The “Department of Defense and Full-Year Continuing Appropriations Act, 2011” required this report to Congress on the impact of sections 2701 through 2703 of the Public Health Service (PHS) Act, as amended by the Affordable Care Act (ACA) on the premiums paid by individuals and families with employer-sponsored health insurance. Specifically, the Chief Actuary of the Centers for Medicare & Medicaid Services (CMS) is to provide an estimate of the number of individuals and families who will experience a premium increase and the number who will see a decrease as a result of these three provisions.
Section 2701 of PHS Act is titled “Fair Health Insurance Premiums” and requires adjusted community rating for plan years beginning on or after January 1, 2014. Specifically, premium rates in the individual and small group market charged for non-grandfathered health insurance coverage may only be varied on the basis of the following four characteristics:
• Individual or family enrollment.
• Geographic area – premium rates can vary by the area of the country.
• Age – premium rates can be higher for an older applicant than that for a younger applicant, but the ratio of premiums cannot exceed 3:1 for adults.
• Tobacco use – premium rates can be higher for smokers, but the ratio cannot exceed 1.5:1.
Section 2702 of the PHS Act requires the guaranteed issuance of health insurance coverage in the individual and group market subject to specified exceptions. This means that insurers that offer coverage in the individual or group market generally must accept all applicants for that coverage in that market. Under section 2703 of the PHS Act, group and individual health insurance coverage
must be guaranteed renewable at the option of the plan sponsor or individual, subject to specified exceptions. These three sections do not apply to grandfathered health insurance coverage.
Read the full report here.
Contact Steven Cosby with questions or to request more information and to schedule a healthcare plan evaluation, savings analysis or group plan solution for your company.
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