“Small Group” Health Insurance – why rates are increasing, and the difference between “Grandmothered” or “Grandfathered” plans vs the new “ACA” plans

January 2016: No more “grandmothered” health insurance plans, and now any employer with 1 to 100 employees is considered a “small group.”

Employers who have more than 50 employees* are now required to provide health insurance, or face a large tax penalty.

 

This infographic, published by Anthem Blue Cross is very helpful for explaining:

“Why are small group health insurance rates increasing?”

and

“What is the difference between the way that the new “Obamacare” /  Affordable Care Act (“ACA”) plans are rated vs the way they were rated previously?”

 

Why are small group health insurance rates increasing, and what is the difference between the way that the new "Obamacare"/ACA/Affordable Care Act plans are rated vs the way they were rated previously. The explanation is: 1. No more "discounts" (previously known as a "RAF"). 2. In many cases, the new ACA plans have better or increased benefits that are mandated by law. The new plans cover more. 3. New regulations regarding how plans charge consumers, designed to spread the cost more equally among the population, so that there are fewer instances of some people paying very little and some people paying extraordinarily high rates. This benefits people who are sicker and older, or who live in areas where hospitals and doctors charge more, and it hurts people who are young, healthy, or live in areas where healthcare costs are very competitive.

Essentially, there are three fundamental trends:

  1. No more “discounts” (previously known as a “RAF”).
  2. In many cases, the new ACA plans have better or increased benefits that are mandated by law.  The new plans cover more.
  3. New regulations regarding how plans charge consumers are designed to spread the cost more equally among the population, so that there are fewer instances of some people paying very little and some people paying extraordinarily high rates.  These new regulations on rates benefit people who are sicker and older, or who live in areas where hospitals and doctors charge more, and the regulations hurt people who are young, healthy, or live in areas where healthcare costs are already very competitive.

* 50 employees = the sum of all your full time employees plus “full-time equivalents.”  Call us at 626-676-3466 for a full explanation.


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Rates and Doctor Networks are changing.  Give me a call for assistance!  As a Covered California Certified Insurance Agent (CIA), I can help you:

  • Renew or Change your plan.
  • Make sure you’re getting the best value.
  • Help you qualify for the correct Tax Credit / Subsidy. (And avoid mistakes that might haunt you at tax time!).
  • Know which plans have your doctors & hospitals “in-network,” and which plans do not.
  • Figure out billing issues and answer other questions.
  • Provide an alternative to waiting on hold with Customer Service hotlines.
  • Troubleshoot.

No Cost to You – No Extra Fees.

 CALL:
626-676-3466

626-676-3466

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