Coventry Mid-Atlantic Region

November 14, 2013

New Rating Guidelines for Small Businesses Headquartered in Pennsylvania

Beginning with quotes received on or after November 15, 2013, we will use the Group's Total Average Employee count to determine whether a group is considered a small employer for rating purposes. Any Pennsylvania group that has employed on average 51 or more employees during the preceding calendar year will be considered a large employer for the purposes of rating.

The ACA definition for number of employees is "the average number of employees employed by the employer's company during the preceding calendar year." It defines an employee as any person for whom the company issues a W-2. This includes full-time, part-time, and seasonal workers who may or may not have been eligible for the employer's medical plan.

How to calculate the Group's Total Average Employee count*

1. Count any employee receiving a W-2. This includes full time, part-time, and seasonal workers who may or may not have been eligible for medical coverage (this does not include 1099 independent contractors);

2. When calculating the average, consider all months of the previous calendar year regardless of whether there was a coverage or carrier change or even if no medical plan was offered;

3. Add each month's number to get an annual total, and then divide by 12. (In the example below, 253 ÷ 12 = 21);

4. Round up or down to the nearest whole number. Example: 24.6, the number reported in the total box would be 25;

5. For newly formed businesses, calculate the prior year average using only those months that your client was in business;

6. For illustrative quotes, be sure to include this number with your request or when determining if you can quote using BenefitExpress;

7. For new business submissions, record the number in the "Average Number of Employees" field on the Group Application.

* Subject to change based on future regulatory guidance.

If the business is aggregated with one or more other businesses and treated as a single employer under subscription (b) controlled group of corporations, (c) partnerships, proprietorships, etc., under common control, (m) employees of an affiliated service group, or (o) other regulations of section 414 of the Internal Revenue Code, then please provide the combined total number of employees for all businesses that are included in the "single employer group" under the Internal Revenue Code.

Contact your account executive with any questions.

HealthAmerica

Coventry of Delaware

Coventry of West Virginia

Quick Links