513B.4 Restrictions relating to the premium rates. 1. Premium rates for health benefit plans subject to this subchapter are subject to the following requirements: a. 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. b. 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 rateswhich could be charged to such employers under the rating system for that class of business,shall not vary from the index rate by more than twenty-five percent of the index rate. c. The percentage increase in the premium rate charged to a small employer for a new rating period shall not exceed the sum of the following: (1) 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 ofbusiness for which the small employer carrier is not issuing new policies, the small employercarrier shall use the percentage change in the base premium rate, provided that the changedoes not exceed, business for which the small employer carrier is not issuing new policies, the small employercarrier shall use the percentage change in the base premium rate, provided that the changedoes not exceed, on a percentage basis, the change in the new business premium rate forthe most similar health insurance coverage into which the small employer carrier is activelyenrolling new insureds who are small employers. (2) An adjustment, not to exceed fifteen percent annually and adjusted pro rata for rating periods of less than one year, due to the claim experience, health status, or durationof coverage of the employees or dependents of the small employer as determined from thesmall employer carrier’s rate manual for the class of business. (3) Any adjustment due to change in coverage or change in the case characteristics of the small employer as determined from the small employer carrier’s rate manual for the class ofbusiness. d. Any adjustment in rates for claims experience, health status, and duration of coverage shall not be charged to individual employees or dependents. Any such adjustment shallbe applied uniformly to the rates charged for all employees and dependents of the status, and duration of coverage shall not be charged to individual employees or dependents. Any such adjustment shallbe applied uniformly to the rates charged for all employees and dependents of the smallemployer. 2. a. This section does not affect the use by a small employer carrier of legitimate rating factors other than claim experience, health status, or duration of coverage in thedetermination of premium rates. Small employer carriers shall apply rating factors, including case characteristics, consistently with respect to all small employers in a class ofbusiness. b. Case characteristics other than age, geographic area, family composition, and group size shall not be used by a small employer carrier without the prior approval of thecommissioner. c. Rating factors shall produce premiums for identical groups which differ only by amounts attributable to coverage design and do not reflect differences due to the natureof the groups assumed to select particular health benefit plans. A small employer carriershall treat all health insurance coverages issued or renewed in the same calendar month ashaving the same rating period. 3. assumed to select particular health benefit plans. A small employer carriershall treat all health insurance coverages issued or renewed in the same calendar month ashaving the same rating period. 3. For purposes of this section, a health insurance coverage that contains a restricted network provision shall not be considered similar coverage to a health insurance coveragethat does not contain such a provision, if the restriction of benefits to network providersresults in substantial differences in claims costs. 4. A small employer shall not be involuntarily transferred by a small employer carrier into or out of a class of business. A small employer carrier shall not offer to transfer asmall employer into or out of a class of business unless the offer is made to transfer all smallemployers in the class of business without regard to case characteristics, claim experience,health status, or duration since issue. 5. Notwithstanding subsection 1, the commissioner, with the concurrence of the board of the Iowa small employer health reinsurance program established in section 513B.13, may byorder reduce or eliminate the allowed rating bands provided under subsection 1, paragraphs'a', 'b', e board of the Iowa small employer health reinsurance program established in section 513B.13, may byorder reduce or eliminate the allowed rating bands provided under subsection 1, paragraphs'a', 'b', and 'c', or otherwise limit or eliminate the use of experience rating. Sat Dec 23 00:43:37 2023 Iowa Code 2024, Section 513B.4 (19, 0) §513B.4, SMALL GROUP HEALTH COVERAGE 2 6. Notwithstanding subsection 4, a small employer carrier may offer to transfer a small employer into a different class of business with a lower index rate based upon claimsexperience, implementation of managed care or wellness programs, or health statusimprovement of the small employer since issue. 91 Acts, ch 244, §4; 92 Acts, ch 1167, §3 – 7; 93 Acts, ch 80, §4; 94 Acts, ch 1176, §10 – 12; 97 Acts, ch 103, §14 – 17; 2001 Acts, ch 69, §14, 15, 39; 2002 Acts, ch 1111, §13; 2007 Acts, ch57, §6, 8; 2012 Acts, ch 1023, §157 Referred to in §513B.2, 513B.4A, 513B.13, 513B.17 Sat Dec 23 00:43:37 2023 Iowa Code 2024, Section 513B.4 (19, 0)
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