View Bill Status
View Bill Text
View Statement of Purpose / Fiscal Impact
H0619...........................................................by BUSINESS
HEALTH INSURANCE - Amends existing law relating to certain health insurance
premium rates to remove sunset provisions; and to delete language requiring
a review and report by the director of the Department of Insurance.
02/06 House intro - 1st rdg - to printing
02/09 Rpt prt - to Bus
02/18 Rpt out - rec d/p - to 2nd rdg
02/19 2nd rdg - to 3rd rdg
02/23 3rd rdg - PASSED - 66-0-4
AYES -- Andersen, Barraclough, Barrett, Bauer, Bayer, Bell, Block,
Boe, Bolz, Bradford, Campbell, Cannon, Clark, Collins, Cuddy, Deal,
Denney, Douglas, Eberle, Edmunson, Ellsworth, Eskridge, Field(18),
Field(23), Gagner, Garrett, Harwood, Henbest, Jaquet, Jones, Kellogg,
Kulczyk, Lake, Langford, Langhorst, Martinez, McGeachin, McKague,
Meyer, Miller, Mitchell, Moyle, Naccarato, Nielsen, Pasley-Stuart,
Raybould, Ridinger, Ring, Ringo, Robison, Rydalch, Sali, Sayler,
Schaefer, Shepherd, Shirley, Skippen, Smith(30), Smith(24), Smylie,
Snodgrass, Stevenson, Trail, Wills, Wood, Mr. Speaker
NAYS -- None
Absent and excused -- Bedke, Black, Crow, Roberts
Floor Sponsor - Deal
Title apvd - to Senate
02/24 Senate intro - 1st rdg - to Com/HuRes
02/27 Rpt out - rec d/p - to 2nd rdg
03/01 2nd rdg - to 3rd rdg
03/16 3rd rdg - PASSED - 33-0-2
AYES -- Andreason, Bailey, Brandt, Bunderson, Burkett, Burtenshaw,
Calabretta, Cameron, Compton, Darrington, Davis, Gannon, Geddes,
Goedde, Hill, Kennedy, Keough, Little, Lodge, Malepeai, Marley,
McKenzie, McWilliams, Noble, Pearce, Richardson, Schroeder, Sorensen,
Stegner, Stennett, Sweet, Werk, Williams
NAYS -- None
Absent and excused -- Ingram, Noh
Floor Sponsor - Cameron
Title apvd - to House
03/17 To enrol
03/18 Rpt enrol - Sp signed
03/19 Pres signed - To Governor
04/01 Governor signed
Session Law Chapter 360
Effective: 07/01/04
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]]
Fifty-seventh Legislature Second Regular Session - 2004
IN THE HOUSE OF REPRESENTATIVES
HOUSE BILL NO. 619
BY BUSINESS COMMITTEE
1 AN ACT
2 RELATING TO INSURANCE PREMIUM RATES; AMENDING SECTIONS 41-4706 AND 41-5206,
3 IDAHO CODE, TO REMOVE SUNSET PROVISIONS AND TO DELETE LANGUAGE REQUIRING A
4 REVIEW AND REPORT BY THE DIRECTOR OF THE DEPARTMENT OF INSURANCE.
5 Be It Enacted by the Legislature of the State of Idaho:
6 SECTION 1. That Section 41-4706, Idaho Code, be, and the same is hereby
7 amended to read as follows:
8 41-4706. RESTRICTIONS RELATING TO PREMIUM RATES. (1) Premium rates for
9 health benefit plans subject to the provisions of this chapter shall be sub-
10 ject to the following provisions:
11 (a) The index rate for a rating period for any class of business shall
12 not exceed the index rate for any other class of business by more than
13 twenty percent (20%).
14 (b) For a class of business, the premium rates charged during a rating
15 period to small employers with similar case characteristics for the same
16 or similar coverage, or the rates that could be charged to such employers
17 under the rating system for that class of business, shall not vary from
18 the index rate by more than fifty percent (50%) of the index rate. The
19 provisions of this subsection (1)(b) shall apply until July 1, 2004, with
20 respect to all health benefit plans offered to small employers other than
21 the small employer basic, standard and catastrophic plans. The director
22 shall review the provisions of this subsection following the receipt of
23 data from health care insurers for calendar year 2004 and shall submit to
24 the house business committee and the senate commerce and human resources
25 committee a report regarding retention of the index rate bands.
