2023 Michigan Compiled Laws › Chapter 550 - General Insurance Laws › Act 350 of 1980 - The Nonprofit Health Care Corporation Reform Act (550.1101 - 550.1704) › 350-1980-6 - Part 6 (550.1601...550.1620) › Section 550.1608 - Rates Charged to Nongroup Subscribers for Certificate; Methodology and Definitions of Rating System, Formula, Component, and Factor Used to Calculate Rates for Group Subscribers for Certificate; Filing; Approval, Disapproval, or Modification; Standard; Burden of Proof; Effective Date of Proposed Rate; Rate Adjustments; Implementation Prior to Approval; Examination of Financial Arrangement; Formulae, and Factors.

550.1608 Rates charged to nongroup subscribers for certificate; methodology and definitions of rating system, formula, component, and factor used to calculate rates for group subscribers for certificate; filing; approval, disapproval, or modification; standard; burden of proof; effective date of proposed rate; rate adjustments; implementation prior to approval; examination of financial arrangement; formulae, and factors.
Sec. 608.
(1) The rates charged to nongroup subscribers for each certificate shall be filed in accordance with section 610 and shall be subject to the prior approval of the commissioner. Annually, the commissioner shall approve, disapprove, or modify and approve the proposed or existing rates for each certificate subject to the standard that the rates must be determined to be equitable, adequate, and not excessive, as defined in section 609. The burden of proof that rates to be charged meet these standards shall be upon the health care corporation proposing to use the rates.
(2) The methodology and definitions of each rating system, formula, component, and factor used to calculate rates for group subscribers for each certificate, including the methodology and definitions used to calculate administrative costs for administrative services only and cost-plus arrangements, shall be filed in accordance with section 610 and shall be subject to the prior approval of the commissioner. The definition of a group, including any clustering principles applied to nongroup subscribers or small group subscribers for the purpose of group formation, shall be subject to the prior approval of the commissioner. However, if a Michigan caring program is created under section 436, that program shall be defined as a group program for the purpose of establishing rates. The commissioner shall approve, disapprove, or modify and approve the methodology and definitions of each rating system, formula, component, and factor for each certificate subject to the standard that the resulting rates for group subscribers must be determined to be equitable, adequate, and not excessive, as defined in section 609. In addition, the commissioner may from time to time review the records of the corporation to determine proper application of a rating system, formula, component, or factor with respect to any group. The corporation shall refile for approval under this subsection, every 3 years, the methodology and definitions of each rating system, formula, component, and factor used to calculate rates for group subscribers, including the methodology and definitions used to calculate administrative costs for administrative services only and cost-plus arrangements. The burden of proof that the resulting rates to be charged meet these standards shall be upon the health care corporation proposing to use the rating system, formula, component, or factor.
(3) A proposed rate shall not take effect until a filing has been made with the commissioner and approved under section 607 or this section, as applicable, except as provided in subsections (4) and (5).
(4) Upon request by a health care corporation, the commissioner may allow rate adjustments to become effective prior to approval, for federal or state mandated benefit changes. However, a filing for these adjustments shall be submitted before the effective date of the mandated benefit changes. If the commissioner disapproves or modifies and approves the rates, an adjustment shall be made retroactive to the effective date of the mandated benefit changes or additions.
(5) Implementation prior to approval may be allowed if the health care corporation is participating with 1 or more health care corporations to underwrite a group whose employees are located in several states. Upon request from the commissioner, the corporation shall file with the commissioner, and the commissioner shall examine, the financial arrangement, formulae, and factors. If any are determined to be unacceptable, the commissioner shall take appropriate action.
History:
1980, Act 350, Eff. Apr. 3, 1981 ;-- Am. 1991, Act 73, Imd. Eff. July 11, 1991
Popular Name:
Blue Cross-Blue Shield
Popular Name:
Act 350