SB 348 - Beginning July 1, 2013, every health carrier must file its premium rates, classification of risks relevant to the form, and sufficient information to support the premium to be charged to an enrollee or policyholder with the Director of the Department of Insurance. The premium rates and the classification of risks must be filed with the director no later than 60 days prior to the premium effective date. Plan forms, rate filings, and supporting information will be public records and posted on the department's website.
Under the act, each rate filing must include the product form number, an actuarial justification, and other information sufficient to support the rate including explanations that can be validated by a qualified member of the American Academy of Actuaries (MAAA).
The act requires that a rate filing from a health carrier must be submitted by a MAAA qualified actuary. The MAAA statement shall certify that the rates are not excessive, inadequate, or unfairly discriminatory.
Under the terms of the act, all health benefit plan premium rates must consider and be in accordance with past and prospective losses, current and projected loss ratios, past and prospective expenses, health services utilization trend projections, current and projected per enrollee per month premium allocations, three year rate increase history, and adequacy of contingency reserves.
The act provides that any risk classification, premium rates, and all modifications cannot establish an excessive, inadequate, or unfairly discriminatory rate. Under the act, an excessive rate is a rate that is unreasonably high for the insurance coverage provided and an inadequate rate is a rate that is unreasonably low for the insurance coverage provided and is insufficient to sustain projected losses and expenses.
A rate that is unfairly discriminatory is an unfair trade practice.
The act requires the director to review the proposed health premium rates and the accompanying information and determine if the rates are excessive, inadequate, or unfairly discriminatory within 30 days from the date of the rate filing.
Under the terms of the act, when a health carrier files a significant rate increase for approval by the department, the carrier must notify in writing all affected enrollees and policyholders of the proposed rate increase. The act delineates what the notice must contain.
Within 10 days of receipt of a significant rate increase filing, the director must set a date for a public hearing. The hearing must be held no later than 30 days after the department receives the filing from the health carrier. At the hearing, the health carrier may provide additional information to support its significant rate increase. Members of the public may provide information in support or in opposition to the proposed significant rate increase.
Within 20 days of the hearing, the director shall determine whether the proposed significant rate increase is justified. If the director determines that the rate is justified, the director shall issue an order authorizing the health carrier to use the proposed premium rate. If the director determines that the rate is not justified, then the director shall issue an order prohibiting the use of the proposed premium rate.
Under the act, a health carrier must notify all enrollees and policyholders in writing within 10 days of the director's determination regarding a premium rate increase.
Under the act, an enrollee or policyholder shall entitled to judicial review of the director's decision if the enrollee pays all or a majority of the health insurance premium and the proposed rate increase is 8% or more for the same coverage or 20% or more for expanded coverage.
The act contains an emergency clause.
STEPHEN WITTE