Category: Analytics/Trends

Michigan Business Vs. Individual Health Insurance: A Cost Comparison

By The Wellthie Insights Team

In the state of Michigan, an individual health insurance policy is 86% more expensive than the monthly premium for a small group plan.

As an employer, depending on your business’ size, you may be required under the Affordable Care Act (ACA) to offer your employees qualified health insurance options. Employees who don’t receive health insurance coverage through a job will need to purchase an individual health care plan. For families, Individuals, and business owners alike, health insurance premiums can seem like an enormous financial burden.

In 2017, health insurance premiums in the state of Michigan accounted for 36% of an individual’s median household income. Naturally, it is recommended to seek out where you can compare health insurance and save money to find the best policy at the lowest available price.

Wellthie partnered with ValuePenguin, a free source for information and tools to help people make consumer spending decisions, to analyze Michigan health insurance plans and identify small group and individual health policy premium differences.

Major Findings

On average, small group policy premiums are $271 cheaper per month when compared to individual health insurance plans.

If you currently do not receive health coverage sponsored by an employer or a federal health insurance program like Medicaid, individual health insurance is available for purchase through a state marketplace. The individual pays entirely for a marketplace policy, which can usually make the policy more costly than a group plan, for which a person would only pay a portion of the monthly premium’s total. 

In the below table, you can notice these differences in health insurance premiums. Group health insurance plans in the Gold tier were 111% less expensive than individual policies. However, individuals whose incomes fall below the federal poverty level may be eligible for premium subsidies on individual plans. Click here to check if you qualify for these subsidies through Michigan’s health insurance marketplace.

 This study utilizes a 70% employer-to-employee contribution ratio of 70%, an industry average for health insurance, meaning that an employer would be responsible for paying 70% of the monthly premiums, while employees would pay the remaining 30%.

As is illustrated below, employees will find significantly cheaper health insurance costs through small group plans as opposed to individual policies. Employees will pay $605 more for an individual Gold-level plan than their share of a small group health insurance premium. Compared to an employee’s percentage of a small group premium, an individual plan will be, on average, 539% more expensive.

On average, employees will pay $518 less for group health plans than individual plans through the Michigan marketplace in Wayne, Oakland, Macomb, Kent, and Genesee. 

When analyzing policies in Michigan’s most highly populated counties, the gap between the group and individual health insurance costs only widens. Group policies will be 137% less expensive than individual health insurance plans of the same metal tier across Bronze, Silver, and Gold metal levels. In Michigan’s five largest counties, Platinum individual health insurance policies were not offered and therefore were not a part of the analysis. 

In 2019, monthly premiums for small group health insurance reached an average of $315, a 3% increase from the cost in 2018.

From 2018-2019, small businesses witnessed a minor increase in per-employee group health insurance costs. The metal-level group health insurance policies which saw the most significant monthly premium increase, with premiums rising $18 over a single year, were Bronze plans.

Gold health insurance policies saw the least significant YOY change, with only a 0.46% increase since the year 2018. Employers should note the Gold tier health insurance plan is the most common policy offered in Michigan, with an average of 121 Gold policies available in each county.

From 2018-2019, small group plan deductibles raised by 2%. 

Depending on the tier, deductibles can vary greatly. Additionally, deductibles directly affect the amount an employee will have to pay for health insurance. It is beneficial for employers to analyze deductibles and decide what plans will be of the most value to their workers. By providing a high tier plan such as Gold, employees will gain access to coinsurance benefits more quickly and will not have to spend as much money out of pocket. 

The most massive increase in deductibles occurred in Gold health policies, which spiked 12% year over year.

Michigan Complete Rankings of Counties and Their Average Group and Individual Premium Costs

Technique

Wellthie, in conjunction with ValuePenguin, compiled and researched individual and small group health insurance policies from the Michigan state marketplace. Wellthie is a national, online small group benefits marketplace that allows a business owner to connect and interact with hundreds of carriers and a licensed broker network. Here they can find a benefits program that can be tailored to their business needs. Wellthie has in-depth knowledge of the small group health industry and can provide some of the most accurate quotes available.

