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Arkansas employers and workers have lagged behind in enrolling in health insurance plans with high deductibles, but since 2015, by switching to health savings account plans faster than any other state, Seriously made up for lost time.
Greg Hatcher, CEO of The Hatcher Agency in Little Rock, said: “Ten years ago he probably had a plan with a high deductible in Arkansas where 20% of people were, now he’s over 50% as opposed to PPO. [preferred provider organizations], was the master plan for most employers. ”
Nationwide, nearly 55% of private sector workers have health insurance with high deductibles, compared with 39.4% in 2015. Arkansas led the switch, from 33% of HDHP in 2015 to 56.9% in 2020, according to KFF figures. Former Kaiser Family Foundation. That her 71.7% increase was the steepest of all states, according to ValuePenguin analysis.
Arkansas insurance experts say health, property and liability insurance are all under pressure in a dangerous world as the pandemic, rising building prices and major liability decisions take their toll. said there is. arkansas business.
The proliferation of health insurance plans with high deductibles offers clear benefits for businesses. Insurance premiums for employer contributions are almost always low, and pre-tax payroll deductions offer attractive income tax deductions for employees. The downside is that some workers may not be able to absorb the initial cost of the higher deductible of $1,400 per year for individuals and $2,800 per year for families.
“Employers must [go with higher-deductible plans] To make employees compensable. Healthcare costs are constantly rising,” said Ralph Haymond, president of Haymond Insurance, Searcy, an independent agency. “The increase in deductibles is due to employees, so they bear most of the costs.”
Greg Hatcher of The Hatcher Agency in Little Rock explained cost dynamics and how the Affordable Care Act changed the equation. When the medical savings plan policy came out, employers had to choose between offering it or offering a PPO plan. “We couldn’t offer both and the prices started going up,” Hatcher said.
“Healthcare reform was really good, but when Obamacare came along, it was gone. [exclusions for] All existing conditions plus 100% wellness coverage added,” continued Hatcher.
“While this has resulted in better plans, it has also increased claims. There is also a requirement that employers must not charge more than 9.6% of an employee’s income for health insurance. and insurance premiums have risen.”
Soaring property values and a surge in claims related to extreme weather events such as hurricanes and floods have led to a surge in property and property insurance, said Andrew Meders, Arkansas CEO of Haymond & Sunstar Insurance. Auto and truck fleet liability insurance deductibles have also increased.
“A single Florida hurricane caused about $60 billion in total damage. The most recent Hurricane Nicole was Florida’s first November hurricane since 1935,” says Meadors. “This is very worrisome.” He said anyone who owns property anywhere near the coast of Florida, Alabama or Mississippi should “have wind and hail deductibles through their roofs, so the wealthy or large You must be a risk taker.
high deductible health Plan your coverage nationally
| Year | % HDHP |
| 2015 | 39.4% |
| 2016 | 42.6% |
| 2017 | 48.7% |
| 2018 | 49.1% |
| 2019 | 50.5% |
| 2020 | 52.9% |
Source: ValuePenguin by LendingTree and Kaiser Family Foundation
Some residents must self-insure their property with a $100,000 deductible, Meadors said. “The reinsurance market is repricing. Those are the insurance companies we all deal with. It’s pushing it up, and that’s what drives premiums.”
This is more than just a coastal phenomenon, Meadors said. “At Hamilton Lake Hot Springs, we insured a great condominium complex and flattened it out to eight different carriers,” he said. I didn’t even mention the update because of the high value.”
Insurance experts say companies are also rethinking their policies to cope with soaring property values. “On the real estate side, if a company bought a building eight years before him for his $5 million, the building is now worth $8 million or $10 million, so the premium is double his. We can see that it could be,” Haymond said.
In response, many companies accept higher deductibles for wind and hail damage. “Instead of his basic $5,000 or $2,500 deductible, companies are taking his 1% and 2% deductibles on the value of the property.” The CEO understands the risks. increase. After all, on his 2% of a $10 million building, deductible costs in a single hailstorm could bring him up to $200,000.
Meadors said some businesses face the possibility of being deducted even with a 3% deductible and are finding workarounds. “We now have a new program called the Wind and Hail Buydown program where customers can say that $100,000 is too much risk for me by paying a reasonable premium. We would like to pay an additional $8,000 to $10,000 to lower the $25,000. That’s more delicious, isn’t it? ”
Haymond, who also has offices in Springdale and Marianna, said large court rulings in liability cases have also pushed up premiums. “We have truck insurance in five different states, and motor vehicle liability has been a major concern for all companies. In, we’re seeing rates of motor vehicle liability go up, and with all these claims, the weather and everything else out there, companies are finding it hard to stay profitable. We have to make a profit to stay in business.”
The coronavirus epidemic has rocked the life insurance market, Meadors said.
“America’s life expectancy has fallen by two years, and you can see it in the obituaries every Sunday,” he said. “Going forward, life insurance premiums will rise and workplace group life insurance premiums will be even more expensive. It’s because of COVID.
One positive trend, according to Meadors, is that workers’ compensation prices have fallen slightly thanks to new emerging markets. “They are called Monoline Workers Compensation Insurance Company and all they do is write workers coverage,” he said. “So increased competition in Arkansas’s favorable loss environment is driving premiums down.
Companies are also dangling new coverage in front of their employees in today’s tight labor market, Hatcher said. “We see more and more voluntary insurance being offered, such as cancer, accident, voluntary insurance and even pet insurance because in today’s working environment it is difficult to find people to hire. The advantage is that sometimes the scale can be tilted.”
