How have the rating rules changed for small group plans?

All qualified health plans for small businesses issued or renewed in 2014, must comply with the Affordable Care Act’s new, adjusted community rating rules. Premium prices can be determined using the following four factors: Per Member/Per Month (PMPM) rating – Premium cost by member, rather than tiered contract, capped at the three highest priced dependents, not including spouse or dependents 21 or older. Geographic rating – Michigan has defined 16 geographic areas in the small group market (rates will be based on the primary zip code of the business). Age rating ratio – Members of a small group, age 21 and older, cannot be charged more than three times the rate of a younger person for the same policy (HAP will use a prescribed age curve for ages 21 to 64). Tobacco ratio – Tobacco users cannot be charged more than 1.5 times the non-tobacco users’ price. Note that these factors do not include health status, gender or industry type.


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