| (4) If, for any rating period, the change in the new
business premium rate for a health benefit plan differs from the change
in the new business premium rate for any other health benefit plan
in the same class of business by more than 20 percent, the health
carrier must make a filing with the commissioner containing a complete
explanation of how the respective changes in new business premium
rates were established and the reason for the difference. The filing
must be made at least 60 days before the beginning of the rating period
during which the change is applicable. The filing allows the commissioner
to determine whether the methodology is actuarially sound and appropriate
to ensure compliance with Insurance Code Chapter 1501.
(5) A small employer carrier must keep the calculations
used to determine the change in base premium rates and new business
premium rates for each health benefit plan for each rating period
for six years.
(f) Changes in premium rates and revised premium rates
must comply with the following.
(1) Except as provided in subsection (e) of this section,
a change in premium rate for a small employer must produce a revised
premium rate that is no more than the base premium rate for the small
employer (as shown in the rate manual as revised for the rating period),
multiplied by one plus the sum of:
(A) the risk load applicable to the small employer
during the previous rating period; and
(B) 15 percent (prorated for periods of less than one
year).
(2) In the case of a health benefit plan into which
a small employer carrier is no longer enrolling new small employers,
a change in premium rate for a small employer must produce a revised
premium rate that is no more than the base premium rate for the small
employer (given its present composition and as shown in the rate manual
in effect for the small employer at the beginning of the previous
rating period), multiplied by one plus the lesser of:
(A) the change in the base rate; or
(B) the percentage change in the new business premium
for the most similar health benefit plan into which the small employer
carrier is enrolling new small employers, multiplied by one plus the
sum of:
(i) the risk load applicable to the small employer
during the previous rating period; and
(ii) 15 percent (prorated for periods of less than
one year).
(3) In the case of a health benefit plan described
in Insurance Code §1501.208, if the current premium rate for
the health benefit plan exceeds the ranges set forth in Insurance
Code §1501.204 (concerning Index Rates), the formulae set forth
in paragraphs (1) and (2) of this subsection will be applied as if
the 15 percent adjustment provided in paragraphs (1)(B) and (2)(B)(ii)
of this subsection were a 0 percent adjustment.
(4) Notwithstanding the provisions of paragraphs (1)
and (2) of this subsection, a change in premium rate for a small employer
may not produce a revised premium rate that would exceed the limitations
on rates provided in Insurance Code §1501.204.
(g) An HMO offering any state-approved, federally qualified
plan described in Insurance Code §1501.255 (concerning Health
Maintenance Organization Plans) and §26.14 of this title (relating
to Coverage) must establish premium rates for those plans in accordance
with formulae or schedules of charges filed with TDI under the procedures
set forth in Insurance Code Chapter 1271 (concerning Benefits Provided
by Health Maintenance Organizations; Evidence of Coverage; Charges)
and Chapter 11, Subchapter H of this title (relating to Schedule of
Charges). An HMO must follow the rating requirements set out in this
section for any plan it offers that is not federally qualified.
(h) An HMO participating in a purchasing cooperative
that provides employees of small employers a choice of benefit plans,
which has established a separate class of business as provided by
Insurance Code §1501.202 (concerning Establishment of Classes
of Business) and §1501.203 (concerning Establishment of Classes
of Business on Certain Bases Prohibited), and a separate line of business
as provided under Insurance Code §1501.255 and 42 U.S.C. §§300e
et seq. (concerning Health Maintenance Organizations), may use rating
methods in accordance with this subchapter that are used by other
small employer carriers participating in the same purchasing cooperative,
including rating by age and gender.
(i) When seeking to obtain information relating to
a small employer group, including the risk characteristics of the
small employer group, a small employer carrier must comply with §26.13(l)
of this title (relating to Fair Marketing).
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| Source Note: The provisions of this §26.11 adopted to be effective December 30, 1993, 18 TexReg 9375; amended to be effective April 9, 1996, 21 TexReg 2648; amended to be effective March 5, 1998, 23 TexReg 2297; amended to be effective April 6, 2005, 30 TexReg 1931; amended to be effective May 17, 2017, 42 TexReg 2539 |
