3 AAC 31.235 - Health care insurance rate filings

(a) Except as provided in (b) of this section, an insurer may not use or change health care insurance premium rates unless the rates and supporting documentation as required by this section have been filed with and approved by the director. Rates and supporting documentation requested under this section must be filed with the director at least 45 days before the proposed effective date of the new or modified premium rates. A rate filing must be filed annually at least 45 days before the end of the rating period, even if no rate change is proposed.

(b) An insurer is not required to file for approval with the director health care insurance premium rates for a large employer health care insurance policy but must submit rates and supporting documentation with the director not later than 30 days after use for a large employer health insurance policy that is not fully experience-rated. In this subsection, "large employer" means an employer that employs an average of at least 51 employees on the business days during the preceding calendar year and that employs at least two employees on the first day of a health benefit plan year.

(c) Except as provided in (b) of this section, an insurer shall submit separate filings for individual, small group, and large group policy forms, riders, or endorsements through the National Association of lnsurance Commissioners' System for Electronic Rate and Form Filing (SERFF). All applicable filing and rate information fields in the System for Electronic Rate and Form Filing must be completed.

(d) An insurer shall propose the date upon which the proposed health care insurance rates will become effective and shall specify the annual rating period for which the proposed rates will be effective. The proposed effective date may be not later than six months after the date the rate filing is submitted to the director except to the extent necessary to meet any federal filing deadlines.

(e) To develop rates or rate revisions, the insurer shall use the most current reliable data available and, to the extent that the experience is credible, use experience specific to the insurer's policyholders in this state and covered individuals in this state. If other experience is used in developing rates or rate revisions, the rates or rate revisions must be

(1) adjusted to be appropriate for this state's benefit, utilization, and cost levels; and

(2) described in the actuarial memorandum under (g) of this section.

(f) Underwriting adjustments to rates must be

(1) documented in detail in the company records;

(2) objectively determined; and

(3) actuarially justified.

(g) Except as provided in (h) of this section, a health care insurance rate filing must include an actuarial memorandum with information sufficient to demonstrate that rates are not excessive, inadequate, or unfairly discriminatory. The actuarial memorandum must include

(1) a list of policy forms, riders, and endorsements to which the rates apply, including

(A) a summary of benefits for each policy form, rider, and endorsement;

(B) an indication of whether the policy form, rider, or endorsement is open or closed to new sales;

(C) a description of the marketing method for each policy form, rider, and endorsement;

(D) a description of applicable underwriting standards for each policy form, rider, and endorsement; and

(E) a description of any benefit changes from the previous year for each policy form, rider, and endorsement;

(2) a signed certification by a member of the American Academy of Actuaries stating that, in the opinion of the actuary, the rates are in compliance with the law of this state and are not excessive, inadequate, or unfairly discriminatory;

(3) a description of the reason for the rate revision, if applicable;

(4) by policy form or, if experience is combined for multiple policy forms, for the combined forms, the number of policyholders in this state and covered individuals in this state that will be affected by the proposed rate revision;

(5) by policy form or, if experience is combined for multiple policy forms, for the combined forms, the average, minimum, and maximum rate revision that any policyholder or covered individual would receive;

(6) a description of the rating formula, including each rating assumption and any changes in the rating formula or rating assumptions from the previous year;

(7) the methodology for determining, and the actuarial justification for, each rating assumption or change in rating assumption including a description and a summary of the experience data used in developing the rates or rate revisions;

(8) rate schedules for the specified rating period;

(9) the cost and utilization trend analysis by major service category;

(10) a comparison of the prior year projected experience and actual experience as well as actual-to-expected cost, utilization, and claim trends for the experience period used in developing rates;

(11) the pricing or target loss ratio;

(12) the impact on rates or rate revisions of state or federally mandated benefit changes and the impact of other benefit changes for both essential and non-essential health benefits, including the impact of changes in cost-sharing requirements by major service category on rates or rate revisions;

(13) the impact on rates or rate revisions of changes in actual or expected enrollee risk profile including federal rating limitations on age and tobacco;

(14) the impact of any overestimate or underestimate of medical trend for previous years on proposed rates or rate revisions;

(15) the impact of changes in reserve needs on rates or rate revisions;

(16) the impact of changes in administrative costs related to programs that improve health care quality;

(17) the impact of changes in other administrative costs on rates or rate revisions;

(18) the impact of changes in applicable taxes, licensing, or regulatory fees on rates or rate revisions;

(19) projected rebates to policyholders in this state under 42 U.S.C. 300 gg - 300gg-95;

(20) for each of the most recent 48 months for each policy form or, if experience is combined for multiple policy forms, for the combined forms:

(A) earned premiums;

(B) paid claims;

(C) incurred claims;

(D) incurred loss ratio;

(E) the number of covered individuals in this state;

(F) the number of member-months;

(G) expected loss ratio;

(21) rate revisions and implementation dates by policy form for the four years before the date of filing;

(22) company capital and surplus, company revenues, and company liabilities for the four years before the date of filing;

(23) rebates paid to policyholders in this state under 42 U.S.C. 300 gg - 300gg-95;

(24) the impact of

(A) geographic factors and variations;

(B) changes within a single risk pool to all products or plans within the risk pool;

(C) any reinsurance or risk adjustment payments and charges under 42 U.S.C. 18061 and 18063; and

(25) other information requested by the director.

(h) An insurer that does not actively market health care insurance in this state but provides health care insurance coverage to a resident of this state through an out-of-state single employer insured group plan is exempt from the requirements under (g) of this section.

(i) If an insurer's response to a request for additional information by the director is inadequate or is submitted to the director later than five days before the expiration of the waiting or extension period under AS 21.51.405 or AS 21.54.015, the director may disapprove the filing.

(j) The director will hold a rate filing confidential until the date that the rates become effective and under AS 21.06.060(g) will continue to hold the following rate filings or information provided within a rate filing confidential on and after the effective date:

(1) a large group rate filing;

(2) a rate filing for a specific group including an association rate filing;

(3) a grandfathered plan rate filing;

(4) third-party data and analysis purchased by the insurer and used in developing the rates.

Notes

3 AAC 31.235

Eff. 1/1/2012, Register 200; am 8/20/2016, Register 219, October 2016

Authority:AS 21.06.060

AS 21.06.090

AS 21.51.405

AS 21.54.015