Arkansas Code of 1987 (2023) › Title 23 - PUBLIC UTILITIES AND REGULATED INDUSTRIES (§§ 23-1-101 — 23-119-105) › Subtitle 3 - INSURANCE (§§ 23-60-101 — 23-103-417) › Chapter 86 - GROUP AND BLANKET ACCIDENT AND HEALTH INSURANCE (§§ 23-86-101 — 23-86-512) › Subchapter 2 - SMALL-EMPLOYER HEALTH INSURANCE (§§ 23-86-201 — 23-86-209) › Section 23-86-204 - Restrictions relating to premium rates

(a)
Premium rates for health benefit plans subject to this subchapter 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 (20%). This subdivision (a)(1) shall not apply to a class of business if all of the following apply:
(A)
The class of business is one for which the carrier does not reject, and never has rejected, small employers included within the definition of employers eligible for the class of business or otherwise eligible employees and dependents who enroll on a timely basis, based upon their claim experience or health status;
(B)
The carrier does not involuntarily transfer, and never has involuntarily transferred, a health benefit plan into or out of the class of business; and
(C)
The class of business is currently available for purchase;
(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 which 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 (25%) 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)
(i)
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.
(ii)
In the case of a class of business for which the small employer carrier is not issuing new policies, the carrier shall use the percentage change in the base premium rate;
(B)
An adjustment, not to exceed fifteen percent (15%) annually and adjusted pro rata for rating periods of less than one (1) 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 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 carrier's rate manual for the class of business; and
(4)
In the case of health benefit plans issued prior to January 1, 1992, a premium rate for a rating period may exceed the ranges described in subdivision (a)(1) or subdivision (a)(2) of this section for a period of five (5) years following January 1, 1992. In such a case, the percentage increase in the premium rate charged to a small employer in such a class of business for a new rating period may not exceed the sum of the following:
(A)
(i)
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.
(ii)
In the case of a class of business for which the small employer carrier is not issuing new policies, the carrier shall use the percentage change in the base premium rate; and
(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.
(b)
(1)
Nothing in this section is intended to affect the use by a small employer carrier of legitimate rating factors other than claim experience, health status, or duration of coverage in the determination of premium rates.
(2)
Small employer carriers shall apply rating factors, including case characteristics, consistently with respect to all small employers in a class of business.
(c)
(1)
A small employer carrier shall not involuntarily transfer a small employer into or out of a class of business.
(2)
A small employer carrier shall not offer to transfer a small employer into or out of a class of business unless the offer is made to transfer all small employers in the class of business without regard to case characteristics, claim experience, health status, or duration since issue.
Acts 1991, No. 1143, § 2.