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The New Rule • Multiple Age Rating Bands for Children

The New Rule: Multiple Age Rating Bands for Children

An Important note for your 2018 renewal! As a result of regulations issued by the Centers for Medicare and Medicaid Services (CMS) last December, one age band for all children from 0 to 20 years of age will no longer be used. Instead, under the new rule, insurers may use:
•    A single age band for individuals age 0 through 14.
•    One-year age bands for individuals age 15 through 20. (This group will likely see a significant rate increase per child)
So, all children from birth to age 14 will be assessed the same premium amount. However, if your child is 15, and your co-worker’s child is 14, the insurer could charge you more for dependent coverage. Similarly, because the insurer can set rates using one-year age bands for children between the ages of 15 and 20, your co-worker with a 16-year-old could pay more in premium than you pay for your 15-year-old.

This change will take effect for plan or policy years beginning on or after January 1, 2018.
Under the regulations, when determining the premium for family coverage under a per-member rating system, the total premium is determined by adding the premium cost for each family member. With respect to family members under the age of 21, “the premiums for no more than the three oldest covered children must be taken into account in determining the total family premium.”
While this new rule is most likely to be felt by employees who pay for dependent coverage, the age bands apply to all individuals who are 20 or younger–whether they are covered as employees or dependents.

- Dave Peters


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