38.2-3433 - Small employer market premium and disclosure provisions.
§ 38.2-3433. Small employer market premium and disclosure provisions.
A. New or renewal premium rates for essential or standard health benefitplans issued by a health insurance issuer to a small employer not currentlyenrolled with that same health insurance issuer shall be based on a communityrate subject to the following conditions:
1. A health insurance issuer may use the following risk classificationfactors in rating small groups: demographic rating, including age and gender;and geographic area rating. A health insurance issuer may not use claimexperience, health status, duration or other risk classification factors inrating such groups, except as provided in subdivision 2 of this subsection.
2. The premium rates charged by a health insurance issuer may deviate fromthe community rate filed by the health insurance issuer by not more thantwenty percent above or twenty percent below such rate for claim experience,health status and duration only during a rating period for such groups withina similar demographic risk classification for the same or similar coverage.Rates for a health benefit plan may vary based on the number of the eligibleemployee's enrolled dependents.
3. Health insurance issuers shall apply rating factors consistently withrespect to all small employers in a similar demographic risk classification.Adjustments in rates for claims experience, health status and duration fromissue may not be applied individually. Any such adjustment must be applieduniformly to the rate charged for all participants of the small employer.
B. In connection with the offering for sale of any health benefit plan to asmall employer, each health insurance issuer shall make a reasonabledisclosure, as part of its solicitation and sales materials, of:
1. The extent to which premium rates for a specific small employer areestablished or adjusted in part based upon the actual or expected variationin claims costs or actual or expected variation in health condition of theeligible employees and dependents of such small employer;
2. Provisions relating to renewability of policies and contracts; and
3. Provisions affecting any preexisting conditions provision.
C. Each health insurance issuer shall maintain at its principal place ofbusiness a complete and detailed description of its rating practices andrenewal underwriting practices pertaining to its small employer business,including information and documentation that demonstrate that its ratingmethods and practices are based upon commonly accepted actuarial assumptionsand are in accordance with sound actuarial principles.
D. Each health insurance issuer shall file with the Commission annually on orbefore March 15 the community rates and an actuarial certification certifyingthat the health insurance issuer and its rates are in compliance with thisarticle. A copy of such certification shall be retained by the healthinsurance issuer at its principal place of business.
E. A health insurance issuer shall make the information and documentationdescribed in subsection C of this section available for review by theCommission upon request.
(1993, c. 960; 1994, c. 138, cl. 2, c. 303; 1997, cc. 807, 913; 1998, c. 26.)