Connecticut: small businesses struggle with soaring premiums, unintended consequences of old law

"Premiums for small employers have been rising by double-digit increases for a few years, and they don't have the negotiating power of larger employers," the Hartford (Conn.) Courant reports.

This year's increases are even higher than usual, on top of an economic recession. Connecticut businesses are resorting to drastic measures to preserve employee's coverage, or are forced to drop it all together.

"Some small businesses are switching to new plans that shift more medical costs to employees, often requiring them to pay a larger portion of premiums. Some business owners are leaving the group insurance market and buying cheaper individual policies for themselves and sometimes employees if health problems don't disqualify them," the Courant reports.

The plight of small businesses is made even worse in Connecticut by the unintended consequences of a 90s-era law that prohibits insurers from using the past claims of an employer's own workforce to determine premiums for members of the group. Meant to protect employers with 50 or fewer workers, insurers instead used age and other factors that combined with across-the-board rate hikes in the insurance market and an aging workforce to create steep hikes (Levick, 7/27).