About this Premium Comparison Survey

The Premium Comparisons below show the rates each carrier would charge a sample small employer for group coverage for one month for two different standard SEH benefit plans.  The premiums for each plan are effective January 1, 2013 and are listed for comparison purposes only.  Premiums for each plan are subject to change throughout the year and may vary among small employers, but only according to the age, gender, and family status of the employees in the group, and the location of the business. 

According to the SEH rating rules, the highest rate for a small employer can be no more than twice the rate for any other small employer with the same carrier and plan.  The premiums shown will demonstrate the relative pricing among carriers in the market for the sample group.  A carrier that provides the lowest rate for the sample group for a particular benefit will not necessarily provide the lowest rate for a group whose employees have different age, gender, or family status characteristics than the sample group.

Rates are allowed to vary by employer location.  The monthly premiums are based on a small employer, located in Middlesex County, with six employees and their dependents, as described below:

• Single female employee age 27;
• Single male employee age 37;
• Female employee age 47, with two children;
• Male employee and spouse, both age 57;
• Male employee age 27, with spouse age 24, and two children; and
• Female employee age 47, with spouse age 50, and two children. 

The Department and the SEH Benefits Program Board do not set or approve rates.  Carriers are required to file rates with the Department prior to using them.  The law permits carriers to consider only three factors (other than plan of benefits, issue date, and family status) in determining the rates for a small employer group:

• the age of the employees;
• the gender of the employees; and
• the location of the business.

Carriers may not consider the health status or past claims experience of a group in determining premiums.  The law requires carriers to limit variation in cost to a two-to-one ratio.  Thus, the rate for the highest cost group (based on age, gender, and geography) may not be more than two times the rate for the lowest cost group of the same size.  Carriers may base rates on the age and gender characteristics of all the employees in the company or on only the employees that are actually enrolling in the plan. This information is available on the Department web site at: www.state.nj.us/dobi/lifehealthactuarial/rateinfo/index.html

Section 5 of P.L. 2003, c. 27 requires that a carrier must provide a renewing employer 60 days’ notice of any rate increase.  (Section 1 of this law also imposes notification requirements on employers.)

Generally, at renewal, if an employer's rate changes, it reflects changes in one or more of the following areas:

• the age/gender composition of the group;
• the location of the business;
• the factors that the carrier uses to reflect age, gender, and location;
• the carrier’s rate for the plan of benefits; and / or
• the plan of benefits offered by the employer.

Carriers in the small employer market are required to issue coverage to eligible small employers who meet the participation and employer contribution requirements. An eligible small employer has from 2 to 50 eligible employees, where “eligible employee” means a full-time, bona fide employee who works a normal work week of 25 or more hours.

Small employers are required to meet a 75% minimum participation requirement, which means generally that 75% or more of the full-time employees must either participate in the employer's plan (or have other qualifying coverage) in order for the employer to be eligible to purchase SEH coverage.  Credit for participation is given for employees that do not take coverage but are covered under another group health plan (for example, as a dependent) or under Medicare, Medicaid, or New Jersey Family Care.

A small employer is required to pay at least 10% of the overall premium for the entire group.  However, the employer may elect to contribute more than 10%. 

To obtain a price quote from a carrier, contact the carrier or an authorized insurance producer (agent or broker).  Carriers and authorized producers are required to provide a price quote to a small employer within 10 working days of receiving a request for a quote which contains the information necessary to provide the quote.  The producer is also required to provide you with the amount of compensation (as a dollar amount or percentage of premium) received by the producer from the carrier. 

Many carriers offer plans with riders that have fewer benefits and cost less than the standard plans illustrated in this survey.  In considering these lower cost rider options, employers should make sure they and their employees understand the implications.  The decreased benefits riders could exclude or limit certain services and supplies covered by the standard plans, or impose higher cost-sharing (deductibles, copayments, and coinsurance).

In addition to cost, an employer may want to consider 1) the financial strength of the carrier; 2) its reputation for service; and 3) for HMO, POS, PPO and EPO plans, the carrier's network of providers,  in making a decision about coverage.

Other information about small employer health coverage is available online at the Department’s web site at: www.state.nj.us/dobi/division_insurance/ihcseh/index.html. 

You may also contact an insurance producer for information.