60 Employers Scramble For Health Insurance

CARSON CITY, NV - Before health insurance can be offered to businesses for their employees, the rate and product must first be approved by Nevada's Health Insurance Division.

Here in Nevada the rate for a certain insurance plan can vary depending upon where you live in the state.

'You know many companies use the rate they use in Clark County as the base rate, but then they adjust that rate to other geographical areas in the state. For example, in this case the area factor-area multiplier for Washoe County is 1.3 instead of 1.0 as used in Clark County,' says Nevada Insurance Commissioner Scott Kipper.

That means at this end of the state, for health insurance offered by Sierra Health and Life, rates would be 30-percent higher in northern Nevada when compared to Clark County rates.

But for reasons not entirely clear, that increase was not reflected.2 products offered by Sierra Health and Life were clearly less expensive than the competition.

Here in northern Nevada, 60 small businesses signed up for Sierra Health insurance because of that low rate.

The problem: Those lower rates aren't government-approved, which makes the insurance illegal.

'We have heard from employers and the overall arching desire of these employers is 'let's just use the rate we were sold at' and unfortunately the Affordable Care Act does not allow that. You have to use the approved rate in that area for those particular products,' says Kipper.

Employers are left with 2 options: pay the 30% increase in rates, or go out to the marketplace and try to find another less expensive plan.

Could Sierra just make up the 30% difference with businesses here in northern Nevada? Kipper says that would equate into a rebate and that's against the law.

The insurance division says the investigation into Sierra Health and Life is ongoing to find out how all of this could have happened.