Some premiums are increasing by as much as 49 percent.
Like many states, Minnesota just gave the green light to some scary cost increases for health insurance in 2016.
Fortunately, as startling as a 49 percent increase sounds—that’s the average increase for individual premiums under Blue Cross and Blue Shield of Minnesota, the state’s largest insurer—the biggest hikes won’t fall on the shoulders of small businesses.
Individual market rates are set to jump between 14.2 percent and 49 percent before tax credits, with an average hike of about 41 percent. But fewer than six percent of Minnesotans purchase this type of health insurance, according to the Department of Commerce.
Small group plans, which cover about 5.4 percent of Minnesotans and apply to businesses with 100 or fewer employees, will increase by an average of just 1.29 percent. Unlike individual rates, small group premiums under Blue Cross and Blue Shield will drop by an average of 4.8 percent.
This decline is a recent trend—and great news for small businesses. The early 2000s saw double-digit spikes for small group premiums, and in 2003 the Minnesota Department of Health wrote in an issue brief: “If premiums continue to rise rapidly … there is reason to be concerned about the continued affordability of coverage for both employers and employees.”
Minnesota’s health insurance premiums are now among the lowest in the country. Even so, the average 2016 rate hike for Minnesota’s individual and small group plans is much higher than the 7.5-percent average for all 37 states served by HealthCare.gov, the Affordable Care Act (ACA) platform, according to data from the U.S. Department of Health & Human Services.
“The prices charged need to cover the expenses coming in 2016,” Jim Schnowalter, president of the Minnesota Council of Health Plans, told CBS Minnesota.
If your small business has 50 or more employees, take note: Starting in 2016, you’ll have to pay a fine of $2,160 per full-time worker if you don’t provide insurance coverage to 95 percent of your staff. NFIB can help you navigate your options during the ACA open enrollment period, which ends January 31.
