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Regular Session, 2013
SENATE BILL NO. 126
BY SENATOR GARY SMITH
Prefiled pursuant to Article III, Section 2(A)(4)(b)(i) of the Constitution of Louisiana.
HEALTH/ACC INSURANCE. Provides relative to health insurance rate review and
approval. (See Act.)
AN ACT1
To amend and reenact R.S. 22:972, Subpart D of Part III of Chapter 4 of Title 22 of the2
Louisiana Revised Statutes of 1950, comprised of R.S. 22:1091 through 1097, and3
R.S. 44:4.1(B)(11), and to enact R.S. 22:821(B)(34), 1098, and 1099, relative to4
health insurance rate review and approval; to provide for definitions; to provide for5
rate filings and rate increases; to provide relative to form approval; to provide6
relative to rating factors, risk pools, and individual market plan and calendar year7
requirements; to provide with respect to review and subsequent approval or8
disapproval of proposed rate filings and rate changes; to provide for fees; to provide9
for exceptions to the Public Records Law; to provide for implementation and10
enforcement; to provide for the frequency of rate increase limitations; to provide11
relative to the prohibition of discrimination in rates due to severe disability; and to12
provide for related matters.13
Be it enacted by the Legislature of Louisiana:14
Section1. R.S. 22:972, Subpart D of Part III of Chapter 4 of Title 22 of the Louisiana15
Revised Statutes of 1950, comprised of R.S. 22:1091 through 1097 are hereby amended and16
reenacted and R.S. 22:821(B)(34), 1098, and 1099 are hereby enacted to read as follows:17 SB NO. 126
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§821. Fees1
* * *2
B. The following fees and licenses shall be collected in advance by the3
commissioner of insurance:4
* * *5
(34) Fee for rate filings for health insurance issuers6
(a) New rate filings $100.007
(b) Rate changes $150.008
* * *9
§972. Approval and disapproval of forms; filing of rates10
A. No policy or subscriber agreement of a health and accident insurance11
issuer, hereafter including a health maintenance organization, shall be delivered12
or issued for delivery in this state, nor shall any endorsement, rider, or application13
which becomes a part of any such policy, which may include a certificate, be used14
in connection therewith until a copy of the form and of the premium rates and of the15
classifications of risks pertaining thereto have been filed with the commissioner of16
insurance; nor shall any such department. No policy, subscriber agreement,17
endorsement, rider, or application, hereinafter referred to as policy or subscriber18
agreements, shall be used until the expiration of forty-five sixty days after the form19
has been filed unless the commissioner of insurance department gives his its written20
approval prior thereto. The commissioner of insurance shall notify in writing the21
insurer which has filed any such form if it does not comply with the provisions of22
this Subpart, specifying the reasons for his opinion; and it shall thereafter be23
unlawful for such insurer to issue such form in this state. Written notification shall24
be provided to the health insurance issuer specifying the reasons a policy form25
or subscriber agreement does not comply with the provisions of this Subpart.26
It shall be unlawful for any health insurance issuer to issue any form in this27
state not previously submitted to and approved by the department. An28
aggrieved party affected by the commissioner's department's decision, act, or order29 SB NO. 126
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in reference to a policy form or subscriber agreement may demand a hearing in1
accordance with Chapter 12 of this Title, R.S. 22:2191 et seq.2
B. After providing twenty days' notice, to the commissioner of health3
insurance issuer, the department may withdraw his its approval of any such policy4
form or subscriber agreement on any of the grounds stated in this Section R.S.5
22:862. It shall be unlawful for the insurer health insurance issuer to issue such6
policy form or subscriber agreement or use it in connection with any policy or7
subscriber agreement after the effective date of such withdrawal of approval. An8
aggrieved party affected by the commissioner's department's decision, act, or order9
in reference to a policy form or subscriber agreement may demand a hearing in10
accordance with Chapter 12 of this Title, R.S. 22:2191 et seq.11
C. The commissioner of insurance department shall not disapprove or12
withdraw approval of any such policy form or subscriber agreement on the ground13
that its provisions do not comply with R.S. 22:975 or on the ground that it is not14
printed in uniform type if it shall be shown that the rights of the insured, or the15
beneficiary, or the subscriber under the policy or subscriber agreement as a whole16
are not less favorable than the rights provided by R.S. 22:975 and that the provisions17
or type size used in the policy or subscriber agreement are required in the state,18
district, or territory of the United States in which the insurer health insurance issuer19
is organized, anything in this Subpart to the contrary notwithstanding.20
D. All references to rates in this Section are to be controlled by Subpart21
D of this Part, R.S. 22:1091 through 1099.22
* * *23
SUBPART D. RATES RATE REVIEW AND APPROVAL24
§1091. Health insurance plans subject to rate limitations review and approval25
A. The provisions of R.S. 22:1091 through 1095 this Subpart shall apply to26
any health benefit plan which provides coverage to a small employer except the27
following: in the large group market, small group market, or individual market,28
including any policy or subscriber agreement, covering residents of this state.29 SB NO. 126
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The provisions of this Section shall apply regardless of where such policy or1
subscriber agreement was issued or issued for delivery in this state and shall2
include any employer, association, or a trustee of a fund established by an3
employer, association, or trust for multiple associations who shall be deemed the4
policyholder, covering one or more employees of such employer, one or more5
members or employees of members of such association or multiple associations,6
for the benefit of persons other than the employer, the association, or the7
multiple associations, as well as their officers or trustees. The provisions of this8
Subpart shall not apply to the following, unless specifically provided for:9
(1) An Archer medical savings account that meets all requirements of Section10
220 of the Internal Revenue Code of 1986.11
(2) A health savings account that meets all requirements of Section 223 of the12
Internal Revenue Code of 1986.13
(3) Group and individual high deductible health plans.14
(4) Excepted benefits.15
(5) Grandfathered health plan coverage.16
B. Notwithstanding any law to the contrary, the following terms shall be17
defined as follows As used in this Subpart, the following terms shall have the18
meanings ascribed to them in this Section:19
(1) "Actuarial certification" means a written statement by a member of the20
American Academy of Actuaries that a small employer carrier is in compliance with21
the provisions of R.S. 22:1092 that a health insurance issuer is in compliance22
with the provisions of this Subpart, based upon the person's actuary's23
examination, including a review of the appropriate records and of the actuarial24
assumptions and methods utilized by the carrier health insurance issuer in25
