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How Hard is it for Small Businesses to Find Health Insurance for their Employees? Nearly impossible.

One of the biggest challenges facing small businesses throughout the United States is how to provide benefits to its employees, while still maintaining profits.

Throughout the last 2 years, I have worked with an organization with under 50 employees that has been desperately searching for healthcare insurance solutions for it's employees. Like the rest of Americans, the majority of this workforce is obese with pre-existing conditions, such as diabetes and high cholesterol and poor lifestyle habits, like drinking and smoking.

Finding insurance solutions for this group was a challenge and we were lucky to lock in an affordable partially self-funded plan. Our employees were able to take advantage of reasonable deductibles and low co-pays. However, with an employee population with large claims, frequent emergency room visits and high pharmacy costs, signing up for another partially self-funded plan the following year was proving to be impossible.

We reached out to a number of insurance brokers and all of them provided us with huge increases. We received quotes that were double and triple the previous years premiums. The insurance market has become so tough to navigate that we, along with a number of other small companies, had to reevaluate if we were even able to provide insurance for our employees.

After calling multiple brokers ourselves, searching the healthcare exchange for small business plans, and reviewing basic coverage plans, we finally found an HMO that would only increase premiums by 20% and we decided to move forward with this plan.

After spending an extreme amount of effort and energy finding an affordable plan, we now had to train employees on how to use this new type of insurance. For a group that had been using PPO plans for the last decade, it was going to be a challenge to retrain the group.

There were two main issues that we ran into almost immediately. The first was educating our employees that in order to see specialty doctors, they must get a referral from a primary care physician. Almost 80% of our employees relied on the emergency room for their primary care and about half already saw specialists for everything from orthopedics to diabetes care to cardiology services.

Most of our employees did not have primary care doctors, but those that did were almost all at a clinic not supported by our new insurance plan. Suddenly, we had high risk patients that were unable to get to their specialty doctors without a primary care referral from a physician that they did not have or were not able to see under our new plan. After hours of working and our staff being more patient and understanding than expected, we were able to get everyone to an assigned PCP and scheduled with their specialists for follow up care.

That being said, we still incurred large claims and numerous emergency room visits on this new plan. We were extraordinarily lucky to receive a small decrease on insurance premiums for the same HMO plan in 2019. That being said, it would have been impossible to go back to a PPO without incurring significant additional costs.

Overall, the healthcare market is extremely tricky for small businesses and without large purchasing power, many companies are at the mercy of the insurance market and insurance company greed.

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