Code of Massachusetts Regulations
211 CMR - DIVISION OF INSURANCE
Title 211 CMR 66.00 - Small Group Health Insurance
Section 66.08 - Submission and Review of Rate Filings
Universal Citation: 211 MA Code of Regs 211.66
Current through Register 1531, September 27, 2024
(1) Definitions. For rate filings submitted pursuant to 211 CMR 66.08(2), the following definitions also shall apply:
(a)
Adjusted Minimum Medical Loss Ratio. A specific
Carrier's aggregated medical loss ratio for all its merged market plans which
was less than the Minimum Medical Loss ratio, but at least 1% greater than the
Carrier's equivalent loss ratio for the 12 months prior to the Carrier's
present rate filing.
(b)
Capital Costs and Depreciation Expenses. All expenses
associated with depreciation (depreciation for electronic data processing,
equipment, software, and occupancy); capital acquisitions (acquisition of
capital assets, including lease payments that were paid or incurred during the
year); capital costs on behalf of a hospital or clinic (expenditures for
capital and lease payments incurred or paid during the year on behalf of a
hospital or clinic (or part of a partnership, joint venture, integration or
affiliation agreement); and other capital (other costs that are directly
associated with the incurring of capital costs, such as legal or administrative
costs, incurred or paid during the year).
(c)
Charitable Contributions
Expenses. All contributions to tax-exempt foundations and
charities, not related to the company business enterprises.
(d)
Claim Completion
Method. Any actuarial method used to quantify claims which have
been incurred but not yet paid.
(e)
Claims Operations Expenses. All expenses associated
with claims adjudication and adjustment of claims, appeals, claims settlement,
coordination of benefits processing, maintenance of the claims system, printing
of claims forms, claim audit function, electronic data interchange expenses
associated with claims processing and fraud investigation.
(f)
Distribution
Expenses. All expenses associated with distribution and sale of
products, including commissions, producer, broker and benefit consultant fees,
other fees, commission processing and account reporting to brokers, agents and
producers.
(g)
Financial Administration Expenses. All expenses
associated with underwriting, auditing, actuarial, financial analysis,
investment-related expenses (not included elsewhere), treasury, and
reinsurance.
(h)
General Administration Expenses. All expenses
associated with payroll administration expenses and payroll taxes (salaries,
benefits and payroll taxes); real estate expenses (company building and other
taxes and expenses of owned real estate, excluding home office employee
expenses and rent (not allocated elsewhere) and insurance on real estate);
regulatory compliance and government relations (federal and state reporting,
rate filing, state and federal audits, tax accounting, lobbying, licensing and
filing fees, preparation and filing of financial, utilization, statistical and
quality reports and administration of government programs); board, bureau or
association fees (Board of Directors, Bureau and association fees paid or
expensed during the calendar year); other administration (information
technology, senior management, outsourcing (not allocated elsewhere), insurance
except on real estate, equipment rental, travel (not allocated elsewhere),
certification and accreditation fees, legal fees and expenses before
administrative and legal bodies, and other general administrative expenses);
and negative adjustment for reimbursement from uninsured plans (all revenue
receipts from uninsured plans (including excess pharmaceutical rebates and
administrative fees net of expenses) and reimbursements from fiscal
intermediaries including administrative fees net of expenses from the
government).
(i)
Marketing and Sales Expenses. All expenses associated
with billing and Member enrollment (group and individual billing, Member
enrollment, premium collection and reconciliation functions); customer service
and Member relations (individual, group or provider support relating to
membership, enrollment, grievance resolution, specialized phone services and
equipment, consumer services and consumer information); product management,
marketing and sales (management and marketing of current products, including
product promotion and advertising, marketing materials, changes or additions to
current products, sales, pricing and enrollee education regarding coverage
prior to the sale); and product development: (product design and development
for new products not currently offered, major systems development associated
with the new products and integrated system network development).
(j)
Medical Administration
Expenses. All expenses associated with quality assurance and cost
containment (health and disease management and wellness initiatives (other than
for education), health care quality assurance, appeals, case management, fraud
detection and prevention, utilization review, practice protocol development,
peer review, outcomes analysis related to existing products, nurse triage,
medical management and other Medical Care evaluation activities); wellness and
health education (wellness and health promotion, disease prevention, Member
education and materials, provide education and outreach services); and medical
research (outcomes research, medical research programs and development of new
medical management programs not currently offered, major systems development
and integrated system network development).
