Frequently Asked Questions

How will a "risk adjustment factor (RAF)" affect our policy?

A risk adjustment factor (RAF) is used to assess your company's premium. If an RAF is high, it means your insurance company believes that factors such as your low group size or prevalence of pre-existing medical conditions warrant a higher premium. A low RAF, however, can mean lower premiums. States sometimes place legal restrictions how much carriers can vary prices from group to group, in order to "level the playing field" and try to ensure the broadest possible coverage. Opinions are divided, however, on whether such laws actually help or hinder their respective missions. For example, by law, in California insurers can only vary premiums by 10 percent amongst all the groups that they insure. Many other states have similar laws.

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