Fortis re-enters health insurance market

The Denver Business Journal - February 18, 2005 by Amy Fletcher

Denver Business Journa

Crediting health insurance changes passed by the state Legislature, a company has re-entered the state health insurance market for small employers -- a move that could help lower premiums.

"That certainly is the hope," Colorado Insurance Commissioner Doug Dean said. "We think it is a good thing to have more carriers out there."

In the last several years, at least a dozen health plans have left Colorado, and small companies have faced large premium increases. That situation has prompted the state Legislature to pass several changes to help lure back competition.

It seems to be working.

Assurant Health -- formerly Fortis Health -- has re-entered the state small-group market.

The company has begun marketing and selling its policies in Colorado, which will take effect beginning March 1.

"The whole legislative environment changed late last year to allow companies to come in and offer more competitive products to the consumer," said Mark Willy, regional vice president for North Star Marketing, which is selling the Assurant plans. And "the governor supported a number of laws that changed the rating practices."

The state's small-group market includes self-employed individuals and groups of two to 50 people. Those seeking coverage through it are guaranteed coverage.

Last year the state Legislature passed a bill that incorporates health savings accounts into the small-group market. In 2003, it passed a proposal allowing insurers for the first time to charge healthy groups up to 15 percent less for their health insurance. Unhealthy groups -- those with more medical claims -- pay up to 10 percent more.

"We're particularly gratified that our health care insurance reforms are already producing results for small businesses and individuals in Colorado," Gov. Bill Owens said in a press release.

Assurant (NYSE: AIZ) calls the old rules "restrictive" and said they made it difficult for companies to compete. In 2001, operating under the name Fortis, the Milwaukee-based company announced it would discontinue its small employer plans.

Assurant Health provides health insurance products nationwide. In Colorado, the company will offer Health Reimbursement Arrangements (HRAs), Health Savings Accounts (HSAs) and other plans.

Arvada insurance broker Paul LoNigro said Assurant's rates appear competitive with the state's large insurers: Anthem Blue Cross and Blue Shield, UnitedHealthcare and PacifiCare of Colorado.

"They are probably more competitive on their HSA product line than anyone currently in Colorado," he said.

Denver insurance broker Bill Lindsay questions the extent to which Assurant will affect the small group market.

"It's positive. I don't think it's significant. It's only one company, and they never had a very big market share here when they were here before," he said. But "it gives small employers one more option."

Assurant Health is part of Assurant, which provides specialized insurance products and related services in North America and selected other markets. Assurant has more than $20 billion in assets and $7 billion in annual revenue.