26 (c) The percentage increase in the premium rate charged to a small
27 employer for a new rating period may not exceed the sum of the following:
28 (i) The percentage change in the new business premium rate measured
29 from the first day of the prior rating period to the first day of the
30 new rating period. In the case of a health benefit plan into which
31 the small employer carrier is no longer enrolling new small employ-
32 ers, the small employer carrier shall use the percentage change in
33 the base premium rate, provided that such change does not exceed, on
34 a percentage basis, the change in the new business premium rate for
35 the most similar health benefit plan into which the small employer
36 carrier is actively enrolling new small employers;
37 (ii) Any adjustment, not to exceed fifteen percent (15%) annually
38 and adjusted pro rata for rating periods of less than one (1) year,
39 due to the claim experience, health status or duration of coverage of
40 the employees or dependents of the small employer as determined from
41 the small employer carrier's rate manual for the class of business;
42 and
43 (iii) Any adjustment due to change in coverage or change in the case
2
1 characteristics of the small employer as determined from the small
2 employer carrier's rate manual for the class of business.
3 (d) Adjustments in rates for claim experience, health status and duration
4 of coverage shall not be charged to individual employees or dependents.
5 Any such adjustment shall be applied uniformly to the rates charged for
6 all employees and dependents of the small employer.
7 (e) Premium rates for health benefit plans shall comply with the require-
8 ments of this section notwithstanding any assessments paid or payable by
9 small employer carriers pursuant to section 41-4711, Idaho Code, or chap-
10 ter 55, title 41, Idaho Code.
11 (f) (i) Small employer carriers shall apply rating factors, including
12 case characteristics, consistently with respect to all small employ-
13 ers in a class of business. Rating factors shall produce premiums for
14 identical groups which differ only by the amounts attributable to
15 plan design and do not reflect differences due to the nature of the
16 groups assumed to select particular health benefit plans; and
17 (ii) A small employer carrier shall treat all health benefit plans
18 issued or renewed in the same calendar month as having the same rat-
19 ing period.
20 (g) For the purposes of this subsection, a health benefit plan that uti-
21 lizes a restricted provider network shall not be considered similar cover-
22 age to a health benefit plan that does not utilize such a network, pro-
23 vided that utilization of the restricted provider network results in sub-
24 stantial differences in claims costs.
25 (h) The small employer carrier shall not use case characteristics, other
26 than age, individual tobacco use, geography, as defined by rule of the
27 director, or gender, without prior approval of the director.
28 (i) A small employer carrier may utilize age as a case characteristic in
29 establishing premium rates, provided that the same rating factor shall be
30 applied to all dependents under twenty-three (23) years of age, and the
31 same rating factor may be applied on an annual basis as to individuals or
32 nondependents twenty (20) years of age or older.
33 (j) The director may establish rules to implement the provisions of this
34 section and to assure that rating practices used by small employer carri-
35 ers are consistent with the purposes of this chapter, including rules
36 that:
37 (i) Assure that differences in rates charged for health benefit
38 plans by small employer carriers are reasonable and reflect objective
39 differences in plan design, not including differences due to the
40 nature of the groups assumed to select particular health benefit
41 plans;
42 (ii) Prescribe the manner in which case characteristics may be used
43 by small employer carriers; and
44 (iii) Prescribe the manner in which a small employer carrier is to
45 demonstrate compliance with the provisions of this section, including
46 requirements that a small employer carrier provide the director with
47 actuarial certification as to such compliance.
48 (2) A small employer carrier shall not transfer a small employer involun-
49 tarily into or out of a class of business. A small employer carrier shall not
50 offer to transfer a small employer into or out of a class of business unless
51 such offer is made to transfer all small employers in the class of business
52 without regard to case characteristics, claim experience, health status or
53 duration of coverage since issue.
54 (3) The director may suspend for a specified period the application of
55 subsection (1)(a) of this section as to the premium rates applicable to one
3
1 (1) or more small employers included within a class of business of a small
2 employer carrier for one (1) or more rating periods upon a filing by the small
3 employer carrier and a finding by the director either that the suspension is
4 reasonable in light of the financial condition of the small employer carrier
5 or that the suspension would enhance the efficiency and fairness of the
6 marketplace for small employer health insurance.