establishing premium rates for applicable health benefit plans.26
(2) "Base premium rate" means, for each class of business as to a rating27
period, the lowest premium rate charged or which could have been charged under a28
rating system for that class of business, by the small employer carrier to small29 SB NO. 126
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employers with similar case characteristics for health benefit plans with the same or1
similar coverage.2
(3) "Carrier" means an insurance company, including a health maintenance3
organization as defined and licensed to engage in the business of insurance under4
Subpart I of Part I of Chapter 2 of this Title, which is licensed or authorized to issue5
individual, group, or family group health insurance coverage for delivery in this6
state.7
(2) "Excepted benefits" means benefits under one or more of the8
following:9
(a) Benefits not subject to requirements:10
(i) Coverage only for accident, or disability income insurance, or any11
combination.12
(ii) Coverage issued as a supplement to liability insurance.13
(iii) Liability insurance, including general liability insurance and14
automobile liability insurance.15
(iv) Workers' compensation or similar insurance.16
(v) Automobile medical payment insurance.17
(vi) Credit-only insurance.18
(vii) Coverage for on-site medical clinics.19
(viii) Other similar insurance coverage, specified in regulations issued by20
the commissioner pursuant to the Administrative Procedure Act, under which21
benefits for medical care are secondary or incidental to other insurance22
benefits.23
(b) Benefits not subject to requirements if offered separately:24
(i) Limited scope dental or vision benefits.25
(ii) Benefits for long-term care, nursing home care, home health care,26
community-based care, or any combination thereof.27
(iii) Such other similar, limited benefits as specified in reasonable28
regulations issued by the commissioner.29 SB NO. 126
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(c) Benefits not subject to requirements if offered as independent,1
non-coordinated benefits:2
(i) Coverage only for a specified disease or illness.3
(ii) Hospital indemnity or other fixed indemnity insurance.4
(d) Benefits not subject to requirements if offered as a separate5
insurance policy:6
(i) Medicare supplemental health insurance as defined by Section7
1882(g)(1) of the Social Security Act.8
(ii) Insurance coverage supplemental to military health benefits.9
(iii) Similar supplemental coverage provided under a group health plan.10
(4) "Case characteristics" mean demographic or other relevant characteristics11
of a small employer, as determined by a small employer carrier, which are12
considered by the carrier in the determination of premium rates for the small13
employer. Claim experience, health status and duration of coverage since issue are14
not case characteristics for the purposes of this Section.15
(3) "Excessive" means the rate charged for the health insurance16
coverage causes the premium or premiums charged for the health insurance17
coverage to be unreasonably high in relation to the benefits provided under the18
particular product. In determining whether the rate is unreasonably high in19
relation to the benefits provided, the department shall consider each of the20
following:21
(a) Whether the rate results in a projected medical loss ratio below the22
federal medical loss ratio standard in the applicable market to which the rate23
applies, after accounting for any adjustments allowable under federal law.24
(b) Whether one or more of the assumptions on which the rate is based25
is not supported by substantial evidence.26
(c) Whether the choice of assumptions or combination of assumptions on27
which the rate is based is unreasonable.28 SB NO. 126
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(5) "Class of business" means all or a distinct grouping of small employers1
as shown on the records of the small employer carrier.2
(a) A distinct grouping may only be established by the small employer carrier3
on the basis that the applicable health benefit plans:4
(i) Are marketed and sold through individuals and organizations which are5
not participating in the marketing or sale of other distinct groupings of small6
employers for such small employer carrier;7
(ii) Have been acquired from another small employer carrier as a distinct8
grouping of plans; or9
(iii) Are provided through an association with membership of not less than10
twenty-five small employers which has been formed for purposes other than11
obtaining insurance.12
(b) A small employer carrier may establish no more than two additional13
groupings under each of the items in Subparagraph (a) of Paragraph (5) of this14
Subsection on the basis of underwriting criteria which are expected to produce15
substantial variation in the health care costs.16
(c) The commissioner may approve the establishment of additional distinct17
groupings upon application to the commissioner and a finding by the commissioner18
that such action would enhance the efficiency and fairness of the small employer19
insurance marketplace.20
(4) "Federal review threshold" means any rate increase that results in21
a ten percent or greater rate increase, or such other threshold as required by22
federal law, regulation, directive, or guidance by the United States Department23
of Health and Human Services, or any rate that, when combined with all rate24
increases and decreases during the previous twelve month period, would result25
in an aggregate ten percent or greater rate increase. For reporting purposes,26
the federal threshold shall mean any rate increase above zero percent or such27
other threshold as required by federal law, regulation, directive, or guidance by28
the United States Department of Health and Human Services. The reporting29 SB NO. 126
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format shall be in a standardized form as prescribed by federal law, regulation,1
directive, or guidance by the United States Department of Health and Human2
Services.3
(5) "Grandfathered health plan coverage" has the same meaning as that4
in 45 C.F.R. 147.140 or other subsequently adopted federal law, rule, regulation,5
directive, or guidance.6
(6) "Health benefit plan", "plan", "benefit", or "health insurance coverage"7
means benefits services consisting of medical care, provided directly, through8
insurance or reimbursement, or otherwise, and including items and services paid for9
as medical care, under any hospital or medical service policy or certificate, hospital10
or medical service plan contract, preferred provider organization, or health11
maintenance organization contract offered by a health insurance issuer. However,12
a "health benefit plan" shall not include limited benefit and supplemental health13
insurance; coverage issued as a supplement to liability insurance; workers'14
compensation or similar insurance; or automobile medical-payment insurance.15
However, excepted benefits are not included as a "health benefit plan".16
(7) "Health insurance issuer" means any entity that offers health17
insurance coverage through a policy, certificate of insurance, or subscriber18
agreement subject to state law that regulates the business of insurance. A19
"health insurance issuer" shall include a health maintenance organization, as20
defined and licensed pursuant to Subpart I of Part I of Chapter 2 of this Title.21
