Ala. Admin. Code r. 482-1-116-.05
Current through Register Vol. 43, No. 1, October 31, 2024
Section 482-1-116-.05 - Restrictions Relating To Premium Rates(a) For rating periods beginning on and after the effective date of this regulation, premium rates for health benefit plans subject to this Regulation shall be subject to all of the following provisions: (1) The small employer carrier shall develop its base rate or rates utilizing an adjusted community rating methodology and may only vary the adjusted community rate or rates for one or more of the following: (2) The adjustment for age in Paragraph c. of Subdivision (1) in Subsection (a) above may not use age brackets smaller than five-year increments and these shall begin with age twenty (20) and end with age sixty-five (65).(3) The small employer carrier shall be 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 shall be subject to the requirements of this Subsection (a).(4) The adjustment for age permitted in Paragraph c. of Subdivision (1) in Subsection (a) above for any age group shall not result in a rate per enrollee of more than four hundred percent (400%) of the lowest rate of any age group, other rating characteristics being the same.(5)a. The small employer carrier shall be permitted to adjust the base rate or rates developed according to the requirements of Subdivisions (1) through (4) in Subsection (a) above by a group health characteristic factor and a group size factor as set forth in this subdivision.b. The small employer carrier may vary the group health characteristic according to the general health characteristics of the group written but may not vary the factor by industry group. The maximum group health characteristic factor (F) which may be applied to health benefit plans issuing or renewing on and after the effective date of this regulation is within a range of .75 < F < 1.25.c. If a carrier employs a group size factor, the factor (G) associated with a group size classification which may be applied to health benefit plans issuing or renewing on and after the effective date of this regulation must be within a range of .85 < G < 1.15.(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 any one or more of the following: (1) Changes to the enrollment of the small employer.(2) Changes to the family composition of the employee.(3) Changes to the health benefit plan requested by the small employer.(4) Changes to the health benefit plan mandated by the legislature and subject to any time constraint in enactment.(c) Premium rates for health benefit plans shall comply with the requirements of this section.(d) Rating factors shall produce premiums for identical groups which 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, except to the extent permitted in Subdivision (5) of Subsection (a) above.(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) 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.(4) A listing of and descriptive information about all benefit plans for which the small employer is qualified.(g)(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, both of the following: a. An actuarial certification certifying that the carrier is in compliance with this Regulation 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 such information, as specified by the Commissioner. A copy of the certification shall be retained by the small employer carrier at its principal place of business.b. A market data and experience report containing information on the market penetration, premium rate trend and claims trend under health benefit plans offered by the carrier. The format and content of the report shall be as specified by the Commissioner.(3) A small employer carrier shall make the information and documentation described in Subdivision (1) available to the Commissioner upon request. Except in cases of violations of this Regulation, the information shall be considered proprietary and trade secret information and shall not be subject to disclosure by the commissioner to persons outside of the Alabama Department of Insurance except as agreed to by the small employer carrier or as ordered by a court of competent jurisdiction.(h) Health benefit plans may not establish individual eligibility rules based on health status related factors. Such factors include, but are not limited to, current medical condition (physical and mental), past claims experience, medical history, genetic information, evidence of insurability (including conditions arising out of acts of domestic violence), and disability.(i) The requirements of this section shall apply to all health benefit plans issued or renewed on or after the effective date of this Regulation. Author: Reyn Norman, Associate Counsel
Ala. Admin. Code r. 482-1-116-.05
New Rule: September 3, 1997; effective September 28, 1997. Amended: October 14, 1999; effective January 1, 2000. Amended: September 12, 2001; effective October 1, 2001. Filed with LRS September 14, 2001. Rule is not subject to the Alabama Administrative Procedure Act.Statutory Authority:Code of Ala. 1975, § 27-52-21.