211 CMR 66.08 - Submission and Review of Rate Filings

Current through Register 1466, April 1, 2022

(1) Definitions. For rate filings submitted pursuant to 211 CMR 66.08(2), the following definitions also shall apply:
(a) Adjusted Minimum Medical Loss Ratio. A specific Carrier's aggregated medical loss ratio for all its merged market plans which was less than the minimum medical loss ratio, but at least 1% greater than the Carrier's equivalent loss ratio for the 12-months prior to the Carrier's present rate filing.
(b) Capital Costs and Depreciation Expenses. All expenses associated with depreciation (depreciation for EDP, equipment, software, and occupancy); capital acquisitions (acquisition of capital assets, including lease payments that were paid or incurred during the year); capital costs on behalf of a hospital or clinic (expenditures for capital and lease payments incurred or paid during the year on behalf of a hospital or clinic (or part of a partnership, joint venture, integration or affiliation agreement); and other capital (other costs that are directly associated with the incurring of capital costs, such as legal or administrative costs, incurred or paid during the year).
(c) Charitable Contributions Expenses. All contributions to tax-exempt foundations and charities, not related to the company business enterprises.
(d) Claim Completion Method. Any actuarial method used to quantify claims which have been incurred but not yet paid.
(e) Claims Operations Expenses. All expenses associated with claims adjudication and adjustment of claims, appeals, claims settlement, coordination of benefits processing, maintenance of the claims system, printing of claims forms, claim audit function, electronic data interchange expenses associated with claims processing and fraud investigation.
(f) Distribution Expenses. All expenses associated with distribution and sale of products, including commissions, producer, broker and benefit consultant fees, other fees, commission processing and account reporting to brokers, agents and producers.
(g) Financial Administration Expenses. All expenses associated with underwriting, auditing, actuarial, financial analysis, investment-related expenses (not included elsewhere), treasury, and reinsurance.
(h) General Administration Expenses. All expenses associated with payroll administration expenses and payroll taxes (salaries, benefits and payroll taxes); real estate expenses (company building and other taxes and expenses of owned real estate, excluding home office employee expenses and rent (not allocated elsewhere) and insurance on real estate); regulatory compliance and government relations (Federal and State reporting, rate filing, state and federal audits, tax accounting, lobbying, licensing and filing fees, preparation and filing of financial, utilization, statistical and quality reports and administration of government programs); board, bureau or association fees (Board of Directors, Bureau and association fees paid or expensed during the calendar year); other administration (information technology, senior management, outsourcing (not allocated elsewhere), insurance except on real estate, equipment rental, travel (not allocated elsewhere), certification and accreditation fees, legal fees and expenses before administrative and legal bodies, and other general administrative expenses); and negative adjustment for reimbursement from uninsured plans (all revenue receipts from uninsured plans (including excess pharmaceutical rebates and administrative fees net of expenses) and reimbursements from fiscal intermediaries including administrative fees net of expenses from the government).
(i) Marketing and Sales Expenses. All expenses associated with billing and Member enrollment (group and individual billing, Member enrollment, premium collection and reconciliation functions); customer service and Member relations (individual, group or provider support relating to membership, enrollment, grievance resolution, specialized phone services and equipment, consumer services and consumer information); product management, marketing and sales (management and marketing of current products, including product promotion and advertising, marketing materials, changes or additions to current products, sales, pricing and enrollee education regarding coverage prior to the sale); and product development: (product design and development for new products not currently offered, major systems development associated with the new products and integrated system network development).
(j) Medical Administration Expenses. All expenses associated with quality assurance and cost containment (health and disease management and wellness initiatives (other than for education), health care quality assurance, appeals, case management, fraud detection and prevention, utilization review, practice protocol development, peer review, outcomes analysis related to existing products, nurse triage, medical management and other medical care evaluation activities); wellness and health education (wellness and health promotion, disease prevention, Member education and materials, provide education and outreach services); and medical research (outcomes research, medical research programs and development of new medical management programs not currently offered, major systems development and integrated system network development).
(k) Minimum Medical Loss Ratio. The higher of the medical loss ratio in state or federal law that applies to individual and small group health insurance premiums. The Minimum Medical Loss Ratio for small group health insurance is 88%.
(l) Miscellaneous Expenditures Expenses. All other not classified expenses including all collection and bank service charges, printing, office supplies, postage and telephone (not allocated elsewhere).
(m) Network Operations Expenses. All expenses associated with provider contracting negotiation and preparation, monitoring of provider compliance, field training with providers, provider communication materials and bulletins, administration of provider capitation and settlements, hospital and physician relations, medical policy procedures, network access fees and credentialing.
(n) Normalized per Member per Month Claim Cost. Claim cost expressed per Member per month adjusted to represent a Member whose rating factors equal one.
(o) Taxes, Assessments and Fines Paid to Federal, State or Local Governments (as Expenses). All expenses associated with taxes (state premium taxes, state and local insurance taxes, federal taxes, except taxes on capital gains, state income tax, state sales tax and other sales taxes not included with the cost of goods purchased); assessments, fees and other amounts paid to regulatory agencies (assessments, fees or other amounts paid to state or local government and does not include taxes or fines or penalties paid to any government agency); and fines and penalties paid to regulatory agencies (penalties and fines paid to government agencies).
(2) Submission of Rate Filings.
(a) Every Carrier, as a condition of doing business under M.G.L. c. 176J and 211 CMR 66.00, must submit quarterly rate filings for their small Group Base Premium Rates and any changes to small group rating factors electronically at least 90 days before their proposed effective dates, and at least 180 days before their proposed effective dates for rates intended to be effective as of January 1st. All Base Premium Rates and rating factors are subject to disapproval if they do not meet the requirements of M.G.L. c. 176J.
(b) Any rates of reimbursement or rating factors included in small group rate filing materials submitted for review by the Division shall be deemed confidential and exempt from the definition of public records in M.G.L. c. 4, § 7, clause 26.
(3) Content of Rate Filings. A Carrier's submission shall be submitted in a format specified by the Commissioner and shall show the company's development of the filed rates and contain at least the following information:
(a) Summary rate information for each product, including:
1. proposed rate increase over rates in effect 12 months before proposed effective date;
2. number of currently enrolled groups/Members impacted by the proposed increase:
a. number of employer groups and covered employees/dependents renewing by month; and
b. individual accounts and covered individuals/dependents renewing by month;
3. average effective rate increase for all persons covered under proposed rate changes; and
4. maximum increase for any group or individual covered under the proposed rate change.
(b) Changes to cost-sharing and/or benefits for each product relative to the 12 month period prior to the proposed effective date of the filed rates for the following:
1. inpatient hospital care;
2. outpatient hospital care, with separate experience for:
a. radiological/laboratory/pathology costs; and
b. all other outpatient costs;
3. health care providers, with separate experience for:
a. medical and osteopathic physicians;
b. mental health providers; and
c. all other health care practitioners;
4. outpatient prescription drugs; and
5. supplies.

