83-9-40 - Determination of eligibility for exemptions for providing mental illness coverage; formula for computing increases in treatment costs; definitions.

§ 83-9-40. Determination of eligibility for exemptions for providing mental illness coverage; formula for computing increases in treatment costs; definitions.
 

    In order to determine if the treatment of mental illness benefit coverage required in Sections 83-9-39 and 83-9-41 results in an increase in the cost under a group health insurance plan of one percent (1%) or more, the total cost incurred by the plan, including both mental health costs and medical/surgical costs, must be divided by such total cost reduced by the costs solely required to comply with Sections 83-9-39 and 83-9-41. Such costs include mental health claims that would have been denied absent plan amendments required to comply with Sections 83-9-39 and 83-9-41, the administrative costs related to those claims and other administrative costs attributable to complying with Sections 83-9-39 and 83-9-41. Premium payments are not considered in this calculation. The ratio is mathematically expressed by the following formula: =
 


   
            IE              ò 1.01000

   
       IE - (CE + AE) 
 

For purposes of this section: 
 

"IE" means the incurred expenditures during the base period. "CE" means the claims incurred during the base period that would have been denied under the terms of the plan absent plan amendments required to comply with Sections 83-9-39 and 83-9-41. 
 

"AE" means administrative costs related to claims in CE and other administrative costs attributable to complying with Sections 83-9-39 and 83-9-41. 
 

"Base period" means the period that begins on the first day in any plan year that the plan complies with the requirements of Sections 83-9-39 and 83-9-41 and shall extend for a period of at least six (6) consecutive calendar months. The base period shall not begin before January 1, 2002. 
 

A group insurance plan may exercise the exemption as soon as the plan documents a cost increase of one percent (1%) or more and provides a thirty-day notice to participants and to the Department of Insurance for informational purposes. 
 

Sources: Laws, 2001, ch. 533, § 3, eff from and after Jan. 1, 2002.