(7) (8) "Health savings accounts" are those accounts for medical expenses22
authorized by 26 U.S.C. 220 et seq.23
(8) (9) "High deductible health plan" means a high deductible health plan or24
policy that is qualified to be used in conjunction with a health savings account,25
medical savings account, or other similar program authorized by 26 USC 220 et seq.26
(9) "Index rate" means for each class of business for small employers with27
similar case characteristics the arithmetic average of the applicable base premium28
rate and the corresponding highest premium rate.29 SB NO. 126
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(10) "Medical savings account policy" means a high deductible health plan1
which is qualified to be used in conjunction with a medical savings account as2
provided in 26 USC 220 et seq.3
(11) "New business premium rate" means, for each class of business as to a4
rating period, the premium rate charged or offered by the small employer carrier to5
small employers with similar case characteristics for newly issued health benefits6
plans with the same or similar coverage.7
(10) "Inadequate" means rates for a particular product are clearly8
insufficient to sustain projected losses and expenses, or the use of such rates.9
(12) "Rating period" means the calendar period for which premium rates10
established by a small employer carrier are assumed to be in effect, as determined11
by the small employer carrier.12
(13)(11) "Index rate" means the average rate resulting from the13
estimated combined claims experience for all Essential Health Benefits, as14
defined pursuant to section 1302(b) of the Patient Protection and Affordable15
Care Act, Pub. L. 111-148, of all non-grandfathered health plan coverage within16
a health insurance issuer's single, state-wide risk pool in the individual market17
and within a health insurance issuer's single, state-wide risk pool in the small18
group market, with a separate index rate being calculated for each market.19
Health insurance issuers may make any market-wide and plan-or product-20
specific adjustments to an index rate as permitted or as required by federal law,21
rules, or regulations.22
(12) "Individual health insurance coverage" or "individual policy"23
means health insurance coverage offered to individuals in the individual market24
or through an association.25
(13) "Individual market" means the market for health insurance26
coverage offered to individuals other than in connection with a group health27
plan.28 SB NO. 126
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(14) "Insured" includes any policyholder, including a dependent,1
enrollee, subscriber, or member, who is covered through any policy or2
subscriber agreement offered by a health insurance issuer.3
(15) "Large group market" means the health insurance market under4
which individuals obtain health insurance coverage directly or through any5
arrangement on behalf of themselves and their dependents through a group6
health plan maintained by a large employer.7
(16) "Large group" or "large employer" means, in connection with a8
group health plan with respect to a calendar year and a plan year, an employer9
who employed an average of at least fifty-one employees on business days10
during the preceding calendar year and who employs at least two employees on11
the first day of the plan year, and beginning on January 1, 2014, an average of12
at least one hundred one employees on business days during the preceding13
calendar year and who employs at least two employees on the first day of the14
plan year.15
(17) "Medical loss ratio" means the ratio of expected incurred benefits16
to expected earned premium over the time period of coverage, subject to the17
requirements of federal statute, regulation, or rule.18
(18) "New rate filing" means a rate filing for any particular product19
which has not been issued or delivered in this state.20
(19) "Particular product" means a basic insurance policy form,21
certificate, or subscriber agreement delineating the terms, provisions, and22
conditions of a specific type of coverage or benefit under a particular type of23
contract with a discrete set of rating and pricing methodologies that a health24
insurance issuer offers in the state.25
(20) "Rate" means the rate initially filed or filed as a result of26
determination of rates by a health insurance issuer for a particular product.27
(21) "Rate change" means whenever rates for any health insurance28
issuer for a particular product differ from the rates on file with the department,29 SB NO. 126
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including but not limited to any change in any current rating factor, periodic1
recalculation of experience, change in rate calculation methodology, change in2
benefits, or change in the trend or other rating assumptions.3
(22) "Rate Filing Justification" means the document filed by a health4
insurance issuer with the department for all rate filings required under this5
Subpart. The contents of the Rate Filing Justification document and forms shall6
be governed and established by 45 C.F.R. 154.200 et seq., or through subsequent7
federal law, rule, regulation, directive, or guidance issued by the United States8
Department of Health and Human Services.9
(23) "Rate increase" means any increase of the rates for a particular10
product. When referring to federal review thresholds, a rate increase includes11
a premium volume-weighted average increase for all insureds for the aggregate12
rate changes during the twelve-month period preceding the proposed rate13
increase effective date.14
(24) "Rating period" means the calendar period for which premium15
rates established by a health insurance issuer are in effect.16
(25) "Small group" or "small employer" means any person, firm,17
corporation, partnership, trust or association actively engaged in business which, on18
at least fifty percent of its working days during the preceding year, employed no less19
than three nor more than thirty-five eligible employees, the majority of whom were20
employed within this state, and is not formed primarily for purposes of buying health21
insurance, and in which a bona fide employer-emplo yee relationship exists. In22
determining the number of eligible employees, companies which are affiliated23
companies or which are eligible to file a combined tax return for purposes of state24
taxation shall be considered one employer. An employer group of one shall be25
considered individual insurance under this Section. has employed an average of at26
least one but not more than fifty employees on business days during the27
preceding calendar year and who employs at least one employee on the first day28
of the plan year, and beginning on January 1, 2014, an average of at least one29 SB NO. 126
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but not more than one hundred employees, on business days during the1
preceding calendar year and who employs at least one employee on the first day2
of the plan year. "Small group or small employer" shall include coverage sold3
to small groups or small employers through associations or through a blanket4
policy. For purposes of rate calculation by a health insurance issuer, a small5
employer group consisting of one employee shall be rated within a health6
insurance issuer's individual market risk pool, unless that health insurance7
issuer only provides employer coverage and thus only has a small group market8
risk pool.9
(26) "Unfairly discriminatory" means rates that result in premium10
