Chapter 048
2009 -- H 5536 SUBSTITUTE A
Enacted 06/24/09
A N A C T
RELATING TO
INSURANCE - SMALL EMPLOYER HEALTH INSURANCE
Introduced By: Representatives Kennedy, Costantino, Carter, Naughton, and Melo
Date Introduced: February 25, 2009
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. [Effective January
1, 2009.] -- (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;
(2) 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) 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) 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) 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
(6) For a small
employer group renewing its health insurance with the same small
employer carrier which provided it small employer health
insurance in the prior year, the
combined adjustment factor for age and gender for that small
employer group will not exceed one
hundred twenty percent (120%) of the combined adjustment
factor for age and gender for that
small employer group in the prior rate year.
(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. Two
groups that are otherwise identical,
but which have different prior year rate factors may,
however, have rating factors that produce
premiums that differ because of the requirements of
subdivision 27-50-5(a)(6). 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(19).
(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 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 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 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 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 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 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
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 October 1, 2000.
SECTION 2. This act shall take effect on January 1, 2010.
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LC01832/SUB A
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