2005 Idaho Code - 41-4706 — RESTRICTIONS RELATING TO PREMIUM RATES

                                  TITLE  41
                                  INSURANCE
                                  CHAPTER 47
                            SMALL EMPLOYER HEALTH
                          INSURANCE AVAILABILITY ACT
    41-4706.  RESTRICTIONS RELATING TO PREMIUM RATES. (1) Premium rates for
health benefit plans subject to the provisions of this chapter shall be
subject to the following provisions:
    (a)  The index rate for a rating period for any class of business shall
    not exceed the index rate for any other class of business by more than
    twenty percent (20%).
    (b)  For a class of business, the premium rates charged during a rating
    period to small employers with similar case characteristics for the same
    or similar coverage, or the rates that could be charged to such employers
    under the rating system for that class of business, shall not vary from
    the index rate by more than fifty percent (50%) of the index rate.
    (c)  The percentage increase in the premium rate charged to a small
    employer for a new rating period may not exceed the sum of the following:
         (i)   The percentage change in the new business premium rate measured
         from the first day of the prior rating period to the first day of the
         new rating period. In the case of a health benefit plan into which
         the small employer carrier is no longer enrolling new small
         employers, the small employer carrier shall use the percentage change
         in the base premium rate, provided that such change does not exceed,
         on a percentage basis, the change in the new business premium rate
         for the most similar health benefit plan into which the small
         employer carrier is actively enrolling new small employers;
         (ii)  Any adjustment, not to exceed fifteen percent (15%) annually
         and adjusted pro rata for rating periods of less than one (1) year,
         due to the claim experience, health status or duration of coverage of
         the employees or dependents of the small employer as determined from
         the small employer carrier's rate manual for the class of business;
         and
         (iii) Any adjustment due to change in coverage or change in the case
         characteristics of the small employer as determined from the small
         employer carrier's rate manual for the class of business.
    (d)  Adjustments in rates for claim experience, health status and duration
    of coverage shall not be charged to individual employees or dependents.
    Any such adjustment shall be applied uniformly to the rates charged for
    all employees and dependents of the small employer.
    (e)  Premium rates for health benefit plans shall comply with the
    requirements of this section notwithstanding any assessments paid or
    payable by small employer carriers pursuant to section 41-4711, Idaho
    Code, or chapter 55, title 41, Idaho Code.
    (f)  (i)   Small employer carriers shall apply rating factors, including
         case characteristics, consistently with respect to all small
         employers in a class of business. 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; and
         (ii)  A small employer carrier shall treat all health benefit plans
         issued or renewed in the same calendar month as having the same
         rating period.
    (g)  For the purposes of this subsection, a health benefit plan that
    utilizes a restricted provider network shall not be considered similar
    coverage to a health benefit plan that does not utilize such a network,
    provided that utilization of the restricted provider network results in
    substantial differences in claims costs.
    (h)  The small employer carrier shall not use case characteristics, other
    than age, individual tobacco use, geography, as defined by rule of the
    director, or gender, without prior approval of the director.
    (i)  A small employer carrier may utilize age as a case characteristic in
    establishing premium rates, provided that the same rating factor shall be
    applied to all dependents under twenty-three (23) years of age, and the
    same rating factor may be applied on an annual basis as to individuals or
    nondependents twenty (20) years of age or older.
    (j)  The director may establish rules 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 rules
    that:
         (i)   Assure that differences in rates charged for health benefit
         plans by small employer carriers are reasonable and reflect objective
         differences in plan design, not including differences due to the
         nature of the groups assumed to select particular health benefit
         plans;
         (ii)  Prescribe the manner in which case characteristics may be used
         by small employer carriers; and
         (iii) Prescribe the manner in which a small employer carrier is to
         demonstrate compliance with the provisions of this section, including
         requirements that a small employer carrier provide the director with
         actuarial certification as to such compliance.
    (2)  A small employer carrier shall not transfer a small employer
involuntarily into or out of a class of business. A small employer carrier
shall not offer to transfer a small employer into or out of a class of
business unless such offer is made to transfer all small employers in the
class of business without regard to case characteristics, claim experience,
health status or duration of coverage since issue.
    (3)  The director may suspend for a specified period the application of
subsection (1)(a) of this section as to the premium rates applicable to one
(1) or more small employers included within a class of business of a small
employer carrier for one (1) or more rating periods upon a filing by the small
employer carrier and a finding by the director either that the suspension is
reasonable in light of the financial condition of the small employer carrier
or that the suspension would enhance the efficiency and fairness of the
marketplace for small employer health insurance.
    (4)  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:
    (a)  The extent to which premium rates for a specified small employer are
    established or adjusted based upon the actual or expected variation in
    claims costs or actual or expected variation in health status of the
    employees of the small employer and their dependents;
    (b)  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;
    (c)  The provisions relating to renewability of policies and contracts;
    and
    (d)  The provisions relating to any preexisting condition provision.
    (5)  (a) 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.
    (b)  Each small employer carrier shall file with the director annually on
    or before March 15, an actuarial certification certifying that the carrier
    is in compliance with the provisions of this chapter and that the rating
    methods of the small employer carrier are actuarially sound. Such
    certification shall be in a form and manner, and shall contain such
    information, as specified by the director. A copy of the certification
    shall be retained by the small employer carrier at its principal place of
    business.
    (c)  A small employer carrier shall make the information and documentation
    described in subsection (4)(a) of this section available to the director
    upon request. Except in cases of violations of the provisions 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.