A Letter from the President

Baker Administration Obtains Small Biz ACA Health Insurance Flexibility 

Dear RAM Member,

Finally, some good news on the small business health insurance front. Through the good work of the Baker Administration, the state has obtained from the federal government some small business rate flexibility, which will once again allow the state’s non-profit small business purchasing cooperatives to offer enhanced upfront discounts to their members beginning January 1, 2020. The largest cooperative in the Commonwealth is the Retailers Association of Massachusetts Health Insurance Cooperative (RAMHIC). 

As many RAM members are aware, for more than a decade your association has been the leading voice calling for health insurance premium fairness for small businesses and their employees in the Commonwealth. Due to complexity of health insurance laws--made worse by often conflicting requirements under federal and state regulation—employees of small businesses in Massachusetts have the second highest premiums in the nation. Yet curiously, individuals have among the lowest premiums in the US, despite the fact we live in a very high cost state.

The discrepancy of rate fairness in Massachusetts as compared to 49 other states is due to the fact that we are the only state which puts individuals and small business employees in the same risk pool. That state regulatory decision coupled with federal rate setting requirements under the ACA, which was written under the assumption that individual and small group risk pools would be kept separate, has created unfair and discriminatory premiums for those working on Main Street in Massachusetts. Without getting into the very complicated rate setting reasons, what in effect happens in Massachusetts as compared to everywhere else is that small businesses of 50 employees or fewer pay more so individuals can pay substantially less.
RAM was the driving force behind the passage of the Massachusetts Small Business Health Insurance Cooperative law back in 2010, which not only made more choices available to our members, but incented wellness and consumer education efforts, while saving real dollars off the premiums. Unfortunately, the implementation of the ACA disrupted the ability of the cooperative model to provide meaningful premium savings as intended. Yet, with the recent approval from Washington D.C. to reinstate the cooperative rating factor allowing us to discount offered health plans, we now see a better pathway going forward for our small business members.

Pending final state approval, beginning in January our upfront discount for plans offered by both Blue Cross Blue Shield of MA and Fallon Health will return to 3%. This discount will be offered on top of the additional choices, benefits and product enhancements RAMHIC already makes available to our members. Like our industry leading small business workers compensation group, we know that by working together to become better healthcare consumers and advocates, we can collectively level the playing field with big business and big government insurance options; and achieve greater savings and better coverage in the years ahead. Watch for more specific details on the offerings from RAMHIC this fall. In the meantime feel free to contact the RAM staff for more information.


Jon B. Hurst, President