2009 Iowa Code
Title 13 - Commerce
Subtitle 1 - Insurance and Related Regulation
CHAPTER 513B - SMALL GROUP HEALTH COVERAGE
513B.4 - RESTRICTIONS RELATING TO THE PREMIUM RATES.

        513B.4  RESTRICTIONS RELATING TO THE PREMIUM RATES.
         1.  Premium rates for health benefit plans subject to this
      subchapter are subject to the following requirements:
         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.
         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 which 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 twenty-five percent
      of the index rate.
         c.  The percentage increase in the premium rate charged to a
      small employer for a new rating period shall not exceed the sum of
      the following:
         (1)  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 class of business for
      which the small employer carrier is not issuing new policies, the
      small employer carrier shall use the percentage change in the base
      premium rate, provided that the change does not exceed, on a
      percentage basis, the change in the new business premium rate for the
      most similar health insurance coverage into which the small employer
      carrier is actively enrolling new insureds who are small employers.
         (2)  An adjustment, not to exceed fifteen percent annually and
      adjusted pro rata for rating periods of less than one 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.
         (3)  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.  Any adjustment in rates for claims 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.
         2.  This section does not affect the use by a small employer
      carrier of legitimate rating factors other than claim experience,
      health status, or duration of coverage in the determination of
      premium rates.  Small employer carriers shall apply rating factors,
      including case characteristics, consistently with respect to all
      small employers in a class of business.
         Case characteristics other than age, geographic area, family
      composition, and group size shall not be used by a small employer
      carrier without the prior approval of the commissioner.
         Rating factors shall produce premiums for identical groups which
      differ only by amounts attributable to coverage design and do not
      reflect differences due to the nature of the groups assumed to select
      particular health benefit plans.  A small employer carrier shall
      treat all health insurance coverages issued or renewed in the same
      calendar month as having the same rating period.
         3.  For purposes of this section, a health insurance coverage that
      contains a restricted network provision shall not be considered
      similar coverage to a health insurance coverage that does not contain
      such a provision, if the restriction of benefits to network providers
      results in substantial differences in claims costs.
         4.  A small employer shall not be involuntarily transferred by a
      small employer carrier 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 the offer is made to transfer all
      small employers in the class of business without regard to case
      characteristics, claim experience, health status, or duration since
      issue.
         5.  Notwithstanding subsection 1, the commissioner, with the
      concurrence of the board of the Iowa small employer health
      reinsurance program established in section 513B.13, may by order
      reduce or eliminate the allowed rating bands provided under
      subsection 1, paragraphs "a", "b", and "c", or otherwise
      limit or eliminate the use of experience rating.
         6.  Notwithstanding subsection 4, a small employer carrier may
      offer to transfer a small employer into a different class of business
      with a lower index rate based upon claims experience, implementation
      of managed care or wellness programs, or health status improvement of
      the small employer since issue.  

         91 Acts, ch 244, § 4; 92 Acts, ch 1167, § 3--7; 93 Acts, ch 80, §
      4; 94 Acts, ch 1176, §10--12; 97 Acts, ch 103, §14--17; 2001 Acts, ch
      69, §14, 15, 39; 2002 Acts, ch 1111, §13; 2007 Acts, ch 57, §6, 8
         Referred to in § 513B.2, 513B.4A, 513B.13, 513B.17