Univera Healthcare, taking a step to bring it in line with competitors, is switching to "rolling rates" for its employer clients, which means its rates now will change only once a year for each group, instead of possibly multiple times in 12 months.
Under the new pricing, changes to insurance premiums will take effect when policies are renewed, and will stay in effect for a full year. Under the old plan, premiums rose or fell on January 1 for all employer groups, regardless of renewal date, and could be adjusted during the year as losses dictated.
The change will start in April for all community-rated employer groups in its health maintenance organization (HMO).
With the move, Univera becomes the last of the big three local insurers to move away from calendar year rates. Both HealthNow New York's Blue Cross Blue Shield of Western New York and Independent Health Association have been on rolling rates more than three years. And Univera itself offers rolling rates in its Utica region, just not here.
That competition was a major reason for the decision, said Univera regional president Mary Lee Campbell-Wisley. She said the company kept hearing complaints from employers and insurance brokers in the community that it was hard to compare Univera's rates to the other two because of the difference.
"The bottom line was we felt we needed to be responsive to the marketplace and what the community was requesting of us," Campbell-Wisley said.
The move doesn't come without risks for Univera. With the old method, the insurer didn't have to impose as large a rate hike at the beginning of the year because it knew it could adjust it later if needed. That meant that the rates it quoted initially might be lower than its competitors. The rates weren't guaranteed for 12 months, however, and could catch up to competitors during the year.
But with rolling rates, the company sets the rates each quarter for all clients renewing or signing up during that three-month period. The price is locked in for a full year, giving the client some certainty but putting more pressure on the carrier to get it right the first time.
"It does add another layer of complexity for us," Campbell-Wisley said. "It means that our actuaries must look at things on an even more frequent basis than they do now and be even more precise than they do today."