Any insurance carrier selling health insurance plans in the state of Kentucky to employers with 50 or fewer employees, must have their rates approved by the Department of Insurance.  These filings are public record and found on the DOI website.

Employers can use these filings to get an idea of what their next insurance renewal will look like.

The chart below shows the insurance carrier filings since 2016:

Carrier	2016	2017	2018	2019*
Anthem	9.1%	9.1%	4%**	13.8%
Humana	10.06%	7.17%	11.42%	15.22%
United Healthcare	6.95%	6.95%	4.68%	9.19%

*2019 premiums are pending approval.  These are the requested increases filed.

**Anthem’s 2018 rate filing was later increased but I don’t have those figures.  4% was the original filing.

 

Step 1: Carrier Comparison

The first step in analyzing the filings is to simply look at the chart and see who has the lowest increases filed at the state. Since 2016, United Healthcare has had the lowest rate filing in Kentucky (after Anthem revised their filing to a higher amount in 2018).

If you are not currently with United, it could be for good reason.  Pre-ACA plans have trended lower than these filings for every year except 2018.  Anthem and Humana both programs that operate outside of the ACA and they may result in lower premiums than the standard block of business at any carrier.

However, if you have an ACA plan, United Healthcare should have the lowest premium.  The only reason I see groups deciding not to go with United are that they are willing to pay a premium to work with Anthem or Humana.

 

Step 2: Calculating your Spread

The next think you should do is write in your historical renewal premium increase under each year.  Then under that, subtract that amount from your carrier’s filings.  This will give you a spread between your carrier’s filing and your renewal increase.  I have provided a chart to make this easy.  Simply fill in the blanks:

Carrier	2016	2017	2018	2019*
Anthem	9.1%	9.1%	4%	13.8%
Humana	10.06%	7.17%	11.42%	15.22%
United Healthcare	6.95%	6.95%	4.68%	9.19%
Your carrier for the referenced year
Your premium increase (%)
Difference in you and the book “spread”

*2019 premiums are pending approval.  These are the requested increases filed.

**Anthem’s 2018 rate filing was later increased but I don’t have those figures.  4% was the original filing.

For example, if you were with Anthem in 2016 and you received a 12% increase, you would complete that column as “Anthem” for Carrier, “12%” for your premium increase, and “3%” for the difference in you and the book.

Repeat this process for every year.  If you have an Anthem or Humana pre-ACA “grandmothered” plan, you may not have had a renewal in 2017 if you extended your renewal to maximize the amount of time you can use your pre-ACA plan.

 

 

Step 3: Predicting your next renewal

In small group, we can’t easily predict an exact renewal increase.  However, we can come up with an educated range.

The first thing I look at is a group’s trend.  Has the “spread” increased or decreased over the years for which you have data?  It is reasonable to expect this trend to continue for your next renewal unless you have had a major change in your population.

The next think I like to do is figure up an average.  I wouldn’t put a lot of stock in this number but it will give you an idea of how you have stacked up on average against your carrier’s book of business.

Finally, I would add the smallest and largest “spread” to the filing for your next renewal.  This will give you a range to expect at your next renewal.

For example, assume you have been with Anthem since 2016 and your smallest spread was 4% in 2016 and your largest was 8% in 2018.  If we add both of these numbers to the 2019 carrier filing for Anthem of 13.8%, we come up with a range of 17.8%-21.8%.

 

 

Step 4: Using the data

If your prediction range looks high, you should prepare yourself and your employees to change carriers this year.  You should make sure your broker shops out every option available to make sure you are in the best plan for your company.

An increasing trend in the “spread” should alert you that you and your employees need to be more engaged with wellness.  Every carrier has great free resources to help with wellness.  Your broker can provide direction here.

 

Final Thoughts:

I like to end all client discussions of premiums or regulatory issues (depressing topics) with the same advice: “Go back to work and do something that generates revenue.   I’ll make sure you get the best value available but at the end of the day, for a group with less than 50 employees, there’s only so much you can do.”

The most rewarding part of what I do is helping people.  I’m more than happy to have a no-obligation discussion with you about your benefits program.  There are a lot of factors that go into your renewal and I enjoy educating employers on the underwriting process, options that may help them, and what they can do to improve their situation.

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