31A-30-106 (Effective 01/01/11) - Individual premiums -- Rating restrictions -- Disclosure.
31A-30-106 (Effective 01/01/11). Individual premiums -- Rating restrictions --Disclosure.
(1) Premium rates for health benefit plans for individuals under this chapter are subjectto the provisions of this section.
(a) The index rate for a rating period for any class of business may not exceed the indexrate for any other class of business by more than 20%.
(b) (i) For a class of business, the premium rates charged during a rating period tocovered insureds with similar case characteristics for the same or similar coverage, or the ratesthat could be charged to the individual under the rating system for that class of business, may notvary from the index rate by more than 30% of the index rate provided in Section 31A-30-106.1.
(ii) A carrier that offers individual and small employer health benefit plans may use thesmall employer index rates to establish the rate limitations for individual policies, even if someindividual policies are rated below the small employer base rate.
(c) 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:
(i) 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;
(ii) 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 rate manual for the class of business of the carrier offering an individualhealth benefit plan; and
(iii) any adjustment due to change in coverage or change in the case characteristics of thecovered insured as determined from the rate manual for the class of business of the carrieroffering an individual health benefit plan.
(d) (i) A carrier offering an individual health benefit plan shall apply rating factors,including case characteristics, consistently with respect to all covered insureds in a class ofbusiness.
(ii) Rating factors shall produce premiums for identical individuals that:
(A) differ only by the amounts attributable to plan design; and
(B) do not reflect differences due to the nature of the individuals assumed to selectparticular health benefit products.
(iii) A carrier offering an individual health benefit plan shall treat all health benefit plansissued or renewed in the same calendar month as having the same rating period.
(e) For the purposes of this Subsection (1), a health benefit plan that uses a restrictednetwork provision may not be considered similar coverage to a health benefit plan that does notuse a restricted network provision, provided that use of the restricted network provision results insubstantial difference in claims costs.
(f) A carrier offering a health benefit plan to an individual may not, without priorapproval of the commissioner, use case characteristics other than:
(i) age;
(ii) gender;
(iii) geographic area; and
(iv) family composition.
(g) (i) The commissioner shall establish rules in accordance with Title 63G, Chapter 3,
Utah Administrative Rulemaking Act, to:
(A) implement this chapter; and
(B) assure that rating practices used by carriers who offer health benefit plans toindividuals are consistent with the purposes of this chapter.
(ii) The rules described in Subsection (1)(g)(i) may include rules that:
(A) assure that differences in rates charged for health benefit products by carriers whooffer health benefit plans to individuals are reasonable and reflect objective differences in plandesign, not including differences due to the nature of the individuals assumed to select particularhealth benefit products;
(B) prescribe the manner in which case characteristics may be used by carriers who offerhealth benefit plans to individuals;
(C) implement the individual enrollment cap under Section 31A-30-110, includingspecifying:
(I) the contents for certification;
(II) auditing standards;
(III) underwriting criteria for uninsurable classification; and
(IV) limitations on high risk enrollees under Section 31A-30-111; and
(D) establish the individual enrollment cap under Subsection 31A-30-110(1).
(h) Before implementing regulations for underwriting criteria for uninsurableclassification, the commissioner shall contract with an independent consulting organization todevelop industry-wide underwriting criteria for uninsurability based on an individual's expectedclaims under open enrollment coverage exceeding 325% of that expected for a standard insurableindividual with the same case characteristics.
(i) The commissioner shall revise rules issued for Sections 31A-22-602 and 31A-22-605regarding individual accident and health policy rates to allow rating in accordance with thissection.
(2) For purposes of Subsection (1)(c)(i), if a health benefit product is a health benefitproduct into which the covered carrier is no longer enrolling new covered insureds, the coveredcarrier shall use the percentage change in the base premium rate, provided that the change doesnot exceed, on a percentage basis, the change in the new business premium rate for the mostsimilar health benefit product into which the covered carrier is actively enrolling new coveredinsureds.
(3) (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.
(4) (a) A carrier who offers a health benefit plan to an individual shall maintain at thecarrier's principal place of business a complete and detailed description of its rating practices andrenewal underwriting practices, including information and documentation that demonstrate thatthe 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 carrier subject to this section shall file with the commissioner, on or beforeApril 1 of each year, in a form, manner, and containing such information as prescribed by thecommissioner, an actuarial certification certifying that:
(A) the carrier is in compliance with this chapter; and
(B) the rating methods of the carrier are actuarially sound.
(ii) A copy of the certification required by Subsection (4)(b)(i) shall be retained by thecarrier at the carrier's principal place of business.
(c) A carrier shall make the information and documentation described in this Subsection(4) available to the commissioner upon request.
(d) 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.
Amended by Chapter 68, 2010 General Session