§ 22:1091 — Health insurance plans subject to rate review

Louisiana § 22:1091

• Jurisdiction: Louisiana
• Title 22: Insurance

Text

§1091. Health insurance plans subject to rate review
A. The provisions of this Subpart shall apply to any health benefit plan which
provides coverage in the small group market or individual market, including any policy or
subscriber agreement covering residents of this state. The provisions of this Section shall
apply regardless of where such policy or subscriber agreement was issued or issued for
delivery in this state and shall include any employer, association, or trustee of a fund
established by an employer, association, or trust for multiple associations who shall be
deemed the policyholder, covering one or more employees of such employer, one or more
members or employees of members of such association or multiple associations, for the
benefit of persons other than the employer, the association, or the multiple associations, as
well as their officers or trustees. The provisions of this Subpart shall not apply to the
following, unless specifically provided for:
(1) An Archer medical savings account that meets all requirements of Section 220
of the Internal Revenue Code of 1986.
(2) A health savings account that meets all requirements of Section 223 of the
Internal Revenue Code of 1986.
(3) Excepted benefit or limited benefits as defined in this Title.
B. As used in this Subpart, the following terms shall have the meanings ascribed to
them in this Section:
(1) "Actuarial certification" means a written statement by a member of the American
Academy of Actuaries that a health insurance issuer is in compliance with the provisions of
this Subpart, based upon the actuary's examination, including a review of the appropriate
records and of the actuarial assumptions and methods utilized by the health insurance issuer
in establishing rates for applicable health benefit plans.
(2) "Excessive" means the rate charged for the health insurance coverage causes the
premium or premiums charged for the health insurance coverage to be unreasonably high in
relation to the benefits provided under the particular product. In determining whether the
rate is unreasonably high in relation to the benefits provided, the department shall consider
each of the following:
(a) Whether the rate results in a projected medical loss ratio below the federal
medical loss ratio standard in the applicable market to which the rate applies, after
accounting for any adjustments allowable under federal law.
(b) Whether one or more of the assumptions on which the rate is based is not
supported by substantial evidence.
(c) Whether the choice of assumptions or combination of assumptions on which the
rate is based is unreasonable.
(3) "Federal review threshold" means any rate increase that results in a ten percent
or greater rate increase, or such other threshold as required by federal law or regulation or
any rate that, when combined with all rate increases and decreases during the previous
twelve-month period, would result in an aggregate ten percent or greater rate increase. For
reporting purposes, the federal threshold shall mean any rate increase above zero percent or
such other threshold as required by federal law or regulation.
(4) "Grandfathered health plan coverage" has the same meaning as that in 45 CFR
147.140 or other subsequently adopted federal law, rule, regulation, directive, or guidance.
(5) "Health benefit plan", "plan", "benefit", or "health insurance coverage" means
services consisting of medical care, provided directly, through insurance or reimbursement,
or otherwise, and including items and services paid for as medical care under any hospital
or medical service policy or certificate, hospital or medical service plan contract, preferred
provider organization, or health maintenance organization contract offered by a health
insurance issuer. However, excepted benefits as defined in R.S. 22:1061(3)(a) are not
included as a "health benefit plan".
(6) "Health insurance issuer" means any entity that offers health insurance coverage
through a policy, certificate of insurance, or subscriber agreement subject to state law that
regulates the business of insurance. A "health insurance issuer" shall include a health
maintenance organization, as defined and licensed pursuant to Subpart I of Part I of Chapter
2 of this Title.
(7) "Health savings accounts" means those accounts for medical expenses authorized
by 26 U.S.C. 220 et seq.
(8) "Inadequate" means rates for a particular product are clearly insufficient to
sustain projected losses and expenses, or the use of such rates.
(9) "Index rate" means the average rate resulting from the estimated combined claims
experience for all Essential Health Benefits, pursuant to 42 U.S.C. 18022, Section 1302(b)
of the Patient Protection and Affordable Care Act, of all nontransitional and
nongrandfathered health plan coverage within a health insurance issuer's single, statewide
risk pool in the individual market and within a health insurance issuer's single, statewide risk
pool in the small group market, with a separate index rate being calculated for each market.
Health insurance issuers may make any market-wide and plan- or product-specific
