| You get your group health insurance renewal letter | | | | 3. Group Size Adjustment |
| from your insurance carrier, you insurance agent or a | | | | Changes in the number of employees enrolled in your |
| letter from each of them. They notify you that your | | | | plan can affect the cost of the plan's premium. |
| rates are going up. | | | | 4. Change in Area Factor |
| Did you ever wonder what factors contribute to this | | | | Where the employees enrolled in the plan live |
| increase? | | | | influences the cost of the insurance. Premium amounts |
| Here are the 6 factors that can affect your renewal | | | | are base on the member's home address. |
| premium rates: | | | | So, if you have new employees living in higher rated |
| 1. Change in Base Rate | | | | areas or you have employees that move into higher |
| The change in base rate reflects changes due to | | | | rated areas, the premium will increase. |
| medical and drug prescription cost trends in your city. | | | | 5. Change in Industry Factor |
| Increases in the cost of medical treatments and the | | | | The type of business you run - what industry it is |
| cost of prescriptions in your geographical area will | | | | categorized as - can also impact premium cost. |
| have an impact on your base rate. | | | | Occasionally, an insurance company will re-evaluate |
| 2. Change in Age/Gender | | | | their pricing based on industry. If they raise the rates |
| These changes are based on the demographics of | | | | for your industry, this increase will be reflected upon |
| your group. | | | | renewal of your policy. |
| If your plan uses age banded rating, rates may | | | | 6. Risk and Compliance Adjustments |
| increase as employees move into a higher costing age | | | | These adjustments are based on the overall rate level |
| band. With age banding, the price brackets are | | | | change to the group and reflect the claim and use |
| generally broken into five year segments. So, the | | | | history of the group. |
| insurance company provides a different rate for each | | | | Please note that you may have a policy that does not |
| employee, based on the age of that employee. An | | | | take every one of these factors into consideration. |
| older employee will pay a higher the premium than a | | | | Check with your insurance agent to see which ones |
| younger employee. | | | | your plan includes. |
| Similarly, some plans set health insurance rates based | | | | The good news is that these rate change factors can |
| on gender. If you have such a plan, changes in the | | | | also result in lower premiums if changes to your group |
| number of women and men enrolled in your group plan | | | | profile are favorable. |
| will affect the premiums. | | | | |