Rule 120-2-79-.17 - Rating(1) Small Employer Rating Requirements. Participating carriers offering coverage to small employers through a health plan purchasing cooperative must comply with the rating requirements of Rule 120-2-10-.12(5) and must consistently use the same set of rating factors otherwise used for small group health insurance coverage issued outside of a health plan purchasing cooperative in developing rates for health benefit plans issued or renewed through the health plan purchasing cooperative. Small employer members shall be considered small groups, and experience from health benefit plans issued by a participating carrier to small employer members of a health plan purchasing cooperative shall be part of that carrier's small group pool. Participating carriers shall adhere to every provision of Rule 120-2-10-.12(5) in the following manner, unless specifically directed otherwise by the following: (a) Every small employer member covered by a participating carrier shall be treated as a small group for purposes of Rule 120-2-10-.12(5), in which premiums for small employers are based on pool rates and deviated by any of the allowable factors, and individual employees are subject to premium quotes made for each small employer; or(b) In lieu of subparagraph (a), all rates for use with all employees and dependents of employees of small employer members in a health plan purchasing cooperative may be developed on a composite basis for factors specified in Rule 120-2-10-.12(5)(b), provided that:(2) A participating carrier may use small group rating factors for age, sex, and family size or composition to apply to composite rates on an individual or family basis, in standard age ranges approved by the health plan purchasing cooperative, with which employees and dependents may then be quoted standard rates on age, sex, or family characteristics;(3) A participating carrier shall develop composite rates by calculating a single, standard deviation from the small group pool rate for the actual or anticipated experience of all employees and dependents of employees of all small employer members covered or expected to be covered by the participating carrier in the health plan purchasing cooperative which is not greater than plus or minus 25 percent of the small group rate (or plus or minus 35 percent if the small group pool is rated in accordance with Rule 120-2-10-.12(5)(h)(1) );(4) A participating carrier not subject to Rule 120-2-10-.12(5)(h)(1) may use select and substandard rating related to new entrants to the participating carrier's health benefit plan in accordance with Rule 120-2-10-.12(5)(f) and must apply such rating uniformly and consistently to all individuals covered by that participating carrier through the health plan purchasing cooperative and consistent with the select and substandard rating methodology applied to its entire small group pool;(5) If a participating carrier uses select and substandard rating as in subparagraph (1)(b)3 of this Rule, it may impose a waiting period for coverage of new entrants pursuant to Rule 120-2-10-.12(5)(a) if permitted by the health plan purchasing cooperative; and(6) If a participating carrier is not permitted by the health plan purchasing cooperative to impose a waiting period as otherwise permitted in subparagraph (1)(b)(4) of this Rule, the carrier may not impose a select or substandard rate on any purchasing cooperative health benefit plan. (a) For the purposes of Rule 120-2-10-.12(5)(g), the anticipated group premiums from health benefit plans issued by a participating carrier in one or more purchasing cooperatives using the methodology in either subparagraph (a) or (b) shall be included in the determination of anticipated pool premiums. Premium deviations related to coverage issued to a health plan purchasing cooperative shall be considered in offsetting upward and downward deviations resulting from the application of rating factors to all small groups.(b) The health plan purchasing cooperative and a participating carrier may negotiate only the administrative expense component of the small group pool rate in determining the rate or rates charged for health benefit plans in the health plan purchasing cooperative, where the carrier can demonstrate net administrative cost savings for its health plan purchasing cooperative business. For the purposes of this paragraph, administrative expenses are limited to marketing expenses, acquisition expenses, the cost of paying claims, commissions, profits, and maintenance expenses.(7) Large Employer Rating Requirements. All large employers members covered in a health plan purchasing cooperative shall be considered as separate from the participating carrier's small group pool for compliance with Rule 120-2-10-.12, and may be considered separate from small employer members in the health plan purchasing cooperative for rating purposes. In particular: (a) If employees are permitted to select a health benefit plan, employees of all large employer members may be rated on composite basis adjusted on by age, sex, and family characteristics, provided that a health plan purchasing cooperative may permit each participating carrier to adjust composite rates applicable to a particular large employer for the specific risk characteristics and expected experience of the large employer, or(b) If an employer selects a health benefit plan on behalf of all eligible employees, each large employer member may be experience rated as otherwise permitted by state law.(8) In the event a health plan purchasing cooperative permits enrollment of individuals as permitted in O.C.G.A. § 33-30-4(a)(4), such individuals shall be subject to Rule 120-2-10-.12(8) and shall be rated as a small group, except that carriers subject to subparagraph (1)(b) of this Rule shall offer coverage to such individuals at the same composite rates (adjusted for age, sex, and family size) offered to other employees.(9) With regard to compliance with Rule 120-2-10-.12 in any respect, a participating carrier offering a health benefit plan in a health insurance purchasing cooperative shall determine compliance based on final rates certified to and accepted by the health plan purchasing cooperative for the duration of the rate guarantee period agreed to by the carrier and purchasing cooperative. A participating carrier may only adjust rates during the negotiated rate guarantee period in accordance with Rule 120-2-10-.12(5)(a)1. Nothing in this Regulation Chapter shall prevent a health plan purchasing cooperative from negotiating any specific rate guarantee period with participating carriers, provided that such periods are at least six months and are established consistently for all participating carriers.(10) In the event a health insurance purchasing cooperative and participating carriers agree to apply a different rating methodology from that established by this Rule, or a risk adjustment mechanism to adjust payments to participating carriers based on disproportionate shares of high- or low-risk enrollees, the health plan purchasing cooperative shall file with the Commissioner such proposal, along with certifications from the participating carriers party to such proposal, for approval. The proposal shall demonstrate compliance with the provisions of Rule 120-2-10-.12 with regard to rating of small employer members, or employees in small employer members, and assure consistent application of such mechanism to all members of the health plan purchasing cooperative within each market type. The proposal shall be developed and certified by a qualified actuary. Any risk adjustment mechanism shall be based on valid data from participating carriers and shall utilize factors actuarially related to risk.(11) The health insurance purchasing cooperative shall keep all documentation pertaining to choice of benefits, materials used to instruct members of such choices, premium tables and other rating disclosures, and any rating mechanism developed in conjunction with participating carriers, for review by the Commissioner upon request. Such documentation must include rating materials demonstrating compliance with this Rule.(12) Upon application and renewal for its certificate of authority, a health plan purchasing cooperative shall provide a certification by a responsible officer of the health plan purchasing cooperative as to compliance with the rating provisions of this Rule. Such certification shall include documentary evidence or certifications from participating carriers that such carriers are also complying with the provisions of this Rule as they apply to small employer members. Additionally, the certification submitted by the health plan purchasing cooperative shall designate whether the health plan purchasing cooperative complies, in its arrangements with participating carriers, with either subparagraph (1)(a) or (1)(b) of this Rule as they apply to small employer members, and shall designate the method of compliance with paragraphs (2) and (3) of this Rule as they apply to members of other market types (if applicable). A health plan purchasing cooperative subject to paragraph (5) of this Rule shall amend its certification as appropriate pursuant to its proposal upon application, and shall certify continued compliance with its originally approved rating proposal upon renewal.Ga. Comp. R. & Regs. R. 120-2-79-.17
O.C.G.A. Secs. 33-2-9, 33-30A-5, 33-30A-9.
Original Rule entitled "Rating" adopted. F. Feb. 23, 2000; eff. Mar. 14, 2000.