7 (4) In connection with the offering for sale of any health benefit plan
8 to a small employer, a small employer carrier shall make a reasonable disclo-
9 sure, as part of its solicitation and sales materials, of all of the follow-
10 ing:
11 (a) The extent to which premium rates for a specified small employer are
12 established or adjusted based upon the actual or expected variation in
13 claims costs or actual or expected variation in health status of the
14 employees of the small employer and their dependents;
15 (b) The provisions of the health benefit plan concerning the small
16 employer carrier's right to change premium rates and the factors, other
17 than claim experience, that affect changes in premium rates;
18 (c) The provisions relating to renewability of policies and contracts;
19 and
20 (d) The provisions relating to any preexisting condition provision.
21 (5) (a) Each small employer carrier shall maintain at its principal place
22 of business a complete and detailed description of its rating practices
23 and renewal underwriting practices, including information and documenta-
24 tion that demonstrate that its rating methods and practices are based upon
25 commonly accepted actuarial assumptions and are in accordance with sound
26 actuarial principles.
27 (b) Each small employer carrier shall file with the director annually on
28 or before March 15, an actuarial certification certifying that the carrier
29 is in compliance with the provisions of this chapter and that the rating
30 methods of the small employer carrier are actuarially sound. Such certifi-
31 cation shall be in a form and manner, and shall contain such information,
32 as specified by the director. A copy of the certification shall be
33 retained by the small employer carrier at its principal place of business.
34 (c) A small employer carrier shall make the information and documentation
35 described in subsection (4)(a) of this section available to the director
36 upon request. Except in cases of violations of the provisions of this
37 chapter, the information shall be considered proprietary and trade secret
38 information and shall not be subject to disclosure by the director to per-
39 sons outside of the department except as agreed to by the small employer
40 carrier or as ordered by a court of competent jurisdiction.
41 SECTION 2. That Section 41-5206, Idaho Code, be, and the same is hereby
42 amended to read as follows:
43 41-5206. RESTRICTIONS RELATING TO PREMIUM RATES. (1) Premium rates for
44 health benefit plans subject to the provisions of this chapter shall be sub-
45 ject to the following provisions:
46 (a) The premium rates charged during a rating period to individuals with
47 similar case characteristics for the same or similar coverage, or the
48 rates that could be charged to such individuals under the rating system,
49 shall not vary from the index rate by more than fifty percent (50%) of the
50 index rate. The provisions of this subsection (1)(a) shall apply until
51 July 1, 2004, with respect to all health benefit plans offered to individ-
52 uals other than the individual basic, standard, catastrophic A and cata-
53 strophic B plans. The director shall review the provisions of this subsec-
4
1 tion following the receipt of data from health care insurers for calendar
2 year 2004 and shall submit to the house business committee and the senate
3 commerce and human resources committee a report regarding retention of the
4 index rate bands.
5 (b) The percentage increase in the premium rate charged to an individual
6 for a new rating period may not exceed the sum of the following:
7 (i) The percentage change in the new business premium rate measured
8 from the first day of the prior rating period to the first day of the
9 new rating period. In the case of a health benefit plan into which
10 the individual carrier is no longer enrolling new individuals, the
11 individual carrier shall use the percentage change in the base pre-
12 mium rate, provided that such change does not exceed, on a percentage
13 basis, the change in the new business premium rate for the most simi-
14 lar health benefit plan into which the individual carrier is actively
15 enrolling new individuals.
16 (ii) Any adjustment, not to exceed fifteen percent (15%) annually
17 and adjusted pro rata for rating periods of less than one (1) year,
18 due to the claim experience, health status or duration of coverage of
19 the individual or dependents as determined from the individual
20 carrier's rate manual; and
21 (iii) Any adjustment due to change in coverage or change in the case
22 characteristics of the individual as determined from the individual
23 carrier's rate manual.
24 (c) Premium rates for health benefit plans shall comply with the require-
25 ments of this section notwithstanding any assessments paid or payable by
26 carriers pursuant to section 41-4711, Idaho Code, or chapter 55, title 41,
27 Idaho Code.
28 (d) (i) Individual carriers shall apply rating factors, including case
29 characteristics, consistently with respect to all individuals. Rating
30 factors shall produce premiums for identical individuals which differ
31 only by the amounts attributable to plan design and do not reflect
32 differences due to the nature of the individuals assumed to select
33 particular health benefit plans; and
34 (ii) An individual carrier shall treat all health benefit plans
35 issued or renewed in the same calendar month as having the same rat-
36 ing period.