For information submitted pursuant to 211 CMR 66.08(3)(c) through (j), a Carrier's submission shall provide details in aggregate.

(c) Number of Member months of coverage reported for each of the latest available 12 months for products issued or renewed according to M.G.L. c. 176J, as well as the number of Member months projected to be impacted by the proposed rate increase.
(d) Actual premium revenue per Member per month reported for each of the latest available 12 months for products issued or renewed according to M.G.L. c. 176J, as well as projected premium revenue per Member per month based on the proposed rates and the projected Membership impacted by the rate increase. The premium revenue also should be shown on a normalized per Member per month basis with a description of normalization factors that are used and how they take into account the average enrollee risk for the permitted risk characteristics. The statement of actual premium revenue should explain any differences between what is included in this filing and what normally is included in the Carrier's reported financial statements.
(e) Actual fee-for-service claims payment experience and utilization experience reported for each of the latest available 12 months for products issued or renewed according to M.G.L. c. 176J, on both an aggregate and normalized per Member per month basis, that was used in the development of the Carrier's rate filing and the projected claims payments and utilization experience for the period impacted for the proposed rate increase, differentiating among:
1. inpatient hospital care;
2. outpatient hospital care, with separate experience for:
a. radiological/laboratory/pathology costs; and
b. all other outpatient costs;
3. health care providers, with separate experience for:
a. medical and osteopathic physicians;
b. mental health providers; and
c. all other health care practitioners.
4. outpatient prescription drugs; and
5. supplies.