(k)
Minimum Medical Loss
Ratio. The Minimum Medical Loss Ratio for the Merged Market is
88%.
(l)
Miscellaneous
Expenditures Expenses. All other not classified expenses including
all collection and bank service charges, printing, office supplies, postage and
telephone (not allocated elsewhere).
(m)
Network Operations
Expenses. All expenses associated with provider contracting
negotiation and preparation, monitoring of provider compliance, field training
with providers, provider communication materials and bulletins, administration
of provider capitation and settlements, hospital and physician relations,
medical policy procedures, network access fees and credentialing.
(n)
Normalized per Member per
Month Claim Cost. Claim cost expressed per Member per month
adjusted to represent a Member whose rating factors equal one.
(o)
Taxes, Assessments and Fines
Paid to Federal, State or Local Governments (as Expenses). All
expenses associated with taxes (state premium taxes, state and local insurance
taxes, federal taxes, except taxes on capital gains, state income tax, state
sales tax and other sales taxes not included with the cost of goods purchased);
assessments, fees and other amounts paid to regulatory agencies (assessments,
fees or other amounts paid to state or local government and does not include
taxes or fines or penalties paid to any government agency); and fines and
penalties paid to regulatory agencies (penalties and fines paid to government
agencies).
(2) Content of Rate Filings. A Carrier's submission shall be submitted in a format specified by the Commissioner and shall show the company's development of the filed rates and contain at least the following information:
(a) Summary rate information for
each product, including:
1. proposed rate
change compared to rates in effect 12 months before proposed effective
date;
2. number of currently
enrolled Members impacted by the proposed rate change presented as:
a. number of employer groups and covered
employees/dependents renewing by month; and
b. individual accounts and covered
individuals/dependents renewing by month; and
3. maximum increase for any employer group or
individual covered under the proposed rate change.
(b) Changes to cost-sharing and/or benefits
for each product relative to the 12-month period prior to the proposed
effective date of the filed rates for the following:
1. inpatient hospital care;
2. outpatient hospital care, with separate
information for:
a.
radiological/laboratory/pathology costs; and
b. all other outpatient costs;
3. health care providers, with
separate information for:
a. medical and
osteopathic physicians;
b.
behavioral health providers; and
c.
all other health care practitioners;
4. outpatient prescription drugs;
and
5. supplies.
For information submitted pursuant to 211 CMR 66.08(2)(c) through (h), a Carrier's submission shall provide details in aggregate.
(c) Actual fee-for-service claims
payment experience, utilization experience, and claims cost for each of the
latest available 12 months on both an actual and per Member per month basis for
products issued or renewed according to M.G.L. c. 176J, on an aggregate basis
for the period impacted for the proposed rate change, differentiating among:
1. inpatient hospital care;
2. outpatient hospital care, with separate
experience for:
a.
radiological/laboratory/pathology costs; and
b. all other outpatient costs;
3. health care providers, with
separate experience for:
a. medical and
osteopathic physicians;
b.
behavioral health providers; and
c.
all other health care practitioners.
4. outpatient prescription drugs;
and
5. supplies.
The analysis should explain any differences between what is included in this filing and what normally is included in the Carrier's financial statements. The Carrier also should submit projected Trend in Health Plan Expenses for fee-for-service utilization per 1,000 Members, price per service and per Member per month costs for each of the noted service types that the Carrier is using to project historic claims forward to the period for which the rates will be effective. Annual price and use assumptions for Trend in Health Plan Expenses for fee-for-service expenses should be provided for each year in the projection period and the carrier must indicate how many months of each year are used in the analysis. Trend in Health Plan Expenses for fee-for-service expenses should reflect provider price increases whereas utilization may include mix of services and mix of providers. The Trend in Health Plan Expenses for fee-for-service expenses information should include the actuarial basis for all changes in Trend in Health Plan Expenses for fee-for-service expenses, including all relevant studies used to derive the factors.
(d) The
Carrier's historic capitation, as well as per Member per month cost experience,
for the latest available 12 months and projected capitation on a per Member per
month basis for the period impacted for the proposed rate change,
differentiating among:
1. inpatient hospital
care;
2. outpatient hospital care,
with separate experience for:
a.
radiological/laboratory/pathology costs; and
b. all other outpatient costs;
3. health care providers, with
separate experience for:
a. medical and
osteopathic physicians;
b.
behavioral health providers; and
c.
all other health care practitioners;
4. outpatient prescription drugs;
and
5. supplies.
