There May Be a Smarter Way to Price Your Health Plan This Renewal
If your renewal notice hit harder this year, you’re not imagining it. Oregon’s fully insured and association health plan markets have posted steep increases, and 2027 is bringing more disruption on top of that: Both Providence Health Plan and HealthNet are exiting the market for all lines of health insurance coverage, and Moda Health is exiting Oregon’s small group ACA market for employers under 50 employees.
Change like this is exactly why it’s worth understanding all of your options this year.
Why This Keeps Happening
Fully insured and most association plans use community rating. Insurers price them on broad factors like age and geography, not your group’s actual health. A healthy group ends up pooled with less healthy ones, and your good numbers have almost no way to show up in your rate.
A Different Way to Price It
A newer generation of plans works differently. Instead of pricing you into one big pool, they score your group’s actual health and price against that. Score well, and it shows up directly in your rate, something a standard fully insured or association plan typically doesn’t do. These are usually level-funded plans, with their own fine print, like refund terms and protection against high claims, that’s worth reviewing carefully.
Where Your Group Fits
Funding options fall on a spectrum, from fully insured on one end to fully self-funded on the other. Small groups used to be limited to the left side of that spectrum, but that’s changing. AI-driven risk scoring and newer regulations are making level-funded and self-funded options realistic for smaller employers too, not just large ones.
Glossary of Terms
- Defined Contribution Plan: an employer gives a fixed, predetermined sum of money or allowance to employees to purchase individual coverage or pay for medical expenses, rather than providing a traditional, one-size-fits-all group insurance policy.
- Fully Insured: a traditional arrangement where an employer or organization buys a policy from a commercial insurance company to cover its members.
- Refunding Contracts: a specific funding arrangement where the final cost of the insurance depends on the group’s actual claims.
- Level-Funded: a hybrid insurance arrangement where an employer pays a fixed monthly amount to cover expected medical claims, administrative fees, and stop-loss insurance.
- Self-Funded: an employer pays for employee medical claims directly out of company funds instead of paying a fixed monthly premium to an outside insurance company.
- Captive: alternative to traditional insurance where a business provides coverage for their own insurance risks by joining or forming their own licensed insurance company.
If your group is under 100 employees, especially under 50, and healthier than average, options further along this spectrum than you might expect are worth a look before simply accepting this year’s renewal.
