New York businesses are bracing for significant health insurance premium increases in 2024. The New York State Department of Financial Services (DFS) has approved average rate hikes of 13.5% for individual plans and 7.4% for small group plans. While these increases are lower than insurers initially requested, they still represent a substantial burden for businesses and employees alike.
Three Factors Driving Premium Increases:
- Rising medical costs: The cost of medical care, including hospital stays, physician services, and pharmaceuticals, continues to rise. This is compounded by increased utilization of these services as patients seek more care post-pandemic.
- Economic inflation: Broader economic inflation has put additional upward pressure on health care costs, including administrative expenses for insurers.
- End of public health emergency (PHE): The unwinding of the PHE has led to changes in coverage, such as the reintroduction of cost-sharing for COVID-19 testing and the commercialization of COVID-19 vaccines, which increase insurers' costs.
What This Means For Business Owners:
Increased costs
Higher insurance premiums will impact New York businesses' overall operating costs. This is particularly challenging for small businesses, which may struggle to absorb these increases.
Administrative challenges
The process of navigating these changes and ensuring compliance can be administratively burdensome. This includes managing renewals and understanding new coverage options for employees. Businesses may need to invest more time and resources into understanding the changes and communicating them effectively to their employees.
Employee impact
Rising premiums may lead to higher contributions from employees or reduced benefits, potentially affecting employee satisfaction and retention. Employees may also face increased out-of-pocket costs, which could affect their financial well-being and job satisfaction.
Strategic decisions
Business owners may need to revisit their benefits strategy. This could involve considering different insurance carriers or plans, exploring self-insurance options, or increasing the focus on preventative care and wellness programs to help control costs.
Navigating Changes In Health Insurance Premiums
As businesses face rising health insurance premiums, it's crucial to explore various options to manage costs while still providing quality coverage for employees. Here are some strategies to consider:
- Explore GMS's master health plan:
- GMS offers an in-house master health plan that helps businesses avoid large swings in usage trends and renewal rates.
- Our plan provides access to one of the largest national networks.
- Leverage group buying power:
- By partnering with GMS, small businesses can access the buying power of a large corporation.
- GMS represents more than 50,000 employees, allowing for more competitive rates.
- Consider different plan options:
- Evaluate various plan types, such as preferred provider organizations (PPOs), health maintenance organizations (HMOs), or high-deductible health plans paired with health savings accounts (HSAs).
- Each option has different cost structures and benefits that may better suit your business and employees.
- Implement cost-sharing strategies:
- Adjust deductibles, copayments, or coinsurance to balance costs between the employer and employees.
- Offer voluntary supplemental insurance plans to cover gaps in primary coverage.
- Promote wellness programs:
- Implement wellness initiatives to improve overall employee health and potentially reduce long-term health care costs.
- Educate employees:
- Provide comprehensive education on plan options and how to use the benefits effectively.
- Help employees understand how these changes might affect their contributions and benefits. Transparency can build trust and reduce anxiety.
- GMS offers a dedicated team of experts to assist with employee training and answering complex health plan questions.
- Regular plan reviews:
- Conduct annual reviews of your health insurance plans to ensure they still meet your business needs and budget.
By exploring these options, particularly GMS's master health plan, businesses can work towards managing premium increases while still offering competitive benefits to their employees.
Navigate Change With GMS:
As New York businesses navigate these challenging premium increases, GMS offers a valuable solution. Our in-house master health plan helps businesses avoid large swings in usage trends and renewal rates. By leveraging the collective purchasing power of over 50,000 employees, GMS enables small businesses to access group health insurance at significantly lower rates—24% lower for employee premiums and 21% lower for family premiums compared to the U.S. average.
By working with GMS, you can navigate these challenges more effectively, ensuring that your business remains competitive and your employees are well supported. Partner with GMS to better manage your health care expenses, support your employees, and maintain a competitive benefits package that supports employee retention.