On Oct. 7, 2014, the Virginia Bureau of Insurance published two documents relating to composite premiums in the Virginia small group market. As background, final rules issued by HHS on March 11, 2014, provided for a two-tiered federal calculation method for composite rates (one tier for each covered adult age 21 or older and a second tier for each covered child under age 21). However, the same final rule permitted states to substitute their own alternative to the federal methodology by seeking approval from HHS.
According to the two documents, Virginia has been approved for and will implement a four-tiered rating structure, including employee, employee plus spouse, employee plus children and employee plus family. This means that while insurers issuing small group market plans in Virginia may continue to provide per-member billing, they may choose to provide family composite premiums on an optional basis. If so, the insurer must follow the state’s four-tiered alternative method, and must make it available for each small employer in the market, regardless of size. Importantly, tiered composite rates must be set at the beginning of the plan year and do not change throughout the plan year, even if the distribution of employees among the tier levels changes.
The tiered-composite methodology applies to Virginia small employer premium rates for plans offered outside of the federally-facilitated exchange in Virginia beginning Jan. 1, 2015. Those offered on the exchange must use per-member ratings.
Composite Premiums in the Small Group Market in Virginia
Approved Virginia Alternate Methodology
On July 28, 2014, the U.S. Court of Appeals for the Fourth Circuit, in Bostic v. Rainey, No. 14-1167 (4th Cir. 2014), upheld a federal district court ruling against Virginia’s ban on same-sex marriage. However, the court issued a stay on their ruling, meaning the ban on same-sex marriage remains in effect pending the outcome of any appeals. So for now, the ban remains the law in Virginia. The issue seems headed eventually to the U.S. Supreme Court.
Read the full nationwide compliance report here.
Contact Steven G. Cosby, MHSA with questions or to request more information and to schedule a healthcare plan evaluation, savings analysis or group plan solution for your company.
