What is Member Level Rating?
THE PATIENT PROTECTION AND
AFFORDABLE CARE ACT (ACA)
requires insurance carriers to
institute Member Level Rating as a
means for determining the cost of
insurance.
Member Level Rating is the process
of calculating health insurance
premium costs separately for
each family member for his or her
coverage based on pre-defined
criteria such as:
• Plan benefits and coverage levels
•Location
–For group plans sold on the
Small Business Health Options
Program (SHOP), the
ZIP code of the primary
business address is used to
determine the location.
•Age
• Tobacco use (for medical plans
only; not presently a factor for
dental insurance)
• The ACA states that insurance
carriers can only bill for the three
oldest children in a family who
are under the age of 21. Rates
are guaranteed for one year
based on the group’s renewal
date. Therefore, if a member
falls under a different age
range during the year, United
Concordia will continue to bill
the current rate until renewal.
Rates shown are for illustrative purposes only.
ERC-0138-0813 external
How does Member Level Rating work?
Sample Member Level Rating Chart
Plan
Location
Age
Monthly Rate
Plan A
Region 1
0–20
$10.00
Plan A
Region 1
21–30
$12.00
Plan A
Region 1
31–40
$15.00
Plan A
Region 1
41–50
$20.00
Plan A
Region 1
$19.00
Plan A
Region 1
51–60
61+
$14.00
Scenario #1: The Smith Family
The Smith family chose Plan A, and the group’s ZIP code falls into Region 1.
Using the Sample Member Level Rating Chart above, here’s how monthly
dental insurance premium breaks down.
Member
Relationship
Age
Monthly Rate
Bob Smith
Subscriber
50
$20.00
Jane Smith
Spouse
49
$20.00
Terra Smith
Child
19
$10.00
Todd Smith
Child
18
$10.00
Chrissy Smith
Child
15
$10.00
Megan Smith
Child
13
$0.00*
*Because the ACA states that insurance carriers can only bill for the three
oldest children under 21, Megan is covered at no additional charge.
Together, the total monthly rate for the Smiths would be $70.00.
Scenario #2: The Jones Family
The Jones Family chose Plan A, and their group’s ZIP code is also in Region 1.
They have four children also, but their monthly rate is $82.00.
Member
Relationship
Age
Monthly Rate
Jim Jones
Subscriber
55
$19.00
Janice Jones
Spouse
54
$19.00
Chris Jones
Child
24
$12.00
Karen Jones
Child
23
$12.00
Henry Jones
Child
15
$10.00
Hunter Jones
Child
13
$10.00
The Jones family pays a higher premium because they have two children
over the age of 21 and two under the age of 21. Therefore, they are charged
for all four children based on their age.