Download as PDF
304.17A-0954 Definitions for section -- Premium rate guidelines for
employer-organized association plans.
(1)
(2)
(3)
For purposes of this section:
(a) "Base premium rate" has the meaning provided in KRS 304.17A-005;
(b) "Employer" means a person engaged in a trade or business who has two
(2) or more employees within the state in each of twenty (20) or more
calendar weeks in the current or preceding calendar year;
(c) "Employer-organized association" means any of the following:
1.
Any entity which was qualified by the commissioner as an eligible
association prior to April 10, 1998, and which has actively marketed
a health insurance program to its members after September 8, 1996,
and which is not insurer-controlled;
2.
An entity organized under KRS 247.240 to 247.370 that has actively
marketed health insurance to its members and which is not
insurer-controlled; or
3.
Any entity which is a bona fide association as defined in 42 U.S.C.
sec. 300gg-91(d)(3), whose members consist principally of
employers, and for which the entity's health insurance decisions are
made by a board or committee the majority of which are
representatives of employer members of the entity who obtain group
health insurance coverage through the entity or through a trust or
other mechanism established by the entity, and whose health
insurance decisions are reflected in written minutes or other written
documentation;
(d) "Index rate" has the meaning provided in KRS 304.17A-005.
Notwithstanding any other provision of this chapter, the amount or rate of
premiums for an employer-organized association health plan may be
determined, subject to the restrictions of subsection (3) of this section, based
upon the experience or projected experience of the employer-organized
associations whose employers obtain group coverage under the plan. Without
the written consent of the employer-organized association filed with the
commissioner, the index rate for the employer-organized association shall be
calculated solely with respect to that employer-organized association and shall
not be tied to, linked to, or otherwise adversely affected by any other index rate
used by the issuing insurer.
The following restrictions shall be applied in calculating the permissible amount
or rate of premiums for an employer-organized health insurance plan:
(a) The premium rates charged during a rating period to members of the
employer-organized association with similar characteristics for the same
or similar coverage, or the premium rates that could be charged to a
member of the employer-organized association under the rating system
for that class of business, shall not vary from its own index rate by more
than fifty percent (50%) of its own index rate; and
(b) The percentage increase in the premium rate charged to an employer
member of an employer-organized association for a new rating period
shall not exceed the sum of the following:
1.
(4)
(5)
The percentage change in the new business premium rate for the
employer-organized association measured from the first day of the
prior rating period to the first day of the new rating period;
2.
Any adjustment, not to exceed twenty percent (20%) annually and
adjusted pro rata for rating period of less than one (1) year, due to
the claims experience, mental and physical condition, including
medical condition, medical history, and health service utilization, or
duration of coverage of the member as determined from the
insurer's rate manual; and
3.
Any adjustment due to change in coverage or change in the case
characteristics of the member as determined by the insurer's rate
manual.
In utilizing case characteristics, the ratio of the highest rate factor to the lowest
rate factor within a class of business shall not exceed five to one (5:1). For
purpose of this limitation, case characteristics include age, gender, occupation
or industry, and geographic area.
For the purpose of this section, a health insurance contract that utilizes a
restricted provider network shall not be considered similar coverage to a health
insurance contract that does not utilize a restricted provider network if
utilization of the restricted provider network results in measurable differences in
claims costs.
Effective:July 15, 2010
History: Amended 2010 Ky. Acts ch. 24, sec. 1214, effective July 15, 2010. -Amended 2002 Ky. Acts ch. 351, sec. 16, effective July 15, 2002. -- Amended
2000 Ky. Acts ch. 476, sec. 27, effective January 1, 2001. -- Created 1998 Ky.
Acts ch. 496, sec. 11, effective April 10, 1998.
Disclaimer: These codes may not be the most recent version. Kentucky may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.