In this study, all plans and quotes were generated from the 2019 plan year for a single individual and then averaged based on coverage metal tier. An industry standard of a 70% employer contribution was used for all employer-employee contribution calculations. Census Intercensal County Population Data was utilized to determine the most populated counties in Michigan. 

New York Business Vs. Individual Health Insurance: A Cost Comparison

 


By The Wellthie Insights Team

The Affordable Care Act (ACA) requires business owners in most states to offer health insurance to their employees when they have 50 or more Full-Time employees (FTEs). In New York, Vermont, Colorado or California, business owners are bound by law to make employee health benefits available when their company has 100 employees or more. If a company falls under this threshold, they should still consider providing benefits to their employees as soon as it is feasible for their budget. Offering health insurance has been proven to be an effective way to attract and retain talent; Doing so benefits a company’s employees, their families, as well as the business as a whole. 

In New York, an employee would (on average) pay 233% more for an individual health insurance plan than the amount in premiums they would contribute to a small group health insurance plan. Employers are risking losing top talent and the health of their workforce by opting out of offering small group health insurance as a benefit to their employees.

The at-times staggeringly high costs of health insurance premiums can weigh heavily on small business owners and individuals who are purchasing their own coverage. Since the ACA may require an organization to offer health insurance, (depending on the size of the organization in question), business owners are naturally curious to know their cheapest health insurance options. The cheapest health insurance options for both small business owners and individuals can vary greatly based on a variety of factors. It is recommended for business owners and individuals to make a thorough comparison of health insurance options in order to guarantee they are enrolled in the most suitable coverage.

Wellthie and ValuePenguin, a free source for information and tools to help people make consumer spending decisions, dug into the New York health insurance market and compared small group and individual health insurance premium costs.

Major Findings

From 2017 to 2019, small group health insurance prices rose by 15%. In 2019, the average monthly cost of small group and individual health insurance is around the same at $712, with employees insured under a small group plan paying only $213 of the total health insurance premium. Small group premiums in the metropolitan areas of New York (the five largest counties) were 13.12% more costly than individual premiums. Over the past two years, small group insurance premiums have increased by 15%.

Small business owners’ group health insurance premiums have increased at a steady rate since early 2017. The average monthly premium for qualified health insurance soared by 8.92% between 2017 and 2018. And between 2018 and 2019, the average premiums for a small group health plan across all coverage metal tiers rose by $5.60%. While this is a more modest rise, small-business owners should know about these cost increases, which will undoubtedly affect a business’s bottom line.

Out of all of the metal tiers, Gold metal plans saw one of the most notable rises in average premium costs, with a 16.49% increase over a two-year period. Small business owners should take note, as Gold policies are the most common metal tier plans sold on the small group marketplace, with 172 health plans offered in 2019.

On average, individuals who do not receive health insurance through an employer spend $499 more for coverage.

For people who currently do not receive coverage through an employer or federal programs like Medicaid or Medicare, individual health insurance is available for consideration. With individual plans as opposed to group plans, the individual pays the entirety of the premiums. As a result, individual plans tend to be much more expensive for an individual as opposed to what they would be expected to contribute to their premiums if insured under an employer policy.

For this study, we decided to use an employer-to-employee contribution ratio of 70%. 70% is an industry average where an employer would be responsible for paying 70% of the monthly health insurance premiums, while employees would pay the remaining 30%.

In NY’s five largest counties, employees pay 195% more for an individual policy.

In some of New York State’s most populated areas, the differences between small group and individual health insurance premiums have even wider gaps. When compared to a marketplace policy, the monthly health insurance premiums for small group plans were, on average, 13.12% more expensive. We analyzed the Bronx, Kings, New York, Queens, and Suffolk, which are the five largest counties by population.

In aggregate, the small group policies are more expensive in these highly populated areas of the state, but there is a more narrow difference in premiums for the employee. Compared to their monthly premium contribution for small group health insurance, a person would pay, on average, 195% or $532 more for an individual policy.

Competitive employee benefits programs can attract competitive talent.

