Impact of Obamacare on Small Business: Update

December 11, 2013

BlueCross BlueShield of Tennessee won't extend small employer policies

While Tennessee's biggest health insurer will give individual policy holders another year before they must come under the requirements of the new health reform law, small businesses facing cancellations will not be granted the same reprieve.

BlueCross BlueShield of Tennessee announced Monday that it will not offer small group customers -- 50 or fewer employees -- the same extension option because BlueCross allowed early renewal this year to let businesses opt to keep their existing plans through most of 2014.

BlueCross vice president Roy Vaughn said last week that the company "had many, many of our groups" take advantage of the early renewal this fall to stay ahead of the changes. Those employers won't come under the new and often more expensive requirements of the so-called ObamaCare law until next fall.

But many of those small employers who have not renewed early are facing double-digit premium increases for 2014.

"I would have loved it if they had extended the health plans another year, but I certainly understand why they did not," said Russ Blakely, longtime Chattanooga health insurance broker. Extending the policies into fall of 2015 would be "nearly impossible to underwrite," he said.

"Basically, you've created two entirely different rating methodologies," he said. "It would be really, really hard to manage."

The new extensions will apply to individual plans through BlueCross with renewal dates from Jan. 1, 2014 to Oct. 1, 2014 can keep their current health plans for another year.

While approximately 66,000 people with BlueCross coverage faced cancellations of their policies, the extension will mean an estimated 50,000 of those people will be offered the extension option.

Approximately 16,000 people covered through the state's insurance program CoverTN -- which is administered by BlueCross -- will not have their policies extended, state officials announced at the end of November.

The extensions followed a wave of outrage from those who found that their policies were not permitted under the Affordable Care Act.

President Barack Obama later said he would allow states to extend those policies one more year, and the Tennessee Department of Commerce and Insurance followed suit, a move BlueCross said it supported.

"These plans have provided high-quality coverage that has met our customers' needs," said Bill Gracey, BlueCross president and CEO. "We expect many of them will welcome the opportunity to renew their coverage for another year."

Those members will need to keep the exact same level of benefits and renewal dates in order to qualify for the extensions, the BlueCross said.

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