CA Health & Safety Code § 1385.045 (2021)
2021 California Code|Health and Safety Code - HSC|DIVISION 2 - LICENSING PROVISIONS|CHAPTER 2.2 - Health Care Service Plans|ARTICLE 6.2 - Review of Rate Increases|Section 1385.045.

1385.045.  (a) For large group health care service plan contracts, a health care service plan shall file with the department the weighted average rate increase for all large group benefit designs during the 12-month period ending January 1 of the following calendar year. The average shall be weighted by the number of enrollees in each large group benefit design in the plan’s large group market and adjusted to the most commonly sold large group benefit design by enrollment during the 12-month period. For the purposes of this section, the large group benefit design includes, but is not limited to, benefits such as basic health care services and prescription drugs. The large group benefit design shall not include cost sharing, including, but not limited to, deductibles, copays, and coinsurance.(b) (1) A plan shall also submit any other information required pursuant to any regulation adopted by the department to comply with this article.(2) The department shall conduct a public meeting in every even-numbered year regarding large group rates within four months of posting the aggregate information described in this section in order to permit a public discussion of the reasons for the changes in the rates, benefits, and cost sharing in the large group market. The meeting shall be held in either the Los Angeles area or the San Francisco Bay area.(c) A health care service plan subject to subdivision (a) shall also disclose the following for the aggregate rate information for the large group market submitted under this section:(1) For rates effective during the 12-month period ending January 1 of the following year, number and percentage of rate changes reviewed by the following:(A) Plan year.(B) Segment type, including whether the rate is community rated, in whole or in part.(C) Product type.(D) Number of enrollees.(E) The number of products sold that have materially different benefits, cost sharing, or other elements of benefit design.(2) For rates effective during the 12-month period ending January 1 of the following year, any factors affecting the base rate, and the actuarial basis for those factors, including all of the following:(A) Geographic region.(B) Age, including age rating factors.(C) Occupation.(D) Industry.(E) Health status factors, including, but not limited to, experience and utilization.(F) Employee, and employee and dependents, including a description of the family composition used.(G) Enrollees’ share of premiums.(H) Enrollees’ cost sharing, including cost sharing for prescription drugs.(I) Covered benefits in addition to basic health care services, as defined in Section 1345, and other benefits mandated under this article.(J) Which market segment, if any, is fully experience rated and which market segment, if any, is in part experience rated and in part community rated.(K) Any other factor that affects the rate that is not otherwise specified.(3) (A) The plan’s overall annual medical trend factor assumptions for all benefits and by aggregate benefit category, including hospital inpatient, hospital outpatient, physician services, prescription drugs and other ancillary services, laboratory, and radiology for the applicable 12-month period ending January 1 of the following year.(B) The amount of the projected trend separately attributable to the use of services, price inflation, and fees and risk for annual plan contract trends by aggregate benefit category, including hospital inpatient, hospital outpatient, physician services, prescription drugs and other ancillary services, laboratory, and radiology.(C) A comparison of the aggregate per-enrollee, per-month costs and rate of changes over the last five years for each of the following:(i) Premiums.(ii) Claims costs, if any.(iii) Administrative expenses.(iv) Taxes and fees.(D) Any changes in enrollee cost sharing over the prior year associated with the submitted rate information, including both of the following:(i) Actual copays, coinsurance, deductibles, annual out of pocket maximums, and any other cost sharing by the benefit categories determined by the department.(ii) Any aggregate changes in enrollee cost sharing over the prior years as measured by the weighted average actuarial value, weighted by the number of enrollees.(E) Any changes in enrollee benefits over the prior year, including a description of benefits added or eliminated, as well as any aggregate changes, as measured as a percentage of the aggregate claims costs, listed by the categories determined by the department.(F) Any cost containment and quality improvement efforts since the plan’s prior year’s information pursuant to this section for the same category of health benefit plan. To the extent possible, the plan shall describe any significant new health care cost containment and quality improvement efforts and provide an estimate of potential savings together with an estimated cost or savings for the projection period.(G) The number of products covered by the information that incurred the excise tax paid by the health care service plan.(4) (A) For covered prescription generic drugs excluding specialty generic drugs, prescription brand name drugs excluding specialty drugs, and prescription brand name and generic specialty drugs dispensed at a plan pharmacy, network pharmacy, or mail order pharmacy for outpatient use, all of the following shall be disclosed:(i) The percentage of the premium attributable to prescription drug costs for the prior year for each category of prescription drugs as defined in this subparagraph.(ii) The year-over-year increase, as a percentage, in per-member, per-month total health care service plan spending for each category of prescription drugs as defined in this subparagraph.(iii) The year-over-year increase in per-member, per-month costs for drug prices compared to other components of the health care premium.(iv) The specialty tier formulary list.(B) The plan shall include the percentage of the premium attributable to prescription drugs administered in a doctor’s office that are covered under the medical benefit as separate from the pharmacy benefit, if available.(C) (i) The plan shall include information on its use of a pharmacy benefit manager, if any, including which components of the prescription drug coverage described in subparagraphs (A) and (B) are managed by the pharmacy benefit manager.(ii) The plan shall also include the name or names of the pharmacy benefit manager, or managers if the plan uses more than one.(d) The information required pursuant to this section shall be submitted to the department on or before October 1, 2018, and on or before October 1 annually thereafter. Information submitted pursuant to this section is subject to Section 1385.07.(e) For the purposes of this section, a “specialty drug” is one that exceeds the threshold for a specialty drug under the Medicare Part D program (Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (Public Law 108-173)).(Amended by Stats. 2020, Ch. 370, Sec. 195. (SB 1371) Effective January 1, 2021.)