Small businesses migrating back to group coverage

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Citing lower costs and better coverage, small businesses that transitioned employees to the individual marketplace in 2014 are slowly gravitating back to group plans, according to the Wall Street Journal.

Many businesses with fewer than 50 employees dropped their group plan in 2014 in favor of individual coverage sold through the Affordable Care Act (ACA) marketplace. Some even gave employees a raise to cover the cost of marketplace plans.

But those same businesses are backtracking because of increasing premiums, narrow provider networks, and the fact that insurers like Aetna and UnitedHealth are dropping out of state exchanges, leaving employees with fewer options. Insurance brokers say that although individual plans were appealing at first, group plans have “more value” for small businesses.

Michael Stahl, a senior vice president at HealthMarkets Inc., told the WSJ that small businesses are transitioning to the individual marketplace at a slower rate, and experts “are seeing a reverse migration back from individual to group.” Part of that migration is driven by prospective employees seeking jobs that include health coverage.

Employers have been slow to embrace the Small Business Health Options Program (SHOP) marketplace which opened in 2014. Least year’s enrollment remained tepid thanks to fewer plan options and more expensive policies.

- here's the WSJ article