Small Employer Rating, Renewability, and Portability Act

Small employer carriers must use a modified community rating methodology, which means the premium for each small employer is determined solely on the basis of the eligible employee's and dependent's

• gender,
• age,
• family composition,
• tobacco use, or
• geographic area.

Non-grandfathered (new) small employer health plans are not required to use gender in the rating process.

Unless the composition of the group changes, small employer carriers may not change the rate for a small employer for 12 months from the issue date or renewal date. Any adjustments in rates for claims, health status, or duration of coverage must be made for the whole group and may not be charged to individual employees or dependents. Premium adjustments may not deviate more than 15% from the carrier's approved rate. The carrier can adjust a renewal premium, up to 10% annually, due to the claims, health status, or duration of coverage of the employees or dependents of the small employer.

Guaranteed issue

This has been mentioned several times now. Florida requires that small employer carriers issue policies on a guaranteed-issue basis. This means it is available to every employer with 2-50 eligible employees and there are no "carve outs." If the insurance company stops offering small employer plans but continues to renew existing plans must continue to provide coverage to newly eligible employees and dependents.

Small employer access program

The 2004 legislature determined that allowing small employers with up to 25 employees better access to health care could improve employees' health and reduce the costs of illness and disabilities among residents of Florida. Thus, the Small Employers Access Program was created, which includes the creation of the Small Business Health Plan. This plan created purchasing pools with the intention of providing small employers the option and ability to provide health care benefits to the other employees. These pools may consist of:

• employers with up to 25 employees
• municipalities,
• counties,
• school districts,
• hospital employers located in rural areas, and
• nursing home employers regardless of the number of employees.

Insurers are selected by the Office of Insurance Regulation through a competitive bidding process and must offer basic, standard, and high-deductible plans. Selected insurers must maintain public awareness programs, encourage the effective use of health saving accounts, and demonstrate the ability to deliver cost-effective health care services.

Stop-Loss Insurance

Some small employers self-insure, and if they do then they may use a stop-loss insurance policy. This is a type of policy issued to a small employer that covers excess medical costs that go above a certain dollar amount. That maximum dollar amour is based on the number of employees and, while the dollar amount itself is not important, this policy covers 100% of all claims that exceed that point.