August 25, 2015
On July 29, 2015, the Nebraska Department of Insurance issued Bulletin CB-135. The bulletin is directed at insurers and details how they should calculate premiums for non-grandfathered small group policies for policy years beginning on or after Jan. 1, 2016. While much of the bulletin is technical, there are a few key points for small employers to understand about their upcoming plan year premiums.
Insurers are not required to provide small employers with composite rates. An insurer has the choice of charging a per member rate (based on age, geographic area, and tobacco usage) or a composite rate. If the insurer chooses to use composite rates, they must offer that method to all small employers. The employer will then have the choice of composite or per member rates. If composite rates are elected, the insurer must calculate the average premium at the time the policy is issued based on the number of participants enrolled at that time. The insurer must provide a four tier-rate structure: employee only, employee plus spouse, employee plus child(ren) and employee plus family. The composite rate would remain unchanged during the entire policy year regardless of enrollment changes under the policy. Lastly, tobacco surcharges are applied to the applicable participants and are not factored into composite rates.
Bulletin CB-135 »