differences between insureds within similar risk categories that do not11
reasonably correspond to differences in expected costs. When applied to rates12
charged, "unfairly discriminatory" shall refer to any rate charged by small13
group or individual health insurance issuers in violation of R.S. 22:1095.14
(27) "Unified Rate Review Template" means the document filed by a15
health insurance issuer with the department for all rate filings required under16
this Subpart. The contents of the Unified Rate Review Template document and17
forms shall be governed and established by 45 C.F.R. 154.200 et seq., or through18
subsequent federal law, rule, regulation, directive, or guidance issued by the19
United States Department of Health and Human Services.20
(28) "Unjustified" means a rate for which a health insurance issuer has21
provided data or documentation to the department in connection with rates for22
a particular product that are incomplete, inadequate, or otherwise do not23
provide a basis upon which the reasonableness of a rate may be determined or24
is otherwise inadequate insofar as the rate charged is clearly insufficient to25
sustain projected losses and expenses.26
(29) "Unreasonable" means any rate that contains a provision or27
provisions that are any of the following:28
(a) Excessive.29 SB NO. 126
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(b) Unfairly discriminatory.1
(c) Unjustified.2
(d) Otherwise not in compliance with the provisions of this Title.3
(14) "Small employer carrier" means any carrier which offers health benefit4
plans covering the employees of a small employer.5
C. Group and individual high deductible health plans are excluded from the6
provisions of R.S. 22:1091 through 1095.7
§1092. Restrictions relating to premium rates; health Health insurance issuers;8
rate filings and rate increases9
A. Premium rates for group health benefit plans subject to R.S. 22:109110
through 1094 shall be subject to the following provisions:11
(1) The index rate for a rating period for any class of business shall not12
exceed the index rate for any other class of business by more than twenty percent.13
(2) For a class of business, the premium rates charged during a rating period14
to any employer with similar case characteristics for the same or similar coverage,15
or the rates which could be charged to such employer under the rating system for that16
class of business, whether new coverage or renewal coverage, shall not vary from the17
index rate by more than thirty-three percent of the index rate.18
(3) The percentage increase in the premium rate charged to a small employer19
for a new rating period may not exceed the sum of the following:20
(a) The percentage change in the new business premium rate measured from21
the first day of the prior rating period to the first day of the new rating period. In the22
case of a class of business for which the small employer carrier is not issuing new23
policies, the carrier shall use the percentage change in the base premium rate.24
(b) An adjustment, not to exceed twenty percent annually and adjusted pro25
rata for rating periods of less than one year, due to one or a combination of the26
following: claim experience, health status, or duration of coverage of the employees27
or dependents of the small employer as determined from the carrier's rate manual for28
the class of business.29 SB NO. 126
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(c) Any adjustment due to change in coverage or change in the case1
characteristics of the small employer as determined from the carrier's rate manual for2
the class of business.3
B. Nothing in this Section is intended to affect the use by a small employer4
carrier of legitimate rating factors other than claim experience, health status, or5
duration of coverage in the determination of premium rates. Small employer carriers6
shall apply rating factors, including case characteristics, consistently with respect to7
all small employers in a class of business.8
C. A small employer carrier shall not involuntarily transfer a small employer9
into or out of a class of business. A small employer carrier shall not offer to transfer10
a small employer into or out of a class of business unless such offer is made to11
transfer all small employers in the class of business without regard to case12
characteristics, claim experience, health status or duration since issue.13
A. Every health insurance issuer shall file with the department every14
proposed rate to be used in connection with all of its particular products. Every15
such filing shall clearly state the date of the filing, the proposed rate, and the16
effective date of the proposed rate. All filings for rate increases pursuant to the17
federal review threshold and reporting threshold shall be in accordance with18
any and all federal requirements. All rate filings required by this Subpart shall19
be made in accordance with the following:20
(1) Rate filings shall be made no less than one hundred five days in21
advance of the proposed effective date unless otherwise waived by the22
department.23
(2) All health insurance issuers assuming, merging, or acquiring blocks24
of business shall be considered as proposing new rates.25
B. All proposed rate filings shall include:26
(1) A completed Unified Rate Review Template, a Rate Filing27
Justification, and all rating tables used by the health insurance issuer in the28
formation of the proposed rates.29 SB NO. 126
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(2) Any other information, documents, or data requested by the1
department or by the United States Department of Health and Human Services.2
C. When a rate filing made pursuant to this Subpart is not accompanied3
by the information upon which the health insurance issuer supports the rate4
filing, with the result that the department does not have sufficient information5
to determine whether the rate filing meets the requirements of this Subpart, the6
department may require the health insurance issuer to re-file the information7
upon which it supports its filing. The time period provided in this Section shall8
begin anew and commence as of the date the proper information is furnished to9
the department.10
D. All proposed rate filings shall be reviewed for compliance with R.S.11
22:1095. Any proposed rate filings that are not in compliance with R.S. 22:109512
shall not be approved.13
E. All rate filings shall be reviewed by the department to determine14
whether such filing is reasonable and compliant with this Subpart.15
F. The department shall consider the following criteria to determine16
whether rates are unreasonable:17
(1) The rate is excessive.18
(2) The rate is unfairly discriminatory.19
(3) The rate is unjustified.20
(4) The rate does not otherwise comply with the provisions of this21
Subpart.22
G. The review of any proposed rate may take into consideration the23
following non-exhaustive list of factors and any other factors established by24
rule, regulation, directive, or guidance by the United States Department of25
Health and Human Services, to the extent applicable, to determine whether the26
filing under review is unreasonable:27
(1) The impact of medical trend changes by major service categories.28
(2) The impact of utilization changes by major service categories.29 SB NO. 126
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(3) The impact of cost-sharing changes by major service categories.1
(4) The impact of benefit changes.2
(5) The impact of changes in an insured's risk profile.3
