Small employers dumping plans faster than expected, WellPoint says

“A year ago, investors worried that WellPoint Inc. would lose more of its small business customers than it could offset by signing up individuals in the Obamacare exchanges.
The first half of those concerns were justified—and then some. Indianapolis-based WellPoint is seeing its small business customers dump their group health plans and move their workers to the Obamacare exchanges at a faster clip this year than it expected.
Already in 2014, WellPoint has watched 218,000 members of its health plans disappear because their employers have ended their group health plans. That’s a 12-percent drop in WellPoint’s overall small group membership.
As I have reported before, the Obamacare tax credits for individuals have proven quite attractive for many employers with fewer than 30 workers. That’s not to say all are taking this route. Most other health insurers have reported that small employers are ending their health plans more slowly than expected.
But WellPoint expects the trend of its small business customers ending their group health plans to play out in just two years, with roughly $400 million in annual profit disappearing.
“We think [that] will be in a more accelerated timeframe over a shorter window of time, meaning this year and next, than over a longer period of time,” said WellPoint Chief Financial Officer Wayne DeVeydt during a July 30 conference call with investors.”