58-18B-3 Regulations on premium rates.
58-18B-3.
Regulations on premium rates.
Premium rates for health benefit plans subject to
this chapter are subject to the following provisions:
(1)
The index rate for a rating period for any class of business may not exceed the index rate
for any other class of business by more than twenty percent unless:
(a)
The class of business is one for which the carrier does not reject, and never has
rejected, small employers included within the definition of employers eligible for
the class of business or otherwise eligible employees and dependents who enroll
on a timely basis, based upon their claim experience or health status;
(b)
The carrier does not involuntarily transfer, and never has involuntarily transferred,
a health benefit plan into or out of the class of business; or
(c)
The class of business is currently available for purchase;
(2)
For a class of business, the premium rates charged during a rating period to small
employers with similar case characteristics for the same or similar coverage, or the rates
which could be charged to such employers under the rating system for that class of
business, may not vary from the index rate by more than twenty-five percent of the index
rate;
(3)
The percentage increase in the premium rate charged to a small employer for a new rating
period may not exceed the sum of the following:
(a)
The percentage change in the new business premium rate measured from the first
day of the prior rating period to the first day of the new rating period. In the case
of a class of business for which the small employer carrier is not issuing new
policies, the carrier shall use the percentage change in the base premium rate;
(b)
An adjustment, not to exceed fifteen percent annually and adjusted pro rata for
rating periods of less than one year, due to the claim experience, health status or
duration of coverage of the employees or dependents of the small employer as
determined from the carrier's rate manual for the class of business; and
(c)
Any adjustment due to change in coverage or change in the case characteristics of
the small employer as determined from the carrier's rate manual for the class of
business;
(4)
For health benefit plans issued prior to July 1, 1991, a premium rate for a rating period
may exceed the ranges described in subdivision (1) or (2) of this section for a period of
five years from July 1, 1991. In that case, the percentage increase in the premium rate
charged to a small employer in such a class of business for a new rating period may not
exceed the sum of the following:
(a)
The percentage change in the new business premium rate measured from the first
day of the prior rating period to the first day of the new rating period. In the case
of a class of business for which the small employer carrier is not issuing new
policies, the carrier shall use the percentage change in the base premium rate; and
(b)
Any adjustment due to change in coverage or change in the case characteristics of
the small employer as determined from the carrier's rate manual for the class of
business.
This section does not affect the use by a small employer carrier of legitimate rating factors other
than claim experience, health status or duration of coverage in the determination of premium rates.
Small employer carriers shall apply rating factors, including case characteristics, consistently with
respect to all small employers in a class of business.
A small employer carrier may not involuntarily transfer a small employer into or out of a class
of business. A small employer carrier may not offer to transfer a small employer into or out of a class
of business unless the offer is made to transfer all small employers in the class of business without
regard to case characteristics, claim experience, health status, or duration since issue.
Source: SL 1991, ch 402, § 3.