(6) The impact of any overestimate or underestimate of medical trend for4
prior year periods related to the rate increase, if applicable.5
(7) The impact of changes in reserve needs.6
(8) The impact of changes in administrative costs related to programs7
that improve health care quality.8
(9) The impact of changes in other administrative costs.9
(10) The impact of changes in applicable taxes or licensing or regulatory10
fees.11
(11) Medical loss ratio.12
(12) The financial performance of the health insurance issuer, including13
capital and surplus levels.14
H. Within fifteen days of submission of any proposed rate increase which15
meets or exceeds the federal review threshold, the department shall publish on16
its website Parts I, II, and III, of each Rate Filing Justification, except the17
portions which are deemed proprietary information by the commissioner, or18
any other documents or forms as otherwise required by federal law, rule, or19
regulation to maintain an effective rate review program. After publication, the20
public shall have thirty days to submit comments.21
I. The commissioner shall disapprove a proposed rate filing if he finds22
the rate is unreasonable. The department shall notify the health insurance23
issuer in writing whether it approves or disapproves a proposed rate filing.24
Such notice shall be given in writing and be made within sixty days of the filing.25
If the department disapproves a proposed rate filing, then the written notice26
shall clearly state the reasons why such proposed rate filing was disapproved.27
J. For any rate increase that meets or exceeds the federal review28
threshold, the department shall, upon request by the United States Department29 SB NO. 126
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of Health and Human Services, provide its final determination with respect to1
unreasonableness to the Centers for Medicare and Medicaid Services in a2
manner and form prescribed along with a brief explanation of the final3
determination. The department shall post a notice of the final determination4
on its website.5
K. A health insurance issuer may implement a proposed new rate filing6
approved by the department upon approval and proposed rate increases no7
sooner than forty-five days after the written approval in order for the insured8
to be notified pursuant to R.S. 22:1093. Any rate filing approved by the9
department shall be implemented within ninety days of notice of approval. Any10
rate or rates not implemented within ninety days of notice of approval shall be11
void and any health insurance issuer seeking to implement the rate or rates12
thereafter shall be required to file a new rate filing in compliance with this Part.13
L. Any aggrieved health insurance issuer may file a petition seeking a de14
novo judicial review within thirty days with the Nineteenth Judicial District15
Court.16
M. Rate filings made by health insurance issuers under this Section shall17
be subject to the Public Records Law, R.S. 44:1 et seq., and the restrictions on18
health information under R.S. 22:42.1. The department shall publish for public19
comment a summary of the rate increases and written justification of the same,20
which do not constitute proprietary or trade secret information.21
§1093. Disclosure of rating practices and renewability provisions for insureds22
A. Each carrier health insurance issuer shall make reasonable disclosure in23
solicitation and sales materials provided to small employers insureds of the24
following:25
(1) The extent to which premium rates for a specific small employer are26
established or adjusted due to the claim claims experience, health status or duration27
of coverage of the employees or dependents of the small employer within the entire28
risk pool.29 SB NO. 126
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(2) The provisions concerning the carrier's health insurance issuer's right1
to change premium vary rates and the from the index rate through allowable2
factors, including case characteristics, and allowable adjustments which affect3
changes in premium rates and the provisions concerning the health insurance4
issuer's right to vary premiums in accordance with R.S. 22:1095.5
(3) A description of the class of business in which the small employer is or6
will be included, including the applicable grouping of plans.7
(4) (3) The provisions relating to renewability of coverage.8
B. Each carrier health insurance issuer shall provide its insureds with a9
written notice, and reasonable explanation and justification, including the10
contributing factors for the rate increase, of for any rate increase no less than11
forty-five days prior to the effective date of such increase. Such explanation shall12
indicate the contributing factors resulting in an increased premium, which may13
include but not be limited to experience, medical cost, and demographic factors.14
§1094. Maintenance of records for the department15
A. Each small employer carrier health insurance issuer shall maintain at its16
principal place of business a complete and detailed description of its rating practices17
and renewal underwriting description of its rating practices and renewal underwriting18
practices, including information and documentation which demonstrate that its rating19
methods and practices are based upon commonly accepted actuarial assumptions and20
are in accordance with sound actuarial principles and the rules and regulations of21
the department.22
B. Each small employer carrier health insurance issuer shall file each March23
first with the commissioner department an actuarial certification that the carrier24
health insurance issuer is in compliance with this Section Subpart and that the25
rating methods of the carrier health insurance issuer are actuarially sound. A copy26
of such certification shall be retained by the carrier health insurance issuer at its27
principal place of business.28 SB NO. 126
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C. A small employer carrier health insurance issuer shall make the1
information and documentation described in Subsection A of this Section available2
to the commissioner department for inspection upon request. The information3
shall be considered proprietary and trade secret information and shall not be subject4
to disclosure by the commissioner department to persons outside of the department5
except as agreed to by the carrier health insurance issuer or as ordered by a court6
of competent jurisdiction, and shall not be subject to disclosure under the Public7
Records Law.8
§1095. Modified community rating; health insurance premiums; compliance with9
rules and regulationsRating factors; risk pools; individual market10
plan and calendar year requirement11
A. Each small group and individual health and accident insurer shall maintain12
at its principal place of business a complete and detailed description of its rating13
practices and a renewal underwriting description of its rating practices and renewal14
underwriting practices, including information and documentation which demonstrate15
that its rating methods and practices are in full and complete compliance with the16
rules and regulations promulgated by the Department of Insurance for a modified17
community rating system for health insurance premiums.18
B.(1) The Department of Insurance shall promulgate regulations no later than19
January 1, 1994, that provide criteria for the community rating of premiums for any20
