TITLE 27

Insurance

CHAPTER 27-50

Small Employer Health Insurance Availability Act

SECTION 27-50-5



   § 27-50-5  Restrictions relating to premium

rates. –

(a) Premium rates for health benefit plans subject to this chapter are subject

to the following provisions:



   (1) Subject to subdivision (2) of this subsection, a small

employer carrier shall develop its rates based on an adjusted community rate

and may only vary the adjusted community rate for:



   (i) Age;



   (ii) Gender; and



   (iii) Family composition;



   (2) The adjustment for age in paragraph (1)(i) of this

subsection may not use age brackets smaller than five (5) year increments and

these shall begin with age thirty (30) and end with age sixty-five (65).



   (3) The small employer carriers are permitted to develop

separate rates for individuals age sixty-five (65) or older for coverage for

which Medicare is the primary payer and coverage for which Medicare is not the

primary payer. Both rates are subject to the requirements of this subsection.



   (4) For each health benefit plan offered by a carrier, the

highest premium rate for each family composition type shall not exceed four (4)

times the premium rate that could be charged to a small employer with the

lowest premium rate for that family composition.



   (5) Premium rates for bona fide associations except for the

Rhode Island Builders' Association whose membership is limited to those who are

actively involved in supporting the construction industry in Rhode Island shall

comply with the requirements of § 27-50-5.



   (6) For a small employer group renewing its health insurance

with the same small employer carrier which provided it small employer health

insurance in the prior year, the combined adjustment factor for age and gender

for that small employer group will not exceed one hundred twenty percent (120%)

of the combined adjustment factor for age and gender for that small employer

group in the prior rate year.



   (b) The premium charged for a health benefit plan may not be

adjusted more frequently than annually except that the rates may be changed to

reflect:



   (1) Changes to the enrollment of the small employer;



   (2) Changes to the family composition of the employee; or



   (3) Changes to the health benefit plan requested by the small

employer.



   (c) Premium rates for health benefit plans shall comply with

the requirements of this section.



   (d) Small employer carriers shall apply rating factors

consistently with respect to all small employers. Rating factors shall produce

premiums for identical groups that 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. Two groups that are

otherwise identical, but which have different prior year rate factors may,

however, have rating factors that produce premiums that differ because of the

requirements of subdivision 27-50-5(a)(6). Nothing in this section shall be

construed to prevent a group health plan and a health insurance carrier

offering health insurance coverage from establishing premium discounts or

rebates or modifying otherwise applicable copayments or deductibles in return

for adherence to programs of health promotion and disease prevention, including

those included in affordable health benefit plans, provided that the resulting

rates comply with the other requirements of this section, including subdivision

(a)(5) of this section.



   The calculation of premium discounts, rebates, or

modifications to otherwise applicable copayments or deductibles for affordable

health benefit plans shall be made in a manner consistent with accepted

actuarial standards and based on actual or reasonably anticipated small

employer claims experience. As used in the preceding sentence, "accepted

actuarial standards" includes actuarially appropriate use of relevant data from

outside the claims experience of small employers covered by affordable health

plans, including, but not limited to, experience derived from the large group

market, as this term is defined in § 27-18.6-2(19).



   (e) For the purposes of this section, a health benefit plan

that contains a restricted network provision shall not be considered similar

coverage to a health benefit plan that does not contain such a provision,

provided that the restriction of benefits to network providers results in

substantial differences in claim costs.



   (f) The health insurance commissioner may establish

regulations 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 regulations that assure that differences in

rates charged for health benefit plans by small employer carriers are

reasonable and reflect objective differences in plan design or coverage (not

including differences due to the nature of the groups assumed to select

particular health benefit plans or separate claim experience for individual

health benefit plans) and to ensure that small employer groups with one

eligible subscriber are notified of rates for health benefit plans in the

individual market.



   (g) 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:



   (1) 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;



   (2) The provisions relating to renewability of policies and

contracts;



   (3) The provisions relating to any preexisting condition

provision; and



   (4) A listing of and descriptive information, including

benefits and premiums, about all benefit plans for which the small employer is

qualified.



   (h)(1) 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.



   (2) Each small employer carrier shall file with the

commissioner annually on or before March 15 an actuarial certification

certifying that the carrier is in compliance with this chapter and that the

rating methods of the small employer carrier are actuarially sound. The

certification shall be in a form and manner, and shall contain the information,

specified by the commissioner. A copy of the certification shall be retained by

the small employer carrier at its principal place of business.



   (3) A small employer carrier shall make the information and

documentation described in subdivision (1) of this subsection available to the

commissioner upon request. Except in cases of violations 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.



   (4) For the wellness health benefit plan described in §

27-50-10, the rates proposed to be charged and the plan design to be offered by

any carrier shall be filed by the carrier at the office of the commissioner no

less than thirty (30) days prior to their proposed date of use. The carrier

shall be required to establish that the rates proposed to be charged and the

plan design to be offered are consistent with the proper conduct of its

business and with the interest of the public. The commissioner may approve,

disapprove, or modify the rates and/or approve or disapprove the plan design

proposed to be offered by the carrier. Any disapproval by the commissioner of a

plan design proposed to be offered shall be based upon a determination that the

plan design is not consistent with the criteria established pursuant to

subsection 27-50-10(b).



   (i) The requirements of this section apply to all health

benefit plans issued or renewed on or after October 1, 2000.



History of Section.

(P.L. 2000, ch. 200, § 9; P.L. 2000, ch 229, § 10; P.L. 2002, ch. 41,

§ 1; P.L. 2002, ch. 124, § 1; P.L. 2002, ch. 292, § 90; P.L.

2002, ch. 306, § 1; P.L. 2002, ch. 366, § 1; P.L. 2003, ch. 119,

§ 1; P.L. 2003, ch. 120, § 1; P.L. 2003, ch. 286, § 1; P.L.

2003, ch. 375, § 1; P.L. 2004, ch. 406, § 2; P.L. 2004, ch. 502,

§ 2; P.L. 2006, ch. 258, § 2; P.L. 2006, ch. 296, § 2; P.L.

2008, ch. 95, § 1; P.L. 2008, ch. 290, § 1; P.L. 2008, ch. 475,

§ 96; P.L. 2009, ch. 48, § 1; P.L. 2009, ch. 77, § 1.)