Small business employers and advocates assert a current rating system established under the Affordable Care Act raises administrative costs and results in higher premiums for employers with an aging workforce. Under the current rating system, small businesses price health insurance through a member-level rating based on an employee’s age, spouse, number of children, home location and tobacco use.
However, some Michigan employers with less than 50 full-time employees are asking the rating system be returned to the original one. The original rating system annually set premiums based on the overall insurance risk level of the business and not individual risk, according to the report.
For the time being, Michigan Insurance Commissioner Pat McPharlin said the current rating system will remain intact. According to the report, 25 states allow small businesses to price health policies based on the original rating system.
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