hospital, health, or medical expense insurance policy, hospital or medical service21
contract, health and accident policy or plan, or any other insurance contract of this22
type, that is small group or individually written.23
(2)(a) The regulations shall place limitations upon the following classification24
factors used by any insurer or group in the rating of individuals and their dependents25
for premiums:26
(i) Medical underwriting and screening.27
(ii) Experience and health history rating.28
(iii) Tier rating.29 SB NO. 126
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(iv) Durational rating.1
(b) The premiums charged shall not deviate according to the classification2
factors in Subparagraph (a) of this Paragraph by more than plus or minus thirty-three3
percent for individual health insurance policies or subscriber agreements. In no event4
shall the increase in premiums for a small employer group policy vary from the5
index rate by plus or minus thirty-three percent.6
(3) The following classification factors may be used by any small group or7
individual insurance carrier in the rating of individuals and their dependents for8
premiums:9
(a) Age.10
(b) Gender.11
(c) Industry.12
(d) Geographic area.13
(e) Family composition.14
(f) Group size.15
(g) Tobacco usage.16
(h) Plan of benefits.17
(i) Other factors approved by the Department of Insurance.18
C. Any small group and individual insurance carrier that varies rates by19
health status, claims experience, duration, or any other factor in conflict with the20
regulations promulgated by the Department of Insurance shall establish a phase-out21
rate adjustment as of the first renewal date on or after January 1, 2002, for each22
entity insured by the carrier in order to come into compliance with this Section23
pursuant to the regulations promulgated by the Department of Insurance.24
D. The provisions of this Section shall not apply to limited benefit health25
insurance policies or contracts.26
A. Health insurance issuers may vary premiums with respect to a27
particular insured's health benefit plan, whether new or upon renewal, in the28 SB NO. 126
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individual or small group market only based on one or more of the following1
factors:2
(1) Whether such product or coverage covers an individual or family.3
(2) Geographic rating area, as established in accordance with this4
Section.5
(3) Age, except that such variation shall be no more than three-to-one for6
adults.7
(4) Tobacco use as defined in 45 C.F.R. 147.102 or any subsequent8
federal law, rule, regulation, directive, or guidance issued by the United States9
Department of Health and Human Services, except that such rate shall not vary10
by more than one- and one-half-to-one.11
B. Every health insurance issuer in this state shall maintain a single,12
separate, and distinct risk pool for the individual market and a single, separate,13
and distinct risk pool for the small group market. Health insurance issuers of14
student health plans shall maintain a single, separate, and distinct risk pool for15
student health plans.16
C. With respect to coverage issued to members within a family under a17
small group plan, the rating variations permitted under Paragraphs (A)(3) and18
(4) of this Section must be attributed, to the extent they are used, to each19
member to which those factors apply, and may only do so as permitted by20
federal law, rule, regulation, directive, or guidance by the United States21
Department of Health and Human Services.22
D. With respect to health insurance coverage in the individual market,23
on January 1, 2014, every health insurance policy in the individual market must24
be based upon a calendar year with coverage commencing on January first of25
each year. Any exceptions or modifications of any kind to the calendar year26
requirement through rule, regulation, directive, or guidance by the United27
States Department of Health and Human Services shall also apply to health28
insurance issuers under this Section.29 SB NO. 126
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E. The department shall determine the geographic rating area or areas1
in this state by rule, regulation, bulletin, or any mechanism made available by2
the United States Department of Health and Human Services.3
F. Any rate proposed to be used by a health insurance issuer shall be4
submitted and controlled by this Subpart.5
§1096. Health and accident insurers; rate increases Regulations; anti-preemption6
provision7
Health and accident insurers shall not increase their premium rates during the8
initial twelve months of coverage and not more than once in any six-month period9
following the initial twelve-month period, for any policy, rider, or amendment issued10
in or for residents of the state, no matter the date of commencement or renewal of the11
insurance coverage except that no health insurance issuer or health maintenance12
organization issuing group or individual policies or subscriber agreements shall13
increase its premium rates or reduce the covered benefits under the policy or14
subscriber agreement after the commencement of the minimum one-hundred-eighty-15
day period described in R.S. 22:1068(C)(2)(a)(i) or 1074(C)(2)(a)(i). This Section16
does not affect increases in the premium amount due to the addition of a newly17
covered person or a change in age or geographic location of an individual insured or18
policyholder or an increase in the policy benefit level.19
A. The commissioner may promulgate such rules and regulations as may20
be necessary and proper to carry out the provisions of this Part. Such rules and21
regulations shall be promulgated and adopted in accordance with the22
Administrative Procedure Act.23
B. If at any time a provision of this Part is in conflict with federal law or24
regulations promulgated pursuant to federal law, such a provision shall be25
preempted only to the extent necessary to avoid direct conflict with federal law26
or regulations. The commissioner shall subsequently administer and enforce27
the provisions of this Part in a manner that conforms to federal law or28
regulations, and if necessary to preserve the department's regulatory authority29 SB NO. 126
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or if necessary to effectively enforce the provisions of this Part, the1
commissioner may promulgate rules or regulations to that effect, and may issue2
directives or bulletins on a provisional basis before such rules or regulations3
take effect. Such provisional basis for the issuance of directives or bulletins4
under this Section shall not exceed a period of one year.5
§1097. Discrimination in rates or failure to provide coverage because of severe6
disability or sickle cell trait prohibited Enforcement7
A. No insurance company shall charge unfair discriminatory premiums,8
policy fees or rates for, or refuse to provide any policy or contract of life insurance,9
life annuity, or policy containing disability coverage for a person solely because the10
applicant therefor has a severe disability, unless the rate differential is based on11
sound actuarial principles or is related to actual experience. No insurance company12
shall unfairly discriminate in the payments of dividends, other benefits payable under13
a policy, or in any of the terms and conditions of such policy or contract solely14
because the owner of the policy or contract has a severe disability.15
B. "Severe disability", as used in this Section, means any disease of, or injury16
