For several years there has been speculation that the employer mandate and other provisions of the Affordable Care Act (ACA) would lead to an increase in part-time employment. New research in the journal Health Affairs, however, refutes these concerns; there is no data to support a trend toward more part-time employment as a result of the ACA.
Another trend, however, is occurring: the group-to-individual migration. While the phrase “group-to-individual migration” evokes a flock of birds heading south for the winter, in the health insurance world, this migration refers to a simultaneous decrease in group, employer-sponsored coverage and an increase in the individual market.
A wide range of industry, employer and consumer forces are converging to drive this shift from group-to-individual plans:
- Industry trends: For many years, the rising cost of group health insurance and the lack of access to affordable individual insurance have been at the center of reforms, most importantly the ACA. Small employers have been exempt from plan benefit requirements so far. However, once the ability to extend non-compliant coverage expires in 2017, it is expected that more small business will cease employer-sponsored coverage for their employees.
- Employer trends: As group rates increase and more individual options become available, employers are opting to cease coverage for some (part-time, hourly, retirees, etc.) or all of their employees who will then purchase individual coverage through public or private exchanges. This is evidenced by recent market data indicating that employers with 3-49 workers offering coverage has dropped from a high in 2010 of 66 percent to 52 percent in 2014.
- Consumer trends: Since the advent of government subsidies through the ACA, employees have often been caught in the middle — without employer group insurance, they would qualify for a subsidy, while the group premiums available to them are too high for them to afford. As group disaggregation continues, employees are taking a more active role in understanding their coverage choices and associated costs.
Insurers have the opportunity to leverage e-commerce to make the group-to-individual transition experience outstanding. As small employer groups disaggregate, insurers can use their private exchange to offer employees individual coverage. In a recent webinar hosted by Array Health, Paula Sunshine – SVP and Chief Marketing Officer of Independence Blue Cross, talked about how Independence is using a private exchange e-commerce platform to preserve small group business and excel at the group-to-individual transition. To learn more about the group-to-individual migration and specific strategies insurers can put in place through their private exchange to help then win individual business, download our white paper, “Bridge the Gap Between Group and Individual Insurance: Creating an e-Commerce Strategy to Retain Members for Life.”