Yesterday, NYS has approved 2022 health insurance rate requests yesterday. Small group rates increase 7.6% and  3.7% for individuals.

As per NY State Law, Health Insurers are required to send out early notices of rate request filings to groups and subscribers see original –NYS 2022 Rate Requests.  Despite only 3 months of mature claims data experience for 2021  health insurers’ original requests were noticeably below average.

The 2021 small group rate increase was the third-lowest ever approved at 4.2% vs. 2020s approval at 7.9%. This reflects a lower cost utilization due to COVID-19. The average medical-loss ratio, which represents the portion of premiums spent on medical claims and quality improvement, was 70% last year in the individual market nationwide. The state Department of Financial Services said medical claims decreased significantly in 2020 due to the postponement of elective and non-emergency services, but medical claims have increased this year as New Yorkers catch up on medical appointments and postponed services.

Rate Factors

The state noted that the premiums increase main drivers are medications.  “The drug costs account for the largest share of medical expenses, followed by inpatient hospital costs, and outpatient hospital costs.” Drug costs account for the largest share of medical expenses (38.7%), followed by inpatient hospital costs (17.3%), primary care (8.1%), outpatient hospital costs (7.9%), and radiology (5.7%).

Nearly 1 million New Yorkers are enrolled in small group plans, which cover employers with 1 to 100 employees. Insurers requested an average rate increase of  11.4% in the small group market.  DFS cut the weighted average requested rate increases by 63% for 2020, saving small businesses over $565 million. About 264,000 New Yorkers are enrolled in individual plans.

Health Insurance Tax is Back

The HIT (Health Insurance Tax) is back. For Small businesses, this translates to an estimated 2.5%-3% added surcharge. For States like NYS where there is already approx. 16% added surcharge to high premiums, this becomes daunting.  It is no surprise the unpopular HIT was suspended. In 2017, payers escaped making $13.9 billion in payments due to the moratorium, according to a 2018 analysis by Oliver Wyman, commissioned by UnitedHealth Group.  This may have saved consumers billions on their insurance coverage.“The taxes on health insurance are non-deductible for federal tax purposes for health insurers,” the report explained.

Website Stop The Hit calculates $5,000 as the average tax for a 10-man small business for example. Calculates how the HIT affects your State and your business, here. Take action now: tell Congress to repeal the HIT! Join small business owners across the country in stopping the HIT. Sign the petition here.

 

NYS 2020 Final Rates Approved

Summary

Before you consider renewing automatically, you should first find out what is a PEO so that you can know exactly what to expect from it. PEO’s are large-group markets underwritten.  With the right PEO, you will be able to manage your businesses’ demand for growth and your employees as well.

Clients on average save 15-40% off the small group market. If you are looking for a complete insurance solution for your business, go to our website and check out our business insurance solutions. Contact us for more information today.

 

 

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