The analysis should explain any differences between what is included in this filing and what normally is included in the Carrier's financial statements. The Carrier also should submit projected Trends in fee-for-service utilization per 1,000 Members, costs per service and per Member per month costs for each of the noted service types that the Carrier is using to project historic claims forward to the period for which the rates will be effective. The Trend information should include the actuarial basis for all changes in fee for service Trends, including all relevant studies used to derive the factors. The analysis also should explain the completion method used to derive the incurred but not reported (IBNR) claims for the claim experience study.

(f) The Carrier's historic capitation, as well as calculated normalized per Member per month cost experience, relevant to products issued or renewed according to M.G.L. c. 176J and used in the development of the rate making for the filing, reported for each of the latest available 12 months of experience, differentiating among:
1. inpatient hospital care;
2. outpatient hospital care, with separate experience for:
a. radiological/laboratory/pathology costs; and
b. all other outpatient costs;
3. health care providers, with separate experience for:
a. medical and osteopathic physicians;
b. mental health providers; and
c. all other health care practitioners;
4. outpatient prescription drugs; and
5. supplies.

The analysis should explain any differences between what is included in this filing and what normally is included in the Carrier's financial statements. The Carrier also should submit projected Trend factors that the Carrier is using to project historic claims forward to the period for which the rates will be effective. The Trend information should include the actuarial basis for all changes in capitation Trends, including all relevant studies or information that the Carrier believes will lead to changes in capitation costs.

(g) The Carrier's other non-fee-for-service and non-capitation payments to providers, as well as calculated normalized per Member per month cost experience, relevant to products issued or renewed according to M.G.L. c. 176J and used in the development of the filing's rate making, for at least the latest available 12 months of experience. The other payments would include all bonus/incentives tied to provider performance and other payments not tied to service or performance. The Carrier also should submit the projected Trends factor in the other provider payments per Member per month costs that the Carrier is using to project historic claims forward to the period for which the rates will be effective. The Trend information should include the actuarial basis for all changes in these payments, including all relevant studies or information that the Carrier believes will lead to changes in these other provider payment costs.
(h) The Carrier's administrative expenses and per Member per month administrative expenses relevant to products issued or renewed according to M.G.L. c. 176J and used in the development of the rate making for the filing, for the two years prior to the submission of the rate filing for each of the following categories:
1. expenses for financial administration;
2. expenses for marketing and sales;
3. expenses for distribution;
4. expenses for claims operations;
5. expenses for medical administration, with specific detail on costs related to programs that improve health care quality;
6. expenses for network operations;
7. expenses for charitable contributions;
8. expenses for general administration;
9. expenses for taxes, assessments and fines paid to federal, state or local governments;
10. expenses for capital costs and depreciation;
11. expenses for miscellaneous expenditures described in detail; and
12. total administrative expenses [subtotaling 211 CMR 66.08(3)(h)1. through 11.].

The Carrier also should submit projected increases in administrative expenses per Member per month costs that the Carrier is using to project administrative expenses forward to the period for which the rates will be effective. The Trend information should include an explanation for all significant changes in the company's administrative expenses due to one time costs, including where changes in administrative expenses may be caused by regulatory requirements or efforts to contain health care delivery costs, an explanation of the projected cost and cost per Member per month that can be attributed to each regulatory requirement or effort to contain health care delivery costs and the method that the Carrier is using to allocate any companywide expenses to the small group line of business.

