HMSA’s Small Business Rates to Increase 6.8%
By Sonia Isotov
Although HMSA requested a rate hike of 8.6% for its community rated group plans, Hawaii State Insurance Commissioner Gordon Ito approved a rate of 6.8%, or a 1.8% reduction, which saved consumers about $10 million, according to an announcement by the Hawaii Department of Commerce and Consumer Affairs’ Insurance Division yesterday.
The community rated group plans mainly cover small businesses that employ less than 100 workers. These plans reportedly cover more than 118,000 Hawaii consumers and include the Preferred Provider Plan, CompMed Plan, Student Plan 19 and several Health Plan Hawaii plans.
“The biggest issue we face with health insurance rates is the increases in health care costs,” said Ito, in a statement to media. “Year over year, health care costs have risen on average 6 to 8%, far outpacing inflation and wages.”
The new rate increase will be effective July 1, 2013.
The announcement mentioned that factors in the increase include fees associated with the Affordable Care Act. The fees account for 2 points of the 6.8% increase.
“We encourage small businesses to take advantage of the small business tax credit that is part of the Act,” Ito said. “Eligible small business owners can receive thousands of dollars in credits for what they contribute to their employees’ premiums.”
The statement also noted that starting in October, the Hawaii Health Connector, which is Hawaii’s online health insurance marketplace created through the Act, will begin offering alternate insurance plans for individuals and small businesses.