31A-30-106 (Superseded 01/01/11) - Premiums -- Rating restrictions -- Disclosure.
31A-30-106 (Superseded 01/01/11). Premiums -- Rating restrictions -- Disclosure.
(1) Premium rates for health benefit plans under this chapter are subject to the provisionsof this Subsection (1).
(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 such employers under the rating system for that class of business, maynot vary from the index rate by more than 30% of the index rate, except as provided in Section31A-22-625.
(ii) A covered carrier that offers individual and small employer health benefit plans mayuse the small employer index rates to establish the rate limitations for individual policies, even ifsome individual 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 and adjusted pro rata for rating periodsof less than one year, due to the claim experience, health status, or duration of coverage of thecovered individuals as determined from the covered carrier's rate manual for the class ofbusiness, except as provided in Section 31A-22-625; and
(iii) any adjustment due to change in coverage or change in the case characteristics of thecovered insured as determined from the covered carrier's rate manual for the class of business.
(d) (i) Adjustments in rates for claims experience, health status, and duration from issuemay not be charged to individual employees or dependents.
(ii) Any adjustment described in Subsection (1)(d)(i) shall be applied uniformly to therates charged for all employees and dependents of the small employer.
(e) A covered carrier may use industry as a case characteristic in establishing premiumrates, provided that the highest rate factor associated with any industry classification does notexceed the lowest rate factor associated with any industry classification by more than 15%.
(f) (i) Covered carriers shall apply rating factors, including case characteristics,consistently with respect to all covered insureds in a class of business.
(ii) Rating factors shall produce premiums for identical groups that:
(A) differ only by the amounts attributable to plan design; and
(B) do not reflect differences due to the nature of the groups assumed to select particularhealth benefit products.
(iii) A covered carrier shall treat all health benefit plans issued or renewed in the samecalendar month as having the same rating period.
(g) 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.
(h) The covered carrier may not, without prior approval of the commissioner, use casecharacteristics other than:
(i) age;
(ii) gender;
(iii) industry;
(iv) geographic area;
(v) family composition; and
(vi) group size.
(i) (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 covered carriers are consistent with the purposesof this chapter.
(ii) The rules described in Subsection (1)(i)(i) may include rules that:
(A) assure that differences in rates charged for health benefit products by covered carriersare reasonable and reflect objective differences in plan design, not including differences due tothe nature of the groups assumed to select particular health benefit products;
(B) prescribe the manner in which case characteristics may be used by covered carriers;
(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).
(j) 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.
(k) 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:
(i) to case characteristics;
(ii) claim experience;
(iii) health status; or
(iv) duration of coverage since issue.
(4) (a) Each covered carrier shall maintain at the covered carrier's principal place ofbusiness a complete and detailed description of its rating practices and renewal underwritingpractices, including information and documentation that demonstrate that the covered carrier'srating methods and practices are:
(i) based upon commonly accepted actuarial assumptions; and
(ii) in accordance with sound actuarial principles.
(b) (i) Each covered carrier shall file with the commissioner, on or before April 1 of eachyear, in a form, manner, and containing such information as prescribed by the commissioner, anactuarial certification certifying that:
(A) the covered carrier is in compliance with this chapter; and
(B) the rating methods of the covered carrier are actuarially sound.
(ii) A copy of the certification required by Subsection (4)(b)(i) shall be retained by thecovered carrier at the covered carrier's principal place of business.
(c) A covered carrier shall make the information and documentation described in thisSubsection (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 382, 2008 General Session
Amended by Chapter 383, 2008 General Session
Amended by Chapter 385, 2008 General Session