WASHINGTON -– More than 4,200 small businesses in West Virginia insured by Highmark Blue Cross Blue Shield are getting insurance premium savings this month because of a key health care provision authored by U.S. Sen. Jay Rockefeller.
These 4,200 small businesses cover 39,000 West Virginians, many of whom contribute to the cost of their coverage, and could benefit from these savings. This relief to small businesses across West Virginia is the direct result of something called "minimum medical loss ratio," which Rockefeller authored in 2010.
"This is great news for thousands of West Virginia's small businesses who are going to shave about $2,500 off their health insurance premium for this year," Rockefeller, D-W.Va., said. "With our economy still struggling and many worried about the cost of health insurance, there's no better time for West Virginia companies to get some long overdue savings. I've already heard from small business managers who are absolutely thrilled with this news."
Under Rockefeller's "minimum medical loss ratio" law, health insurance companies are required to spend at least 80 percent of small businesses' health insurance premium dollars on medical care or improving the quality of care. Insurers that do not meet these targets must pay their customers a rebate starting in 2012.
This fall, Highmark determined that it might fall short of the law's target. As a result, Highmark cut December premiums by 75 percent. That means that instead of collecting $14 million in December premiums from its 4,200 small group clients in West Virginia, the company is giving back $10.5 million to its customers and collecting only $3.5 million. That $10.5 million is being provided in the form of a 75 percent premium discount for each small business - savings that they can choose to share with their employees.