The analysis should explain any differences between what is included in this filing and what normally is included in the Carrier's financial statements. The Carrier also should submit projected factors for Trends in Health Plan Expenses for capitation payments that the Carrier is using to project capitation costs forward to the period for which the rates will be effective. Annual Trends in Health Plan Expenses for capitation payments assumptions should be provided for each year in the projection period and the Carrier must indicate how many months of each year are used in the analysis. Trends in Health Plan Expenses for capitation should reflect provider price increases whereas utilization may include mix of services and mix of providers. The Trend in Health Plan Expenses for capitation payments to providers information should include the actuarial basis for all changes, including all relevant studies or information that the Carrier believes will lead to changes in capitation costs.
(e) The Carrier's other non-fee-for-service
and non-capitation payments to providers, as well as per Member per month
experience, and projected non-fee-for-service and noncapitation payments to
providers for the period impacted for the proposed rate change, differentiating
among.
1. inpatient hospital care;
2. outpatient hospital care, with separate
experience for:
a.
radiological/laboratory/pathology costs; and
b. all other outpatient costs;
3. health care providers, with
separate experience for:
a. medical and
osteopathic physicians;
b.
behavioral health providers; and
c.
all other health care practitioners;
4. outpatient prescription drugs;
and
5. supplies.
The other payments should include all bonus/incentives tied to provider performance and other payments not tied to service or performance. The Carrier also should submit the projected Trends in Health Plan Expenses for non-fee-for-services and non-capitation payments to providers factor in the other provider payments per Member per month costs that the Carrier is using to project other costs forward to the period for which the rates will be effective. Annual assumptions for Trend in Health Plan Expenses for non-fee-for-services and non-capitation payments to providers should be provided for each year in the projection period and the Carrier must indicate how many months of each year are used in the trend analysis. Trend in Health Plan Expenses for non-fee-for-services and non-capitation payments to providers should reflect provider price increases whereas utilization may include mix of services and mix of providers. The Trend in Health Plan Expenses for non-fee-for-services and non-capitation payments to providers information should include the actuarial basis for all changes in these payments, including all relevant studies or information that the Carrier believes will lead to changes in these other provider payment costs.
(f) The Carrier's administrative expenses and
per Member per month administrative expenses relevant to products issued or
renewed according to M.G.L. c. 176J and used in the development of the filing,
for the two years prior to the submission of the rate filing for each of the
following categories:
1. expenses for capital
costs and depreciation;
2. expenses
for charitable contributions;
3.
expenses for claims operations;
4.
expenses for distribution;
5.
expenses for financial administration;
6. expenses for general
administration;
7. expenses for
marketing and sales;
8. expenses
for medical administration, with specific detail on costs related to programs
that improve health care quality;
9. expenses for miscellaneous expenditures
described in detail;
10. expenses
for network operations;
11.
expenses for taxes, assessments and fines paid to federal, state or local
governments; and
12. total
administrative expenses [subtotaling
211
CMR 66.08(2)(f)1. through
11.].
The Carrier also should submit projected increases in administrative expenses per Member per month that the Carrier is using to project administrative expenses forward to the period for which the rates will be effective. The Trend information should include an explanation for all significant changes in the Carrier's administrative expenses due to onetime costs, including where changes in administrative expenses may be caused by regulatory requirements or efforts to contain health care delivery costs, an explanation of the projected cost and cost per Member per month that can be attributed to each regulatory requirement or effort to contain health care delivery costs and the method that the Carrier is using to allocate any companywide expenses to the Merged Market line of business.
(g) The Carrier's contribution to
surplus, relevant to products issued or renewed according to M.G.L. c. 176J,
both in the aggregate, on a normalized per Member per month basis and as a
percentage (%) of premium for the two years prior to the submission of the rate
filing. The Carrier also should identify the contribution to surplus included
in the rate filing on a per Member per month basis and as a percentage (%) of
premium and should provide a detailed explanation of the reasons that the
contribution to surplus has been filed at that level, as well as the
contribution to surplus levels that the Carrier is using in all other lines of
coverage. The Carrier should describe the method used to quantify the
contribution to surplus in the proposed rates.
(h) The three-year historic medical loss
ratio for the rates, relevant to products issued or renewed according to M.G.L
c. 176J and the projected medical loss ratios for the one year period during
which rates will be in effect.