Depending on an organization’s employee population, small-business owners may be required by the ACA to offer their employees health insurance options. The ACA does not currently have the individual mandate in 2019, but the employer mandate is still in place, and something for employers to keep in mind. According to the ruling, employers with 50 or more FTEs are required to offer minimum essential coverage or face a penalty. However, if a company has fewer than this number of employees, an employer is not required to offer their employees health insurance coverage. But despite the ACA’s mandate, there is a multitude of reasons it can be beneficial to provide employee coverage.

Choosing to offer health insurance to employees can positively impact your employees and business overall. In the Harvard Business Review’s survey of the “Most Desirable Employee Benefits,” over 88% of respondents mentioned better health, vision and dental insurance as a primary factor when deciding whether or not to accept a job. If employers decide not to offer insurance, they may lose out on potentially strong candidates for positions at their company. This loss could negatively affect profits and bottom line, as companies won’t be hiring the best workers for the job.

New York Complete Rankings of Counties and Their Average Group and Individual Premium Costs

Technique

Wellthie, along with ValuePenguin, compiled health insurance plans and quotes from the New York small group and individual health insurance marketplace. ValuePenguin possesses a wealth of valuable data, which, coupled with Wellthie’s in-depth knowledge of the small business health insurance industry, enabled ValuePenguin and Wellthie to collaborate to produce a thorough analysis of small group and individual health insurance premiums in New York State. The quotes and plans used in this study were pulled for the 2019 plan year for a single individual and then were averaged depending on the coverage metal tier. For all of the employer-employee contribution calculations, there was an industry standard of a 70% contribution from the employer used. Census Intercensal County Population Data was used in calculating the largest counties in New York to determine which were the most populated.

3 InsurTech Trends Expected to Accelerate in 2019

By Sally Poblete, Founder and CEO of Wellthie

The excitement increasingly surrounding insurtech indicates that 2019 promises to be an even more meaningful and game-changing time for the insurtech space. Here are three insurtech trends you should keep an eye out for in 2019 and beyond.

This year was a breakout one for insurtech companies. The insurance industry has been long overdue for innovation and disruption, and 2018 saw the industry attracting both talent and funding. FT Partners Research announced InsurTech’s quarterly financing volume for Q3 2018 totaled $1.2 Billion, which is up from $749 Million in Q2 2018. The excitement increasingly surrounding insurtech indicates that 2019 promises to be an even more meaningful and game-changing time for the insurtech space. Here are three insurtech trends you should keep an eye out for in 2019 and beyond.

Sophisticated analytics
Any successful insurtech startup is not only passionate about transforming the current insurance model to be more cost-effective and automated, but is invested in exploring the role data analytics plays at the core of this process. Intelligent and productive data aggregation, integration and analysis, are crucial in achieving this.

When it comes to data analytics, the insurance industry’s antiquated business model has much room for improvement. Insurtech is modernizing insurance as we know it by implementing advanced big data analytics to optimize insurance products and services. And investors are taking notice. Significant investments are being made in data analytics and modeling techniques to improve nearly every part of the business. By embracing data analytics, your business can gain a competitive advantage by finding “new revenue opportunities, enhancing customer service, delivering more effective marketing, and improving operational efficiency.” Over time, this rise in digital innovation is sure to bring significant opportunities for a more efficient, competitive and sustainable progress for insurtech as a whole.

Transparency

The vast and complex insurance industry has long awaited simplification. Insurers’ underwriting models have historically been a black box for consumers, while easy comparisons of complex data have been reserved for the experts. Transparency is critical to earning the trust of customers, especially in this digital age. People are now accustomed to online shopping, and they want procuring insurance plans to be less complicated — similar to shopping for and purchasing other high ticket items such as homes and financial products. Consumers desire their pricing and product information to not only be transparent, but comparable as “apples to apples” so they can make smarter choices. Users can access online marketplaces to compare prices and benefits of different plans side-by-side.

Partnerships between carriers and innovators

There is a deepening need for laser-focused investments and partnerships between carriers and innovators as insurtech has now matured into an everyday business. Insurance executive and insurtech dealmaker, Stephen Goldstein argues that “the team is what is ultimately going to make an Insurtech initiative a success,” meaning that incumbents and insurance leaders executing partnerships with insurtech companies are part of the recipe that is going to provide a positive ROI and make insurtech thrive as an industry. While 2018 was a year of exploring and experimentation for insurtech, 2019 will be the year of engaging and deepening those relationships.

