Small Group Transition : 51-100 Employees

As of January 1st, 2016 the definition of small group has been expanded to include groups with 51-100 full time equivalent employees.  For groups that will be making the transition, the changes are significant and should be reviewed in detail with a small group specialist.  Since 70-80% of renewals will take effect in Q4 of 2016, it is imperative that you consider all options as soon as possible to familiarize yourself with the new ACA mandates. Rating Regions – Large group rating regions vary by each carrier. Small group consists of 19 regions that are standardized for all carriers. Rating Structure – Large group rates are composite (same rate for each member) and are generated based on the average of employee ages, tiers, genders, and zip codes. Small group rates are determined on a member level based on employer location, where employees and dependents are rated independently.  While age bands can vary by carrier, you will typically see the same rates for age 0-20, one band for each year between 21-63, and one band for age 64+.  Dependents under the age of 21 will be rated individually, up to 3 children. In addition, the ACA has imposed a 3:1 ratio for small group rates.  The rate difference between the youngest to oldest may not exceed a 3 to 1 ratio. The biggest rate increases will hit groups with good medical and SIC risk, and employees with dependents age 20+.  Conversely, young employees may experience rate decreases. Carriers release one set of rates and all groups receive the same standardized rates based on the enrollee’s age.  Rate negotiations are not...