(i)
A detailed description of all cost containment programs the Carrier is
employing or will employ during the Rating Period to address health care
delivery costs and the realized past savings and projected savings from all
such programs.
(j) If the Carrier
intends to pay similarly situated providers within its provider networks
different rates of reimbursement, a detailed description of the bases for the
different rates including, but not limited to:
1. quality of care delivered;
2. mix of patients;
3. geographic location at which care is
provided; and
4. intensity of
services provided.
(k)
Interrogatories including, but not limited to:
1. Detailed explanations of methodological
changes that have been employed by the
Carrier in development of rates, loads or factors since most recent filing, including:
a. pricing
methodology;
b. administrative
expense loads;
c. contribution to
surplus loads;
d. Rating Adjustment
Factors;
e. cost containment and
quality improvement efforts;
f.
provider contracting initiatives;
g. methodology for setting claim
reserves;
h. size of the claim
reserve relative to the total incurred claims estimate for the most recent year
of experience; and
i.
reconciliation of claim payments in filing to claims system and recorded claim
payments in filed financial statements.
2. Detailed explanations of the development
of the filing's claims completion factor(s) including, but not limited to:
a. explanation of the Claim Completion Method
and the source of the filing's completion factor(s);
b. high level analysis of derivation of
factor;
c. explanation of whether
factor(s) is consistent with reserve development for financial
reporting;
d. explanation of level
of conservatism used in developing factor(s);
e. demonstration for each calendar month in
the claim experience period of how any incurred but unreported claims were
estimated using the Carrier's completion factor(s); and
f. a comparison of estimated claim payments
provided in the most recent prior filing to current estimated claims costs for
the same time period.
3.
Detailed explanations of planned changes in methods of paying providers,
including:
a. Three-year historical analysis
of the proportion of provider services reimbursed according to the following
methodologies:
i. discounted or undiscounted
charges;
ii. payment based on fee
schedules;
iii. incentive-based
fee-for-service (payment is initially withheld and repaid to provider based on
provider performance);
iv.
fee-for-service payments with bonus/incentives tied to performance (additional
payments above and beyond the standard payment where the amount of the
additional payment is based on provider performance;
v. capitation payments (fixed payment per
Member per month for a specified set of services);
vi. risk sharing adjustment to provider
payments made in a fiscal year-end settlement whereby provider payments are
increased or decreased based on provider performance that is shared with the
health plan; and
vii. payments not
tied to provision of specific service or performance.
b. Explanation of projected distribution of
provider services to be reimbursed using these methodologies in the Rating
Period and an explanation of the impact on expected costs for covered Member
services.
c. Explanation of the
weighting of the criteria that the plan uses for evaluating performance based
provider payments, including:
i. patient
satisfaction;
ii. outcomes
measurement;
iii. participation or
adherence to processes to improve quality;
iv. measured achievement of quality
standards;
v. measured achievement
of utilization efficiency standards;
vi. measured achievement of cost containment
goals; and
vii. measured
implementation of technology necessary to improve efficiency.
d. Explanation of a Carrier's plan
to change the distribution of payment systems to providers in the future and
how this will impact future rate filings.
4. Benefit Level Rate Adjustment Factors,
including:
a. explanation of the process used
to ensure that the Benefit Level Rate Adjustment Factor reflects the actuarial
value of benefits in one plan versus another;
b. explanation of any effect that
Connector-offered plans may have on plans not offered through the Connector;
and
c. explanation of any reasons
that a filing may reflect different Benefit Level Trends for different products
and how this may be incorporated into the rate analysis.
5. Rating Adjustment Factors, including an
illustration of how a sample Member's premium is calculated based on that
Member's permissible Rating Adjustment Factors;
6. Credibility analyses, including:
a. explanation of how the actuary conducted a
credibility analysis of available data; and
b. explanation of adjustments made due to
concerns over the credibility of available data and basis for said adjustments,
including an explanation of national or regional data that was used in place of
or in combination with plan data when developing factors.
7. A discussion of the impact of
overestimates or underestimates of Trend in Health Plan Expenses in prior year
rate filings on the development of the current proposed rate.
8. Overall rate impacts, including:
a. Illustration of rate changes for each
product, after application of the Rating Adjustment Factors and any changes in
the demographic make-up of the individual or group contract, using the
following ranges:
i. reduction of 10% or
more;
ii. reduction between 5.01%
and 9.99%;
iii. reduction of 5% or
less (including no change);
iv.
increase of less than 5%;
v.
increase of between 5.01% and 9.99%;
vi. increase of between 10.0% and 14.99%;
and
vii. increase of 15% or
more.
b. Explanation of
the reasons, distinguishing by Group Base Premium Rate changes and the
application of Rating Adjustment Factors, for which rates of any Eligible
Individuals or Eligible Small Groups increase by more than 15%.
