7 October 2013Analysis

Merger seeks to drive down rising Obamacare costs

Group Management Services has merged with three third party administrators—Ogden Benefits Administration, Employee Benefits Concepts and Variable Protection Administrators—as the combined entity looks to drive down client medical costs associated with Obamacare.

Group Management Services, an Ohio-based payroll, human resources and employee benefits specialist has merged with the three third party administrators (TPA) in order to help lower premiums manage healthcare costs, and provide health benefits to employees. Much of this will be done thought Group Management Services health and workers’ compensation captive insurance company, Group Captive Management.

Group Management Services indicated that Ohio businesses can expect an 88 percent in small group health insurance premiums, due to a new Adjusted Community Rating. Whereas in the past employee premiums were based on general medical and population factors, Adjusted Community Rating ““will not consider medical history, but instead will determine premiums based on the carrier’s pool of companies as a whole. Generally, younger and/or healthier groups will pay more, while older and/or unhealthier groups will pay less. The end result is higher premiums for many employees and higher healthcare costs for employers”, according to Group Management Services.

In response, Group Management Services has combined its captive insurance and TPA services, enabling “businesses to use an alternative to Adjusted Community Rating to mitigate premium increases, thus lowering healthcare costs for employers and enabling them to provide higher-quality health benefits to their employees.”

“This latest acquisition puts Group Management Services in a unique position,” said president, Mike Kahoe. “The changes to our healthcare system are making it more difficult for small and medium-size business owners to provide quality health benefits and remain profitable, but now we are capable of providing the option for business owners to accomplish both.”