2021 -- H 5763

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LC001446

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2021

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A N   A C T

RELATING TO INSURANCE -- ACCIDENT AND SICKNESS INSURANCE POLICIES

     Introduced By: Representatives Kazarian, Kislak, Fogarty, Alzate, Potter, Casimiro,
Henries, Handy, Felix, and McGaw

     Date Introduced: February 24, 2021

     Referred To: House Corporations

     It is enacted by the General Assembly as follows:

     SECTION 1. Chapter 27-18 of the General Laws entitled "Accident and Sickness Insurance

Policies" is hereby amended by adding thereto the following section:

     27-18-85. Gender rating.

     (a) No individual or group health insurance contract, plan, or policy delivered, issued for

delivery, or renewed in this state, which provides medical coverage that includes coverage for

physician services in a physician's office, and no policy which provides major medical or similar

comprehensive-type coverage, excluding disability income, long-term care, and insurance

supplemental policies which only provide coverage for specified diseases or other supplemental

policies, shall vary the premium rate for a health coverage plan based on the gender of the individual

policy holders, enrollees, subscribers, or members.

     (b) This section shall not apply to insurance coverage providing benefits for any of the

following:

     (1) Hospital confinement indemnity;

     (2) Disability income;

     (3) Accident only;

     (4) Long-term care;

     (5) Medicare supplement;

     (6) Limited benefit health;

     (7) Specified disease indemnity;

     (8) Sickness of bodily injury or death by accident or both; and

     (9) Other limited benefit policies.

     SECTION 2. Chapter 27-19 of the General Laws entitled "Nonprofit Hospital Service

Corporations" is hereby amended by adding thereto the following section:

     27-19-77. Gender rating.

     (a) No individual or group health insurance contract, plan, or policy delivered, issued for

delivery, or renewed in this state, which provides medical coverage that includes coverage for

physician services in a physician's office, and no policy which provides major medical or similar

comprehensive-type coverage, excluding disability income, long-term care, and insurance

supplemental policies which only provide coverage for specified diseases or other supplemental

policies, shall vary the premium rate for a health coverage plan based on the gender of the individual

policy holders, enrollees, subscribers, or members.

     (b) This section shall not apply to insurance coverage providing benefits for any of the

following:

     (1) Hospital confinement indemnity;

     (2) Disability income;

     (3) Accident only;

     (4) Long-term care;

     (5) Medicare supplement;

     (6) Limited benefit health;

     (7) Specified disease indemnity;

     (8) Sickness of bodily injury or death by accident or both; and

     (9) Other limited benefit policies.

     SECTION 3. Chapter 27-20 of the General Laws entitled "Nonprofit Medical Service

Corporations" is hereby amended by adding thereto the following section:

     27-20-73. Gender rating.

     (a) No individual or group health insurance contract, plan, or policy delivered, issued for

delivery, or renewed in this state, which provides medical coverage that includes coverage for

physician services in a physician's office, and no policy which provides major medical or similar

comprehensive-type coverage, excluding disability income, long-term care, and insurance

supplemental policies which only provide coverage for specified diseases or other supplemental

policies, shall vary the premium rate for a health coverage plan based on the gender of the individual

policy holders, enrollees, subscribers, or members.

     (b) This section shall not apply to insurance coverage providing benefits for any of the

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following:

     (1) Hospital confinement indemnity;

     (2) Disability income;

     (3) Accident only;

     (4) Long-term care;

     (5) Medicare supplement;

     (6) Limited benefit health;

     (7) Specified disease indemnity;

     (8) Sickness of bodily injury or death by accident or both; and

     (9) Other limited benefit policies.

     SECTION 4. Chapter 27-41 of the General Laws entitled "Health Maintenance

Organizations" is hereby amended by adding thereto the following section:

     27-41-90. Gender rating.

     (a) No individual or group health insurance contract, plan, or policy delivered, issued for

delivery, or renewed in this state, which provides medical coverage that includes coverage for

physician services in a physician's office, and no policy which provides major medical or similar

comprehensive-type coverage, excluding disability income, long-term care, and insurance

supplemental policies which only provide coverage for specified diseases or other supplemental

policies, shall vary the premium rate for a health coverage plan based on the gender of the individual

policy holders, enrollees, subscribers, or members.

     (b) This section shall not apply to insurance coverage providing benefits for any of the

following:

     (1) Hospital confinement indemnity;

     (2) Disability income;

     (3) Accident only;

     (4) Long-term care;

     (5) Medicare supplement;

     (6) Limited benefit health;

     (7) Specified disease indemnity;

     (8) Sickness of bodily injury or death by accident or both; and

     (9) Other limited benefit policies.

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     SECTION 5. Section 27-50-5 of the General Laws in Chapter 27-50 entitled "Small

Employer Health Insurance Availability Act" is hereby amended to read as follows:

     27-50-5. Restrictions relating to premium rates.

     (a) Premium rates for health benefit plans subject to this chapter are subject to the following

provisions:

     (1) Subject to subdivision (2) of this subsection, a small employer carrier shall develop its

rates based on an adjusted community rate and may only vary the adjusted community rate for:

     (i) Age; and

     (ii) Gender; and

     (iii)(ii) Family composition;

     (2) The adjustment for age in paragraph (1)(i) of this subsection may not use age brackets

smaller than five (5) year increments and these shall begin with age thirty (30) and end with age

sixty-five (65).

     (3) The small employer carriers are permitted to develop separate rates for individuals age

sixty-five (65) or older for coverage for which Medicare is the primary payer and coverage for

which Medicare is not the primary payer. Both rates are subject to the requirements of this

subsection.