(l) Any other
information requested by the Commissioner including, but not limited to, any
information requested by the Commissioner on behalf of the National Association
of Insurance Commissioners.
(m)
Each rate filing shall be accompanied by a supporting actuarial memorandum and
an Actuarial Opinion prepared and certified by a qualified Member of the
American Academy of Actuaries.
(3) Timing of Submission and Opportunity for Public Comment.
(a) Every Carrier, as a condition of doing
business under M.G.L. c. 176J and
211 CMR
66.00, must submit a complete annual rate filing for
their Group Base Premium Rates and Rating Adjustment Factors. Such rate filings
must be submitted on or before May 15th for rates
intended to be effective on or after January 1st of
the following calendar year.
(b)
Any provider-specific rates of reimbursement or Rating Adjustment Factors
included in the Merged Market rate filing materials submitted for review by the
Division shall be deemed confidential and exempt from the definition of public
records in M.G.L. c. 4, § 7, clause 26.
(c) In addition to the rate filing required
by 211 CMR 66.08, each Carrier
shall submit a rate filing summary that will be available for public inspection
while the rate filing is reviewed by the Division. The rate filing summary
should be submitted in a format determined by the Commissioner and must
include:
1. An overview of the rate filing,
including an identification of the products that are subject to the rate
filing, key drivers for the proposed rate change, the range of rate changes and
the overall average proposed rate change, and the number of renewing Eligible
Individuals and the number of renewing Eligible Small Groups and Small Group
Members.
2. A summary of the
cost-sharing and benefits for each product, as proposed in the rate filing for
a. inpatient hospital care
b. outpatient hospital care
i. radiological/laboratory/pathology
costs
ii. all other outpatient
costs
c. health care
providers
i. medical and osteopathic
physicians
ii. behavioral health
providers
iii. all other health
care practitioners
d.
outpatient prescription drugs
e.
supplies.
3. An
explanation of the general methodology for establishing rates of reimbursement
for providers; any proposed changes in the methods of paying providers or
provider contracting initiatives; the basis for paying similarly situated
providers within a provider network different rates of reimbursement including,
but not limited to, quality of care delivered, mix of patients, geographic
location at which care is provided and intensity of services provided; and any
non-fee-for-service and non-capitation payments to providers included in the
rate filing including, but not limited to, bonuses and incentives tied to
provider performance and other payments not tied to service or
performance.
4. A summary of the
administrative expenses, in the aggregate and per Member per month, used in the
development of the rate filing and the projected increases for the period in
which the filed rates will be in effect, including an explanation for
significant changes in the Carrier's administrative expenses due to one-time
costs.
5. Medical loss ratios,
including three-year historic ratios for Merged Market products and the
projected medical loss ratio for the period during which the filed rates will
be in effect.
6. Contribution to
surplus and the reasons why the Carrier filed at that level.
7. An explanation of how or why information
contained in the rate filing is different from information contained in the
Carrier's filed financial statements.
8. A description of cost containment programs
the Carrier is employing to address health care delivery costs and a summary of
the realized past savings and projected savings from all such
programs.
9. Any other information
required by the Commissioner.
(d) Within ten business days of the annual
rate filing submission deadline, the Division will prepare and post to its
website a summary of the rate filings received, along with copies of the rate
filing summaries submitted by the Carriers pursuant to
211
CMR 66.08(3)(c). This
summary will include a table of the rate change requests with the rate changes
requested and approved for the last two years.
(e) The Division will provide notice of an
opportunity for the public to comment on the Carriers' proposed rate changes.
No later than June 5th, on an annual basis, unless
otherwise determined by the Commissioner, the Division will schedule during the
course of review a public information session to accept comments from
interested parties on the proposed rate changes submitted under
211
CMR 66.08(3)(a). At the
public information session, Carriers will be expected to present the
information contained in their rate filing summaries submitted under
211
CMR 66.08(3)(c) and may be
asked to respond to questions from the Division. Interested parties will be
invited to present oral or written comments on the Carriers' proposed rate
changes to the Division. At the hearing officer's discretion, the Division will
accept written comments from interested parties from the date notice of the
public information session is given for at least ten days following the public
information session. While written and oral comments on the Carriers' proposed
rate changes will be considered by the Division as part of the public
information session, the Division's review of a specific rate filing will at
all times be governed by the requirements of
211
CMR 66.08.
