Next wave of health plan cancellations looming this fall for small businesses


The Post’s Ariana Cha reports that many individuals who receive health insurance through a small business may lose their plans in the coming year. (Andrew Harrer/Bloomberg)

A number of small business owners and employees have already seen their health insurance plans canceled as a result of the health care law.

But is that just the beginning?

Our colleague Ariana Cha reports that a second wave of cancellations is looming this fall for small employers whose plans fail to meet new minimum coverage standards in the legislation. Many firms bought themselves extra time by renewing their plans this past fall, she says, extending coverage through the end of next year.

However, come next fall, insurance experts and state regulations expect most of those firms to receive notices that their plans cannot be continued in 2015. Meanwhile, others may lose their plans as insurers consolidate their offerings.

Cha explains:

Some of the small-business cancellations are occurring because the policies don’t meet the law’s basic coverage requirements. But many are related only indirectly to the law; insurers are trying to move customers to new plans designed to offset the financial and administrative risks associated with the health-care overhaul. As part of that, they are consolidating their plan offerings to maximize profits and streamline how they manage them.

“If they do it one way, the word canceled gets attached to it. If they do it another way, they say they are amending the policy. It sounds more gentle but it’s the same thing,” said Gary Claxton, an expert in private insurance at the Kaiser Family Foundation. “The basic point is, for many people in the small-group market at some point soon their coverage is going to change.”

Read the rest of the story here.

Related: Health care law’s delays leave small business owners in a tough spot

Follow J.D. Harrison and On Small Business on Twitter.

J.D. Harrison covers startups, small business and entrepreneurship, with a focus on public policy, and he manages the Post's On Small Business blog.
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