Study indicates that replacing group health plans with individual plans will benefit workers…………
SOURCE: Health & Voluntary Benefits Association (HVBA)
Eliminating small-group health plans could save workers hundreds, study suggests
By Allison Bell – Eliminating the U.S. small-group health insurance market could be good for the workers, according to a team of four economists led by Sebastián Fleitas. Fleitas and his colleagues argue in a new working paper that having the workers spend their cash and the employers’ cash on individual coverage, instead of on premiums for fully insured small-group coverage, would save the workers’ households an average of $842 per year.
HVBA Article Summary
Greater Choice May Lead to Cost Savings: The research suggests that giving workers the option to select their own health insurance—rather than relying solely on employer-provided small-group coverage—could result in significant cost savings. This is primarily because individuals would be able to choose plans that more closely match their household needs and financial situations.
Preference Varies by Health and Income: According to the economists, workers’ preferences for coverage types are influenced by their health status and income level. Sicker or lower-income individuals are more likely to stick with small-group insurance, while healthier or higher-income individuals may find individual coverage more appealing due to greater flexibility and potentially better alignment with their personal circumstances.
Policy Debate Around Small-Group Market Decline: As enrollment in the small-group insurance market continues to decline, researchers and lawmakers are considering various alternatives. These include mechanisms like individual coverage health reimbursement arrangements (ICHRAs) and association health plans, which could give small employers more options for supporting their employees’ access to health insurance.
More Reasons Why Employers Are Getting Out of The Health Insurance Business
