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petitioner in a year from a group were considered excessive in
light of the total medical claims paid by petitioner during the
year on behalf of the group and its members.
Cost-plus group contracts simply represented a variation of
experience-rated group contracts. Premiums on cost-plus group
contracts would be calculated for the following year based upon
claims submitted to petitioner and petitioner’s administrative
costs relating to each group for a year.
Cost-plus group contracts offered by petitioner had a
retrospective adjustment feature that, where applicable, adjusted
the total premiums received by petitioner for a year to reflect
the group’s actual claims and petitioner’s administrative costs
for the year relating to the group.
Other Matter
As indicated, the rating formulas used by petitioner to
determine the premium rates for its group contracts were subject
to annual approval by the PID.
Unless terminated, community-rated group contracts were
automatically renewed with petitioner on a month-to-month basis,
and experience-rated and cost-plus group contracts were
automatically renewed with petitioner on an annual basis.
Regardless, however, of the nominal renewal terms associated
with petitioner’s group contracts, as a practical matter, all of
petitioner’s group contracts were effectively terminable at will
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Last modified: May 25, 2011