37 (e) For purposes of this subsection, a health benefit plan that utilizes
38 a restricted provider network shall not be considered similar coverage to
39 a health benefit plan that does not utilize such a network, provided that
40 utilization of the restricted provider network results in substantial dif-
41 ferences in claims costs.
42 (f) The individual carrier shall not use case characteristics, other than
43 age, individual tobacco use, geography as defined by rule of the director,
44 or gender, without prior approval of the director.
45 (g) An individual carrier may utilize age as a case characteristic in
46 establishing premium rates, provided that the same rating factor shall be
47 applied to all dependents under twenty-three (23) years of age, and the
48 same rating factor may be applied on an annual basis as to individuals or
49 nondependents twenty (20) years of age or older.
50 (h) The director may establish rules to implement the provisions of this
51 section and to assure that rating practices used by individual carriers
52 are consistent with the purposes of this chapter, including rules that:
53 (i) Assure that differences in rates charged for health benefit
54 plans by individual carriers are reasonable and reflect objective
55 differences in plan design, not including differences due to the
5
1 nature of the individuals assumed to select particular health benefit
2 plans;
3 (ii) Prescribe the manner in which case characteristics may be used
4 by individual carriers; and
5 (iii) Prescribe the manner in which an individual carrier is to
6 demonstrate compliance with the provisions of this section, including
7 requirements that an individual carrier provide the director with
8 actuarial certification as to such compliance.
9 (2) The director may suspend for a specified period the application of
10 subsection (1)(a) of this section as to the premium rates applicable to one
11 (1) or more individuals for one (1) or more rating periods upon a filing by
12 the individual carrier and a finding by the director either that the suspen-
13 sion is reasonable in light of the financial condition of the individual car-
14 rier or that the suspension would enhance the efficiency and fairness of the
15 marketplace for individual health insurance.
16 (3) In connection with the offering for sale of any health benefit plan
17 to an individual, an individual carrier shall make a reasonable disclosure, as
18 part of its solicitation and sales materials, of all of the following:
19 (a) The extent to which premium rates for an individual are established
20 or adjusted based upon the actual or expected variation in claims costs or
21 actual or expected variation in health status of the individual and his
22 dependents;
23 (b) The provisions of the health benefit plan concerning the individual
24 carrier's right to change premium rates and the factors, other than claim
25 experience, that affect changes in premium rates;
26 (c) The provisions relating to renewability of policies and contracts;
27 and
28 (d) The provisions relating to any preexisting condition provision.
29 (4) (a) Each individual carrier shall maintain at its principal place of
30 business a complete and detailed description of its rating practices and
31 renewal underwriting practices, including information and documentation
32 that demonstrate that its rating methods and practices are based upon com-
33 monly accepted actuarial assumptions and are in accordance with sound
34 actuarial principles.
35 (b) Each individual carrier shall file with the director annually on or
36 before September 15, an actuarial certification certifying that the car-
37 rier is in compliance with the provisions of this chapter and that the
38 rating methods of the individual carrier are actuarially sound. Such cer-
39 tification shall be in a form and manner, and shall contain such informa-
40 tion, as specified by the director. A copy of the certification shall be
41 retained by the individual carrier at its principal place of business.
42 (c) An individual carrier shall make the information and documentation
43 described in subsection (4)(a) of this section available to the director
44 upon request. Except in cases of violations of the provisions of this
45 chapter, the information shall be considered proprietary and trade secret
46 information and shall not be subject to disclosure by the director to per-
47 sons outside of the department except as agreed to by the individual car-
48 rier or as ordered by a court of competent jurisdiction.
STATEMENT OF PURPOSE
RS 13771
The purpose of this legislation is to remove the sunset
provisions of Sections 41-4706 and 41-5206 and to delete language
requiring a review and report regarding retention of the index
rate bands to the Director of the Department of Insurance
relating to the rating system for health insurance plans.
FISCAL IMPACT
None
Contact
Name: Rep. Bill Deal
Phone: 208/332-1000
STATEMENT OF PURPOSE/FISCAL NOTE H 619