Renewals and early renewals

Groups renewing August 2013 through December 2013 will go through their normal renewal process. If a group elects to change their plan year and renew again in December 2013, the rates will be adjusted. Groups who have already renewed and change their plan year to December will also be adjusted. All new employer groups that elect a HAP product from now through November 2013 can opt for an early renewal in December 2013.

The following taxes/fees will be applied as a separate line item on group invoices starting January, 2014:

  • Health Insurance Premium Tax
  • Transitional Reinsurance Program Fee
  • Health Insurance Claims Assessment Act* (State of Michigan)

These combined taxes/fees will be approximately 3.5 - 4 percent in addition to the trend listed above.

HAP is projecting an estimated premium increase in the range of 10 - 90 percent for PPACA-compliant plans renewing in 2014. This range is approximate. It takes into consideration the mapping of existing plans to similar metal-tier plans, the PPACA rating methodology and taxes/fees. In addition to the taxes/fees listed above, the Risk Adjustment and Exchange User Fees will be applied to PPACA plans.


Example of early renewal

ABC Company has renewed their current plan on 7/1/13, with a single price of $350.00. The following would occur:

  1. A trended increase (see July in above chart) will be added to the current price on 12/1/13: $350.00 x 1.0273 = $359.56
  2. The group would have a new single price of $359.56 effective 12/1/13 through 11/30/14
  3. Effective 1/1/14, the group will begin getting billed for the three taxes listed above in a separate line on their invoice
  4. Effective 12/1/14, the group would select a PPACA-compliant plan (see item #4 below)

Example of not renewing early

ABC Company has renewed their current plan on 7/1/13, with a single price of $350.00. The following would occur:

  1. The group’s 7/1/13 renewal price would be effective through 6/30/14
  2. Effective 1/1/14, the group will begin getting billed for the 3 taxes listed above in a separate line on their invoice
  3. Starting 7/1/14, a PPACA-compliant plan will be quoted
  4. That PPACA-compliant plan may reflect an increase of 10 - 90 percent, which includes Essential Health Benefits, taxes and fees, and applies the PPACA rating methodology

The chart below provides further information regarding the rate adjustment for early renewals.

Current Renewal MonthTerm Date of Current PolicyImpacted Months Updated Renewal MonthPrices EndingTrend Taxes/Fees - Approximate % starting January
January11/201311 Months12/201311/20146.10%3.5% - 4%
February11/201310 Months12/201311/20145.53%3.5% - 4%
March11/20139 Months12/201311/20144.97%3.5% - 4%
April11/20138 Months12/201311/20144.40%3.5% - 4%
May11/20137 Months12/201311/20143.84%3.5% - 4%
June11/20136 Months12/201311/20143.28%3.5% - 4%
July11/20135 Months12/201311/20142.73%3.5% - 4%
August11/20134 Months12/201311/20142.18%3.5% - 4%
September11/20133 Months12/201311/20141.63%3.5% - 4%
October11/20132 Months12/201311/20141.08%3.5% - 4%
November11/20131 Month12/201311/20140.54%3.5% - 4%

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