adjustments to an index rate as permitted or as required by federal law, rules, or regulations.
In the event this rate cannot be determined by reference to 42 U.S.C. 18022, Section 1302(b)
of the Patient Protection and Affordable Care Act, the commissioner of insurance shall
promulgate rules pursuant to the Administrative Procedure Act, R.S. 49:950 et seq., to define
a substantially similar alternative.
(10) "Individual health insurance coverage" or "individual policy" means health
insurance coverage offered to individuals in the individual market or through an association.
(11) "Individual market" means the market for health insurance coverage offered to
individuals other than in connection with a group health plan.
(12) "Insured" includes any policyholder, including a dependent, enrollee, subscriber,
or member, who is covered through any policy or subscriber agreement offered by a health
insurance issuer.
(13) "Large group" or "large employer" means, in connection with a group health
plan with respect to a calendar year and a plan year, an employer who employed an average
of at least fifty-one employees on business days during the preceding calendar year and who
employs at least two employees on the first day of the plan year.
(14) "Large group market" means the health insurance market under which
individuals obtain health insurance coverage directly or through any arrangement on behalf
of themselves and their dependents through a group health plan maintained by a large
employer.
(15) "Medical loss ratio" means the ratio of expected incurred benefits to expected
earned premium over the time period of coverage, subject to the requirements of federal law,
regulation, or rule.
(16) "New rate filing" means a rate filing for any particular product which has not
been issued or delivered in this state.
(17) "Particular product" means a basic insurance policy form, certificate, or
subscriber agreement delineating the terms, provisions, and conditions of a specific type of
coverage or benefit under a particular type of contract with a discrete set of rating and pricing
methodologies that a health insurance issuer offers in the state.
(18) "Rate" means the rate initially filed or filed as a result of determination of rates
by a health insurance issuer for a particular product.
(19) "Rate change" means the rates for any health insurance issuer for a particular
product differ from the rates on file with the department, including but not limited to any
change in any current rating factor, periodic recalculation of experience, change in rate
calculation methodology, change in benefits, or change in the trend or other rating
assumptions.
(20) "Rate increase" means any increase of the rates for a particular product. When
referring to federal review thresholds, "rate increase" includes a premium volume-weighted
average increase for all insureds for the aggregate rate changes during the twelve-month
period preceding the proposed rate increase effective date.
(21) "Rating period" means the calendar period for which rates established by a
health insurance issuer are in effect.
(22) "Small group" or "small employer" means any person, firm, corporation,
partnership, trust, or association actively engaged in business which has employed an average
of at least one but not more than fifty employees on business days during the preceding
calendar year and who employs at least one employee on the first day of the plan year.
"Small group" or "small employer" shall include coverage sold to small groups or small
employers through associations or through a blanket policy. For purposes of rate calculation
by a health insurance issuer, a small employer group consisting of one employee shall be
rated within a health insurance issuer's individual market risk pool, unless that health
insurance issuer provides only employer coverage and thus has only a small group market
risk pool.
(23) "Unfairly discriminatory" means rates that result in premium differences
between insureds within similar risk categories that do not reasonably correspond to
differences in expected costs. When applied to rates charged, "unfairly discriminatory" shall
refer to any rate charged by small group or individual health insurance issuers in violation
of R.S. 22:1095.
(24) "Unjustified" means a rate for which a health insurance issuer has provided data
or documentation to the department in connection with rates for a particular product that is
incomplete, inadequate, or otherwise does not provide a basis upon which the reasonableness
of the rate may be determined or is otherwise inadequate insofar as the rate charged is clearly
insufficient to sustain projected losses and expenses.
(25) "Unreasonable" means any rate that contains a provision or provisions that are
any of the following:
(a) Excessive.
(b) Unfairly discriminatory.
(c) Unjustified.
(d) Otherwise not in compliance with the provisions of this Title, or with other
provisions of law.

Legislative History

Acts 1991, No. 777, §2, eff. Sept. 30, 1992; Acts 1993, No. 54, §1; Acts 2001, No. 272, §1, eff. Jan. 1, 2002; Acts 2003, No. 659, §1; Acts 2004, No. 663, §1; Redesignated from R.S. 22:228.1 by Acts 2008, No. 415, §1, eff. Jan. 1, 2009; Acts 2009, No. 93, §1; Acts 2014, No. 718, §1, eff. June 18, 2014; Acts 2016, No. 32, §1; Acts 2020, No. 36, §1.