[Text of section effective until July 1, 2007. For text effective July 1, 2007, see below.]
Section 3. (a) Premiums charged to every eligible small business for a health benefit plan issued or renewed on or after April first, nineteen hundred and ninety-two shall satisfy the following requirements:
(1) For every health benefit plan issued or renewed on or after April first, nineteen hundred and ninety-two, the group base premium rates charged by a carrier to each group during a rating period shall not exceed two times the group base premium rate which could be charged by that carrier to the group with the lowest group base premium rate for that rate basis type within that class of business.
(2) A carrier may establish a benefit level rate adjustment for all groups which shall be expressed as a number. The number shall represent the relative actuarial value of the benefit level of the health benefit plan issued to that group as compared to the actuarial value of other health benefit plans within that class of business. If a carrier chooses to establish benefit level rate adjustments, every group shall be subject to the applicable benefit level rate adjustment.
(3) The commissioner shall annually establish not less than five distinct regions of the state for the purposes of area rate adjustments. A carrier may establish an area rate adjustment for each distinct region, the value of which shall range from eight-tenths to one and one-fifth. If a carrier chooses to establish area rate adjustments, every group within each area shall be subject to the applicable area rate adjustment.
(4) A carrier may establish a group size rate adjustment, the value of which shall range from ninety-five one-hundredths to one and five one-hundredths. The group size rating must be based only upon actual administrative costs or other business costs borne by the carrier for serving groups of varying sizes. If a carrier chooses to establish group size rate adjustments, every group shall be subject to the applicable group size rate adjustment.
(5) A carrier may establish participation-rate rate adjustments for any health benefit plan or plans for any ranges of participation rates below the minimum participation requirements established in accordance with the definition of participation requirement in section two, the value of which shall be expressed as a number. The participation-rate rate adjustments must be based upon actuarially sound analysis of the differences in the experience of groups with different participation rates. If a carrier chooses to establish participation-rate rate adjustments, every group with a participation rate within the ranges defined by the carrier shall be subject to the applicable participation-rate rate adjustment.
(6) A carrier may establish a wellness program rate discount for any eligible small businesses which provide employees wellness programs which meet minimum standards established by the commissioner. The value of the wellness program rate discount shall range from ninety-five one-hundredths to ninety-nine one-hundredths. If a carrier establishes a wellness program rate discount, every eligible insured with a wellness program that meets such standards shall be subject to the applicable wellness program rate discount.
(7) A carrier who, as of December thirty-first, nineteen hundred and ninety-one, varies rates by health status, claims experience, duration, or any factors other than case characteristics or area may establish a phase-out rate adjustment for each group. The phase-out rate adjustments shall range from sixty-seven one-hundredths to one and thirty-three one-hundredths between April first, nineteen hundred and ninety-two and December thirty-first, nineteen hundred and ninety-two, inclusive. The phase-out rate adjustment shall range from three-quarters to one and one-quarter between January first, nineteen hundred and ninety-three and December thirty-first, nineteen hundred and ninety-three, inclusive. The phase-out rate adjustments shall range from eighty-five one-hundredths to one and fifteen one-hundredths between January first, nineteen hundred and ninety-four and December thirty-first, nineteen hundred and ninety-four, inclusive. No phase-out rate adjustments shall be permitted after December thirty-first, nineteen hundred and ninety-four. If a carrier chooses to establish phase-out rate adjustments, every group which was part of the carrier’s in-force business on April first, nineteen hundred and ninety-two shall be subject to a phase-out rate adjustment, but all groups which were not part of the carrier’s in-force business on April first, nineteen hundred and ninety-two shall not be subject to a phase-out rate adjustment.
A carrier who, as of December thirty-first, nineteen hundred and ninety-one varies rates by health status, claims experience, duration, group size, or any factors other than case characteristics or area, may base its phase-out rate adjustments only upon those factors other than case characteristics or area which it used to vary its rates on December thirty-first, nineteen hundred and ninety-one and may vary its rates due to these factors only by the amount of the phase-out rate adjustments established in this section, or by the amount which it varied its rates due to those factors on December thirty-first, nineteen hundred and ninety-one, whichever is less. A carrier who, as of December thirty-first, nineteen hundred and ninety-one, does not vary rates by any factors other than case characteristics may not establish a phase-out rate adjustment for any group. Effective January first, nineteen hundred and ninety-five, no carrier may charge a premium rate to an eligible small business which is based upon a group’s health status, duration of coverage, or actual or expected claims experience.
