Welcome! Login | Register
 

EDITORIAL: Dear Gov. Raimondo, “Why Don’t You Pay Us Girls As Much As Boys”—EDITORIAL: Dear Gov. Raimondo, “Why Won’t You Pay…

RI Airport Corporation Taps Top Airport and Tourism Leader—RI Airport Corporation Taps Top Airport and Tourism…

Developer Getting $3.6M in RI Tax Credits Sued by N. Carolina Town for Backing Out of Project—Developer Getting $3.6M in RI Tax Credits Sued…

NEW: 2 Children in Serious Condition After Car Hits Woman Pushing Stroller on Potters Ave—NEW: 2 Children in Serious Condition After Car…

3 Dead, Over 100 Injured After Train Crashes at New Jersey’s Hoboken Station—3 Dead, Over 100 Injured After Train Crashes…

Bob Whitcomb’s Digital Diary: Catholic Church, Wells Fargo, and Rabbi Gutterman—Bob Whitcomb’s Digital Diary: Catholic Church, Wells Fargo,…

Siedle: FBI & SEC Should Investigate Raimondo & Magaziner’s Billion-Plus Losing Hedge Fund Gamble—Siedle: FBI & SEC Should Investigate Raimondo &…

NEW: Aponte Campaign Finance Case Referred to Attorney General—NEW: Aponte Campaign Finance Case Referred to Attorney…

RI Ranks 7th Worst in U.S. for Business Tax Climate—RI Ranks 7th Worst in U.S. for Business…

Bishop: Trump for President—Bishop: Trump for President

 
 

Smart Benefits: New Rating Requirements For Fairer Premiums

Monday, March 18, 2013

 

To meet healthcare reform requirements, some health insurance rates will be calculated differently beginning in 2014.

To meet healthcare reform requirements, beginning in 2014, health insurance rates for individual and small group plans (non-grandfathered) will be calculated differently to provide for fairer premiums.

According to the final regulations, insurance premiums may only be based on four factors:

  • Age (with a maximum surcharge of 300% for the oldest members)
  • Tobacco use (with a maximum surcharge of 150% for tobacco users)
  • Family status (i.e. individual or family coverage)
  • Geography
     

Rhode Island rating today

Currently, in Rhode Island, insurers use adjusted community rating to set a single rate for a plan. However, adjustments can be made based on factors like gender and age (insurers are prohibited from considering health status for individual and small group plans already). As a result of healthcare reform, a couple of rating factors used in the state will have to change:

  • Gender will no longer be factor
  • Rhode Island’s 4:1 rating factor based on age is higher than what the federal government will allow and will have to be capped at 3:1
     

State Surcharge Option

Under the new rules, Rhode Island will be allowed to limit, or prohibit, the age and/or tobacco surcharge.

Unless the state prohibits the age and tobacco surcharge, each family member must be rated individually, with their costs then aggregated (if a family has more than three children, only the premiums of the three oldest children who are under age 21 will be considered).

For states who allow the tobacco surcharge, small group plans must offer smoking cessation wellness programs to provide a way to avoid the surcharge. Insurers will be able to collect back premiums if someone misrepresents their smoking status.

Amy Gallagher has over 19 years of healthcare industry experience. As Vice President at Cornerstone Group, she advises large employers on long-term cost-containment strategies, consumer-driven solutions and results-driven wellness programs. Amy speaks regularly on a variety of healthcare-related topics, is a member of local organizations like the Rhode Island Business Group on Health, HRM-RI, SHRM, WELCOA, and the Rhode Island Business Healthcare Advisory Council, and participates in the Lieutenant Governor’s Health Benefits Exchange work group of the Health Care Reform Commission.

 

Related Articles

 

Enjoy this post? Share it with others.

 

X

Stay Connected — Free
Daily Email
 
:!