(f) The Division will develop and post to its
website a set of frequently asked questions about the rate review process for
Merged-Market rates.
(g) Following
the Division's review of the rate filings and no later than August
31st each year, unless otherwise determined by the
Commissioner, the Division will update the table posted to its website to
reflect the rate changes that were not disapproved and which will be used by
Carriers on and after the succeeding January
1st.
(4) Review of Rate Filings.
(a) All Group Base
Premium Rates and Rating Adjustment Factors are subject to disapproval if they
do not meet the requirements of M.G.L. c. 176J and
211 CMR
66.00.
(b)
A Carrier shall respond to any request for additional information by the
Division within five business days of the date of the Division's request.
Failure to respond to the Division's request within five business days may
result in a delay of the Division's review of the filing and a delay in the
proposed effective date of the filed rates.
(c) Every Carrier shall include with any
submission under
211
CMR 66.08(3) a cover letter
summarizing the content in
211
CMR 66.08(2)(g)12., (h) and
(i). Group Base Premium Rates will be presumptively disapproved as excessive if
the rate filing does not meet the following standards:
1.
Administrative Expense
Standards. Group Base Premium Rates will be presumptively
disapproved if the filing's projected administrative expense loading component,
not including taxes and assessments, health care quality improvement expenses,
and fraud and abuse detection, increases by more than the most recent calendar
year's increase in the New England medical CPI.
a. The projected administrative expense
loading component is the per Member per month administrative expense described
in 211 CMR
66.08(2)(g)12. plus the
producer commission expense.
b. The
most recent calendar year's increase in the New England medical CPI shall be
calculated by dividing the index value for the November period preceding the
date of the filing by the same index value from the November period one year
earlier. For the purpose of
211
CMR 66.08(4)(d)1.b., the New
England medical CPI shall reflect the Consumer Price Indexes for All Urban
Consumers (CPI-U), U.S. city averages and selected areas, for the
Boston-Brockton-Nashua area.
2.
Contribution to Surplus
Standards. Group Base Premium Rates will be presumptively
disapproved as excessive if the rate filing's contribution-to-surplus loading
component exceeds 1.9% of the total filed Group Base Premium Rate.
a. The contribution-to-surplus loading
component shall represent the per Member per month contribution-to-surplus
amount submitted in
211CMR
66.08(2)(h).
b. If a Carrier's Risk-Based Capital Ratio,
calculated according to the provisions of
211 CMR
25.00: Risk-based Capital (RBC) for Health
Organizations, falls below 300% for the four most recent consecutive
quarters, the Group Base Premium Rates will be presumptively disapproved as
excessive if the filing's contribution-to-surplus loading component exceeds
2.5% of premium.
3.
Medical Loss Ratio Standards. Group Base Premium Rates
will be presumptively disapproved as excessive if the rate filing's projected
aggregate medical loss ratio for all plans offered in the Merged Market is less
than the Minimum Medical Loss Ratio.
a. The
projected aggregate medical loss ratio shall be reported as submitted in
211
CMR 66.08(2)(i).
b. When a Carrier's Merged Market Group Base
Premium Rates for a Rating Period would have been presumptively disapproved for
failure only to meet the aggregate Minimum Medical Loss Ratio, the Group Base
Premium Rate will not be presumptively disapproved if the aggregate loss ratio
for all of the Carrier's Merged Market plans was at least 1% higher than the
Carrier's equivalent medical loss ratio in the 12 months prior to the present
filing. In this case, the filed medical loss ratio will be considered the
Adjusted Minimum Medical Loss Ratio.
(5) Presumptive Disapprovals Issued Pursuant to M.G.L. c. 176J, § 6(g).
(a) Rate filings may be presumptively
disapproved by the Commissioner as described in
211
CMR 66.08(4)(d).
(b) If a Carrier's filing is presumptively
disapproved, the Commissioner shall notify the Carrier in writing within five
business days of the annual rate filing submission stating the reason(s) for
the presumptive disapproval.
(c)
New Health Benefit Plans whose initial Group Base Premium Rates are
presumptively disapproved may not be offered.
