Premium rates: Methodology for determining; minimum rates; review of methodology.
1. The plan of operation must include a methodology for determining premium rates to be charged by the Program of Reinsurance for Reinsuring Small Employers and Eligible Persons pursuant to NRS 689C.610 to 689C.980, inclusive. The methodology must:
(a) Include a system for the classification of small employers which reflects the types of case characteristics commonly used by carriers that provide health insurance coverage to small employers pursuant to the provisions of this chapter; and
(b) Provide for the development of initial base premium rates for reinsurance to be used pursuant to subsection 2 to determine the premium rates for the Program of Reinsurance. The Board shall establish such base rates, subject to the approval of the Commissioner, at levels that reasonably approximate the gross premiums charged to small employers by small employer carriers, to eligible employees and their dependents by small employer carriers, or to eligible persons by individual carriers, as appropriate, for health benefit plans with benefits similar to the standard health benefit plan, as adjusted to reflect the minimum amount of claims and the maximum liability established pursuant to NRS 689C.800.
2. Premiums for the Program of Reinsurance:
(a) For an entire small employer group, must be at a rate that is at least 1 1/2 times the base premium rate established pursuant to subsection 1.
(b) For an eligible employee and his dependent, must be at a rate that is at least five times the base premium rate established pursuant to subsection 1.
(c) For an eligible person, must be at a rate that is at least 1 1/2 times the base premium rate established pursuant to subsection 1.
3. The Board shall periodically review the methodology established pursuant to this section, including the system of classification and any rating factors, to ensure that the methodology reasonably reflects the claims experience of the Program of Reinsurance. The Board may, subject to the approval of the Commissioner, change the methodology as needed.
4. The Board may adjust the factor by which the base premium rate must be multiplied pursuant to this section to determine the premium rates to be charged for the Program of Reinsurance to reflect the use of effective measures of cost containment and any arrangements for managed care.
Last modified: February 27, 2006