(i) The Carrier's contribution to surplus, relevant to products issued or renewed according to M.G.L. c. 176J, both in the aggregate, on a normalized per Member per month basis and as a percentage (%) of premium for the two years prior to the submission of the rate filing. The Carrier also should identify the contribution to surplus included in the rate filing on a per Member per month basis and as a percentage (%) of premium and should provide a detailed explanation of the reasons that the contribution to surplus has been filed at that level, as well as the contribution to surplus levels that the Carrier is using in all other lines of coverage. The Carrier should describe the method used to quantify the contribution to surplus in the proposed rates.
(j) The three year historic medical loss ratio for the rates, relevant to products issued or renewed according to M.G.L c. 176J and the projected medical loss ratios for the one year period during which rates will be in effect.
(k) A detailed description of all cost containment programs the Carrier is employing or will employ during the Rating Period to address health care delivery costs and the realized past savings and projected savings from all such programs.
(l) If the Carrier intends to pay similarly situated providers within its provider networks different rates of reimbursement, a detailed description of the bases for the different rates including, but not limited to:
1. quality of care delivered;
2. mix of patients;
3. geographic location at which care is provided; and
4. intensity of services provided.
(m) Interrogatories, including:
1. Detailed explanations of methodological changes that have been employed by the Carrier in development of rates, loads or factors since most recent filing, including:
a. pricing methodology;
b. administrative expense loads;
c. contribution to surplus loads;
d. rating factors;
e. cost containment and quality improvement efforts;
f. provider contracting initiatives;
g. methodology for setting claim reserves;
h. size of the claim reserve relative to the total incurred claims estimate for the most recent year of experience; and
i. reconciliation of claim payments in filing to claims system and recorded claim payments in filed financial statements.
2. Detailed explanations of the development of claims completion factors, including:
a. explanation of the source of the filing's completion factor;
b. high level analysis of derivation of factor;
c. explanation of whether factor is consistent with reserve development for financial reporting;
d. explanation of level of conservatism used in developing factor;
e. demonstration for each calendar month in the claim experience period of how any incurred but unreported claims were estimated using the Carrier's completion factor(s); and
f. a comparison of estimated claim payments provided in the most recent prior filing to current estimated claims costs for the same time period.
3. Detailed explanations of planned changes in methods of paying providers, including:
a. Three year historical analysis of the proportion of provider services reimbursed according to the following methodologies:
i. discounted or undiscounted charges;
ii. payment based on fee schedules;
iii. incentive based fee for service (payment is initially withheld and repaid to provider based on provider performance);
iv. fee for service payments with bonus/incentives tied to performance (additional payments above and beyond the standard payment where the amount of the additional payment is based on provider performance;
v. capitation payments (fixed payment per Member per month for a specified set of services);
vi. risk sharing adjustment to provider payments made in a fiscal year-end settlement whereby provider payments are increased or decreased based on provider performance that is shared with the health plan; and
vii. payments not tied to provision of specific service or performance.
b. Explanation of projected distribution of provider services to be reimbursed using these methodologies in the Rating Period and an explanation of the impact on expected costs for covered Member services.
c. Explanation of the weighting of the criteria that the plan uses for evaluating performance based provider payments, including:
i. patient satisfaction;
ii. outcomes measurement;
iii. participation or adherence to processes to improve quality;
iv. measured achievement of quality standards;
v. measured achievement of utilization efficiency standards;
vi. measured achievement of cost containment goals; and
vii. measured implementation of technology necessary to improve efficiency.
d. Explanation of a Carrier's plan to change the distribution of payment systems to providers in the future and how this will impact future rate filings.
4. Benefit Level Rate Adjustment Factors, including:
a. explanation of the process used to ensure that the Benefit Level Rate Adjustment Factor reflects the actuarial value of benefits in one plan versus another;
b. explanation of any effect that Connector-offered plans may have on plans not offered through the Connector; and
c. explanation of any reasons that a filing may reflect different Benefit Level Trends for different products and how this may be incorporated into the rate analysis.
