There are several different types of small group options in Nevada, but they can all be boiled down into two main group health rating structures: age banded and composite. There are pros and cons to each, so it’s important to choose the one that best fits your business and employees. Here’s what you should know.
Age-Banded Group Health Plans
The age-banded group health plan rating structure was introduced in 2014 under the Affordable Care Act (ACA). Premiums are based on the individual age of each enrolled member — gender has no effect, per ACA rules. As members get older, premiums increase.
For example, under an age-banded group health plan rating structure, a 54-year-old husband and a 58-year-old spouse would pay slightly different premiums because of the age difference.
Families with multiple children may also see higher rates. However, for large families with more than three children under the age of 21, the 4th+ child is free.
Age-banded group health plans are commonly used for standard small-group ACA plans.
Composite-Rating Group Health Plans
Under a composite-rating group health plan rating structure, rates are based on dependent enrollment type:
- Employee only
- Employee + spouse
- Employee + child/children
- Employee + family
Premiums increase with the more dependents enrolled in the plan. Age and gender of employees and dependents don’t affect the premiums. The number of child dependents also doesn’t affect the rates.
Composite-rating group health plans are easier for employees and employers to understand, since pricing is fixed at each tier. Many also view them as fairer because all employees pay the same rate for each enrollment tier.
This type of group health plan rating structure simplifies budgeting and plan administration for employers and employees, since everything is fixed. It’s commonly used in dental, vision, large-group medical, association health plans, and level-funded plans.
Find the Group Health Plan Rating Structure That Works for You
Understanding how a group health rating plan structure works is a key part of making informed decisions with your company’s health insurance, one that works both for your organization and your employees.
If you would like more information about the Nevada small group options available, contact us at Health Benefits Associates. Our team of knowledgeable local agents will walk you through the options to find the one that works best for you. Schedule an appointment by calling 775-828-1216 today.