§ 38.2-3433. Small employer market premium and disclosure provisions
A. New or renewal premium rates for essential or standard health benefit plans issued by a health insurance issuer to a small employer not currently enrolled with that same health insurance issuer shall be based on a community rate subject to the following conditions:
1. A health insurance issuer may use the following risk classification factors in rating small groups: demographic rating, including age and gender; and geographic area rating. A health insurance issuer may not use claim experience, health status, duration or other risk classification factors in rating such groups, except as provided in subdivision 2 of this subsection.
2. The premium rates charged by a health insurance issuer may deviate from the community rate filed by the health insurance issuer by not more than twenty percent above or twenty percent below such rate for claim experience, health status and duration only during a rating period for such groups within a similar demographic risk classification for the same or similar coverage. Rates for a health benefit plan may vary based on the number of the eligible employee's enrolled dependents.
3. Health insurance issuers shall apply rating factors consistently with respect to all small employers in a similar demographic risk classification. Adjustments in rates for claims experience, health status and duration from issue may not be applied individually. Any such adjustment must be applied uniformly to the rate charged for all participants of the small employer.
B. In connection with the offering for sale of any health benefit plan to a small employer, each health insurance issuer shall make a reasonable disclosure, as part of its solicitation and sales materials, of:
1. The extent to which premium rates for a specific small employer are established or adjusted in part based upon the actual or expected variation in claims costs or actual or expected variation in health condition of the eligible employees and dependents of such small employer;
2. Provisions relating to renewability of policies and contracts; and
3. Provisions affecting any preexisting conditions provision.
C. Each health insurance issuer shall maintain at its principal place of business a complete and detailed description of its rating practices and renewal underwriting practices pertaining to its small employer business, including information and documentation that demonstrate that its rating methods and practices are based upon commonly accepted actuarial assumptions and are in accordance with sound actuarial principles.
D. Each health insurance issuer shall file with the Commission annually on or before March 15 the community rates and an actuarial certification certifying that the health insurance issuer and its rates are in compliance with this article. A copy of such certification shall be retained by the health insurance issuer at its principal place of business.
E. A health insurance issuer shall make the information and documentation described in subsection C of this section available for review by the Commission upon request.
(1993, c. 960; 1994, c. 138, cl. 2, c. 303; 1997, cc. 807, 913; 1998, c. 26.)
Sections: Previous 38.2-3430.6 38.2-3430.7 38.2-3430.8 38.2-3430.9 38.2-3430.10 38.2-3431 38.2-3432 38.2-3432.1 38.2-3432.2 38.2-3432.3 38.2-3433 38.2-3434 38.2-3435 38.2-3436 38.2-3437 NextLast modified: April 3, 2009