5. Rating factors and Rating Adjustment Factors, including:
a. illustration of how a sample Member's factor is calculated for each permissible rate adjustment factor (i.e., age, industry, participation rate, group size, participation in smoking cessation programs, geographic region, group purchasing cooperative, as appropriate); changes to every filed Rating Adjustment Factor; and
b. explanation of the methodology used to aggregate each Member's factors to arrive at a total Rating Adjustment Factor for the individual or small group, showing how the factors are applied to arrive at the final premium charged to each dependent coverage tier in an individual contract or small group policy.
6. Credibility analyses, including:
a. explanation of how actuary conducted a credibility analysis of available data; and
b. explanation of adjustments made due to concerns over the credibility of available data and basis for said adjustments, including an explanation of national or regional data that was used in place or in combination with plan data when developing factors.
7. A discussion of the impact of overestimates or underestimates of medical Trend in prior year rate filings on the development of the current proposed rate.
8. A calculation of the Carrier's risk-based capital level at the end of the most recent calendar quarter and the risk-based capital level for the prior calendar year.
9. Overall rate impacts, including:
a. Illustration of rate changes for each product, after application of the Rating Adjustment Factors and any changes in the demographic make-up of the individual or group contract, using the following ranges:
i. reduction of 10% or more;
ii. reduction between 5.01% and 9.99%;
iii. reduction of 5% or less (including no change);
iv. increase of less than 5%;
v. increase of between 5.01% and 9.99%;
vi. increase of between 10.0% and 14.99%; and
vii. increase of 15% or more.
b. Explanation of the reasons, distinguishing by base rate changes and the application of Rating Adjustment Factors, for which rates of any groups increase by more than 15%.
(o) Any other information requested by the commissioner, including, but not limited to, any information requested by the commissioner on behalf of the National Association of Insurance Commissioners.
(p) Each rate filing shall be accompanied by a supporting actuarial memorandum prepared and certified by a qualified Member of the American Academy of Actuaries and an Actuarial Opinion.
(4) Review of Filing.
(a) A Carrier's filing will not be considered to be complete until all materials required by M.G.L. c. 176J and 211 CMR 66.00 have been received by the Division.
(b) A Carrier shall respond to any request for additional information by the Division within five days of the date of the Division's request. Failure to respond to the Division's request within five business days may result in a delay of the Division's review of the filing and a delay in the proposed effective date of the filed small group rates.
(c) Every Carrier shall include with any submission under 211 CMR 66.08(3) a cover letter summarizing the content in 211 CMR 66.08(3)(h)12., (i) and (j), and a statement indicating whether the Carrier consents to a designation of presumptive disapproval pursuant to M.G.L. c. 176J, § 6(d). Group Base Premium Rates will be presumptively disapproved as excessive if the rate filing does not meet the following standards:
1. Administrative Expense Standards. Group Base Premium Rates will be presumptively disapproved if the filing's projected administrative expense loading component, not including taxes and assessments, increases by more than the most recent calendar year's increase in the New England medical CPI.
a. The projected administrative expense loading component is the per Member per month administrative expense described in 211 CMR 66.08(3)(h)12. plus the producer commission expense. The most recent calendar year's increase in the New England medical CPI shall be calculated by dividing the index value for the November period preceding the date of the filing by the same index value from the November period one year earlier. For the purpose of 211 CMR 66.08(4)(c)1.b., the New England medical CPI shall reflect the Consumer Price Indexes for All Urban Consumers (CPI-U), U.S. city averages and selected areas, for the Boston-Brockton-Nashua area.
2. Contribution-to-surplus Standards. Group Base Premium Rates will be presumptively disapproved as excessive if the rate filing's contribution-to-surplus loading component exceeds 1.9% of the total filed Group Base Premium Rate.
a. The contribution-to-surplus loading component shall represent the per Member per month contribution-to-surplus amount submitted in 211 CMR 66.08(3)(i).
b. If a Carrier's Risk Based Capital Ratio, calculated according to the provisions of 211 CMR 25.00: Risk-based Capital (RBC) for Health Organizations, falls below 300% for the four most recent consecutive quarters, the Group Base Premium Rates will be presumptively disapproved as excessive if the filing's contribution-to-surplus loading component exceeds 2.5% of premium.
