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Obamacare Premium Prices to Soar (per Insurers) – Update Section 125 Plans Now

And, Core Documents on Obamacare: Section 125 Premium Only Plans are still just a one-time $99 fee (key point). All Core competitors charge an annual recurring fee. For just $99 (one-time) employers can set up a Section 125 POP Plan by Core Documents so their employees can legally eliminate: federal and state income taxes, FICA taxes, and FUTA taxes on most insurance premium; plus, the employer eliminates matching FICA and FUTA taxes (7.65%), and workers’ compensation premium (in most states). The employee and employer save money. The employer will recoup the full cost of a $99 Section 125 premium only plan through employer matching FICA tax savings (7.65%) on just $1,299 in health insurance premium tax deductions.


Expect Obamacare Premium Prices to Soar

Health insurance premiums will likely skyrocket next year, despite the Obama administration’s consistent assurance that consumers will not experience sticker shock under the president’s health care law.

That’s according to industry insiders who told The Hill that they are expecting the price of monthly health insurance premiums to increase significantly. In some states, rates could increase by as much as 300 percent.

Related: Obamacare Sticker Shock Found in Deductibles, Not Premiums

“There is extensive concern about rate increases next year,” said Avalere Health’s Vice President Caroline Pearson. “Particularly since early exchange enrollment is skewed toward older enrollees, some are concerned that plans will need to raise prices in 2015.”

Rates won’t be announced until the fall, however, and Pearson cautioned that it’s still too early to know what they are likely to be since the enrollment period for this year is still ongoing.

The industry’s concerns of rising premiums are largely out of step with Health and Human Services Secretary Kathleen Sebelius’s comments at a congressional hearing last week, where the secretary downplayed any potential sticker shock.

“The increases are far less significant than what they were prior to the Affordable Care Act,” Sebelius said in testimony before the House Ways and Means Committee.

Related: Consumers Hit With Surprise Tax in Obamacare Premium

But insurers say a combination of ObamaCare’s new taxes and fees, as well as rule changes and delays announced to cope with the rocky roll-out, will likely contribute to higher than expected rates.

For instance, the administration’s decision to allow people to keep their old policies likely means that fewer people than anticipated are enrolling on the new exchanges.

This is bad news for the Obama administration, which has routinely pointed out that premiums on the exchanges are less expensive than comparable employer-based policies. While premiums may be cheaper, out of pocket costs on exchange plans tend to be higher. A survey by HealthPocket.com found the deductibles on the exchange plans were 42 percent higher than employer based policies. But now, insurers say Obamacare consumers can expect to experience sticker shock from both premiums and deductibles.

Still, administration officials as well as health policy experts say the rising cost of premiums and deductibles were an issue even before the law took effect.

“The bottom line is that we just don’t know. Premiums were rising 7 to 10 percent a year before the law. So the question is whether we will see a continuation of that sort of single digit increase, as Sebelius said, or whether it will be larger,” MIT professor and one of the architects of Obamacare, Jonathan Gruber told The Hill.

Insurers say not everyone will see premiums rise significantly. That’s because the rates vary depending on the region and carriers available in the area.

For instance, counties that have a population that skews older or have only one major hospital system in the area will likely be hit with higher premiums. In contrast, places with a mix of healthier younger people and more competition for providers will likely see lower premiums.

Check out the worst places to live for ObamaCare here.



Section 125 Premium Only Plan, or a POP Plan is an essential part of any employer group health insurance and ancillary benefit program. Section 125 is the part of the Internal Revenue Code that allows employees to purchase health insurance and other ancillary benefits tax free. A Section 125 Plan legally allows your employees to pay their portion of medical insurance premium and other ancillary benefits premiums using pretax or tax-free dollars.

Core Documents provides employers with everything they need to establish an IRS and DOL compliant Section 125 POP Plan for only $99.00 in PDF version emailed to you as soon as your document is completed. For $149, you can receive the Deluxe Binder option that includes the PDF email version ASAP, and a printed plan document in a 3-ring binder shipped via Priority Mail.

Core Documents, Inc. has been providing free consulting, affordable plan documents, and plan updates as needed for Section 125 Cafeteria Plans and Health Reimbursement Arrangements since 1997. See more information about these fringe benefit plans at Core Documents’ website: www.coredocuments.com, or call toll free 1-888-755-3373.

Why Use CoreDocuments.com instead of TaxFreePremiums.com for $99 Section 125 Premium Only Plan POP Documents?

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