Administrative Rules of Montana › Department 6 - STATE AUDITOR › Chapter 6.6 - INSURANCE DEPARTMENT › Subchapter 6.6.50 - Small Employer Health Insurance Rules › Rule 6.6.5090 - RATE MANUAL AND RATE RESTRICTION GUIDELINES

Current through Register Vol. 13, July 5, 2024
(1)
				Each small employer carrier shall develop a separate rate manual for each class
				of business, which must be the basis for all premium rates and new business
				premium rates charged to small employers by the small employer carrier. To the
				extent that a portion of the premium rates charged by a small employer carrier
				is based on the carrier's discretion, the manual must specify the criteria and
				factors considered by the carrier in exercising such discretion.
(2) The rate manual developed pursuant to (1)
				must specify the case characteristics and rate factors to be applied by the
				small employer carrier in establishing premium rates for each class of
				business.
(3) The small employer
				carrier shall use the same case characteristics in establishing premium rates
				for each health benefit plan in a class of business and shall apply them in the
				same manner in establishing premium rates for each such health benefit plan.
				Case characteristics must be applied without regard to the risk characteristics
				of a small employer.
(4) The rate
				manual developed pursuant to (1) must clearly illustrate the relationship among
				the base premium rates charged for each health benefit plan in the class of
				business. If the new business premium rate is different than the base premium
				rate for a health benefit plan, the rate manual must illustrate and justify the
				difference.
(5) Differences among
				base premium rates for health benefit plans must be based solely on the
				reasonable and objective differences in the design and benefits of the health
				benefit plans and may not be based in any way on the actual or expected health
				status or claims experience of the small employer groups that choose, or are
				expected to choose, a particular health benefit plan. The small employer
				carrier shall apply case characteristics and rate factors within each class of
				business in a manner that assures that premium differences among health benefit
				plans for identical small employer groups vary only due to reasonable and
				objective differences in the design and benefits of the health benefit plans,
				and not due to the actual or expected health status or claims experience of the
				small employer groups that choose, or are expected to choose, a particular
				health benefit plan.
(6) The rate
				manual developed pursuant to (1) must provide for premium rates to be developed
				in a two-step process. In the first step, a base premium rate must be developed
				for the small employer group, without regard to any risk characteristics of the
				group. In the second step, the resulting base premium rate may be adjusted by a
				risk load, subject to the provisions of
				33-22-1809, MCA, to reflect the
				risk characteristic of the group.
(7) Premiums charged to small employers for
				health benefit plans must not include separate application fees, underwriting
				fees, or any other separate fees or charges.
(8) Small employer carriers shall allocate
				administrative expenses to basic and standard health benefit plans on no less
				favorable a basis than expenses are allocated to other health benefit plans in
				the class of business. The rate manual developed pursuant to (1) must describe
				the method of allocating administrative expenses to the health benefit plans in
				the class of business for which the manual was developed.
(9) Each rate manual developed pursuant to
				(1) must be maintained by the carrier for a period of 6 years. Updates and
				changes to the manual must be maintained with the manual.
(10) If group size is used as a case
				characteristic by a small employer carrier, the highest rate factor associated
				with a group size classification must not exceed the lowest rate factor
				associated with such a classification by more than 35%.
(11) The restrictions related to changes in
				premium rates in
				33-22-1809(1),
				MCA, apply as follows:
(a) Small employer
				carriers revise their rate manuals each rating period to reflect changes in
				base premium rates and changes in new business premium rates.
(b) If, for any health benefit plan with
				respect to any rating period, the percentage change in the new business premium
				rate is less than, or the same as, the percentage change in the base premium
				rate, the change in the new business premium rate must be deemed to be a change
				in the base premium rate under
				33-22-1809(1),
				MCA.
(c) If, for any health benefit
				plan with respect to any rating period, the percentage change in the new
				business premium rate exceeds the percentage change in the base premium rate,
				the health benefit plan must be considered a health benefit plan into which the
				small employer carrier is no longer enrolling new small employers for the
				purposes of
				33-22-1809(1),
				MCA.
(d) 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%, the carrier shall file a
				statement with the commissioner which contains 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 within 30 days of the
				beginning of the rating period.
(e)
				Small employer carriers shall keep on file for a period of at least 6 years,
				all calculations used to determine all changes in base premium rates and new
				business premium rates for each health benefit plan for each rating
				period.