Health insurance costs are projected to rise, small businesses to feel the strain
COLORADO (KRDO) -- The Colorado Division of Insurance is reviewing filing information from insurance agencies throughout the state that is projecting the cost of insurance premiums will rise 11.3 percent for the individual market and 9.2 percent for the small group market in 2023.
Small businesses that provide insurance for their employees will now have to navigate the effects.
"It seems to be more of a domino effect, because when the employer can't afford it, they may still offer it, but it comes at a deeper cost for the employee," said Reeana Werner, Chief Problem Solver for HR Branches.
As a company, HR Branches serve as consultants to small businesses, providing expertise on employee relations, benefits, compensation, terminations, and recruiting.
Werner says in the current labor market, employers must offer competitive benefits to employees in order to recruit and retain a workforce. Those benefits are being impacted directly by the increasing prices.
"Unfortunately, it's this chain reaction for small businesses," said Werner. "It starts with the affordability, and then eventually it drops down to the employee and often times they lose that plan because of this chain reaction."
As the rising prices impact both employer and employee, Werner says small businesses will see the hit.
"It becomes cyclical at that point because the employees than are not attracted to that organization because they're unable to offer the benefits," Werner said. "And then, of course, that reduces that individual or that company's ability to be competitive in the market, both on the consumer side as well as the employment side."
Colorado Insurance Commissioner Michael Conway says individuals concerned over the projected increase should know that this is a state average. People could experience greater or smaller increases depending on where they live in the state.
Conway said these increases can be connected to multiple factors, including inflation and the rise of costs for insurance companies to operate.
"I think that there's some inflation concerns that are built into the rates that have been filed," said Conway. "I think you're seeing some workforce increase requirements that are part of that too, and then you're seeing to some degree, a utilization of just health care, in general, coming out of the pandemic."
Coloradans are encouraged to "shop" their health insurance options through the platform, Connect for Health. There they can find different prices for the health insurance plans that best meet their needs.
On that platform, Coloradans will see the "Colorado Option", a state-designed health insurance plan Conway believes will be cheaper than other alternatives.
The Division of Insurance, which falls under the Colorado Department of Regulatory Agencies, will release the finalized insurance costs in early to mid-October.
