ACA imposes new rating structures which support rating based on individual age, geographic area, and tobacco usage. The flexibility to setup the plan design offers multiple components that may need to be utilized. This article addresses all components; however all may not need to be utilized. Reference the scenarios below to identify which components may be necessary for your plan design.
A. Rates based on Office Location, only one office location (Easiest)
- Use the ACA Rate Group based on "everyone" rule.
B. Rates based on Office Location, everyone not in primary office gets an out of area rate
- Add company offices, including one for remote where County is not the same as the Primary Office. Employees must be assigned to one of these offices.
- Create a Company Geographic Rule where County = the same county as configured in the Primary Office. (see Create Company Geographic Rule)
- ACA Rate Grouping based on Company Geographic Rule. Build or import your rate structure.
- Add the Out-of-Area rate group.
C. Rates based on Office Location, with multiple office locations
- Add company Offices. Employees must be assigned to these offices.
- Create a Company Geographic Rule or use an existing Agency Geographic Rule (see Create Agency Geographic Area for tips on when to use this instead of Company)
- Add the ACA Rate Grouping based on above geographic area uses. Add as many as needed to support company options.
D. Rates based on Employee Residence (Hardest)
- Use State-Based Geographic Regions from the agency Geographic Areas Library. (See Create Agency Geographic Areas)
- Add the ACA Rates based on State Library
Create Company Geographic Areas (Company Setup)
Company geographic areas are groupings based on county, zip code or state that are specific to the individual company. When using company geographic rules based on office location, you must create offices (setup/define class structure/ offices) and assign employees to these offices. To quickly assign employees to these offices, create a report with SSN, First Name, Last Name, and Office, and download into excel to create a file that can be imported back into the system to assign the offices.
Tip! ACA rates based on Geographic Areas can only copy within the company, not copy between companies. Use Agency Geographic Rules if configuring a template plan that will be copied between companies.
Create Agency Geographic Areas (Agency Templates)
Agency geographic areas allow an agency to build a library of county, zip code, or state groupings that are stored at the agency level, preventing the need to create the groupings within each company. The agency library will help create scalable setups which can be used for any company in the agency. Since copies aren’t created under each company, updating the library will update for anyone using that rule.
When do I need to use Agency Geographic Areas?
- Carrier rates are based on employee residence
- Strategic Agency Management
- Creating Agency Template Plans with all available rate groupings
Add an Area:
Create your own custom geographic grouping areas and store in your library (Templates/Geographic Areas). The broker geographic area will be available to use on any company when configuring ACA rate groupings.
Import a State:
Insurers are mandated to use a set of uniform geographic areas within the state for rating purposes. These mandated areas have been (are being) built at the system level to simplify the distribution for use within each broker agency. These Broker State Areas will be available to use for any company when configuring ACA rate groups.
Note: Employee Navigator is in the process of building out each state’s rating areas based on the published list from the Centers for Medicare & Medicaid Services. If your state has not yet been created, please let us know and we can move it to the front of the queue for you!
Best Practice: Import the State Based Geographic Areas for all your small business states to prevent duplicating copies if they are added one at a time by multiple users.
ACA Plan Rate Options (Plan Setup)
ACA imposes new rating structures which support rating based on individual age, geographic area, and tobacco usage. Review and set any applicable option for the specific plan (plan/setup basic policy information).
Includes tobacco: If carrier charges separate fee based on tobacco usage, select this option to open up the two sets of rates: Non-smoker and Smoker.
Employee Geographic Rating Area: Rates are based on where employee resides, as opposed to their office location. When selected rate grouping evaluate the employee address. When unselected, the rate groupings evaluate the office assigned to the employee.
State: Applicable if you are using state based geographic areas and the rates are for a states other than on the company profile.
Age Child Rates as Individual: Children on or above this age will be rated as individuals and not be included in the # of children count.
Max # of Children Rated: The # of children the carrier will assess rates for. Any children above this # will not incur additional monthly premiums.
Note! When the number of children exceed the number specified in this setting, the system will rate the oldest children and the youngest will be exempt. Children over the "Age Child Rates as Individual" will not be included in this count.
Rate Effective Date: Typically rates will be based on the age when the employee is effective for the plan. Based on Policy Start will use the age of the individual on the policy anniversary date.
ACA Rate Groupings (Plan Setup)
ACA rate groupings allow configuration of one or more rate grouping(plan/ setup ACA rates). If only one grouping exists, use the everyone rule. If more than one rate group exists for the company, use one of the following selections. Refer back to Company or Agency Geographic Areas to determine which options best fits the plan needs.
Important! The “Employee Geographic Rating Area” setting on the basic tab will drive whether the rule-based option are using the office location or the employee residence location.
Everyone: Rates are based on office location, and everyone is in the same location
Company Geographic Rule: Use any company specific geographic rules created. Note, these rates do not copy between companies. If geographic rules haven’t been created, nothing will be available to select. See “Create Company Geographic Areas.”
Custom Library: Any broker configured Geographic rules created will be available to choose. See “Create Agency Geographic Areas, Add an Area.”
State Library: Any broker state areas copied into the agency that match either the state listed on the company profile, or the state listed on the basic policy tab. See “Create Agency Geographic Areas, Import a State.”
Tip! If you don’t have any selections to choose, make sure you have configured them on the agency geographic template, and the company has a state in its profile.
Building Rate Tables
Rates can be input two ways:
Build a Rate Table:
Enter the rate for the 21 year old band and select create. The rate tiers will be calculated based on the mandated rating rules. Review the calculated rates for any rounding variances or carrier adjusted values. Adjust +/- icons make increasing or decreasing by a penny simple. Select save.
Uploading rates reduces the risk of data keying errors. Copy and paste the rate structure into an excel document. The ACA rates page has a copy of the import template you can use, with 3 available options, depending on how the carrier presents the age bands. Pay close attention to the lower and upper ranges. <21 will create the band 0-20. 64+ will create a band for 64-120.
Contributions can be grouped based on the following options:
The Employee Cost $: Amount the employee pays per month
The Company Cost $: Amount the company pays per month
The Company Contribution %: Percentage of the total cost the employer pays. Useful when rates are age banded.
Additional Employee Cost $: (Dependent only option) Amount of $ the employee pays in addition to the cost of the Employee Only coverage in the same plan.
Additional Company Cost $: (Dependent only option) Amount of $ the employer pays in addition to the cost of the Employee Only coverage in the same plan.
Additional Company Contribution %: (Dependent only option) Additional % the employer pays in addition to the cost of the Employee Only coverage in the same plan.