Broker sees age-band train wreck

Starting a group health plan that complies with the federal law could infuriate veteran workers.

Alan Schulman, a Rockville, Md., benefits broker, told members of the House Small Business workforce subcommittee about the problem Thursday at a hearing on Patient Protection and Affordable Care Act implementation.

Schulman spoke at the hearing on behalf of the National Association of Health Underwriters.

PPACA prohibits carriers from using most forms of personal health information when setting small-group rates, but it does let them charge the oldest workers three times as much as they do the youngest ones.

In the past, carriers also used employee age when they set small group health rates, but they offered the groups “composite rates” calculated in such a way that the premium for younger workers was the same as the premium for the older workers, Schulman testified, according to a written version of his testimony.

Now, because of the way the U.S. Department of Health and Human Services has written the PPACA “age band” regulations,”it’s virtually impossible for an issuer to give an employer a composite rate,” Schulman said.

“Instead, each employee gets an individual rate that varies based on their personal age,” Schulman said.