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healthcare savings 2014
December 18, 2013
This is not a debate on Obamacare! Just our experience going through the process as a small company. Your milage may vary, etc etc.
Early in the fall we received a notice from our healthcare provider Aetna that we wouldn't be able to renew the plan we were currently on. It did not conform (though they didn't say why) with the new laws.
Fear level was pretty high at UserScape HQ (meaning Jamie and myself). Every employee at UserScape has a family covered under the plan. We got in touch with our insurance agent and were told they wouldn't have any information at all until November 1st. The insurance companies weren't releasing information to them before then.
So we pretty much just waited around with nothing to do. Most articles we were reading estimated increases for small business of at least 10%, though some said as high as 30%. We pay 100% of all premiums for UserScape employee's so a 30% increase is a significant expense. In 2013 we'll pay about $71,000 in healthcare premiums for our 4 active plans (that's freaking crazy BTW).
In the 5 years we've offered a healthcare plan here rates have never gone down. They've gone up every year, usually at least 5% or more. To say we were expecting the worst is an understatement.
November 1st came and they still didn't have information. We waited more, constantly checking in.
A few weeks later we finally had some details. The plans offered were pretty shocking. They had nearly the same coverage with a few minor tweaks and a slightly higher max out of pocket limits. The prices came in 23% less than last year, a savings of $16,000.
We went even deeper into panic mode as this surely must be in error! We'd now have to get that straightened out all while working with the deadline of January 1st. That was when our plans expired and we'd need to obtain coverage before then to avoid any lapse and general chaos.
We double checked and not to our surprise the agent said yes, something is wrong. They sent new plans. These had a savings of $7,000. Still great on paper, if not slightly disappointing. Like thinking you had all 6 lotto numbers and finding out it was only 5 (it's like that right?).
We prepared to move forward, but a day later the agent emailed us yet again. The original numbers were in fact correct. They were sure this time. Hopefully.
A few more back and forth emails and we were able to get our renewal in place at the 23% savings level. Truly amazing.
You can't underestimate the importance that kind of savings has on a small business. During this back and forth we were in talks to bring on another employee. While we were going to do the hire either way, this savings makes that process just a little bit more comfortable. For other lower margin businesses these savings are the difference between hiring and firing.
I know there's plenty of stories out there about people paying more. I can't speak for anyone else, but for us at least the new law seems to be a positive so far.
- Our plan is a national plan in order to cover 4 families in 4 different states. We're located in New York, Tennessee, North Carolina and Arkansas.
- Certainly the worst part of the entire process was the obvious confusion of all parties involved. Perhaps it's to be expected for such a large change, but it did certainly made everything more stressful and complicated.