Missouri Revised Statutes













Chapter 379

Insurance Other Than Life

←379.934

Section 379.936.1

379.938→

August 28, 2015

Premium rates, subject to conditions--no transfer out of class of business--disclosure required, contents--rating and renewal records required to be kept.

379.936. 1. Premium rates for health benefit plans subject to sections

379.930 to 379.952 shall be subject to the following provisions:



(1) 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;



(2) 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 that 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 thirty-five percent of the index rate;



(3) The percentage increase in the premium rate charged to a small

employer for a new rating period may not exceed the sum of the following:



(a) 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 small employer

carrier is no longer enrolling new small employers, the small employer 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 small

employer carrier is actively enrolling new small employers;



(b) Any 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; and



(c) 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;



(4) Adjustments in rates for claim 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;



(5) Premium rates for health benefit plans shall comply with the

requirements of this section notwithstanding any assessments paid or payable

by small employer carriers pursuant to sections 379.942 and 379.943;



(6) A small employer carrier may utilize the employer's industry as a

case characteristic in establishing premium rates, provided that the rate

factor associated with any industry classification shall not vary by more

than ten percent from the arithmetic mean of the highest and lowest rate

factors associated with all industry classifications;



(7) In the case of health benefit plans issued prior to July 1, 1993, a

premium rate for a rating period may exceed the ranges set forth in

subdivisions (1) and (2) of this subsection for a period of three years

following July 1, 1993. In such case, 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:



(a) 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 small employer

carrier is no longer enrolling new small employers, the small employer 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 small

employer carrier is actively enrolling new small employers;



(b) Any adjustment due to change in coverage or change in the case

characteristics of the small employer, as determined from the carrier's rate

manual for the class of business;



(8) (a) Small employer carriers shall apply rating factors, including

case characteristics, consistently with respect to all small employers in a

class of business. Rating factors shall produce premiums for identical groups

which differ only by amounts attributable to plan design and do not reflect

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

health benefit plans;



(b) A small employer carrier shall treat all health benefit plans issued

or renewed in the same calendar month as having the same rating period;



(9) For the 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;



(10) A small employer carrier shall not use case characteristics, other

than age, sex, industry, geographic area, family composition, and group size

without prior approval of the director;



(11) The director may promulgate rules to implement the provisions of

this section and to assure that rating practices used by small employer

carriers are consistent with the purposes of sections 379.930 to 379.952,

including:



(a) Assuring that differences in rates charged for health benefit plans

by small employer 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 plans; and



(b) Prescribing the manner in which case characteristics may be used by

small employer carriers.



2. A small employer carrier shall not transfer a small employer

involuntarily 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 such offer is made to transfer all small employers in the

class of business without regard to case characteristics, claim experience,

health status or duration of coverage.



3. The director may suspend for a specified period the application of

subdivision (1) of subsection 1 of this section as to the premium rates

applicable to one or more small employers included within a class of business

of a small employer carrier for one or more rating periods upon a filing by

the small employer carrier and a finding by the director either that the

suspension is reasonable in light of the financial condition of the small

employer carrier or that the suspension would enhance the efficiency and

fairness of the marketplace for small employer health insurance.



4. 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 extent to which premium rates for a specified small employer are

established or adjusted based upon the actual or expected variation in claims

costs or actual or expected variation in health status of the employees of the

small employer and their dependents;



(2) The provisions of the health benefit plan concerning the small

employer carrier's right to change premium rates and factors, other than

claim experience, that affect changes in premium rates;



(3) The provisions relating to renewability of policies and contracts;

and



(4) The provisions relating to any preexisting condition provision.



5. (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 director annually on

or before March fifteenth an actuarial certification certifying that the

carrier is in compliance with sections 379.930 to 379.952 and that the rating

methods of the small employer 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 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 section available to the

director upon request.



(L. 1992 S.B. 796 § 4, A.L. 2007 H.B. 818)



Effective 1-01-08





1993



1993



379.936. 1. Premium rates for health benefit plans subject

to sections 379.930 to 379.952 shall be subject to the following

provisions:



(1) 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;



(2) 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

that 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;



(3) The percentage increase in the premium rate charged to

a small employer for a new rating period may not exceed the sum

of the following:



(a) 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 small employer carrier is no longer

enrolling new small employers, the small employer 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 small employer carrier is actively enrolling

new small employers;



(b) Any 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; and



(c) 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;



(4) Adjustments in rates for claim 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;



(5) Premium rates for health benefit plans shall comply

with the requirements of this section notwithstanding any

assessments paid or payable by small employer carriers pursuant

to sections 379.942 and 379.943;



(6) A small employer carrier may utilize the employer's

industry as a case characteristic in establishing premium rates,

provided that the rate factor associated with any industry

classification shall not vary by more than ten percent from the

arithmetic mean of the highest and lowest rate factors associated

with all industry classifications;



(7) In the case of health benefit plans issued prior to

July 1, 1993, a premium rate for a rating period may exceed the

ranges set forth in subdivisions (1) and (2) of this subsection

for a period of three years following July 1, 1993. In such

case, 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:



(a) 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 small employer carrier is no longer

enrolling new small employers, the small employer 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 small employer carrier is actively enrolling

new small employers;



(b) Any adjustment due to change in coverage or change in

the case characteristics of the small employer, as determined

from the carrier's rate manual for the class of business;



(8) (a) Small employer carriers shall apply rating

factors, including case characteristics, consistently with

respect to all small employers in a class of business. Rating

factors shall produce premiums for identical groups which differ

only by amounts attributable to plan design and do not reflect

differences due to the nature of the groups assumed to select

particular health benefit plans;



(b) A small employer carrier shall treat all health benefit

plans issued or renewed in the same calendar month as having the

same rating period;



(9) For the 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;



(10) A small employer carrier shall not use case

characteristics, other than age, sex, industry, geographic area,

family composition, and group size without prior approval of the

director;



(11) The director may promulgate rules to implement the

provisions of this section and to assure that rating practices

used by small employer carriers are consistent with the purposes

of sections 379.930 to 379.952, including:



(a) Assuring that differences in rates charged for health

benefit plans by small employer 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 plans; and



(b) Prescribing the manner in which case characteristics

may be used by small employer carriers.



2. A small employer carrier shall not transfer a small

employer involuntarily 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 such offer is

made to transfer all small employers in the class of business

without regard to case characteristics, claim experience, health

status or duration of coverage.



3. The director may suspend for a specified period the

application of subdivision (1) of subsection 1 of this section as

to the premium rates applicable to one or more small employers

included within a class of business of a small employer carrier

for one or more rating periods upon a filing by the small

employer carrier and a finding by the director either that the

suspension is reasonable in light of the financial condition of

the small employer carrier or that the suspension would enhance

the efficiency and fairness of the marketplace for small employer

health insurance.



4. 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 extent to which premium rates for a specified small

employer are established or adjusted based upon the actual or

expected variation in claims costs or actual or expected

variation in health status of the employees of the small employer

and their dependents;



(2) The provisions of the health benefit plan concerning

the small employer carrier's right to change premium rates and

factors, other than claim experience, that affect changes in

premium rates;



(3) The provisions relating to renewability of policies and

contracts; and



(4) The provisions relating to any preexisting condition

provision.



5. (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

director annually on or before March fifteenth an actuarial

certification certifying that the carrier is in compliance with

sections 379.930 to 379.952 and that the rating methods of the

small employer 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 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 section

available to the director upon request.



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