The ACA’s 3:1 age banding rule for small group plans stipulates that the premium for the oldest adult cannot exceed three times the premium for the youngest adult. This rule is designed to moderate the cost of health insurance for older individuals, who are typically more prone to health issues and thus would otherwise face much higher premiums. It aims to create a balance where younger, healthier individuals pay slightly more than their expected cost, subsidizing older individuals who are likely to require more medical care.