Insurer fee expected to spike 2020 group premiums

ACA tax back in place for 2020

The Affordable Care Act requires insurers offering fully-insured plans to pay a “health insurance tax” based on premiums and market share. These fees help fund the ACA’s marketplace exchanges, but Congress passed a one-year hold on the tax in 2019.

The tax, also called a premium tax or health insurer provider fee, is back in place beginning in 2020, and fully-insured groups should expect to see higher premiums as a result.

Last year, an analysis by Oliver Wyman Actuarial Consulting predicted the $16 billion tax would tack on an extra 2.2 percent on renewal rates in 2020 and each subsequent year.

Self-funded and level-funded plans provide more transparency to employers about where their benefit dollars are going, and allow the group to recognize savings associated with low-claim years.

To learn more, download “The Employer’s Guide to Self-Insuring” here. 

Bernard Benefits advisors have more than a decade of experience in evaluating health plan options for groups of all sizes. Click below to request a consultation with a Bernard Benefits advisor.