At the start of 2018, insurance professionals predicted that the number of partnerships and collaborations between carriers and innovators would only gather momentum over the next year. And in June 2018, The Digital Insurer reported that partnerships remained a priority where insurtech was concerned. Insurtech companies are actively enabling new technologies which are utilized to provide increased efficiency and the ability to execute new tasks and analyses. These technologies are changing the industry on a fundamental level, all the while causing more incumbents to adopt these capabilities through investments or partnerships to compete effectively. The possibilities alone suggest that there will be expected growth in partnerships throughout the end of 2018 and well into 2019.

Conclusion

2018 proved to be a massive year for insurtech, with a dramatic increase in funding from Q2 2018 to Q3 2018. There has been demand for skillfully acquired and implemented analytics, transparent experiences for consumers and mutually beneficial partnerships. All three trends are being successfully observed in 2018, and are believed to gather more momentum to lead us into 2019 and later.

Previously published here on www.benefitspro.com

Learnings from Auto Insurance for Health Insurance

By Sally Poblete

Consumer expectations have decidedly pivoted towards an e-commerce experience that guarantees value. Yet, in spite of the high level of complexity, health insurance seems to have remained the exception – until now. Below are three lessons health insurance incumbents can learn from the auto insurance industry to better meet customer expectations, boost sales, and ensure long-term competitiveness.

One price doesn’t fit all

Auto insurers like Progressive, Allstate, and State Farm are using the Internet of Things (IoT) to monitor behavior – driver habits, changes in speed, how often they drive, and the time of day they drive with the expectation are just a few examples. The hope is that doing so reduces costs by more accurately pricing driver risk. For consumers, this is a strong incentive to drive well and maintain lower premium rates.

This behavior-based model is a great example for health insurance companies in their product and pricing models for health plans. Walking 10,000 steps a day, getting an annual checkup, and other health-related behaviors can be a good indication that overall health can be incorporated into innovative behavior-based health insurance products.

This is particularly appealing to millennials, for whom wellness is a daily activity. Recent research indicates that millennials are exercising more, eating better, and smoking less than previous generations. This generation is using apps to track training and nutrition data, all of which can be incorporated into risk assessments to help insurers stay competitive. This data also presents insurers with more opportunities to incentivize healthy behaviors by rewarding members who reach certain milestones.

Insurance shopping has to be an online experience

Insurance is complicated, and there are many factors that go into understanding the value of coverage. For consumers, choosing the best plan for your needs is much simpler when marketplace comparisons can be made. In the auto insurance world, such comparisons exist. For example, NerdWallet allows users to compare quotes from multiple car insurance companies at once. Comparing exactly what is being offered – and at what price – simplifies the process of choosing a provider and plan.

Similarly, consumers would greatly benefit from health insurance marketplaces where they can get educated, view quotes, and enroll in plans within minutes. Easier-to-understand product information, reviews, and price comparisons should guide the transition to a marketplace model for the health insurance industry.  Considering that we may soon see more short-term plans and association health plans (which are not as comprehensive) alongside standard plans, it is especially important for consumers to understand exactly what they are purchasing and what services will be covered. An e-commerce platform would help ensure that consumers are actually comparing similar plans that will provide them with what they need.

Empowered agents can make personalized recommendations

Auto insurance companies such as Goji and CoverHound operate data-driven platforms that help agents match customer needs with the correct coverage through integrated networks of insurance carriers. In the health insurance industry, there is a similar opportunity for carriers to enable their agents to find more personalized options for customers at a fraction of the time it typically takes.

Brokers add value to the health insurance experience of many consumer segments, and there is a lot more agents can incorporate into their recommendations through technology. For example, a small business owner in the retail industry might want to know what other similar companies in the area have purchased based on their demographics. Through better use of data at the point-of-sale, a broker should be able to make those suggestions with ease.

Conclusion

Streamlined e-commerce experiences and improved value are key for consumers across industries, including health insurance. Health insurance providers would benefit from incorporating things that the auto industry has been doing well already — using technology to incentivize healthy behaviors, having easy-to-understand information available on marketplaces, and utilizing data to help agents show personalized offerings.