New “small” group plans and non-grandfathered renewals starting January 1st, 2014 will have premiums based on community rating. Fully insured plans in the individual and small group markets will only be able to consider family size, geography, tobacco use, and age in calculating health insurance premiums.
Although this change to the rating methodology will ease the burden of the medical underwriting process, some groups will see significant rate adjustments as they move to this new rate environment. However, once the first year adjustment is made, rates should stabilize and increases should become easier to budget for. Initially employers with 2-50 full-time employees will be community rated. In 2016 employer groups with between 1 and 100 full-time employees become community rated.