NJDOBI Issues Amendments to IHC and SEH Rating Rules under PPACA
For rates applicable to all rating periods beginning on or after January 1, 2014, carriers are directed to:
- Formulate rates in the IHC market to achieve a required 300 percent maximum ratio between premiums for the highest rated individual policyholder and the lowest rated individual policyholder in the State. Age factor categories should be in the following increments: children ages 0 through 20, one-year age bands for adults ages 21 through 63, and a single age band for adults ages 64 and over;
- Formulate rates in the SEH market without regard to gender. Age factor categories should be in the following increments: children ages 0 through 20, one-year age bands for adults ages 21 through 63, and a single age band for adults ages 64 and over.
- In the SEH market, Medicare status should not be used as a rating factor (which means a carve out rate is not permitted).
Existing rating requirements for Basic and Essential plans will be moot as of January 2014, and such plans will not be available for sale.
The new Federal fees and taxes on insurers were not anticipated when the current rules were promulgated. New Federal fees and taxes should be excluded from premium for purposes of Medical Loss Ratio (MLR) calculation.
Click HERE to view the NJDOBI Bulletin No. 13-14 regarding amendments to the IHC AND SEH rating rules under the Patient Protection and Affordable Care Act (ACA).
If you have any questions, please contact your Total Benefit Solutions advisor.