2005 Idaho Code - 41-5206 — RESTRICTIONS RELATING TO PREMIUM RATES

                                  TITLE  41
                                  INSURANCE
                                  CHAPTER 52
                 INDIVIDUAL HEALTH INSURANCE AVAILABILITY ACT
    41-5206.  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 premium rates charged during a rating period to individuals with
    similar case characteristics for the same or similar coverage, or the
    rates that could be charged to such individuals under the rating system,
    shall not vary from the index rate by more than fifty percent (50%) of the
    index rate.
    (b)  The percentage increase in the premium rate charged to an individual
    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 individual carrier is no longer enrolling new individuals, the
         individual 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 individual carrier is
         actively enrolling new individuals.
         (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 individual or dependents as determined from the individual
         carrier's rate manual; and
         (iii) Any adjustment due to change in coverage or change in the case
         characteristics of the individual as determined from the individual
         carrier's rate manual.
    (c)  Premium rates for health benefit plans shall comply with the
    requirements of this section notwithstanding any assessments paid or
    payable by carriers pursuant to section 41-4711, Idaho Code, or chapter
    55, title 41, Idaho Code.
    (d)  (i)   Individual carriers shall apply rating factors, including case
         characteristics, consistently with respect to all individuals. Rating
         factors shall produce premiums for identical individuals which differ
         only by the amounts attributable to plan design and do not reflect
         differences due to the nature of the individuals assumed to select
         particular health benefit plans; and
         (ii)  An individual carrier shall treat all health benefit plans
         issued or renewed in the same calendar month as having the same
         rating period.
    (e)  For 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.
    (f)  The individual 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.
    (g)  An individual 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.
    (h)  The director may establish rules to implement the provisions of this
    section and to assure that rating practices used by individual carriers
    are consistent with the purposes of this chapter, including rules that:
         (i)   Assure that differences in rates charged for health benefit
         plans by individual carriers are reasonable and reflect objective
         differences in plan design, not including differences due to the
         nature of the individuals assumed to select particular health benefit
         plans;
         (ii)  Prescribe the manner in which case characteristics may be used
         by individual carriers; and
         (iii) Prescribe the manner in which an individual carrier is to
         demonstrate compliance with the provisions of this section, including
         requirements that an individual carrier provide the director with
         actuarial certification as to such compliance.
    (2)  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 individuals for one (1) or more rating periods upon a filing by
the individual carrier and a finding by the director either that the
suspension is reasonable in light of the financial condition of the individual
carrier or that the suspension would enhance the efficiency and fairness of
the marketplace for individual health insurance.
    (3)  In connection with the offering for sale of any health benefit plan
to an individual, an individual 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 an individual are established
    or adjusted based upon the actual or expected variation in claims costs or
    actual or expected variation in health status of the individual and his
    dependents;
    (b)  The provisions of the health benefit plan concerning the individual
    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.
    (4)  (a) Each individual 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 individual carrier shall file with the director annually on or
    before September 15, an actuarial certification certifying that the
    carrier is in compliance with the provisions of this chapter and that the
    rating methods of the individual 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 individual carrier at its principal place of
    business.
    (c)  An individual 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 individual
    carrier or as ordered by a court of competent jurisdiction.