Why did my small business health insurance go up 200%?
Insurers penalize small groups when even a single employee has high medical claims, leaving employers with massive rate hikes or terrible fallback options like 20 percent co-insurance. This dynamic forces very small organizations to choose between unaffordable coverage or abandoning group insurance entirely.
What people tried
Every workaround mentioned in the threads below. We haven’t tested any of them — and nobody here is claiming they worked.
- 1Switching employees to an HRA or ICHRA to help pay for out-of-pocket expenses or individual marketplace plans
- 2Having employees enroll in a spouse's health insurance plan
- 3Asking benefit brokers about carving out high-claimant individuals from the group policy
- 4Switching to level-funded health plans
- 5Joining construction captives or pooling costs
- 6Relying on specialized brokers to handle benefits administration
- 7Passing insurance costs on to employees
- 8Using a cafeteria plan for employees to cover family members
- 9Reimbursing only for the individual employee and excluding family coverage
In their words
Unedited, most upvoted first, each linked to the thread it came from.
“I've had to oversee a self-funded plan and it was a bloody nightmare. It did not result in lower costs. It was ultimately not only more expensive, but I was put in a position of knowing some of our employees' personal medical info, which I didn't want at all.”source ↗
“It's very hard under 50 and even harder the smaller you get, especially if you have even one small claimant. Either claims history or risk history is going to hurt the whole group.”source ↗
“Our provider last year essentially told us to leave group insurance because one employee had a child with major health issues. Our term plan ended in June of this year; we received a quote for a 200% cost increase.”source ↗
“The other plan options were awful 20% co-insurance plan was the only option that matched our prior costs.”source ↗
“It feels like there aren't great options for small orgs in the US.”source ↗
“We were just informed of a dramatic increase in our rates and are wondering whether other companies are being forced to pass the cost on to employees.”source ↗
“I'm mostly reimbursed for just myself. No coverage for my spouse.”source ↗
Where this came up
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