Risk Adjustment (RA) FAQ
Guidance for FAQ regarding Risk Adjustment Operations and Policy
Program Area: Risk Adjustment (RA)
Question: How should an issuer determine the rating area for an employer group?
Answer: Geographic rating areas should be based on the employer's principal business address generally for plan years beginning on or after January 1, 2014. However, for plan year 2014, where issuers can demonstrate that they relied in good faith on different guidance from a state insurance regulator prior to the issuance of the Program Integrity Final Rule (August 30, 2013), then rating based on principal business address will not apply until the first plan year beginning on or after January 1, 2015 with respect to coverage in the Small Group market. We note that this flexibility will not apply to plans offered through the Federally-facilitated Small Business Health Options Program (FF-SHOP), which will apply rates based on the employer's principal business addressing beginning in 2014. For more information please refer to the Program Integrity Final Rule available at: http://www.gpo.gov/fdsys/pkg/FR-2013-08-30/pdf/2013-21338.pdf, pages 54072-73.
Issued by: Centers for Medicare & Medicaid Services (CMS)
Issue Date: December 11, 2014
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