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Pedro Reyes, Charter School Practice Group Leader

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A Small Group Benefits Solution for Charter Schools

By Pedro Reyes, Charter School Practice Group Leader

clock September 26, 2016 at 10:00 AM

Since January 1, 2016, employers with 51-100 benefit eligible employees are considered small group employers. As a newly labeled “small business,” you may see rate increases of 20-30%, depending on your group, if you haven’t already.

Why the big jump in rates?

The change is tied to rules that apply to small groups. Small groups are charged with what the insurance industry calls “age-banded” rates. Age-banded simply means age-based. In other words, cost is assessed for the age of each employee and spouse in the group. The shift adds another obstacle in the quest to offer affordably priced health care coverage.

If you are one of these employers, the following is a quick summary of things to be aware of.

For all renewals moving forward, employers with 51 to 100 benefit eligible employees will:

  1. Move from large group to small group
  2. Pay medical rates based on each family member’s age and not the employee’s age
  3. Have rates based on the ZIP code of the employer (instead of the employees’ residential zip codes)
  4. Potentially lose online administration of benefit eligibility
  5. Cease to receive underwriting discounts for industry and favorable employee demographics

Solution for CharterShield School Employers

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Topics: Employee Benefits

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