Changes Coming to Small Group Premiums for Children

New regulations will take effect January 1, 2018 that will affect the premiums for covered children and employees under the age of 21.

This change will make administration even more complicated for small employers (100 or fewer employees in California and some other states, 50 or fewer in most states).

The Affordable Care Act established rating rules for individual and small group plans. Under these rules, insurance companies have been required to use the same rate for all children up through age 20.

This means that, whether a child is 2 or 20, under existing rules the insurance company charges the same premium. New regulations are changing this rule.

The Centers for Medicare and Medicaid Services has issued regulations saying that one age band will apply for all children from 0 to 14 years of age and there will be one-year age bands for ages 15 through 20.

This change will be effective for policy years beginning in 2018.

For larger families, only the three oldest covered children are counted.

The age bands apply to all individuals who are 20 or younger, including employees.

The new rule does not apply to grandfathered plans.

When determining the number of employees, full-time equivalent employees are counted and all employers in the controlled group of companies must be included.


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About John Garner

John Garner has over thirty five years of experience in employee benefits. He specializes in compliance, health care reform, the Health Insurance Portability and Accountability Act (HIPAA), the Consolidated Omnibus Budget Reconciliation Act (COBRA), and the Employee Retirement Income Security Act (ERISA). He helps clients with life, health, and disability benefits, cost containment, flexible benefits, and claim consulting.

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