New Jersey Administrative Code › Title 11 - INSURANCE › Chapter 20 - INDIVIDUAL HEALTH COVERAGE PROGRAM › Subchapter 6 - INDIVIDUAL HEALTH BENEFITS CARRIERS INFORMATIONAL RATE FILING REQUIREMENTS › Section 11:20-6.3 - Informational rate filing requirements

Current through Register Vol. 56, No. 14, July 15, 2024
(a) All members issuing standard health benefits plans on a new contract or policy form and the basic and essential health care services plan shall make, prior to issuing any standard health benefits plan (or rider for a standard health benefits plan), or basic and essential health care services plan (or rider for a basic and essential plan), an informational rate filing with the Department, which shall include the following supporting data:
1. Rate manuals specifying the standard health benefits plans and the basic and essential health care services plan, with riders, if any, offered. The manuals shall not include references to, or premiums containing assumptions based upon, an individual's claims experience, underwriting, substandard ratings, occupational limitations or any other factors prohibited by the Act, except that the rates for a standard plan and any riders thereto may consider age as permitted by 17B:27A-2 and 6a and the rates for the basic and essential health care services plan and any riders thereto may consider age, gender and geography, as permitted by 17B:27A-4.5 and 11:20-6.5;
2. Monthly premium rates and any factors used in the calculation of the premium rates and the effective dates for the rates. The premium rates may be for a period of effective dates not to exceed 12 months from the initial effective date. Unless a carrier amends the rate filing to specify an alternative effective date, carriers shall use the rates shown in the rate filing as of the stated effective date. Rates may be developed on different rate tiers for: single; two adults; adult/child(ren); and family. A description of the rating methodology or plan and the numerical value of the classification factors used in determining a policyholder's rates that addresses the use of the factors of age, gender (basic and essential only) and geography (basic and essential only) as discussed in (a)2i, ii and iii below. The filing shall include:
i. The numerical value of the classification factors utilized in the calculation of an individual's premium rate or rates, limited to: age, gender, geographic location, effective date, and rating tier of each covered adult in accordance with the factors set forth in N.J.A.C. 11:20-6.5;
ii. A written description which may include elementary formulas of the rating method so that a knowledgeable member of the public may understand how to translate the basic rates into the rates charged for an individual policy; and
iii. A detailed example calculation, in the proposal format used by the carrier, including any rider option(s), showing all the steps to develop premiums for a policy and demonstrating the adjustment, if any, to achieve the required 350 percent maximum ratio between premiums for the highest rated individual policyholder and the lowest rated individual policyholder in the State;
3. A detailed actuarial memorandum, which shall include the following:
i. The monthly rates being submitted for each period addressed in the rate filing along with factors or actual rates for quarterly or semi-annual modes, if such modes are available;
ii. Identification of the plans and riders affected, using the alphabet name if indemnity or PPO, and the copay and coinsurance, if applicable, if HMO, and using a descriptive code for each rider;
iii. Application of the rates to new business and renewal business, including a description of the application of any limits on renewal increases pursuant to 17B:27A-3;
iv. The duration of the rate guarantee period, and if none, so state;
v. A sample of the notice(s) that will be sent to policyholders to advise them of a rate change, including any adjustments for limits pursuant to 17B:27A-3;
vi. The anticipated loss experience and the assumptions used in developing such anticipated loss experience, including:
(1) Historical experience. The historical experience should specify enrollment, premium, claims and loss ratio data from the period used in the development of the anticipated loss ratio, where the period should be at least 12 months. If premiums are based on some other experience base, the enrollment, premium, claims, and loss ratio data for that other experience base;
(2) Medical cost trend assumptions, for each plan or type of benefit;
(3) Plan relativity assumptions, if a carrier uses plan relativity assumptions in calculating anticipated loss experience;
(4) Any other factors used in developing the anticipated loss experience, such as selection factors or adjustments to experience of other plans; and
(5) The anticipated enrollment, premium, claims, and loss ratio for the rating period;
vii. Specific identification of the administrative expense, premium tax and commission payment assumptions, and other margins;
viii. Specification of the percentage change(s) in rates as compared to the prior rating period; and the prior year and the average change for all plans; and
ix. The anticipated distribution by age and family tier (in the case of standard plans) or age, gender, location, and family tier (in the case of basic and essential plans);
4. A certification signed by a member of the American Academy of Actuaries, Society of Actuaries, or Casualty Actuarial Society, which shall include the following:
i. A statement that the informational filing is complete and complies with all of the requirements of this section;
ii. A statement that the carrier's loss ratio is expected to be at least 80 percent for standard plans over the rating period, and at least 80 percent for basic and essential plans over the rating period; and
iii. A statement that the rating methodology will not produce rates (for each rate tier) for the highest rated policyholder which are greater than 350 percent of the rates (for each rate tier) for the lowest rated policyholder for each plan and rider option; and
5. Such other information or data as may be required or requested by the Department to analyze the adequacy of the rate filing submitted.