Patrons: Sen. George Baker – SB 1341 & Del. Chris Hurst – HB 2033
• Under both Federal law and Virginia law, groups of small employers are currently permitted to band together to create their own, single risk pool full of employees working for these small employer members. These groups are then allowed to offer one, single health plan to all of the employer members’ employees.
• These groups include credit unions, banks, electrical and telephone cooperatives, small employers with a unionized workforce, and industry-based trade associations (e.g., trade groups in the tech industry, construction, manufacturing, and restaurant industries).
• The Virginia REALTORS® Association is simply trying to do the same thing these groups of employers are permitted to do under current law, which is: Create one, single risk pool full of its realtor members (here, realtors who are self-employed and employees of real estate brokerage firms who are members of the Virginia REALTORS® Association), and then offer one, single health plan to all of these Association members.
• The Virginia REALTORS® Health Plan created under this legislation would include many of the same consumer protections included in the Affordable Care Act (ACA). Specifically, the Health Plan:
o Must cover the ACA’s “essential health benefits”;
o Must comply with other ACA coverage requirements like prohibiting annual and lifetime limits on benefits, providing free coverage for certain preventive services, and covering adult children up to age 26;
o Must comply with the Commonwealth’s “benefit mandates” applicable to “large group” health plans;
o Cannot deny coverage based on a pre-existing condition;
o Cannot develop premiums based on the health-status of an individual, employee, or their dependents.
• Every large employer plan – including the State Health Benefits Plan offered to Commonwealth employees – can vary their plan premiums by age by a 5 to 1 ratio, meaning these plans can charge older employees five times more than younger employees. The groups of employers discussed above are also permitted to vary their plan premiums by age by a 5 to 1 ratio.
• Our bill, however, would limit the age variation to a 4 to 1 ratio.
The ACA requires individual and small employer plans to limit the age variation to 3 to 1. However, actuarial studies from the Society of Actuaries and Milliman, along with economic studies from the Congressional Budget Office, indicate that a 3 to 1 age ratio increases premiums for younger individuals,1 which has contributed to younger/healthier individuals opting against entering the ACA’s “individual” market risk pool (e.g., data shows that only 25% of the existing Healthcare.gov enrollees are between the ages of 18 and 34,2 and the Milliman study indicates that enrollment among younger individuals would increase, while enrollment among older individuals would generally not decrease, if the ACA’s 3 to 1 age band was increased to 5 to 13).
o Based on these actuarial and economic studies, we believe that a 4 to 1 ratio will protect older realtors and attract them to our plan, while also helping younger realtors who are currently going without health insurance to obtain an affordable health plan that provides comprehensive coverage.
• We estimate that around 7,000 Virginia REALTORS® go without health insurance each year because they do not qualify for the ACA’s premium subsidies and they cannot afford the high out-of-pocket costs for premiums and deductibles for an “unsubsidized” individual market plan.
o If permitted to establish the Virginia REALTORS® Health Plan, we believe that our uninsured members will be able to access much-needed health coverage that is affordable, comprehensive, and includes all of the necessary consumer protections.