02-031 C.M.R. ch. 940, § 9 - Small Group Health Plans Subject to Title 24-A M.R.S.A. section 2808-B

Current through 2022-14, April 6, 2022

In addition to the requirements of Section 5 and, if applicable, Sections 6 and 12, small group rate filings subject to Title 24-A M.R.S.A. § 2808-B, which include rate filings applicable to subgroups as defined in Title 24-A M.R.S.A. § 2808-B(1)(H), must meet the following requirements:

A. Small group rates must be filed separately from large group rates or individual rates. The carrier must clearly identify the filing as a small group rate filing.

B. In addition to the general requirements for all filings, small group health rate submissions must contain:

1. Rate Factors:The filing must include the community rate and any formulas or factors used to adjust that rate.

a. A carrier may not vary the premium rate due to the gender or health status of any covered individual, or due to claims experience or policy duration.

b. A carrier may vary the premium rate due to family membership to the extent permitted by the ACA.

c. Except as provided in paragraph 3, variations based on age must not exceed the limits set forth in set forth in Title 24-A M.R.S.A. § 2808-B(2)(D), subparagraphs 4 through 8.

d. Pursuant to the ACA, age variations are limited to a ratio of 3 to 1 on or after January 1, 2014 for plans other than grandfathered health plans as defined under the ACA and for transitional coverage as defined in Subsection 4(I).

e. Pursuant to the ACA, variations by industry or occupation will not be permitted on or after January 1, 2014 for plans other than grandfathered health plans as defined under the ACA and for transitional coverage as defined in Subsection 4(I).

f. Variations based on geographic area are limited to a ratio of 1.5 to 1.

g. Variations based on tobacco use are limited to a ratio of 1.5 to 1.

2. Group Size Rate Variation:If rates vary by group size, the filing must disclose those factors and provide support based on expected differences by group size. Pursuant to the ACA, variations by group size will not be permitted on or after January 1, 2014 for plans other than grandfathered health plans as defined under the ACA and for transitional coverage as defined in Subsection 4(I).

3. Closed Block: A carrier that offered small group health plans before October 1, 2011 may close its small group book of business sold before that date and may establish a separate community rate for eligible groups applying for coverage under a small group health plan on or after that date, subject to the following:

a. Rates are subject to the following rating restrictions:

(i) Variations based on age must not exceed the limits set forth in Title 24-A M.R.S.A. § 2808-B(2)(H), subparagraphs 1 through 5.

(ii) Pursuant to the ACA, on or after January 1, 2014, age variations are limited to a ratio of 3 to 1 for plans other than grandfathered health plans as defined under the ACA and for transitional coverage as defined in Subsection 4(I).

(iii) Pursuant to the ACA, variations by industry or occupation will not be permitted on or after January 1, 2014 for plans other than grandfathered health plans as defined under the ACA and for transitional coverage as defined in Subsection 4(I).

(iv) Variations based on geographic area are limited to a ratio of 1.5 to 1.

(v) Variations based on tobacco use are limited to a ratio of 1.5 to 1.

b. Pursuant to the ACA, except for enrollees in grandfathered health plans as defined under the ACA, beginning January 1, 2014, a carrier shall consider all enrollees in all small group health plans offered by the carrier to be members of a single risk pool. Therefore, after that date, the separate community rate for the closed block will only apply to grandfathered health plans and to transitional coverage as defined in Subsection 4(I).

4. Disclosure of Percentage Increases: If a rate adjustment is proposed, the filing must disclose the average percentage increase an employer will experience as well as the largest percentage increase that any employer will receive. The average increase must be determined by comparing the aggregate premium before and after the increase (assuming no lapses) for all policies renewing during the period during which the rates are intended to be in effect. The maximum increase is the largest increase for an employer under a currently in-force policy, including changes due to trend, aging, and changes in demographic, area, industry rating factors, but excluding changes in the covered population.

5. Size of Block: The rate filing must state the carrier's anticipated average number of members in all small group health plans during the period for which the rates will be in effect and the basis for the estimate.

6. Association and Trustee Groups: Rates applicable to small employers in association or trustee groups that differ from rates applicable to other small employers are subject to the following:

a. Different community rates may not be used for an association or trustee group, unless authorized by the Superintendent pursuant to Title 24-A M.R.S.A. § 2808-B(2)(E).

b. (Repealed)

c. Pursuant to the ACA, beginning January 1, 2014, a carrier shall consider all enrollees in all small group health plans offered by the carrier to be members of a single risk pool, except for enrollees in grandfathered health plans as defined under the ACA. Therefore, after that date, the separate community rate for the association or trustee group will only apply to grandfathered, unless the association is deemed to be a single large employer under the ACA.

7. Actuarial Certification:Certification by a qualified actuary that to the best of the actuary's knowledge and judgment, the entire rate filing is in compliance with the applicable laws of the State of Maine and with the rules of the Bureau of Insurance. "Qualified actuary," as used herein, means a member in good standing of the American Academy of Actuaries.

8. Notice to Policyholders:The filing must include a copy of the form letter to be used to notify policyholders of a rate increase, as required by Title 24-A M.R.S.A. § 2839-A(1), and the date on which the notices were sent. If they have not yet been sent, state the date they are intended to be sent and provide written confirmation to the Bureau when the notices have been sent.

C. Annual data collection:The information described in Appendix A must be submitted annually. This data must be filed separately from any rate filing and must be in an electronic format prescribed by the Superintendent.

D. Credible Blocks

1. A block of small group health plans is considered credible if the carrier's anticipated average number of members in all small group health plans during the period for which the rates will be in effect meets standards for full or partial credibility pursuant to the ACA. If the Superintendent determines that the number of members is likely to meet that standard, the filing is subject this subsection. Otherwise it is subject to Subsection E.

2. Filings subject to ACA review must contain the items required by Section12. Filings not subject to ACA review must include a demonstration that the rate revision is not subject to review pursuant to the ACA.

3. Rates filed pursuant to this subsection do not require prior approval. They must be filed for informational purposes at least 60 days prior to implementation unless the Superintendent waives this requirement pursuant to Title 24-A M.R.S.A. § 2808-B(2-A)(A). Filings will be reviewed for compliance with subsections A through C and with the requirements of the small group law. Any deficiencies will be brought to the attention of the carrier. If the rates have already been implemented and do not meet statutory requirements, corrective action may be required. Every effort will be made to process filings within 30 days.

E. Non-credible Blocks: A block of small group health plans is considered non-credible if the carrier's anticipated average number of members in all small group health plans during the period for which the rates will be in effect does not meet standards for full or partial credibility pursuant to the ACA. Rates for non-credible blocks require prior approval and are subject to the following:

1. Minimum Required Loss Ratio: The minimum anticipated pure loss ratio for the period the rates will be in effect must meet the minimum requirements of Title 24-A M.R.S.A. § 2808-B(2-B)(A).

2. Filings of rates applicable to small employers in association or trustee groups that differ from rates applicable to other small employers must include justification for the difference in rates.

3. The filing must include a full explanation of how rates were modified, and the amount of the modifications, to reflect:

a. Risk adjustment under the ACA; and

b. For rates that will be in effect during the years 2014 through 2016, risk corridors under the ACA.

Notes

02-031 C.M.R. ch. 940, § 9