Prior to the Affordable Care Act (ACA) becoming law, it was common pratice for insurance companies to vary the price of premiums based on things like health status, demographics, industry and the amount of time someone has been on a plan. While those practices are currently still in effect, they will be banned for some plans starting January 1, 2014.
Beginning Jan. 1, 2014, health insurance companies offering coverage to individuals and small employers will only be allowed to vary premiums based on age, family size, geography and tobacco use. Basing premiums on other factors will be illegal under the Fair Health Insurance Premiums provision of the ACA.
Factors that will no longer be permitted in determining premium prices in 2014 include health status, past insurance claims, gender, occupation, how long an individual has held a policy, or size of the small employer.
The ACA also permits employment-based health plans to charge employees up to 30 percent more on their premiums (and potentially up to 50 percent more) if they fail to participate in a wellness program or meet specified health goals such as losing weight and quitting smoking.
If you have a health plan that was in existence before March 23, 2010, that adjusts premiums outside of the above provisions, that plan is considered grandfathered and does not have to change.
If you find this to be confusing, you’re not alone! Rest assured that Blue Ridge Insurance Services is here to help you through the process! Call us to see whether you’re better off keeping your current coverage until the end of the policy period, or if you would be best served by going on the public exchange.