31A-30-106.1 - Small employer premiums -- Rating restrictions -- Disclosure.
31A-30-106.1. Small employer premiums -- Rating restrictions -- Disclosure.
(1) Premium rates for small employer health benefit plans under this chapter are subjectto the provisions of this section for a health benefit plan that is issued or renewed, on or afterJanuary 1, 2011.
(2) (a) The index rate for a rating period for any class of business may not exceed theindex rate for any other class of business by more than 20%.
(b) For a class of business, the premium rates charged during a rating period to coveredinsureds with similar case characteristics for the same or similar coverage, or the rates that couldbe charged to an employer group under the rating system for that class of business, may not varyfrom the index rate by more than 30% of the index rate, except when catastrophic mental healthcoverage is selected as provided in Subsection 31A-22-625(2)(d).
(3) The percentage increase in the premium rate charged to a covered insured for a newrating period, adjusted pro rata for rating periods less than a year, may not exceed the sum of thefollowing:
(a) the percentage change in the new business premium rate measured from the first dayof the prior rating period to the first day of the new rating period;
(b) any adjustment, not to exceed 15% annually for rating periods of less than one year,due to the claim experience, health status, or duration of coverage of the covered individuals asdetermined from the small employer carrier's rate manual for the class of business, except whencatastrophic mental health coverage is selected as provided in Subsection 31A-22-625(2)(d); and
(c) any adjustment due to change in coverage or change in the case characteristics of thecovered insured as determined for the class of business from the small employer carrier's ratemanual.
(4) (a) Adjustments in rates for claims experience, health status, and duration from issuemay not be charged to individual employees or dependents.
(b) Rating adjustments and factors, including case characteristics, shall be applieduniformly and consistently to the rates charged for all employees and dependents of the smallemployer.
(c) Rating factors shall produce premiums for identical groups that:
(i) differ only by the amounts attributable to plan design; and
(ii) do not reflect differences due to the nature of the groups assumed to select particularhealth benefit products.
(d) A small employer carrier shall treat all health benefit plans issued or renewed in thesame calendar month as having the same rating period.
(5) A health benefit plan that uses a restricted network provision may not be consideredsimilar coverage to a health benefit plan that does not use a restricted network provision,provided that use of the restricted network provision results in substantial difference in claimscosts.
(6) The small employer carrier may not use case characteristics other than the following:
(a) age, as determined at the beginning of the plan year, limited to:
(i) the following age bands:
(A) less than 20;
(B) 20-24;
(C) 25-29;
(D) 30-34;
(E) 35-39;
(F) 40-44;
(G) 45-49;
(H) 50-54;
(I) 55-59;
(J) 60-64; and
(K) 65 and above; and
(ii) a standard slope ratio range for each age band, applied to each family compositiontier rating structure under Subsection (6)(c):
(A) as developed by the department by administrative rule;
(B) not to exceed an overall ratio of 5:1; and
(C) the age slope ratios for each age band may not overlap;
(b) geographic area; and
(c) family composition, limited to:
(i) an overall ratio of 5:1 or less; and
(ii) a four tier rating structure that includes:
(A) employee only;
(B) employee plus spouse;
(C) employee plus a dependent or dependents; and
(D) a family, consisting of an employee plus spouse, and a dependent or dependents.
(7) If a health benefit plan is a health benefit plan into which the small employer carrieris no longer enrolling new covered insureds, the small employer carrier shall use the percentagechange in the base premium rate, provided that the change does not exceed, on a percentagebasis, the change in the new business premium rate for the most similar health benefit productinto which the small employer carrier is actively enrolling new covered insureds.
(8) (a) A covered carrier may not transfer a covered insured involuntarily into or out of aclass of business.
(b) A covered carrier may not offer to transfer a covered insured into or out of a class ofbusiness unless the offer is made to transfer all covered insureds in the class of business withoutregard to:
(i) case characteristics;
(ii) claim experience;
(iii) health status; or
(iv) duration of coverage since issue.
(9) (a) Each small employer carrier shall maintain at the small employer carrier'sprincipal place of business a complete and detailed description of its rating practices and renewalunderwriting practices, including information and documentation that demonstrate that the smallemployer carrier's rating methods and practices are:
(i) based upon commonly accepted actuarial assumptions; and
(ii) in accordance with sound actuarial principles.
(b) (i) Each small employer carrier shall file with the commissioner on or before April 1of each year, in a form and manner and containing information as prescribed by thecommissioner, an actuarial certification certifying that:
(A) the small employer carrier is in compliance with this chapter; and
(B) the rating methods of the small employer carrier are actuarially sound.
(ii) A copy of the certification required by Subsection (9)(b)(i) shall be retained by thesmall employer carrier at the small employer carrier's principal place of business.
(c) A small employer carrier shall make the information and documentation described inthis Subsection (9) available to the commissioner upon request.
(10) (a) The commissioner shall, by July 1, 2010, establish rules in accordance with Title63G, Chapter 3, Utah Administrative Rulemaking Act, to:
(i) implement this chapter; and
(ii) assure that rating practices used by small employer carriers under this section andcarriers for individual plans under Section 31A-30-106, as effective on January 1, 2011, areconsistent with the purposes of this chapter.
(b) The rules may:
(i) assure that differences in rates charged for health benefit plans by carriers arereasonable and reflect objective differences in plan design, not including differences due to thenature of the groups or individuals assumed to select particular health benefit plans; and
(ii) prescribe the manner in which case characteristics may be used by small employerand individual carriers.
(11) Records submitted to the commissioner under this section shall be maintained by thecommissioner as protected records under Title 63G, Chapter 2, Government Records Access andManagement Act.
Enacted by Chapter 68, 2010 General Session