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It may pay to hire healthier employees

A bill sent to Gov. Jeb Bush distinguishes the cost of premiums for workers in poor health.

By JO BECKER

© St. Petersburg Times, published May 5, 2000


TALLAHASSEE -- Health insurance premiums will rise for small employers that hire people in poor health, but will fall for those that employ the healthy under a bill sent to Gov. Jeb Bush on Thursday.

It was one of two bills sent to Bush that Republican leaders hope will make health insurance more available for small businesses.

Currently, insurance companies cannot consider the health or medical claims history of employees when determining a premium rate for small group policies -- those purchased by employers with up to 50 employees.

The bill would remove that prohibition. Instead, insurers could adjust rates up or down by up to 15 percent based on those factors, followed by annual increases of 10 percent. Insurance companies for the most part would have to offset rate increases with rate decreases, but overall they could still net a 5 percent increase.

As of March 1999, 1.73-million Floridians were insured under such small group policies.

Bush has not yet reviewed the bill, said his spokesman Justin Sayfie.

Supporters say the bill will help attract small group insurers to the state. The number of carriers willing to write policies in Florida has dropped from 116 in 1997 to 90 in 1999. The thinking goes like this: The more insurers, the more competition and the lower the rates.

"Small employers are having great trouble getting these policies; companies are not writing the coverage," said state Sen. Jim Scott, R-Fort Lauderdale.

The bill may lead to discrimination.

"The bill may impact an employer's hiring decisions, due to an employer's concern about how the health status of employees will affect the employer's group health insurance premium," reads a legislative staff analysis of the bill.

The bill could have a particular impact on older employees. It also allows employers with fewer than 10 employees to charge each individual employee a different rate, based on how their age and gender affects premium rates.

The other change lawmakers made is less controversial.

The state's Community Health Purchasing Alliances, intended to provide affordable health insurance for small employers, are being scrapped.

Instead, private, non-profit organizations will be given the right to pool small businesses under a single master policy and negotiate lower premium rates.

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