Some PEO’s Think Healthcare Reform Will Just Disappear

Their are some employee leasing companies and professional employer organizations in the HR outsourcing industry, who act as if the Affordable Care Act won’t actually affect them, or  change the way they  provide small group health insurance and employee benefits. One of the reasons could be, that many of these PEO’s actually believe that the Act’s provisions, and protections will never be enacted. Like waking up from a sweet dream (or horrific nightmare), they remain convinced that the Republicans will take power in 2011, and make it all go away.

I hate to pour cold water on their dreams, but it is time to face reality.

If you still have questions about the Affordable Care Act, any of it’s provisions, and the timeline for implementation, then click on the Link below.

Professional Employers Experience Double Digit Increases Again

Group health insurance premium renewals are going out and the reports are not encouraging. It’s that time of the year when employee leasing companies and professional employers send small business owners their new health rates for the coming year. Employers across the nation are being told what to expect, and it’s not exactly what they want to hear. Especially now, when the economy is starting to stabilize.

Many of our small business clients who have been relying on their PEO partner to keep their health insurance rates low, are finding out that it’s no longer the case. Business owners with some of America’s best known and largest human resource outsourcing firms, Administaff, ADP Totalsource, and TriNet / Gevity HR have experienced another round of double digit increases. CFO’s and HR managers have complained about increases from Alphastaff HR, another “Top 10” provider. Their clients renew in September, and a few said they received cost masters with 35% rate increases across the board from Aetna.

Bait and Switch?

Many of our small business clients are learning that some of their health plan choices have been replaced with new healthcare plans that offer more limited networks with fewer in-network providers, or of medical plans that are restricted by geographical location. Just last week we were contacted by a primary care practice with 3 offices in West Virginia. They told us how  their current PEO had just informed them that an entire network of plans was  being eliminated. The majority of their employees will be left with just one  option, and a very expensive one at that. Needless to say, they are now looking to us to help the doctors find a better option for their staff.

It May Only Be RoundOne ?

The worst may be yet to come. September through January is when over 75% of group health insurance plans are set to renew. This includes most of the nation’s largest and most successful staff leasing, HR outsourcing, and professional employer services firms. Yet to announce their new health plan renewals are leading HR and employee benefits providers Advantec HR, Oasis Outsourcing, and SCI Staffing Concepts, who are scheduled to renew in the month of October, Frank Crum’s health rates are good until November, and Accord HR and Fortune Business Solutions renew in January 2011.

It is important to note that while these industry giants, and their highly compensated employee benefits advisors, are still battling it out with their health insurers, the fate of hundreds of thousands of small and midsize businesses are being decided. Combined, these PEOs and employee leasing companies represent about two hundred and fifty thousand (250,000) business owners and about five million (5,000,000) employees nationwide. Let’s hope for the best.