Small employers in Washington state face double-digit increases in health-care insurance rates for 2023, in some cases. 

In most instances, those small employers, which the state defines as those with 50 employees or fewer—are sustaining the largest increases in premiums in years.

Seattle-based Premera Blue Cross, which holds one of Washington state’s largest market shares, say industry experts, has the largest increase, at 11.64%. Other rate increases in Eastern Washington include a 10.94% hike for Kaiser Foundation Health Plan of Washington, a 9.74% jump for Health Alliance Northwest Health Plan, an 8.21% increase for Asuris Northwest Health, and a 5.75% bump for Regence BlueShield, among other carriers.

Only one insurer in Eastern Washington, Aetna Life Insurance health plan, will decrease its rates. 

The median increase across the 11 carriers is 5.18%.

The new insurance rates were approved by the Washington state Office of the Insurance Commissioner and published on Nov. 1, giving employers two months to shop for different plans or absorb increased costs.

Nate Edmondson, vice president for Advanced Professional Insurance & Benefit Solutions, a wholesale industry consultant for Spokane-based Associated Industries, says it’s not a surprise for rates to increase. However, the 2023 rate increases across most markets are the highest he has seen in several years.

“We are seeing the effects of COVID hit finally. We know it has impacted people’s health,” Edmondson says. “Now, those things are coming to roost with insurance carriers rates trending higher.”

Amanda Lansford, Premera Blue Cross’ strategic communications manager, says the rate increase for small group plans is a reflection of the ongoing rise of health care costs.

Lansford notes that over the past year, the carrier has seen substantial increases in costs coming from people using their plan more frequently, and a rising cost of care from hospitals.

“From our side, this increase is really reflecting the increased cost and frequency use,” she says. “Hospitals are dealing with high administrative costs in particular with labor shortage, a big increase in travel nurses and labor in general.”

Lansford says many people held off seeking care during the height of the pandemic, building up demand for care and playing into the increased frequency of use in the past year. She adds that the pause in care during the pandemic includes people not getting care for bigger issues such as diabetes or cancer, which if not caught early can lead to more costly care.

Edmonson says he’s been hearing the term “long COVID” being used more frequently by agents, brokers, and carriers. Long COVID, or post COVID conditions include a range of new, returning, or ongoing health problems that people experience after being infected with the virus that causes COVID-19, states the Centers for Disease Control and Prevention.

Edmondson says insurance carriers for small groups file a request for a rate increase or decrease in the spring of which are approved or adjusted in October. 

During that time, he works with carriers, brokers and other professionals to understand the reasons for rate changes and informs customers about potential changes.

“We try to collect as much information as we can not only to inform our customers but also to understand why things are costing more,” he says. “Often, it’s a simple ratio of how much (carriers) are paying out in claims versus how much they are receiving in premiums.”

Edmonson says he acquires as much information to keep his client base up to speed so that when rates are approved, there are not many surprises.

“Good or bad, we want to prepare people for what to expect in the new year as best we can,” he says.

Edmondson says he encourages employers to benchmark their health care coverage, compare rates, and move to a different carrier if a plan is no longer something they can afford or need.

He also advises employers to make sure they are providing insurance options that meet the needs of their workforce.

“Don’t pay for more than you think you’ll use,” he says. “If you don’t use it, you don’t get it back.” 

Stefanie Howe, director of marketing for Spokane-based Associated Industries, says the association currently is fielding many requests for rate quotes for the organization’s industry-specific health plan. She also says the association’s health plan landing page is seeing double the traffic compared with a year earlier.

“I think it speaks to the market demand for small employers,” she says.

Howe says that Associated Industries has 645 employer members, of which about half are currently accessing the association’s industry-specific health plan.

The specific industries that qualify for the plan include construction, manufacturing, health care, retail, and business services.

She says that the association is an employer association focused on providing resources to small and midsize businesses, but members aren’t always aware that the association sponsors a health plan.

However, she has noticed many members inquiring about accessing the association health plan, which is underwritten through Asuris Northwest Health.

“The value is really in that bundle of dental, medical, vision, disability,” she says. “It’s really to offer it to make it more accessible and comprehensive for small employers.”

However, she notes it’s important for employers to shop around as the bundle might not be right for everyone.