(d) Within ten days of receipt of the
presumptive disapproval, the Carrier shall communicate to all employers and
individuals covered under a Health Benefit Plan approved under M.G.L. c. 176J
that the proposed rate change has been presumptively disapproved and will be
subject to a public hearing at the Division.
(e) In the event of a presumptive
disapproval, Carrier shall comply with the following procedures:
1. the Carrier shall not quote, issue, make
effective, deliver, or renew Health Benefit Plans in the Commonwealth using
disapproved Group Base Premium Rates. The Carrier shall quote, issue, make
effective, deliver or renew all Health Benefit Plans using Group Base Premium
Rates in effect 12 months prior to the proposed effective date of the
presumptively disapproved Group Base Premium Rates. In recalculating premiums,
the Carrier must apply the age and geographic Rating Adjustment Factors in
effect 12 months prior to the proposed effective date of the presumptively
disapproved Group Base Premium Rates;
2. the Carrier shall recalculate applicable
rates for all affected Health Benefit Plans and shall issue rate quotes and
make all Health Benefit Plans available through all distribution channels,
including Intermediaries, the Connector, licensed insurance producers and the
Carrier's website, but in no event more than ten calendar days after the
Carrier's receipt of the presumptive disapproval;
3. the Carrier shall promptly provide notice
of all material changes to the evidence(s) of coverage to all affected
individuals and groups in accordance with M.G.L. c. 176O, § 6(a) and
211
CMR 52.12(6):
General Notice of Material Changes.
(f) With respect to the hearing for the
presumptive disapproval:
1. the public hearing
shall be scheduled within 15 calendar days of the submission of a complete rate
filing; and
2. notice of the public
hearing will be given to, or advertised in, newspapers in Boston, Brockton,
Fall River, Pittsfield, Springfield, Worcester, New Bedford, and Lowell and
posted to the Division's website.
3. The purpose of the public hearing will be
to provide the Carrier with the opportunity to rebut the reasons for the
presumptive disapproval. For purposes of
211
CMR 66.08(5)(f)3., the
administrative record to be considered at the public hearing will be limited to
the materials and information included in the Carrier's presumptively
disapproved rate filing submitted pursuant to
211
CMR 66.08.
(6) Disapprovals Issued Pursuant to M.G.L. c. 176J, § 6(h).
(a) Rate filings also shall be disapproved by
the Commissioner if the benefits provided therein are unreasonable in relation
to the rate charged, or if the rates are excessive, inadequate or unfairly
discriminatory or do not otherwise comply with the requirements of M.G.L. c.
176J or
211 CMR
66.00.
(b)
Changes to filed Rating Adjustment Factors shall be disapproved by the
Commissioner if found to be discriminatory or not actuarially sound.
(c) New Health Benefit Plans whose initial
Group Base Premium Rates are disapproved may not be offered.
(d)
1. If
the Commissioner disapproves a Carrier's proposed Group Base Premium Rate(s) or
proposed changes to rating factors or Rating Adjustment Factor(s), the
Commissioner shall notify the Carrier no later than 75 days prior to the
effective date of the Carrier's filing, and he shall state the reason(s) for
the disapproval, including whether the disapproval is presumptive.
2. Unless otherwise determined by the
Commissioner, if the Commissioner disapproves a Carrier's proposed Group Base
Premium Rate(s) or proposed changes to Rating Adjustment Factor(s), the
Commissioner shall notify the Carrier in writing no later than July
5th of the year preceding the rates' effective date,
stating the reason(s) for the disapproval.
(e) In the event of a disapproval, Carrier
shall comply with the following procedures:
1.
the Carrier shall not quote, issue, make effective, deliver or renew Health
Benefit Plans in the Commonwealth using disapproved Group Base Premium Rates.
The Carrier shall quote, issue, make effective, deliver or renew all Health
Benefit Plans using Group Base Premium Rates as in effect 12 months prior to
the proposed effective date of the disapproved Group Base Premium Rates. In
recalculating premiums, the Carrier may apply the age and geographic Rating
Adjustment Factors;
2. the Carrier
shall recalculate applicable rates for all affected Health Benefit Plans and
shall issue rate quotes and make all Health Benefit Plans available through all
distribution channels, including Intermediaries, the Connector, licensed
insurance producers and the Carrier's website, but in no event more than ten
calendar days after the Carrier's receipt of the disapproval;
3. the Carrier shall promptly provide notice
of all material changes to the evidence(s) of coverage to all affected
individuals and groups in accordance with M.G.L. c. 176O, § 6(a) and
211
CMR 52.12(6):
General Notice of Material Changes.
