On August 27th, the Maryland Insurance Administration (MIA) issued a bulletin announcing that carriers will be able to use composite premiums for non-grandfathered small groups that would otherwise be age-rated due to federal health care reform. Maryland’s composite premium methodology will include four enrollment tiers (Employee, Employee with Spouse, Employee with Children, Family) instead of the two-tiered methodology established by HHS.
Composite premiums provide ease of administration for small employers with regard to budgeting, contribution-setting, and billing. It also enables employers to use a defined contribution model, which is prohibited with age-rated premiums.
Composite premiums are permitted for plans renewing December 1, 2014 and after. Carriers have the ability to decide which plans will offer composite premiums. Age-rated premiums are still permitted, and will still be used for small employers electing to purchase group coverage through the Maryland Health Connection.