2006 Utah Code - 31A-30-106 — Premiums -- Rating restrictions -- Disclosure.

     31A-30-106.   Premiums -- Rating restrictions -- Disclosure.
     (1) Premium rates for health benefit plans under this chapter are subject to the provisions of this Subsection (1).
     (a) The index rate for a rating period for any class of business may not exceed the index rate for any other class of business by more than 20%.
     (b) (i) For a class of business, the premium rates charged during a rating period to covered insureds 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, may not vary from the index rate by more than 30% of the index rate, except as provided in Section 31A-22-625.
     (ii) A covered carrier that offers individual and small employer health benefit plans may use the small employer index rates to establish the rate limitations for individual policies, even if some individual policies are rated below the small employer base rate.
     (c) The percentage increase in the premium rate charged to a covered insured for a new rating period, adjusted pro rata for rating periods less than a year, 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;
     (ii) any adjustment, not to exceed 15% 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 covered individuals as determined from the covered carrier's rate manual for the class of business, except as provided in Section 31A-22-625; and
     (iii) any adjustment due to change in coverage or change in the case characteristics of the covered insured as determined from the covered carrier's rate manual for the class of business.
     (d) (i) Adjustments in rates for claims experience, health status, and duration from issue may not be charged to individual employees or dependents.
     (ii) Any adjustment described in Subsection (1)(d)(i) shall be applied uniformly to the rates charged for all employees and dependents of the small employer.
     (e) A covered carrier may use industry as a case characteristic in establishing premium rates, provided that the highest rate factor associated with any industry classification does not exceed the lowest rate factor associated with any industry classification by more than 15%.
     (f) (i) Covered carriers shall apply rating factors, including case characteristics, consistently with respect to all covered insureds in a class of business.
     (ii) Rating factors shall produce premiums for identical groups that:
     (A) differ only by the amounts attributable to plan design; and
     (B) do not reflect differences due to the nature of the groups assumed to select particular health benefit products.
     (iii) A covered 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 (1), a health benefit plan that uses a restricted network provision may not be considered similar coverage to a health benefit plan that does not use such a network, provided that use of the restricted network provision results in substantial difference in claims costs.
     (h) The covered carrier may not, without prior approval of the commissioner, use case characteristics other than:

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     (i) age;
     (ii) gender;
     (iii) industry;
     (iv) geographic area;
     (v) family composition; and
     (vi) group size.
     (i) (i) The commissioner may establish rules in accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, to:
     (A) implement this chapter; and
     (B) assure that rating practices used by covered carriers are consistent with the purposes of this chapter.
     (ii) The rules described in Subsection (1)(i)(i) may include rules that:
     (A) assure that differences in rates charged for health benefit products by covered 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 products;
     (B) prescribe the manner in which case characteristics may be used by covered carriers;
     (C) implement the individual enrollment cap under Section 31A-30-110, including specifying:
     (I) the contents for certification;
     (II) auditing standards;
     (III) underwriting criteria for uninsurable classification; and
     (IV) limitations on high risk enrollees under Section 31A-30-111; and
     (D) establish the individual enrollment cap under Subsection 31A-30-110(1).
     (j) Before implementing regulations for underwriting criteria for uninsurable classification, the commissioner shall contract with an independent consulting organization to develop industry-wide underwriting criteria for uninsurability based on an individual's expected claims under open enrollment coverage exceeding 200% of that expected for a standard insurable individual with the same case characteristics.
     (k) The commissioner shall revise rules issued for Sections 31A-22-602 and 31A-22-605 regarding individual accident and health policy rates to allow rating in accordance with this section.
     (2) For purposes of Subsection (1)(c)(i), if a health benefit product is a health benefit product into which the covered carrier is no longer enrolling new covered insureds, the covered 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 benefit product into which the covered carrier is actively enrolling new covered insureds.
     (3) (a) A covered carrier may not transfer a covered insured involuntarily into or out of a class of business.
     (b) A covered carrier may not offer to transfer a covered insured into or out of a class of business unless the offer is made to transfer all covered insureds in the class of business without regard:
     (i) to case characteristics;
     (ii) claim experience;
     (iii) health status; or

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     (iv) duration of coverage since issue.
     (4) (a) Each covered carrier shall maintain at the covered carrier's principal place of business a complete and detailed description of its rating practices and renewal underwriting practices, including information and documentation that demonstrate that the covered carrier's rating methods and practices are:
     (i) based upon commonly accepted actuarial assumptions; and
     (ii) in accordance with sound actuarial principles.
     (b) (i) Each covered carrier shall file with the commissioner, on or before April 1 of each year, in a form, manner, and containing such information as prescribed by the commissioner, an actuarial certification certifying that:
     (A) the covered carrier is in compliance with this chapter; and
     (B) the rating methods of the covered carrier are actuarially sound.
     (ii) A copy of the certification required by Subsection (4)(b)(i) shall be retained by the covered carrier at the covered carrier's principal place of business.
     (c) A covered carrier shall make the information and documentation described in this Subsection (4) available to the commissioner upon request.
     (d) Records submitted to the commissioner under this section shall be maintained by the commissioner as protected records under Title 63, Chapter 2, Government Records Access and Management Act.

Amended by Chapter 108, 2004 General Session