(8) A carrier who, as of December thirty-first, nineteen hundred and ninety-one, varies rates by the age of the insured may establish an age rate adjustment for each eligible small business. The age rate adjustments shall range from sixty-seven one-hundredths to one and thirty-three one-hundredths between April first, nineteen hundred and ninety-two and December thirty-first, nineteen hundred and ninety-three, inclusive.
The premium rate charged by a carrier to each group on the date the group’s policy is issued or renewed shall be established such that the average premium rates charged for each rate basis type at the beginning of the rating period, adjusted to a January first basis, equals that rate basis type’s group base premium rate, multiplied by the benefit level rate adjustment, multiplied by the area rate adjustment, multiplied by the group size rate adjustment, multiplied by the participation-rate rate adjustment, multiplied by the wellness program rate discount, multiplied by the phase-out rate adjustment, multiplied by the age rate adjustment, as may be applicable pursuant to this section.
Notwithstanding the provisions of any general or special law to the contrary, including the provisions of this section, any carrier that issues, delivers or renews a health benefit plan on or before December thirty-first, nineteen hundred and ninety-four, subject to this chapter without a phase-out rate adjustment may charge a group base premium rate which does not exceed the rate band allowable for any other carrier under paragraph (1) of subsection (a).
(b) For all rating periods which begin between April first, nineteen hundred and ninety-two and December thirty-first, nineteen hundred and ninety-four, inclusive, the premium rate for each group which renews its coverage with a carrier shall not exceed the premium rate charged by that carrier for that group during the prior rating period by more than: (1) trend within that class of business for that carrier; plus, (2) the sum of any premium changes due to changes in the age, sex, group size, area, participation rate, or rate basis types represented in the group and any change in the applicable wellness program discount; plus (3) ten percent; plus, (4) the change in the actuarial value of the benefits due to changes in the benefit level for that eligible insured.
No carrier shall vary any premium rate on the basis of sex or gender in any health plan issued or renewed on or after August fifteenth, nineteen hundred and ninety-six.
A carrier who, as of August fifteenth, nineteen hundred and ninety-six, pursuant to paragraph (1) of subsection (a) charged group base premium rates to any group from among twenty-six to no more than fifty eligible employees eligible employees as defined in section one of this statute that were more than two times the group base premium rate charged by that carrier to any group from among twenty-six to no more than fifty eligible employees eligible employees with the lowest group base premium rate for that rate basis type within that class of business may establish a phase-out adjustment for all groups that were charged more than two times such group base premium rate. No carrier may vary its rates by more than such phase-out adjustment or the amount by which it varied its rates due to those factors on August fifteenth, nineteen hundred and ninety-six, whichever is less. Between December first, nineteen hundred and ninety-six and November thirtieth, nineteen hundred and ninety-seven, inclusive, the group base premium rate charged by a carrier to any eligible small business from among twenty-six to no more than fifty eligible employees under this section shall not exceed four times the group base premium rate charged by that carrier to an eligible small business from among twenty-six to no more than fifty eligible employees under this section with the lowest group premium rate for that rate basis type within that class of business. Between December first, nineteen hundred and ninety-seven and November thirtieth nineteen hundred and ninety-eight, inclusive, the group base rate charged by a carrier to any eligible small business from among twenty-six to no more than fifty eligible employees under this section shall not exceed three times the group base premium rate charged by that carrier to an eligible small business from among twenty-six to no more than fifty eligible employees under this section with the lowest group premium rate for that rate basis type within that class of business. Between December first, nineteen hundred and ninety-eight and November thirtieth, nineteen hundred and ninety-nine, the group base rate charged by a carrier to any eligible small business from among twenty-six to no more than fifty eligible employees under this section shall not exceed two times the group base premium rate charged by that carrier to an eligible small business from among twenty-six to no more than fifty eligible employees under this section with the lowest group premium rate for that rate basis type within that class of business. If a carrier chooses to establish a phase-out rate adjustment, every group business from among twenty-six to no more than fifty eligible employees that was charged a group base premium rate that was more than two times the group base premium rate charged by that carrier to the group business from among twenty-six to no more than fifty eligible employees with the lowest group base premium rate for that rate basis type within that class of business on August fifteenth, nineteen hundred and ninety-six shall be subject to a phase-out rate adjustment; provided, however, that no carrier shall apply a phase-out rate adjustment to any other group business from among twenty-six to no more than fifty eligible employees employees.
