Health Insurance: Rate Changes and Exchange Options

A review of 2014 rating structures, the individual mandate and subsidies available

 

Healthcare's New Era

Our country is moving into an entirely new era in Healthcare, and it brings many questions about the best approach to health insurance for both employers and employees.  There are several important things to know about how health insurance rates and policies are changing as a result of the Affordable Care Act.

Small Group Rate Structure

Health insurance companies are completely revising their rate structures effective January 1, 2014.  Rather than the traditional small group rating system of charging based solely on the subscriber’s age and location, the rate structure will now take each member’s age into account, and will therefore rate each individual separately.  In addition, some areas are dividing up the locations to increase the number of rating zones.  Once each member has been rated, the cost of insuring the family will be the combined cost of each individual in that family. 

The change in rating will have the biggest effect on families as well as insured spouses, where the non-subscribing spouse is older than the subscriber, as that was never factored in with the traditional rating structure.  Insurance companies are, however, currently offering small groups a chance to renew early and “lock in” the current rating structure for 2014.  This is a major benefit to small groups, and now is a great opportunity to take advantage of what is being offered.Covered California health exchange

Individual Mandate

Because of the requirement that each individual in the United States be insured, employees that do not have access or cannot afford traditional health insurance may be interested in being insured through the Exchange (also called the Marketplace).  California’s exchange program, Covered California, officially opened for 2014 enrollments on October 1st.  The response was so overwhelming that consumers encountered overloaded websites and jammed phone lines.  On Tuesday night, Covered California officials pulled the enrollment portion of their website down for overnight emergency upgrades.  According to the Associated Press, over 7,770 people had already started applications prior to the shutdown.   

The exchange websites and phone lines are not the only resource to Americans, however.  Many insurance brokers are becoming certified to help individuals and businesses access affordable health care through the exchange programs, and they may provide a more personal approach with a broader perspective. 

Individual Subsidies

Many Americans do not realize that they may qualify for significant subsidies through the exchange programs in their state, and thousands have been pleased to learn how inexpensive it can be to cover themselves and their families.  Benefits not only include a discount on plan cost, but individuals may have access to co-pays as low as $5.00 for doctor visits.  It is important to speak with a certified Covered California representative to ensure the best possible plan.   

What Should You Do?

Changes to small group health plans are a current reality.  Organizations that already offer health insurance to employees should consider renewing their small group policy by December 2013 to secure the current rate structure and plan designs for one more year.  Companies that do not currently offer insurance, but are interested in helping their employees gain access to affordable insurance can get in touch with a certified Covered California broker.

PAYDAY Workforce Solutions has added Beneforce Insurance Solutions to its line of Smart Solutions and employs certified Covered California representatives.  Regardless of the size of your company, if you have any questions about the changes in healthcare or would like assistance with a group or individual quote, contact us today.

 

 

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About the Author:

As Director of Operations, Jessica oversees the day-to-day operations for payroll, human resources, tax, finance and client affairs. She also plays an active role in formulating corporate strategy and developing client programs. Jessica believes a company’s success begins with its people. She strives to build a team encompassing excellence and professionalism, and to play a large role in developing the staff on an ongoing basis. Her passion for strong client relationships drives her in ensuring that clients receive the highest level of personal service and the best products in the industry. Jessica joined PAYDAY in 2004, and quickly advanced to Development Coordinator in 2006, when she took charge of Human Resources. She was promoted to Director of Operations in September, 2011.

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