to, the spinal cord resulting in permanent and total disability, amputation of any17
extremity that requires prosthesis, permanent visual acuity of twenty/ two hundred18
or worse in the better eye with the best correction, or a peripheral field so contracted19
that the widest diameter of such field subtends an angular distance no greater than20
twenty degrees, total deafness, inability to hear a normal conversation or use a21
telephone without the aid of an assistive device, or persons who have developmental22
disabilities, including but not limited to autism, cerebral palsy, epilepsy, mental23
retardation, and other neurological impairments.24
C. Nothing in this Section shall be construed as requiring an insurance25
company to provide insurance coverage against a severe disability which the26
applicant or policyholder has already sustained.27
D. No insurance company shall charge unfair discriminatory premiums,28
policy fees or rates for, or refuse to provide any policy or contract of life insurance,29 SB NO. 126
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life annuity, or policy containing disability coverage for a person solely because the1
applicant therefor has sickle cell trait. No insurance company shall unfairly2
discriminate in the payments of dividends, other benefits payable under a policy, or3
in any of the terms and conditions of such policy or contract solely because the4
insured of the policy of contract has sickle cell trait. Nothing in this Subsection shall5
prohibit waiting periods, pre-existing conditions, or dreaded disease rider exclusions,6
or any combination thereof, if they do not unfairly discriminate.7
A. Whenever the commissioner has reason to believe that any health8
insurance issuer is not in compliance with any of the provisions of R.S. 22:10919
et seq., excluding disapproval by the commissioner as provided in R.S.10
22:1092(C) and (G), he shall notify such health insurance issuer. Upon such11
notice, the commissioner may, in addition to the penalties in Subsection C of12
this Section, issue and cause to be served upon such health insurance issuer an13
order requiring the health insurance issuer to cease and desist from any14
violation.15
B. Any health insurance issuer who violates a cease and desist order16
issued by the commissioner pursuant to this Subpart while such order is in17
effect shall be subject to any one or more of the following at the commissioner's18
discretion:19
(1) A monetary penalty of not more than twenty-five thousand dollars for20
each and every act or violation and every day the health insurance issuer is not21
in compliance with the cease and desist order, not to exceed an aggregate of two22
hundred fifty thousand dollars for any six-month period.23
(2) Suspension or revocation of the health insurance issuer's certificate24
of authority to operate in this state.25
(3) Injunctive relief from the district court of the district in which the26
violation may have occurred or in the Nineteenth Judicial District Court.27
C. As a penalty for violating this Subpart, the commissioner may refuse28
to renew, or may suspend or revoke the certificate of authority of any health29 SB NO. 126
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insurance issuer, or in lieu of suspension or revocation of a certificate of1
authority, the commissioner may levy a monetary penalty of not more than one2
thousand dollars for each and every act or violation, not to exceed an aggregate3
of two hundred fifty thousand dollars.4
D. An aggrieved party affected by the commissioner's decision, act, or5
order may demand a hearing in accordance with Chapter 12 of this Title, R.S.6
22:2191 et seq., except as otherwise provided by this Subpart. If a health7
insurance issuer has demanded a timely hearing, the penalty, fine, or order by8
the commissioner shall not be imposed until such time as the Division of9
Administrative Law makes a finding that the penalty, fine, or order is10
warranted in a hearing, held in the manner provided in Chapter 12 of this Title.11
§1098. Frequency of rate increase limitations12
A. The following rate increase limitations shall apply to all health benefit13
plans, limited benefits, and excepted benefits:14
(1) Health insurance issuers of limited benefits and excepted benefits15
policies shall not increase rates during the initial twelve months of coverage,16
and may not do so more than once in any six-month period following the initial17
twelve-month period.18
(2) Health insurance issuers shall not increase rates for policies or plans19
in the individual market during the plan year. Rate increases for policies or20
plans in the individual market may only occur upon renewal or upon21
commencement of the policy or plan year.22
(3) Rates for policies or plans in the small group market shall not23
increase during the initial twelve months of coverage unless such increases were24
previously filed, reviewed, and approved in conformity with this Subpart at the25
commencement of the policy or plan, and are implemented on a quarterly basis.26
(4) With respect to the limitation on rate increases in the small group27
market, if health insurance issuers are permitted by federal law or regulations28
to increase rates without including such increases in the initial filing of the29 SB NO. 126
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Uniform Rate Review Template and the Rate Filing Justification, such rate1
increases shall be permitted for health insurance issuers in the small group2
market in this state, but only to the extent allowed by such federal law or3
regulations. Any such allowable rate increases under this Section must be4
submitted to the department for review and approval pursuant to the provisions5
of this Subpart.6
B. No health insurance issuer issuing policies or subscriber agreements7
shall increase its rates or reduce the covered benefits under the policy or8
subscriber agreement after the commencement of the minimum one hundred9
eighty-day period following the notice of the discontinuation of offering all10
health insurance coverage as described in R.S. 22:1068(C)(2)(a)(i) or11
1074(C)(2)(a)(i).12
C. This Section shall not affect increases in the premium amount due to13
any change due to compliance with the addition of a newly covered person or14
policy benefit level, or such changes necessary to comply with R.S. 22:1095 or15
other federal or state law, regulation, or rule.16
§1099. Discrimination in rates or failure to provide coverage because of severe17
disability or sickle cell trait prohibited18
A. No insurance company shall charge unfair discriminatory premiums,19
policy fees or rates for, or refuse to provide any policy or contract of life20
insurance, life annuity, or policy containing disability coverage for a person21
solely because the applicant therefor has a severe disability, unless the rate22
differential is based on sound actuarial principles or is related to actual23
experience. However, health insurance issuers subject to this Subpart may not,24
regardless of actuarial principles or actual experience, unfairly discriminate in25
violation of this Subpart or federal law. No insurance company shall unfairly26
discriminate in the payments of dividends, other benefits payable under a27
policy, or in any of the terms and conditions of such policy or contract solely28
because the owner of the policy or contract has a severe disability.29 SB NO. 126
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words in boldface type and underscored are additions.