Effective December 1, 1999, group base premium rates charged by a carrier to an eligible small business shall not exceed two times the group base premium rate which could be charged by that carrier to an eligible small business under this chapter with the lowest group premium rate basis type within that class of business.
For every health benefit plan issued or renewed on or after December 1, 1999, the group base premium rates charged by a carrier to each group business from among 26 to no more than 50 eligible employees during a rating period shall not exceed two times the group base premium rate charged to the group business from among 26 to no more than 50 eligible employees with the lowest group base premium rate. No phase-out adjustments shall be permitted after November 30, 1999.
[Text of section as amended by 2006, 58, Sec. 82 and 2006, 324, Secs. 46 and 47 effective July 1, 2007. See 2006, 58, Sec. 142 as amended by 2006, 324, Sec. 66 and 2006, 58, Sec. 145 as amended by 2006, 324, Sec. 68 and 2006, 324, Secs. 78 and 79 as amended by 2006, 450, Sec. 9. For text effective until July 1, 2007, see above.]
Section 3. (a) Premiums charged to every eligible small business for a health benefit plan issued or renewed on or after April 1, 1992, or eligible individuals for a health benefit plan issued or renewed on or after July 1, 2007, shall satisfy the following requirements:—
(1) For every health benefit plan issued or renewed to eligible small groups on or after April 1, 1992 and to eligible individuals on or after July 1, 2007, including a certificate issued to an eligible small group or eligible individual that evidences coverage under a policy or contract issued or renewed to a trust, association or other entity that is not a group health plan, a carrier shall develop a base premium rate for a class of business. The group base premium rates charged by a carrier to each eligible group or eligible individual during a rating period shall not exceed 2 times the group base premium rate which could be charged by that carrier to the eligible group or eligible individual with the lowest group base premium rate for that rate basis type within that class of business in that group’s or individual’s geographic area. In calculating the premium to be charged to each eligible small group or eligible individual, a carrier shall develop a base premium rate for each rate basis type and may develop and use any of the rate adjustment factors identified in clauses (2) to (6), inclusive, provided that after multiplying any of the used rate adjustment factors by the base premium rate, the resulting product for all adjusted group base premium rate combinations fall within rate bands ranging between 0.66 and 1.32 that is required of all products offered to eligible small groups and eligible individuals. In addition, carriers may apply additional factors, identified in subsection (b) that would apply outside the 0.66 to 1. 32 rate band. All other rating adjustments are prohibited. Carriers may offer any rate basis types, but rate basis types that are offered to any eligible small employer or eligible individual shall be offered to every eligible small employer or eligible individual for all coverage issued or renewed on or after July 1, 2007. If an eligible small employer does not meet a carrier’s minimum or participation contribution requirements, the carrier may separately rate each employee as an eligible individual.
(2) A carrier may establish an age rate adjustment that applies to both eligible individuals and eligible small groups.
(3) A carrier may establish an industry rate adjustment. If a carrier chooses to establish industry rate adjustments, every eligible small group in an industry shall be subject to the applicable industry rate adjustment. The industry rate adjustment applicable to an eligible individual shall be based on the industry of the eligible individual’s primary employer and shall be the same adjustment applied to eligible small groups in the same industry. A carrier may not apply an industry rate to an eligible individual who is not employed.
(4) A carrier may establish participation-rate rate adjustments that apply only to eligible small groups for any health benefit plan or plans for any ranges of participation rates below the minimum participation requirements established under the definition of participation requirement in section 1, the value of which shall be expressed as a number. Alternatively, a carrier may separately rate each employee enrolling through such a group as an eligible individual. The participation-rate rate adjustments must be based upon actuarially sound analysis of the differences in the experience of groups with different participation rates. If a carrier chooses to establish participation-rate rate adjustments, every eligible small group with a participation rate within the ranges defined by the carrier shall be subject to the applicable participation-rate rate adjustment.
