LRA Insurance & Financial Services, Inc

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2014 Member Level Age Rating for Small Businesses

What is it?

Beginning January 1 2014, at your next group renewal, the Affordable Care Act (ACA) requires a new rating structure for health insurance carriers issuing coverage to small businesses.

The new member-level rates must adhere to these standard age ranges or age bands, established by ACA:

·         Children: A single age band covering children ages 0-20 where all rates for a specific plan are the same.

·         Adult: Single year age bands covering individuals between ages 21-63.

·         Senior: A single age band covering individuals age 64 and older where all rates for a specific plan are the same.

What does this mean for employers and their employees?

3:1 Rates for Adults between 21-63 means that carriers cannot charge their oldest customers more than three times what they charge their youngest in that age band.

For subscribers with a policy that covers more than three dependent children (under 21), the total family rate will include the rates for all covered adults and a maximum of three of the oldest “covered children”. Additional dependent children (under 21) will have a rate of $0.

For example:

Ricardo: Employee only age 45

·         Employee - $215

Martha: Employee age 45 with Spouse age 37 and 2 children under 21

·         Employee - $215

·         Spouse - $200

·         Child under 21 - $125

·         Child under 21 - $125

Janice: Employee age 37 with Spouse age 37 and 5 children 4 under 21 & 1 age 24

·         Employee - $200

·         Spouse - $200

·         Child under 21 - $125

·         Child under 21 - $125

·         Child under 21 - $125

·         Child under 21 - $0

·         Child age 24 - $150

Beginning January 1 2014, at your group’s next renewal, a member’s age will be determined at the time of enrollment along with the employee’s resident zip code. Rating tier changes will occur at each annual renewal period.