EmblemHealth Drops Small Business Insurance Plans

Move also reduces incentive for brokers to sell insurance

HEALTHCARE REFORM
EmblemHealth recently announced to its network of insurance brokers that it was “streamlining” products for small companies and sole proprietors in the New York City area, a move that may be repeated around the country.

The insurance company is completely dropping health plans for sole proprietors and will only keep three plans (with reduced benefits) for small businesses. While the change does not affect companies already enrolled in any small business health insurance plans, new companies will not be allowed to sign up for the plans.

The company explained that it’s “not withdrawing from the small group market” but restructuring its products due to new rules set up by the affordable healthcare act. Once a state’s health insurance exchange becomes operational the company will be able to “slim down our portfolio and streamline the refilling process,” said Charlene Maher, EmblemHealth’s senior vice president and chief marketing officer.

The company also ended broker commission on certain plans, which guarantees brokers will not sell those products because they will have no financial incentive to do so. Nearly 90% of small business insurance coverage is purchased through brokers, who reap $693 million a year in commissions, according to a recent study.

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