Effective January 1st, 2014, all companies who sponsor a group health plan and have a full time employee count under 50, will be subject to community rates.

  • Group plans under 50 employees will no longer have a tier rating system of employee only, employee plus spouse, employee plus children or employee plus family, but instead will have different rates for each age of an employee.
  • The rating system will have a 3:1 premium difference for all ages, meaning that the youngest employee will only be 3 times less expensive than the oldest employee of the group.
  • Carriers will also be able to add a surcharge to the premium if the employee is a tobacco user. Many carriers are choosing not to implement a tobacco surcharge right away; however they could start using it in the future.
  • This new rating system will impact groups differently.
  • For some it may lead to better health insurance rates and for others it may lead to higher rates as the market rates start to compress and gravitate towards the middle. There will also be changes to designs of health insurance plans with deductible limits and out of pocket maximums being capped at a certain dollar amount. The addition of Essential Health Benefits and new taxes and insurance fees being added to the premium bill will also have an impact financially.

Final Rule Regarding ACA 90-Day Waiting Period Limitation – The final regulations require that no group health plan or group health insurance issuer impose a waiting period that exceeds 90 days after an employee is otherwise eligible for coverage. The rules do not require coverage be offered to any particular individual or class of individuals. To ensure that eligibility conditions based solely on the passage of time are not used to evade the waiting period limit, the rules state that such conditions cannot exceed 90 days. Other conditions for eligibility are generally permissible, such as meeting certain sales goals, earning a certain level of commission, or successfully completing an orientation period.

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