California Insurance Commissioner Dave Jones said the nation's largest health insurer, UnitedHealth Group Inc., is imposing unreasonable rate hikes on about 5,000 small businesses.
Jones said Wednesday that UnitedHealth couldn't justify the average annual increase of nearly 8%, which reflects both higher premiums and a reduction in benefits. He said the rate hike, which went into effect Wednesday, affects up to 45,000 small-business employees and dependents and represents $12.5 million in higher costs.
"At a time when small businesses are struggling to survive, UnitedHealthcare's rate increase is just one more unwarranted economic burden on California's small business owners and their employees," Jones said.
UnitedHealth, based in Minnetonka, Minn., said it was "disheartened" by Jones' comments and that the average annual increase for these customers is less than 2%.