Some small-business owners will have more time to shop for new group health insurance plans following a recent decision by Empire Blue Cross Blue Shield to drop a fixed date of April 1, 2012 to cancel several of its money-losing plans in the small-group market.
Instead, the cancellations will take effect as company policies come up for renewal this year. The phase-out of seven Blue Cross plans will be completed by April 1, 2013, the insurer said.
Empire officials in a statement said the change “will be less disruptive to affected members if we discontinue the products on renewal.” The insurer said the decision was reached in discussions with the state Department of Financial Services.
The cancellations will force an estimated 20,000 companies ”“ two-thirds of Empire”™s share of the state market for groups of two to 50 employees ”“ to find other plans offered by Empire or its competitors.
“Empire Blue Cross has reluctantly succumbed to the pressure from the outraged small businesses, brokers and most effectively the Department of Financial Services, but only to allow for a customer to be able to fulfill the full term of the policy contract they purchased,” said Rory P. O”™Brien, president of RPO Group Inc., an employee benefits brokerage and advisory firm in White Plains.
O”™Brien said the insurer still plans to slash commissions paid to brokers and advisers for Blue Cross products as of Jan. 1. Instead of a 4 percent commission on sold premiums, brokers will be paid a flat monthly fee of $5 for each member of a small-group plan.
