Those large employers will continue to be the big winners in the new system. Conventional wisdom holds that medium to small employers will lose out under the new system. So even disregarding the particulars, it can be said that premiums of individual small businesses will be higher than those offered to their larger competitors. Under open rating, each carrier determines its own rating plan - a written document that assigns a rate to each risk. A rating plan may have a number of factors that increase or reduce the premium.
Open rating has no floor.
The most desirable risks will be priced at rock-bottom rates, linked in some way with their cost to the insurer, and insurers' rating plans will so provide. Not all businesses can or should be written at the lowest rate, so this means there will be a tendency to price small business policies at their actual, higher cost. Some carriers plan to offer high-premium employers a deductible workers' compensation insurance policy, where the employer pays a part of any medical costs in exchange for a lower premium. Insurers will require substantial amounts of capital in a business that requests a deductible or retrospective plan, and small businesses just do not have access to substantial capital. If insurers that have depended on the benign competition structure of the minimum rate do not price carefully and intelligently, they may require regulatory attention from the insurance commissioner.