HOUSE BILL 106

49th legislature - STATE OF NEW MEXICO - second session, 2010

INTRODUCED BY

John A. Heaton

FOR THE LEGISLATIVE HEALTH AND HUMAN SERVICES COMMITTEE

AN ACT

RELATING TO HEALTH INSURANCE RATES; LIMITING THE INDEX RATE FOR CERTAIN HEALTH BENEFIT PLANS.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

     Section 1. Section 59A-23C-5 NMSA 1978 (being Laws 1991, Chapter 153, Section 5, as amended) is amended to read:

     "59A-23C-5. RESTRICTIONS RELATING TO PREMIUM RATES.--

          A. Premium rates for health benefit plans subject to the Small Group Rate and Renewability Act shall be subject to the following provisions:

                (1) the index rate for a rating period for any class of business shall not exceed the index rate for any other class of business by more than [twenty percent] the following percentages for policies issued or delivered in the respective year:

                     (a) twenty percent through December 31, 2010;

                     (b) eighteen percent for calendar year 2011;

                     (c) sixteen percent for calendar year 2012;

                     (d) fourteen percent for calendar year 2013;

                     (e) twelve percent for calendar year 2014; and

                     (f) ten percent for every year thereafter;

                (2) for a class of business, the premium rates charged during a rating period to small employers with similar case characteristics for the same or similar coverage, or the rates that could be charged to those employers under the rating system for that class of business, shall not vary from the index rate by more than [twenty percent] the following percentages of the index rate for policies issued or delivered in the respective year:

                     (a) twenty percent through December 31, 2010;

                     (b) eighteen percent for calendar year 2011;

                     (c) sixteen percent for calendar year 2012;

                     (d) fourteen percent for calendar year 2013;

                     (e) twelve percent for calendar year 2014; and

                     (f) ten percent for every year thereafter;

                (3) the percentage increase in the premium rate charged to a small employer for a new rating period [may] shall not exceed the sum of the following:

                     (a) the percentage change in the new business premium rate measured from the first day of the prior rating period to the first day of the new rating period. In the case of a class of business for which the small employer carrier is not issuing new policies, the carrier shall use the percentage change in the base premium rate;

                     (b) an adjustment, not to exceed ten percent annually and adjusted pro rata for rating periods of less than one year due to the claim experience, health status or duration of coverage of the employees or dependents of the small employer as determined from the carrier's rate manual for the class of business; and

                     (c) any adjustment due to change in coverage or change in the case characteristics of the small employer as determined from the carrier's rate manual for the class of business; and

                (4) in the case of health benefit plans issued prior to the effective date of the Small Group Rate and Renewability Act, a premium rate for a rating period may exceed the ranges described in Paragraph (1) or (2) of this subsection for a period of five years following the effective date of the Small Group Rate and Renewability Act. In that case, the percentage increase in the premium rate charged to a small employer in that class of business for a new rating period [may] shall not exceed the sum of the following:

                     (a) the percentage change in the new business premium rate measured from the first day of the prior rating period to the first day of the new rating period. In the case of a class of business for which the small employer carrier is not issuing new policies, the carrier shall use the percentage change in the base premium rate; and

                     (b) any adjustment due to change in coverage or change in the case characteristics of the small employer as determined from the carrier's rate manual for the class of business.

          B. Nothing in this section is intended to affect the use by a small employer carrier of legitimate rating factors other than claim experience, health status or duration of coverage in the determination of premium rates. Small employer carriers shall apply rating factors, including case characteristics, consistently with respect to all small employers in a class of business.

          C. A small employer carrier shall not involuntarily transfer a small employer into or out of a class of business. A small employer carrier shall not offer to transfer a small employer into or out of a class of business unless the offer is made to transfer all small employers in the class of business without regard to case characteristics, claim experience, health status or duration since issue.

          D. Prior to usage and June 14, 1991, each carrier shall file with the superintendent the rate manuals and any updates thereto for each class of business. A rate filing fee is payable under Subsection U of Section 59A-6-1 NMSA 1978 for the filing of each update. The superintendent shall disapprove within sixty days of receipt of a complete filing or the filing is deemed approved. If the superintendent disapproves the form during the sixty-day review period, [he] the superintendent shall give the carrier written notice of the disapproval stating the reasons for disapproval. At any time, the superintendent, after a hearing, may disapprove a form or withdraw a previous approval. The superintendent's order after the hearing shall state the grounds for disapproval or withdrawal of a previous approval and the date not less than twenty days later when disapproval or withdrawal becomes effective."