shift in the way people purchase health insurance over the next several years. The individual exchange site will help you take advantage of a growing trend and put your individual sales on autopilot.