Delaware Business Insurance Update From CNC Insurance Associates Inc. "Why are Delaware Policy Holders Getting Back 2.0 million ?" 12-8-15

It was announced today by the Delaware Insurance Department that health insurers will be reimbursing 2.0 million dollars back to 14,399 health policy holders. So attention to all the small business owners in the state, your employees may be getting checks in the mail.
It would be good to outline why this is occurring, and what to say when you employees come to you for an explanation.


It all begins with the Affordable Care Act ( Obama Care), which spelled out that health insurance companies must spend 80% of every dollar on medical costs and activities that improve health. This leaves 20% left to pay salaries, administration, marketing, commissions, and make a profit. If health insurers do not meet this ratio they are forced to pay up. So in the case of Delaware, the health insurers spent less than 80% on covering health costs and more than 20% on admin, salaries, and profit.


Health insurers find themselves having to manage this ratio or pay big rebates. As is the case in Delaware, breaking the 80/20 rule can be very costly to insurance companies. The bad news for small business owners is the insurance companies will pass this 2.0 million dollar "fine" on.  Small business owners will most likely see higher health insurance rates next year.
Until next time be careful out there and know your risks.


G. Kevin Nemith,  President CNC Insurance Associates Inc. & The Small Business Insurance Center
Serving DE, MD, PA, VA, & NJ
www.cncinsurance.com
www.bizinsurancetv.org

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