(5) A carrier may apply a wellness program rate discount that applies to both eligible individuals and eligible small groups who follow those wellness programs that have been approved by the commissioner. If a carrier establishes a wellness program rate discount every eligible insured following the wellness program shall be subject to the applicable wellness program rate discount.
(6) A carrier may apply a tobacco use rate discount that applies to both eligible small groups and eligible individuals who can certify, in a method approved by the commissioner, that eligible individuals and their eligible dependents or eligible small group employees and their eligible dependents have not used tobacco products within the past year.
(b)(1) A carrier may establish a benefit level rate adjustment for all eligible individuals and eligible small groups that shall be expressed as a number. The number shall represent the relative actuarial value of the benefit level, including the health care delivery network, of the health benefit plan issued to that eligible small group or eligible individual as compared to the actuarial value of other health benefit plans within that class of business. If a carrier chooses to establish benefit level rate adjustments, every eligible small group and every eligible individual shall be subject to the applicable benefit level rate adjustment.
(2) The commissioner shall establish not less than 5 distinct regions of the state for the purposes of area rate adjustments. A carrier may establish an area rate adjustment for each distinct region, the value of which shall range from eight-tenths to one and one-fifth. If a carrier chooses to establish area rate adjustments, every eligible small group and every eligible individual within each area shall be subject to the applicable area rate adjustment.
(3) A carrier shall establish a rate basis type adjustment factor for eligible individuals and eligible small groups which shall be expressed as a number. The number shall represent the relative actuarial value of the rate basis type, which shall include at least the following 4 categories:—single, 2 adults, 1 adult and children, and family.
(4) A carrier may establish a group size rate adjustment that applies to both eligible individuals and eligible small groups, the value of which shall range from 0.95 to 1.10. If a carrier chooses to establish group size rate adjustments, every eligible individual and eligible small group shall be subject to the applicable group size rate adjustment. If an eligible small business does not meet a carrier’s participation or contribution requirements, the carrier may apply the group size adjustment that applies to eligible individuals to each employee who enrolls through the eligible small business.
(c)(1) A carrier that, as of the close of the calendar year 2005, had a combined total of 5,000 or more eligible employees and eligible dependents as defined by this chapter who are enrolled in health benefit plans sold, issued, delivered, made effective or renewed to qualified small businesses pursuant to its license under chapter 176G, shall be required to file a plan with the connector, for its consideration, which could attain the connector seal of approval.
(2) As of January 1, 2007, a carrier that as of the close of any preceding calendar year, has a combined total of 5,000 or more eligible individuals, eligible employees and eligible dependents, who are enrolled in health benefit plans sold, issued, delivered, made effective or renewed to qualified small businesses or eligible individuals pursuant to its license under chapter 176G, shall be required annually to file a plan with the connector for its consideration, which could attain the connector seal of approval; provided however, the plan shall be filed no later than October 1 of any calendar year.
(d)(1) A carrier that, as of the close of the calendar year 2005 had a combined total of 5,000 or more eligible employees and eligible dependents as defined by this chapter who are enrolled in health benefit plans sold, issued, delivered, made effective or renewed to qualified small businesses pursuant to its authority under chapter 175, chapter 176A or chapter 176B shall be required to file a plan with the connector for its consideration, which could attain the connector seal of approval.
(2) As of January 1, 2007, a carrier that as of the close of any preceding calendar year, has a combined total of 5,000 or more eligible individuals, eligible employees and eligible dependents, who are enrolled in health benefit plans sold, issued, delivered, made effective or renewed to qualified small businesses or eligible individuals pursuant to its authority under chapter 175, 176A or 176B, shall be required annually to file a plan with the connector for its consideration, which could attain the connector seal of approval; provided however, the plan shall be filed no later than October 1 of any calendar year.
(e) For the purposes of this section, neither an eligible individual or eligible employee, nor an eligible dependent, shall be considered to be enrolled in a health benefit plan issued pursuant to its authority under chapter 175, 176A or 176B if the health benefit plan is sold, issued, delivered, made effective or renewed to said eligible employee or eligible dependent as a supplement to a health benefit plan subject to licensure under chapter 176G.