§ 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 subsection (a)(2) of this section, 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) [Deleted by P.L. 2021, ch. 88, §â€‰ 5 and P.L. 2021, ch. 89, §â€‰ 5.]
(iii) Family composition.
(2) The adjustment for age in subsection (a)(1)(i) of this section may not use age brackets
smaller than five-year (5) 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 (a).
(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 that provided it small employer health insurance in the prior year, the adjustment
factor for age for that small employer group will not exceed one hundred twenty percent
(120%) of the adjustment factor for age 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
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 subsection (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 subsection (a)(4) 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.
(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 ensure that rating practices used by small employer carriers
are consistent with the purposes of this chapter, including regulations that ensure
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:
(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
subsection (h)(1) of this section 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.