Chapter
095
2008 -- S 2680 SUBSTITUTE A
Enacted 06/26/08
A N A C T
RELATING TO INSURANCE
-- SMALL EMPLOYER HEALTH INSURANCE
AVAILABILITY ACT
Introduced By: Senators Miller, Perry, Bates, Gibbs, and C Levesque
Date Introduced: February 26, 2008
It
is enacted by the General Assembly as follows:
SECTION
1. Section 27-50-5 of the General Laws in Chapter 27-50 entitled "Small
Employer
Health Insurance Availability Act" is hereby amended to read as follows:
27-50-5.
Restrictions relating to premium rates. -- (a) Premium rates for health
benefit
plans
subject to this chapter are subject to the following provisions:
(1) Subject to subdivision (2) of this subsection, a small employer carrier
shall develop
its
rates based on an adjusted community rate and may only vary the adjusted
community rate for:
(i) Age;
(ii) Gender; and
(iii) Family composition.; and
(2)
A small employer carrier who as of June 1, 2000, varied rates by health status
may
vary the
adjusted community rates for health status may vary the adjusted community rate
for
employer
groups covering only one enrolled employee of any family composition by up to a
ten
percent
(10%) upward adjustment, provided that the adjustment percentage applied must
be the
same
for all groups with one such enrolled employee, and the resulting rates comply
with the
other
requirements of this section, including excepting subdivision (5) of this
subsection.
(2) (3) The adjustment for age in paragraph (1)(i) of this
subsection may not use age
brackets
smaller than five (5) year increments and these shall begin with age thirty
(30) and end
with age
sixty-five (65).
(3) (4) The small employer carriers are permitted to develop
separate rates for
individuals
age sixty-five (65) or older for coverage for which Medicare is the primary
payer and
coverage
for which Medicare is not the primary payer. Both rates are subject to the
requirements
of this
subsection.
(4) (5) For each health benefit plan offered by a carrier, the
highest premium rate for
each
family composition type shall not exceed four (4) times the premium rate that
could be
charged
to a small employer with the lowest premium rate for that family composition.
(5) (6) Premium rates for bona fide associations except for the
Rhode Island Builders'
Association
whose membership is limited to those who are actively involved in supporting
the
construction
industry in Rhode Island shall comply with the requirements of section 27-50-5.
(b) The premium charged for a health benefit plan may not be adjusted more
frequently
than
annually except that the rates may be changed to reflect:
(1) Changes to the enrollment of the small employer;
(2) Changes to the family composition of the employee; or
(3) Changes to the health benefit plan requested by the small employer.
(c) Premium rates for health benefit plans shall comply with the requirements
of this
section.
(d) Small employer carriers shall apply rating factors consistently with
respect to all
small
employers. Rating factors shall produce premiums for identical groups that
differ only by
the
amounts attributable to plan design and do not reflect differences due to the
nature of the
groups assumed
to select particular health benefit plans. Nothing in this section shall be
construed
to
prevent a group health plan and a health insurance carrier offering health
insurance coverage
from
establishing premium discounts or rebates or modifying otherwise applicable
copayments or
deductibles
in return for adherence to programs of health promotion and disease prevention,
including
those included in affordable health benefit plans, provided that the resulting
rates
comply
with the other requirements of this section, including subdivision (a)(5) of
this section.
The calculation of premium discounts, rebates, or modifications to otherwise
applicable
copayments
or deductibles for affordable health benefit plans shall be made in a manner
consistent
with accepted actuarial standards and based on actual or reasonably anticipated
small
employer
claims experience. As used in the preceding sentence, "accepted actuarial
standards"
includes
actuarially appropriate use of relevant data from outside the claims experience
of small
employers
covered by affordable health plans, including, but not limited to, experience
derived
from the
large group market, as this term is defined in section 27-18.6-2(20).
(e) For the purposes of this section, a health benefit plan that contains a
restricted
network
provision shall not be considered similar coverage to a health benefit plan
that does not
contain
such a provision, provided that the restriction of benefits to network
providers results in
substantial
differences in claim costs.
(f) The director health insurance commissioner may establish
regulations to implement
the
provisions of this section and to assure that rating practices used by small
employer carriers
are
consistent with the purposes of this chapter, including regulations that assure
that differences
in rates
charged for health benefit plans by small employer carriers are reasonable and
reflect
objective
differences in plan design or coverage (not including differences due to the
nature of the
groups
assumed to select particular health benefit plans or separate claim experience
for
individual
health benefit plans) and to ensure that small employer groups with one
eligible
subscriber
are notified of rates for health benefit plans in the individual market.
(g) In connection with the offering for sale of any health benefit plan to a
small
employer,
a small employer carrier shall make a reasonable disclosure, as part of its
solicitation
and
sales materials, of all of the following:
(1) The provisions of the health benefit plan concerning the small employer
carrier's
right to
change premium rates and the factors, other than claim experience, that affect
changes in
premium
rates;
(2) The provisions relating to renewability of policies and contracts;
(3) The provisions relating to any preexisting condition provision; and
(4) A listing of and descriptive information, including benefits and premiums,
about all
benefit
plans for which the small employer is qualified.
(h) (1) Each small employer carrier shall maintain at its principal place of
business a
complete
and detailed description of its rating practices and renewal underwriting
practices,
including
information and documentation that demonstrate that its rating methods and
practices
are
based upon commonly accepted actuarial assumptions and are in accordance with
sound
actuarial
principles.
(2) Each small employer carrier shall file with the director commissioner
annually on or
before
March 15 an actuarial certification certifying that the carrier is in
compliance with this
chapter
and that the rating methods of the small employer carrier are actuarially
sound. The
certification
shall be in a form and manner, and shall contain the information, specified by
the
director commissioner. A copy of the certification
shall be retained by the small employer carrier
at its
principal place of business.
(3) A small employer carrier shall make the information and documentation
described in
subdivision
(1) of this subsection available to the director commissioner
upon request. Except in
cases of
violations of this chapter, the information shall be considered proprietary and
trade secret
information
and shall not be subject to disclosure by the director to persons outside of
the
department
except as agreed to by the small employer carrier or as ordered by a court of
competent
jurisdiction.
(4) For the wellness health benefit plan described in section 27-50-10, the
rates proposed
to be
charged and the plan design to be offered by any carrier shall be filed by the
carrier at the
office
of the health insurance commissioner no less than thirty (30)
days prior to their proposed
date of
use. The carrier shall be required to establish that the rates proposed to be
charged and the
plan
design to be offered are consistent with the proper conduct of its business and
with the
interest
of the public. The health insurance commissioner may approve,
disapprove, or modify the
rates and/or
approve or disapprove the plan design proposed to be offered by the carrier.
Any
disapproval
by the health insurance commissioner of a plan design proposed to
be offered shall be
based
upon a determination that the plan design is not consistent with the criteria
established
pursuant
to subsection 27-50-10(b).
(i) The requirements of this section apply to all health benefit plans issued
or renewed on
or after
September 1, 2000.
SECTION
2. This act shall take effect on January 1, 2009, and shall apply to all health
benefit
plans issued or renewed to take effect on or after January 1, 2009.
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LC01975/SUB A
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