(f) The Commissioner retains the right to
disapprove a rate filing for reasons other than those identified upon review of
the rate filing.
(g) Hearings on
Disapprovals issued pursuant to M.G.L. c. 176J, § 6(h)
1. within ten days of receipt of the
disapproval, the Carrier may request a hearing on the disapproval;
2. the Division shall schedule a hearing
within 15 calendar days of receipt of the Carrier's request;
3. the purpose of the hearing will be to
consider whether the disapproval is supported by substantial evidence and not
based upon an error of law; and
4.
The Commissioner shall issue a written decision either affirming or rejecting
the disapproval within 30 days after the conclusion of the hearing.
(7) Appeals. Any final order, decree, or judgment of the Massachusetts Superior Court or appellate court modifying, amending, annulling, or reversing a decision of the Commissioner disapproving a rate filing, and any further decision of the Commissioner pursuant to such an order, decree, or judgment that affects the overall rate not disapproved shall be effective as ordered.
(8) Maintaining Records. Every Carrier must maintain at its principal place of business a complete and detailed description of its rating practices, including information and documentation which demonstrates that its rating methods and practices are based upon commonly accepted actuarial assumptions, are in accordance with sound actuarial principles, and comply with the provisions of 211 CMR 66.00.
(9) Methodology for Calculating and Reporting Refund, Rebate or Credit Calculations.
(a) Unless
otherwise determined by the Commissioner, for the purposes of M.G.L. c. 176J,
§ 6, Carriers are to calculate and submit a rebate calculation form as
designated by the Commissioner each calendar year by July
31st, or another date as determined by the
Commissioner, for the previous calendar year based on the current federal
methodology for calculating rebates. When completing the form for
Massachusetts, Carriers are to use the Minimum Medical Loss Ratio, or if
applicable, the Adjusted Minimum Medical Loss Ratio, that applies in the year
for which the calculation was completed.
(b) If the calculation illustrates that a
refund or rebate is warranted, the Carrier shall submit a detailed plan, for
the Commissioner's approval, that will provide a detailed description of the
manner in which the Carrier will refund the excess premium to those individuals
or small employers who were covered during the prior calendar year or an
explanation of the reasons that the Carrier proposes not to make a refund or
rebate. The amount of the rebate will be based on the individual's or small
employer's relative share of the premiums that were paid to the Carrier during
the calendar year.
(c) A Carrier
shall communicate within 30 days to all individuals and small employers that
were covered under plans during the relevant 12-month calendar year that such
individuals and small employers qualify for a refund which may take the form of
either a refund on the premium for the applicable 12-month period, or if the
individual or small employer are still covered by the Carrier, a credit on the
premium for the subsequent 12-month period.
(d) The basis for all refunds issued shall
equal the amount of a Carrier's earned premium that exceeds that amount
necessary to achieve the Minimum Medical Loss Ratio, or if applicable, the
Adjusted Minimum Medical Loss Ratio, as reported to the Commissioner. The
Commissioner may authorize a waiver or adjustment of the refund requirement if
the Commissioner determines that issuing such refunds would result in Financial
Impairment for the Carrier or if the Commissioner determines that such refunds
are de minimus. The aggregate of any de
minimus amount not refunded shall be used to reduce overall
premiums.
(e) Refunds shall be paid
annually by August 31st or another date as
determined by the Commissioner, following the calendar year of the rebate
calculation.
(f) Carriers who issue
refunds shall keep records of all refunds made to affected individuals and
small groups for inspection by the Division.
(g) No individual or small employer may
assign his or her or its rights to such premium adjustments to another person
or entity.
(h) If a Carrier fails
to make refunds, rebates or premium adjustments acceptable to the Commissioner,
the Commissioner may order premium adjustments, refunds or premium credits he
or she deems necessary.
(10) Implementation. The provisions of 211 CMR 66.08(3), 211 CMR 66.08(5) and 211 CMR 66.08(6) shall only apply to merged-market rates to be effective on or after January 1, 2024. For merged-market rates with effective dates prior to January 1, 2024, the requirements of the most recent prior version of 211 CMR 66.08 relative to the submission and disapproval of merged-market rate filings shall apply.
Disclaimer: These regulations may not be the most recent version. Massachusetts may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
This site is protected by reCAPTCHA and the Google
Privacy Policy and
Terms of Service apply.