B. "Severe disability", as used in this Section, means any disease of or1
injury to the spinal cord resulting in permanent and total disability, amputation2
of any extremity that requires prosthesis, permanent visual acuity of twenty/two3
hundred or worse in the better eye with the best correction, or a peripheral field4
so contracted that the widest diameter of such field subtends an angular5
distance no greater than twenty degrees, total deafness, inability to hear a6
normal conversation or use a telephone without the aid of an assistive device,7
or any developmental disability, including but not limited to autism, cerebral8
palsy, epilepsy, mental retardation, and other neurological impairments.9
C. No insurance company, including health insurance issuers subject to10
this Subpart, shall charge unfair discriminatory premiums, policy fees, or rates11
for, or refuse to provide any policy, subscriber agreement, or contract of life12
insurance, life annuity, or policy containing disability coverage for a person13
solely because the applicant therefor has sickle cell trait. No insurance14
company, including health insurance issuers subject to this Subpart, shall15
unfairly discriminate in the payments of dividends, other benefits payable16
under a policy, or in any of the terms and conditions of such policy or contract17
solely because the insured of the policy of contract has sickle cell trait. Nothing18
in this Subsection shall prohibit waiting periods, pre-existing conditions, or19
dreaded disease rider exclusions, or any combination thereof, as may be20
permitted by federal law.21
Section 2. R.S. 44:4.1(B)(11) is hereby amended and reenacted to read as follows:22
§4.1. Exceptions23
* * *24
B. The legislature further recognizes that there exist exceptions, exemptions,25
and limitations to the laws pertaining to public records throughout the revised26
statutes and codes of this state. Therefore, the following exceptions, exemptions, and27
limitations are hereby continued in effect by incorporation into this Chapter by28
citation:29 SB NO. 126
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* * *1
(11) R.S. 22:2, 14, 42.1, 88, 244, 461, 572, 572.1, 574, 618, 706, 732, 752,2
771, 1092, 1094, 1203, 1460, 1466, 1546, 1644, 1656, 1723, 1927, 1929, 1983, 1984,3
2036, 23034
* * *5
Section 3. The provisions of R.S. 22: 821(B)(34), as amended by Section 1 of this6
Act, shall become effective upon signature by the governor or, if not signed by the governor,7
upon expiration of the time for bills to become law without signature by the governor, as8
provided by Article III, Section 18 of the Constitution of Louisiana. If vetoed by the9
governor and subsequently approved by the legislature, this Act shall become effective on10
the day following such approval.11
Section 4. The provisions of R.S. 22: 972, 1091 through 1097, and R.S. 44:4.1, all12
as amended by Section 1 of this Act, and R.S. 22:1098 and 1099 as enacted in Section 1 of13
this Act, shall become effective on January 1, 2014. 14
The original instrument and the following digest, which constitutes no part
of the legislative instrument, were prepared by Cheryl Horne.
DIGEST
Proposed law requires the commissioner of insurance to collect a $100 fee for new rate
filings for insurance issuers and $150 for rate changes.
Present law provides for approval and disapproval of health and accident insurance forms
and policies by the commissioner of insurance.
Proposed law retains present law and increases the time for the use of forms from 45 days
to 60 days after filing. Requires written notification to be provided to the health insurance
issuer specifying the reasons a policy form or subscriber agreement does not comply with
the provisions of proposed law. Provides that it shall be unlawful for any health insurance
issuer to issue any form not previously submitted to and approved by the department.
Present law provides rate limitations for health benefit plans for small employers and
individuals. Provides for rating factors and sets allowable percentages of annual increases.
Requires each small group and individual health and accident insurer to make reasonable
disclosure of rates to small employers and provides required content of each disclosure.
Provides that when a rate increase occurs, the insurer shall provide a reasonable explanation
of the increase. Also requires each insurer to maintain records of its rating practices and to
certify to the commissioner that it is in compliance with the rating requirements. Prohibits
health and accident insurers from increasing their premiums except as provided in present
law. Excludes group and individual high deductible health plans from the rate limitations
and requirements. SB NO. 126
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words in boldface type and underscored are additions.
Proposed law makes rate review and approval requirements applicable to health benefit plans
which provide coverage in the large group market in addition to the small group and
individual markets. Requires each health benefit plan to file a copy of its rates with all
insurance policy forms. The commissioner shall review rates and may only disapprove
proposed rate increases that meet the statutory definition of unreasonable. Provides that
certain rating restrictions shall become effective on January 1, 2014, including limiting
variations on health insurance premiums to variations based on whether the insured is an
individual or member of a family group, on the age of the insured, by geographic region, and
whether the insured uses tobacco products. Prohibits insurers from using the health status
of the insured in the calculation of rates. Provides for fees for proposed rate filings and rate
changes. Lists and identifies those benefits not subject to the requirements. Additionally,
subjects HMOs and any entity that offers health insurance coverage through a policy,
certificate, or subscriber agreement to proposed rating law. Requires rate filings with the
department, made under certain time lines, subject to certain filing fees, and containing
required information in prescribed, standardized formats. Requires that any such filings that
contain rate increases beyond a specific threshold must be published for public comment.
Exempts certain information submitted in required filings from the Public Records Law.
Present law allows health insurers to create and maintain separate risk pools through closed
blocks of business or classes of business.
Proposed law prohibits the maintenance of separate risk pools. Requires all health insurance
issuers to maintain a single, state-wide risk pool in each of the following markets: small
group, individual, and student health plans.
Proposed law provides that if the commissioner determines that any health insurance issuer
is not in compliance with the rate review provisions, he may issue penalties or cease and
desist orders. Provides monetary penalties for violations of cease and desist orders.
Authorizes the commissioner to revoke, suspend, or non-renew a certificate of authority of
any health insurance issuer for noncompliance. Permits any aggrieved health insurance
issuer the opportunity to seek a judicial review of the commissioner's decisions on certain
decisions.
Proposed law requires that on January 1, 2014, every individual health insurance policy or
plan year must be for a period of one year, and must commence on January 1, 2014.
Prohibits any rate increases in the individual market during the course of the policy or plan
year. Requires health insurance issuers to file an actuarial certification that such issuers use
actuarially sound methods and are in compliance with applicable laws.
Present law prohibits unfair discrimination in rates or failure to provide life, life annuity, or
disability coverage because of severe disability or sickle cell trait.
Proposed law retains present law and prohibits such unfair discrimination by health
insurance issuers.
Fee scheduled for rate filings effective upon signature of the governor or lapse of time for
gubernatorial action. All other provisions become effective on January 1, 2014.
(Amends R.S. 22:972, 1091 through 1097 and R.S. 44:4.1(B)(11); adds R.S. 22:821(B)(34),
1098, and 1099)