Current through Register 1531, September 27, 2024
Premiums charged to Eligible Small Groups and Eligible
Individuals shall be based on the collective experience of the covered small
groups and individuals. Premiums charged to every Eligible Small Business or
Eligible Individual for a Health Benefit Plan, whether through a trust or
association or through an Intermediary or Group Purchasing Cooperative, or
through the Connector, or directly, also must satisfy the following
requirements:
(1)
Premium
Calculations.
(a) In calculating
the premium to be charged to each Eligible Small Group or Eligible Individual,
a Carrier shall develop a Group Base Premium Rate and may develop and use one
or more of the Rating Adjustment Factors, provided that such Rating Adjustment
Factors are used in connection with all products offered to Eligible Small
Groups and Eligible Individuals.
(b) In calculating the premium to be charged
to each Eligible Small Group or Eligible Individual, a Carrier shall develop a
Group Base Premium Rate and may develop and use only the Rating Adjustment
Factors set forth in
211
CMR 66.07(1)(b):
1.
Age Rating Adjustment
Factor. If a Carrier applies an age Rating Adjustment Factor to
Eligible Individuals or Eligible Small Groups, the Carrier must apply the Age
Rating Adjustment Factor in accordance with both the ACA and any guidance
provided by the Commissioner such that the ratio of the highest factor for
adults older than 20 years of age compared to the lowest factor for adults
older than 20 years of age shall not exceed a ratio of 2-to-1.
2.
Area Rating Adjustment
Factors.
a. The area Rating
Adjustment Factor for each distinct region in
211
CMR 66.07(1)(b)2. must range
from not less than 0.8 to not more than 1.2.
b. The permissible regions are based on the
following zip code groupings which refer to the first three digits of the zip
code for each Eligible Small Business or Eligible Individual:
i. 010 through 013;
ii. 014 through 016;
iii. 017 and 020;
iv. 018 through 019;
v. 021 through 022 and 024;
vi. 023 and 027; and
vii. 025 through 026,
except that a Carrier may combine the zip code groupings
outlined in
211
CMR 66.07(1)(b)2.b.iii. and
iv. into one region or combine the zip code groupings outlined in
211
CMR 66.07(1)(b)2.b.iii.
through v. into one region for all of its Health Benefit Plans subject to
211 CMR
66.00, or use regions based on groupings of counties
that roughly approximate the zip code groupings.
c. If a Carrier chooses to establish an area
Rating Adjustment Factor, it must apply the Rating Adjustment Factor to every
Eligible Small Business and Eligible Individual within each area. The area
Rating Adjustment Factor for an Eligible Small Group will be based upon the
head office location of the Eligible Small Group and the area Rating Adjustment
Factor for an Eligible Individual will be based on the primary residence of the
Eligible Individual.
3.
Tobacco Use Rating Adjustment
Factor.
a. The tobacco use Rating
Adjustment Factor, which may only be applied when expressly permitted by the
Commissioner, will consistently apply to all Eligible Individuals and Eligible
Small Groups.
b. Eligible
Individuals and Eligible Small Groups must certify, in a method approved by the
Commissioner, that Eligible Individuals and/or their Eligible Dependents or
Eligible Small Group employees and/or their Eligible Dependents have not used
Tobacco Products during the previous 12 months.
4.
Benefit Level Rating
Adjustment Factor. If a Carrier chooses to establish a Benefit
Level Rating Adjustment Factor, it must apply the Rating Adjustment Factor with
respect to every Eligible Individual and Eligible Small Business.
(2)
Premium
Rate Calculation Not Experience Based. No Carrier may charge a
premium rate to an Eligible Individual or Eligible Small Business that is based
upon the Eligible Individual's or Eligible Small Business's Eligible Employees'
or Eligible Dependents' health status, duration of coverage, or actual or
expected claims experience.
(3)
Additional Information regarding Premium Rate
Calculation. The premium charged by a Carrier to each Eligible
Individual or Eligible Small Business on the date the Eligible Individual's or
Eligible Small Business' Health Benefit Plan is issued or renewed shall be
established as follows:
the Group Base Premium Rate;
multiplied by the Benefit Level Rating Adjustment
Factor;
multiplied by the area Rating Adjustment Factor;
multiplied by the age Rating Adjustment
Factor.