3. Medical Loss Ratio Standards. Group Base Premium Rates will be presumptively disapproved as excessive if the rate filing's projected aggregate medical loss ratio for all plans offered in the individual-small employer market is less than the Minimum Medical Loss Ratio.
a. The aggregate medical loss ratio shall be reported as submitted in 211 CMR 66.08(3)(k).
b. When a Carrier's individual/small Group Base Premium Rates for a Rating Period would have been presumptively disapproved for failure only to meet the aggregate Minimum Medical Loss Ratio, the group base premium will not be presumptively disapproved if the aggregate loss ratio for all of the Carrier's individual/small group plans was at least 1% higher than the Carrier's equivalent medical loss ratio in the 12-months prior to the present filing. In this case, the filed medical loss ratio will be considered the Adjusted Minimum Medical Loss Ratio.
(5) Disapprovals.
(a) Rate filings may be presumptively disapproved with the consent of the Carrier or presumptively disapproved by the Commissioner as described in 211 CMR 66.08(4)(c). Rate filings also shall be disapproved by the Commissioner if the benefits provided therein are unreasonable in relation to the rate charged, or if the rates are excessive, inadequate or unfairly discriminatory or do not otherwise comply with the requirements of M.G.L. c. 176J or 211 CMR 66.00. Changes to filed small group Rating Adjustment Factors shall be disapproved by the Commissioner if found to be discriminatory or not actuarially sound. Notwithstanding the foregoing, where applicable, rate filings made under 211 CMR 66.00 also are subject to the provisions of regulations specifying the procedures for rate hearings on such rate filings.
(b) If a Carrier's filing is presumptively disapproved, it shall be subject to a hearing to be scheduled to commence within 45 days of the Carrier's submission of a complete filing. The Commissioner retains the right to presumptively disapprove or disapprove the subject filing for reasons other than those identified by the Carrier and to provide notice of such presumptive disapproval or disapproval to the Carrier.
(c) If a Carrier's filing is presumptively disapproved by the Commissioner, it shall be considered disapproved. A Carrier shall communicate to all employers and individuals covered under a small group product that the proposed increase has been presumptively disapproved and is subject to a hearing at the Division
(d) If the Commissioner disapproves a Carrier's proposed base rate(s) or proposed changes to rating factors or rating adjustment factor(s), he shall notify the Carrier in writing in accordance with the timing described below and he shall state the reason(s) for the disapproval, including whether the disapproval is presumptive.
1. If a Carrier's submission is deemed complete and filed at least 120 days in advance of its proposed effective date, the Commissioner shall notify the Carrier of any disapproval no later than 75 days prior to the effective date of the Carrier's filing.
2. If a Carrier's submission is deemed complete and filed between 119 and 105 days in advance of its proposed effective date, the Commissioner shall notify the Carrier of any disapproval no later than 60 days prior to the effective date of the Carrier's filing.
3. If a Carrier's submission is deemed complete and filed between 104 and 90 days in advance of its proposed effective date, the commissioner shall notify the Carrier of any disapproval no later than 45 days prior to the effective date of the Carrier's filing.
(e) In the event of a disapproval under 211 CMR 66.08(5)(a) through (d), a Carrier shall comply with the following procedures:
1. the Carrier shall not quote, issue, make effective, deliver or renew Health Benefit Plans in the Commonwealth using disapproved base rates. The Carrier shall quote, issue, make effective, deliver or renew all Health Benefit Plans using base rates as in effect 12 months prior to the proposed effective date of the disapproved base rates. 211 CMR 66.08(5)(a) through (d) also applies to new Health Benefit Plans whose base rates are disapproved. In calculating premiums, the Carrier may apply any applicable, but not previously disapproved, Rating Adjustment Factors;
2. the Carrier shall recalculate applicable rates for all affected Health Benefit Plans and shall issue rate quotes and make all Health Benefit Plans available through all distribution channels, including Intermediaries, the Connector, licensed insurance producers and the Carrier's website, but in no event more than ten calendar days after the Carrier's receipt of the disapproval;
3. the Carrier shall notify all affected policyholders of the disapproval within ten calendar days of the Carrier's receipt of the disapproval;
4. the Carrier shall promptly provide notice of all material changes to the evidence(s) of coverage to all affected individuals and groups in accordance with M.G.L. c. 176O, § 6(a) and 211 CMR 52.12(6): General Notice of Material Changes;
5. within ten days of receipt of the disapproval, the Carrier may request a hearing on the disapproval. The hearing shall be adjudicatory and de novo;
