After the Affordable Care Act goes into effect in 2014, underlying claims costs which form the basis for insurers' health care coverage premiums will jump by one-third across the U.S. according to the Society of Actuaries.
The increases will vary depending on the state with Ohio seeing claims costs jump by almost 81% and California with a 62% increase. Other states anticipating big increases in claims costs are Wisconsin with an 80% jump; Indiana at 68%; Maryland; with a 67% bump; and Idaho at 62%. Some states will actually see decreasing costs. Among those are New York, with claims costs sliding 14%, and Massachusetts, with a 13% decline.
According to the study, an influx of sick people joining the insurance rolls "will overwhelm the expected lower costs" from younger and healthier people joining the program resulting in higher prices.
To avoid the immediate impact of the Affordable Care Act, many carriers are offering extended or off-cycle 2013 renewals. Insured companies will be able mitigate some of the significant increases and give them the opportunity to evaluate their future plans.
To Date the following information is available:
Blue Cross Blue Shield
Although the details will not be released till this week, it is likely that there will be an offer of early renewals in July 2013 for groups that renewed 2-1-13 through 9-1-13 (once they actually renew) they will have two options - they can change their effective date to 12-1-13 and keep the old plans or 1-1-14 and take a new plan.
Aetna
Aetna is offering “Aetna’s Premium Savings Program” – an early renewal option for your clients. Groups can elect an off-cycle renewal September 1 – December 1, 2013 and keep current benefits and rate levels in place for the following 12 months. Groups wishing to make an anniversary date change to December 1, 2013 need to request an off-cycle renewal 90 days prior to the requested effective date, with acceptance from the group needed 45 days prior to the renewal date. A letter on company letterhead requesting the anniversary date change with a reason for the change is required.
Humana
Humana will honor anniversary date changes as long as the request is received no later than four months prior to the new requested renewal date. If the employer requests an early renewal date and they later change their decision and revert back to their previous renewal date only if the employer makes the request before the new coverage is issued. To make this change, a letter on company letterhead requesting the anniversary date change and a completed Early Renewal Date Request form are required.
United Healthcare
United will honor an anniversary date change to December 1, 2013 and the request must be submitted prior to June 15, 2013. Groups renewing after June 2013 will not be able to participate in the program. Anniversary date changes must not be submitted until after the group’s original renewal date. Once the request is made they cannot change their decision and revert back to their previous renewal date. To make this change, a letter on company letterhead requesting their new anniversary date and acknowledging the fact that they will re-renew again in December on a “short contract” and going forward all renewals will have a December 1st effective date. A completed Employer Certification of Plan Year Change form must also be submitted.
Assurant
When you sell plans effective April 1, 2013 through December 28, 2013, Assurant is offering to keep benefits and rates the same until the end of next year. Most important, your clients are the ones making the choice—and if they decide they want a plan with complete health care reform benefits as of January 1, 2014, the choice is theirs as long as they don't make any plan changes. Available for individual major medical plans effective April 1 through December 28, 2013 in 32 states including Texas.
Contact Heather Matias Ainesworth for more information.
