Market Rating Reforms
State Specific Rating Variations
The Market Rules and Rate Review Final Rule (45 CFR Part 147) provides that each state will have age rating ratios of 3:1 using a federally established age curve, tobacco rating ratios of no more than 1.5:1 and per member rating unless a state requests ratios less than the standard, is a community rating state with uniform family tiers, or allows for averaging of enrollee premiums in the small group market.
The Protecting Affordable Coverage for Employees Act (Pub. L. 114-60) amended the definition of small employer in section 1304(b) of the Affordable Care Act and section 2791(e) of the Public Health Service Act to mean generally an employer with 1-50 employees, with the option for states to expand the definition of small employer to 1-100 employees.
The table below includes only states that have implemented standards other than the federal defaults. If a cell is blank or a state is not listed, the federal default applies. Please scroll down for more specific information on:
Updated June 2, 2017
|Individual Market||Small Group Market|
|State||Age Rating Ratio||State-Established Age Curve||Tobacco Rating Ratio||Uniform Family Tiers||Age Rating Ratio||State-Established Age Curve||Tobacco Rating Ratio||Uniform Family Tiers||Average Enrollee Premiums1||State-Specific Composite Premium Method2||State expanded definition of small employer3|
|District of Columbia||Yes||1:1||Yes||1:1||Yes|
* Overall 2:1 variation for small groups: NJSA 17B:27A-25.
**Overall 3:1 variation for small groups: ORS 743.737(11).
1 Average Enrollee Premiums: the state requires that all issuers use a composite premium methodology to bill consumers instead of a per-member only billing methodology. Unless the state has a CMS-approved state-specific alternative composite premium methodology, for plan years beginning on or after January 1, 2015, issuers in the state must composite using the federal default method of two tiers: one tier for all adults and a second tier for all children under 21.
2 State-Specific Composite Premium Method: the state has received authorization from CMS to require that all issuers use an alternative method to the federal default method using two tiers. In a state that has an approved alternate composite premium method, issuers that offer composite premiums in addition to per-member premiums must use the state-specific method when compositing premiums. If the state requires composite premiums, the state-specific composite premium method is the only billing method allowed. Employers and issuers in states with an approved alternate composite premium method should check with the state department of insurance to assure understanding of the alternate composite method.
3 State has notified CMS that it will expand the definition of small employer from 1-50 employees to 1-100 employees.
|State||One Adult||Two Adults||One Adult and One or More Children||Two Adults and One or More Children|
- March 5, 2020 Information Related to COVID–19 Individual and Small Group Market Insurance Coverage
- March 12, 2020 FAQs on Essential Health Benefits Coverage and the Coronavirus (COVID-19)
- March 18, 2020 FAQs on Catastrophic Plan Coverage and the Coronavirus Disease 2019 (COVID-19)
- March 24, 2020 FAQs on Availability and Usage of Telehealth Services through Private Health Insurance Coverage in Response to Coronavirus Disease 2019 (COVID-19)
- March 24, 2020 Payment and Grace Period Flexibilities Associated with the COVID-19 National Emergency
- March 24, 2020 FAQs on Prescription Drugs and the Coronavirus Disease 2019 (COVID-19) for Issuers Offering Health Insurance Coverage in the Individual and Small Group Markets
- April 11, 2020 FAQs about Families First Coronavirus Response Act and the Coronavirus Aid, Relief, and Economic Security Act Implementation
*This document was updated on April 15, 2020, to correct an error in footnote 10 regarding the current end date of the public health emergency related to COVID 19.
- April 13, 2020 Postponement of 2019 Benefit Year HHS-operated Risk Adjustment Data Validation (HHS-RADV)