The U.S. Department of Health and Human Services released a Final rule on February 22 that implements key provisions of ACA.
The release finalizes five provisions of ACA that are applicable to non-grandfathered health plans. These provisions apply to groups less than 50 employees and the individual market.
- Guaranteed Renewability - Insurance companies must renew plans with very few exceptions (ie. non-payment of premium)
- Guaranteed Availability - Insurance companies must issue plans to individuals, with no consideration of existing health conditions. However, individuals can only purchase a plan during certain times of the year which will be considered the open enrollment period. This first year the open enrollment will be October - February, but October - December each subsequent year.
- Premiums - Insurance companies can only vary premiums based on age, tobacco use, family size and location. Age rating can not be greater than 3:1 and tobacco 1.5:1. This is a monumental change from how premiums are calculated now, expect large rate increases for young and healthy individuals and employer groups.
- Risk Pool - Insurers are required to maintain a single risk pool for claims experience in the individual market and one statewide risk pool for the small group market.
- Catastrophic plans - Individuals younger than 30 can expect large increases due to the new rating structure. To try to keep insurance affordable for these individuals, they can satisfy the insurance requirement by purchasing a policy that will be considered catastrophic only coverage.
The Rockwood
Company - Insurance Brokers since 1896 - To find out more about healthcare
reform and how it affects your business, please feel free to contact us at
ddoe@rockwoodco.com or 312-621-2215.
