With the onset of the Patient Protection and Affordable Care Act, group health insurance rates for the 2-99 employee market are standardized and guaranteed issue. Within the state of California, there are 19 different rating regions and an employee’s premium is based off their age and the employer’s zip code. The latest development addressing rates in 2018 is the restructuring of age bands, where children age 0-14 receive one rate, and every other age through 65+ has its own individual rating. All adult children under the age of 26, along with the three eldest aged 20 and under are included in a household’s total premium.
To meet the ACA’s definition of minimum essential coverage, all plans are structured within four tiers: Bronze, Silver, Gold, and Platinum. While there are small variances within each tier, notable price differences can be seen with your choice of network.
Businesses with 100+ employees are subject to medical underwriting. Rates can be based on the average age of a group, dependent status, gender, and location. Large group rates are affected by a group’s claims experience. Rates are determined annually based on the prior year’s claim history for both employees and ex-employees participating in COBRA. One large claim can drastically impact renewal rates for the following year.
Once determined, large groups receive composite rating, meaning each employee receives the same rate regardless of age. Rates are broken down into four tiers:
Employee + Spouse
Employee + Child(ren)
Employee + Family