6. presumptive disapproval hearings shall commence within 45 days of the submission of a complete rate filing and other disapproval hearings shall commence within 15 days of the Commissioner's receipt of the Carrier's request for a rate hearing. In either case, notice of the public hearing will be given to, or advertised in, newspapers in Boston, Brockton, Fall River, Pittsfield, Springfield, Worcester, New Bedford, and Lowell. The Commissioner shall issue a written decision within 30 days after the conclusion of the hearing.
7. the Commissioner shall issue an order as to the requested rates within 30 days following the conclusion of the public hearing. The Commissioner may base a final disapproval of the filing on reason(s) other than those identified in the initial disapproval. If the filing is disapproved and a revised filing conforming to the terms of the decision is resubmitted in accordance with applicable regulations specifying the procedures for rate hearings on such rate filings, it shall be placed on file, thereby making those rates available for use.
(6) Appeals. Any order, decree, or judgment of the Supreme Judicial Court modifying, amending, annulling, or reversing a decision of the Commissioner disapproving a rate filing, and any further decision of the Commissioner pursuant to such an order, decree, or judgment that affects the overall rate not disapproved shall be effective as ordered.
(7) Maintaining Records. Every Carrier must maintain at its principal place of business a complete and detailed description of its rating practices including information and documentation which demonstrates that its rating methods and practices are based upon commonly accepted actuarial assumptions, are in accordance with sound actuarial principles, and comply with the provisions of 211 CMR 66.00. This information must be made available to the Commissioner upon request, but will remain confidential.
(8) Methodology for Calculating and Reporting Refund, Rebate or Credit Calculations.
(a) Unless otherwise determined by the Commissioner, for the purposes of M.G.L. c. 176J, § 6, Carriers are to calculate and submit a rebate calculation form as designated by the Commissioner each calendar year by July 31st for the previous calendar year in accordance with the current NAIC methodology for calculating rebates. When completing the form for Massachusetts, Carriers are to use the Minimum Medical Loss Ratio, or if applicable, the Adjusted Minimum Medical Loss Ratio, that applies in the year for which the calculation was completed.
(b) If the calculation illustrates that a refund or rebate is warranted, the Carrier shall submit a detailed plan, for the Commissioner's approval, that will provide a detailed description of the manner in which the Carrier will refund the excess premium to those individuals or small employers who were covered during the prior calendar year or an explanation of the reasons that the Carrier proposes not to make a refund or rebate. The amount of the rebate will be based on the individual's or small employer's relative share of the premiums that were paid to the Carrier during the calendar year.
(c) A Carrier shall communicate within 30 days to all individuals and small employers that were covered under plans during the relevant 12-month calendar year that such individuals and small employers qualify for a refund which may take the form of either a refund on the premium for the applicable 12-month period, or if the individual or small employer are still covered by the Carrier, a credit on the premium for the subsequent 12-month period.
(d) The basis for all refunds issued shall equal the amount of a Carrier's earned premium that exceeds that amount necessary to achieve the Minimum Medical Loss Ratio, or if applicable, the Adjusted Minimum Medical Loss Ratio, calculated using data reported by the commissioner. The Commissioner may authorize a waiver or adjustment of the refund requirement if the Commissioner determines that issuing such refunds would result in Financial Impairment for the Carrier or if the commissioner determines that such refunds are de minimus. The aggregate of any de minimus amount not refunded shall be used to reduce overall premiums.
(e) Refunds shall be paid annually by August 31st of the year following the calendar year of the rebate calculation.
(f) Carriers who issue refunds shall keep records of all refunds made to affected individuals and small groups for inspection by the Division.
(g) No individual or small employer may assign his or her or its rights to such premium adjustments to another person or entity.
(h) If a Carrier fails to make refunds, rebates or premium adjustments acceptable to the commissioner, the commissioner may order premium adjustments, refunds or premium credits he deems necessary.
(9) Information. Every Carrier must maintain at its principal place of business a complete and detailed description of its rating practices including information and documentation which demonstrates that its rating methods and practices are based upon commonly accepted actuarial assumptions, are in accordance with sound actuarial principles, and comply with the provisions of 211 CMR 66.00. This information must be made available to the Commissioner upon request, but will remain confidential.

Notes

211 CMR 66.08
Amended by Mass Register Issue 1349, eff. 10/6/2017.

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