New changes in age-band rates became effective Jan.1, 2018, which means that Brokers and Carriers must adjust how they estimate quotes in the new year. According to the American Academy of Actuaries, the new age band changes were made “to better reflect the actuarial risk of children and to provide a more gradual transition from child to adult age rating.” For Brokers, this means that they’ll have to factor in these changes to accurately quote, enroll and maintain Small Groups.
Changes Made to Age Bands in 2018
In 2017, there was a single age band for individuals who were 20 years old or younger. That age band is now broken into multiple bands for rating purposes. According to the amended 2018 Payment Notice in the Public Health Service Act, the new uniform age bands are:
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Children
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A single age band for individuals age 0 through 14
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One-year age bands for individuals age 15 through 20
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Adults
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One-year age bands for individuals age 21 through 63
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Older adults
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A single age band for individuals age 64 and older
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This new structure is not the only change that Brokers need to note. These changes will apply to anyone seeking new coverage in 2018, while people already covered will have the updates apply when they renew their contracts during the year.
How These Updates Affect Brokers
The 2018 age band changes will alter how much people will have to pay for coverage, which means that Brokers will need to adjust how they generate quotes for their groups. The rate ratios are still based off the 21-year-old rate, but the rate formulas for the one-year age bands are new. Individuals age 15 through 20 can expect higher rates, while the one-year age bands over the age of 21 generally have slight decreases. More importantly for Brokers, the addition of more one-year age bands means that they can’t include everyone under the age of 21 in the same rate estimate. This places even more importance in accurate dates of birth for groups with dependent children or younger workers so that Brokers can provide good estimates during 2018.
How FormFire Helps Broker Adjust to the 2018 Age Band Changes
One-year age bands make it more difficult for Brokers to accurately and efficiently offer estimates for their small groups, so the 2018 update adds even more complexity to the process. We adjusted our fully-insured quote estimating tool to accommodate the new 2018 rates. This means that Brokers can use this tool to get accurate rate estimates for their group and know that they are up to date with the latest age band standards. FormFire health insurance quoting software for Brokers helps eliminate unnecessary challenges, even after the 2018 age band updates. Request a demo today to find out just how much our software can simplify your quoting process this year.