     (4) For each health benefit plan offered by a carrier, the highest premium rate for each

family composition type shall not exceed four (4) times the premium rate that could be charged to

a small employer with the lowest premium rate for that family composition.

     (5) Premium rates for bona fide associations except for the Rhode Island Builders'

Association whose membership is limited to those who are actively involved in supporting the

construction industry in Rhode Island shall comply with the requirements of this section.

     (6) For a small employer group renewing its health insurance with the same small employer

carrier which provided it small employer health insurance in the prior year, the combined

adjustment factor for age and gender for that small employer group will not exceed one hundred

twenty percent (120%) of the combined adjustment factor for age and gender for that small

employer group in the prior rate year.

     (b) The premium charged for a health benefit plan may not be adjusted more frequently

than annually except that the rates may be changed to reflect:

     (1) Changes to the enrollment of the small employer;

     (2) Changes to the family composition of the employee; or

     (3) Changes to the health benefit plan requested by the small employer.

     (c) Premium rates for health benefit plans shall comply with the requirements of this

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section.

     (d) Small employer carriers shall apply rating factors consistently with respect to all small

employers. Rating factors shall produce premiums for identical groups that differ only by the

amounts attributable to plan design and do not reflect differences due to the nature of the groups

assumed to select particular health benefit plans. Two groups that are otherwise identical, but which

have different prior year rate factors may, however, have rating factors that produce premiums that

differ because of the requirements of subdivision (a)(6) of this section. Nothing in this section shall

be construed to prevent a group health plan and a health insurance carrier offering health insurance

coverage from establishing premium discounts or rebates or modifying otherwise applicable

copayments or deductibles in return for adherence to programs of health promotion and disease

prevention, including those included in affordable health benefit plans, provided that the resulting

rates comply with the other requirements of this section, including subdivision (a)(5) of this section.

     The calculation of premium discounts, rebates, or modifications to otherwise applicable

copayments or deductibles for affordable health benefit plans shall be made in a manner consistent

with accepted actuarial standards and based on actual or reasonably anticipated small employer

claims experience. As used in the preceding sentence, "accepted actuarial standards" includes

actuarially appropriate use of relevant data from outside the claims experience of small employers

covered by affordable health plans, including, but not limited to, experience derived from the large

group market, as this term is defined in § 27-18.6-2(19).

     (e) For the purposes of this section, a health benefit plan that contains a restricted network

provision shall not be considered similar coverage to a health benefit plan that does not contain

such a provision, provided that the restriction of benefits to network providers results in substantial

differences in claim costs.

     (f) The health insurance commissioner may establish regulations to implement the

provisions of this section and to assure that rating practices used by small employer carriers are

consistent with the purposes of this chapter, including regulations that assure that differences in

rates charged for health benefit plans by small employer carriers are reasonable and reflect objective

differences in plan design or coverage (not including differences due to the nature of the groups

assumed to select particular health benefit plans or separate claim experience for individual health

benefit plans) and to ensure that small employer groups with one eligible subscriber are notified of

rates for health benefit plans in the individual market.

     (g) In connection with the offering for sale of any health benefit plan to a small employer,

a small employer carrier shall make a reasonable disclosure, as part of its solicitation and sales

materials, of all of the following:

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     (1) The provisions of the health benefit plan concerning the small employer carrier's right

to change premium rates and the factors, other than claim experience, that affect changes in

premium rates;

     (2) The provisions relating to renewability of policies and contracts;

     (3) The provisions relating to any preexisting condition provision; and

     (4) A listing of and descriptive information, including benefits and premiums, about all

benefit plans for which the small employer is qualified.

     (h)(1) Each small employer carrier shall maintain at its principal place of business a

complete and detailed description of its rating practices and renewal underwriting practices,

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.

     (2) Each small employer carrier shall file with the commissioner annually on or before

March 15 an actuarial certification certifying that the carrier is in compliance with this chapter and

that the rating methods of the small employer carrier are actuarially sound. The certification shall

be in a form and manner, and shall contain the information, specified by the commissioner. A copy

of the certification shall be retained by the small employer carrier at its principal place of business.

     (3) A small employer carrier shall make the information and documentation described in

subdivision (1) of this subsection available to the commissioner upon request. Except in cases of

violations of this chapter, the information shall be considered proprietary and trade secret

information and shall not be subject to disclosure by the director to persons outside of the

department except as agreed to by the small employer carrier or as ordered by a court of competent

jurisdiction.

     (4) For the wellness health benefit plan described in § 27-50-10, the rates proposed to be

charged and the plan design to be offered by any carrier shall be filed by the carrier at the office of

the commissioner no less than thirty (30) days prior to their proposed date of use. The carrier shall

be required to establish that the rates proposed to be charged and the plan design to be offered are

consistent with the proper conduct of its business and with the interest of the public. The

commissioner may approve, disapprove, or modify the rates and/or approve or disapprove the plan

design proposed to be offered by the carrier. Any disapproval by the commissioner of a plan design

proposed to be offered shall be based upon a determination that the plan design is not consistent

with the criteria established pursuant to § 27-50-10(b).

     (i) The requirements of this section apply to all health benefit plans issued or renewed on

or after October 1, 2000.

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     SECTION 6. This act shall take effect on January 1, 2023.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO INSURANCE -- ACCIDENT AND SICKNESS INSURANCE POLICIES

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     This act would prohibit insurance companies from varying the premium rates charged for

a health coverage plan based on the gender of the individual policy holder, enrollee, subscriber, or

member.

     This act would take effect on January 1, 2023.

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LC001446

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