Summary
To compare solely on the basis of large group trends vs. small group trends would be unfair as the needs of the small group business owner are different.
Analysis
Data on the small group market place shows increases.
Small businesses with fewer than 500 employees numbered 198,983 in 2001 and employed 1,822,060 people or 50.3 percent of the state's non-farm private workforce. Total net employment gain in the state amounted to 69,916 between 2000 and 2001. Of that number, 69,916 are attributable to MSAs (metropolitan statistical areas). During the same time period, firms with fewer than 20 employees gained 37,528 jobs.
Source: U.S. Dept. of Commerce, Bureau of the Census, Statistics of U.S. Businesses in NJ.
The large percentage of small group plans in '06 have switched to the "CDHP" design purely for economic reasons. Less than 10% of employers in this market have initiated multiple options at their work place. Although this was a growing trend in this market before, now the renewal premiums of the more traditional "managed care plans" have forced employers to not only pass along more premium cost to their employees, but they are also changing the plan options to lower priced "CDHP" in order to
re-gain some control on these costs. The large group market may have a different trend as rates on most plans can be negotiated, but with the mandates in place for the small group market place, "CDHP's" are the wave of the future. They were not designed to compete with HMO/PPO plans. The were designed to bring back consumerism back to the market place. Even non-healthy groups have been forced to switch to these plans as rates for the non-CDHP plans keep rising at a double digit pace. The bottom line is that CDHP's are here to stay and with newer plan options coming on the market from the various carriers, these plans will dominate the market place for years to come. Of course, until the next "new" thing comes along.
