2012 -- S 2208

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LC00791

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STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2012

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A N A C T

RELATING TO INSURANCE -- GENDER RATING

     Introduced By: Senators Sosnowski, Miller, Lynch, DiPalma, and Crowley

     Date Introduced: January 24, 2012

     Referred To: Senate Health & Human Services

It is enacted by the General Assembly as follows:

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

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

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     27-18-71. Gender rating. – (a) No individual and/or group health insurance contract,

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plan, or policy delivered, issued for delivery, or renewed in this state, which provides medical

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coverage that includes coverage for physician services in a physician’s office, and no policy

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which provides major medical and/or similar comprehensive-type coverage, excluding disability

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income, long-term care, and insurance supplemental policies which only provide coverage for

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specified diseases or other supplemental policies, shall vary the premium rate for a health

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coverage plan based on the gender of the individual policy holders, enrollees, subscribers, or

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members.

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

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following:

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     (1) Hospital confinement indemnity;

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     (2) Disability income;

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     (3) Accident only;

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     (4) Long-term care;

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     (5) Medicare supplement;

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     (6) Limited benefit health;

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     (7) Specified diseased indemnity;

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

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     (9) Other limited benefit policies.

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

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

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     27-19-62. Gender rating. – (a) No individual and/or group health insurance contract,

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plan, or policy delivered, issued for delivery, or renewed in this state, which provides medical

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coverage that includes coverage for physician services in a physician’s office, and no policy

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which provides major medical and/or similar comprehensive-type coverage, excluding disability

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income, long-term care, and insurance supplemental policies which only provide coverage for

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specified diseases or other supplemental policies, shall vary the premium rate for a health

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coverage plan based on the gender of the individual policy holders, enrollees, subscribers, or

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members.

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

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following:

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     (1) Hospital confinement indemnity;

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     (2) Disability income;

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     (3) Accident only;

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     (4) Long-term care;

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     (5) Medicare supplement;

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     (6) Limited benefit health;

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     (7) Specified diseased indemnity;

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

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     (9) Other limited benefit policies.

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

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

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     27-20-57. Gender rating. – (a) No individual and/or group health insurance contract,

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plan, or policy delivered, issued for delivery, or renewed in this state, which provides medical

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coverage that includes coverage for physician services in a physician’s office, and no policy

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which provides major medical and/or similar comprehensive-type coverage, excluding disability

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income, long-term care, and insurance supplemental policies which only provide coverage for

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specified diseases or other supplemental policies, shall vary the premium rate for a health

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coverage plan based on the gender of the individual policy holders, enrollees, subscribers, or

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members.

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

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following:

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     (1) Hospital confinement indemnity;

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     (2) Disability income;

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     (3) Accident only;

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     (4) Long-term care;

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     (5) Medicare supplement;

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     (6) Limited benefit health;

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     (7) Specified diseased indemnity;

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

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     (9) Other limited benefit policies.

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

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

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     27-41-75. Gender rating. – (a) No individual and/or group health insurance contract,

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plan, or policy delivered, issued for delivery, or renewed in this state, which provides medical

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coverage that includes coverage for physician services in a physician’s office, and no policy

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which provides major medical and/or similar comprehensive-type coverage, excluding disability

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income, long-term care, and insurance supplemental policies which only provide coverage for

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specified diseases or other supplemental policies, shall vary the premium rate for a health

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coverage plan based on the gender of the individual policy holders, enrollees, subscribers, or

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members.

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

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following:

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     (1) Hospital confinement indemnity;

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     (2) Disability income;

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     (3) Accident only;

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     (4) Long-term care;

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     (5) Medicare supplement;

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     (6) Limited benefit health;

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     (7) Specified diseased indemnity;

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

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     (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

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

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     27-50-5. Restrictions relating to premium rates. -- (a) Premium rates for health benefit

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plans subject to this chapter are subject to the following provisions:

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

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

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      (i) Age; and

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      (ii) Gender; and

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      (iii)(ii) Family composition;

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

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

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with age sixty-five (65).

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

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

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

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subsection.

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

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

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

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

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

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construction industry in Rhode Island shall comply with the requirements of section 27-50-5.

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

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

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

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

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small employer group in the prior rate year.

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

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

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

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

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

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

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section.

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

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

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

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

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

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premiums that differ because of the requirements of subdivision 27-50-5(a)(6). Nothing in this

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

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health insurance coverage from establishing premium discounts or rebates or modifying

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otherwise applicable copayments or deductibles in return for adherence to programs of health

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promotion and disease prevention, including those included in affordable health benefit plans,

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provided that the resulting rates comply with the other requirements of this section, including

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subdivision (a)(5) of this section.

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

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

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

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

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

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employers covered by affordable health plans, including, but not limited to, experience derived

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from the large group market, as this term is defined in section 27-18.6-2(19).

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

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

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

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substantial differences in claim costs.

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

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

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

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

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

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

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individual health benefit plans) and to ensure that small employer groups with one eligible

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subscriber are notified of rates for health benefit plans in the individual market.

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

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

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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

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

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premium rates;

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

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

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

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benefit plans for which the small employer is qualified.

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

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

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including information and documentation that demonstrate that its rating methods and practices

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are based upon commonly accepted actuarial assumptions and are in accordance with sound

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actuarial principles.

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

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

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

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

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A copy of the certification shall be retained by the small employer carrier at its principal place of

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business.

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

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

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

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

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

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competent jurisdiction.

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

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

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

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carrier shall be required to establish that the rates proposed to be charged and the plan design to

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be offered are consistent with the proper conduct of its business and with the interest of the

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public. The commissioner may approve, disapprove, or modify the rates and/or approve or

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disapprove the plan design proposed to be offered by the carrier. Any disapproval by the

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commissioner of a plan design proposed to be offered shall be based upon a determination that

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the plan design is not consistent with the criteria established pursuant to subsection 27-50-10(b).

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

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or after October 1, 2000.

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SECTION 6. This act shall take effect upon passage.

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LC00791

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N A C T

RELATING TO INSURANCE -- GENDER RATING

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     This act would provide that insurance companies shall not vary the premium rates

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charged for a health coverage plan based on the gender of the individual policy holder, enrollee,

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subscriber, or member.

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     This act would take effect upon passage.

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LC00791

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