Health Insurance Rate Filing Submission Guidelines

STATE OF CONNECTICUT INSURANCE DEPARTMENT BULLETIN NO. HC-81-17 MARCH 2, 2017 TO: ALL INSURANCE COMPANIES, FRATERNAL BENEFIT SOCIETIES, HOSPITAL SERVICE CORPORATIONS, MEDICAL SERVICE CORPORATIONS AND HEALTH CARE CENTERS THAT DELIVER OR ISSUE INDIVIDUAL AND GROUP HEALTH INSURANCE POLICIES IN CONNECTICUT RE: HEALTH INSURANCE RATE FILING SUBMISSION GUIDELINES This notice sets forth the requirements for all rate filing submissions made to the Insurance Department ("Department") pursuant to sections 38a-183, 38a-208, 38a-218 and 38a-481 ofthe Connecticut General Statutes as well as the rate filings, including small group indemnity rate filings, that must be filed with the Department pursuant to the requirements ofthe rate review regulations promulgated by the US Department ofHealth and Human Services ("HHS") pursuant to the Patient and Protection Act, P.L. 111-148, as amended ("PPACA"). A rate filing must accompany the forms approved by HHS to report unreasonable rate increases and will serve as the basis to determine ifthe unreasonable rates are justified. In accordance with the HHS fmal regulations at 45 CFR, Part 154, the company must provide a preliminary justification that consists ofa Rate Increase Summary (Part I) and a written description justifying the rate increase (Part II) that is consistent with 45 CFR §154.215. Filing Requirements While multiple market segments can be filed in one rate filing submission, the Department requests that the carrier include separate filings for each market segment (individual, small group and large group) that comply with the following information to assist the Department in its actuarial review: • A cover letter describing all policy forms affected by the requested rate change as well as the effective date ofthe requested rate change. • Historical experience from inception-to-date, this includes earned premium, paid claims, incurred claims, members, actual loss ratios and expected loss ratios (annual experience is appropriate for all years; monthly experience for the most recent two years). • A demonstration that the experience data submitted is consistent with the most recent financial statement filed with the Department pursuant to section 38a-53a ofthe Connecticut General Statutes. • Unit cost trend by broad service category, including actual unit cost data and impact ofprovider contract changes from experience period to rating period (medical and prescription drug separately). • Utilization trend by broad service category, including utilization data. • Impact ofcost sharing leverage on trend. • Medical technology trend. • Benefit buy-down analysis and impact on trend. www.ct.gov/cid P.O. Box 816 • Hartford, CT 06142-0816 An EQual Opportunity Employer • Cost ofeach new benefit mandate or requirement due to change in law, separately identified, from the experience period to the rating period. This includes requirements ofboth state and federal law. • A list ofeach component ofPPACA that impacted premium and the actual impact used in pricing for each component. • A comparison ofthe proposed retention charge in the filing to the most recently filed statutory fmancial statement for the regulated entity for which this filing is being made. • Claim lag triangles. • The current capital and surplus for the regulated entity for which this filing is being made. • A demonstration that the increase requested in this rate filing will generate an expected medical loss ratio, for rebate purposes, that is consistent with the 80% prescribed by the federal law for individual health insurance and small group or 85% for large group, whichever applies to this rate filing. • Actuarial certification signed by a Member ofthe American Academy ofActuaries (MAAA). • Any additional information the Commissioner deems necessary for the review ofrates. In addition, carriers filing individual or small group rates must identify all estimates ofwhich they are aware, ofthe risk adjustment transfer amount (paid or received) for the previous rating year. This should include the date ofall estimates received, the source ofthose estimates, and the actual pmpm amounts. Once the risk adjustment report is published by CCIIO, the Insurance Department will request rate adjustments ifdeemed necessary and will finalize the rate filing review. Only those changes requested by the Department will be allowed. All rate filings must be submitted via the National Association ofInsurance Commissioners System for Electronic Rate and Form Filings (SERFF). All fields in SERFF added for reporting requirements to HHS in accordance with PP ACA must be populated. Incomplete submissions may be rejected. In addition, carriers should submit the Uniform Rate Review Template (URRT), the Part III Actuarial Memorandum and the HIOS rate tables in a PDF format. Carriers should also provide a summary ofbenefits for each plan design along with the Actuarial Value calculator output that confirms compliance with the corresponding metal tier (see attached example). Indicate the HIOS plan ID and the corresponding plan name on the summary ofbenefits for each plan. Any changes submitted after the initial filing should include a red-lined version as well as a clean copy to facilitate the review. For new products other than policies subject to the requirements ofPPACA, the rates should be filed with the form filing in one submission using the Filing Type FORMIRA TE. Policies subject to PPACA should file separate submissions for form and rate filings for new products or amendments. Rate increases should be filed as a separate rate filing submission for all products. Every rate filing submission that includes an increase ofpreviously approved rates shall include a summary ofthe rate increases requested and should be clearly marked as Appendix A. The appendix should include the following, but not be limited to: • The requested increase for each product contained within the rate filing and the effective date ofthose proposed rate increases. The requested increase for each product should be identified as a specific percent increase or ifappropriate a range ofpercent increases with an explanation ofwhat the variance is that produces the range. • Number ofcovered individuals for each product; number ofcovered policyholders; minimum current premium on a per member per month (pmpm) basis; minimum proposed premium on a pmpm basis; maximum current premium on a pmpm basis; maximum proposed premium on a pmpm basis and the percentage change. • Each component ofthe increase including trend, experience adjustments and any other factors that are a component ofthe requested increase. These can be identified as a specific percent or if appropriate a percent range. • A footnote listing any other factors that can have an impact on premium rates that have not been specifically identified in the appendix, including but not limited to age bands, gender, geographic area, smoking, etc. Annual Certifications to be Included as Part of the Rate Filing Carriers must provide a demonstration ofcompliance with mental health parity for each plan that utilizes varying co pays within a service category as allowed in Bulletin HC-1 09. The Final Rules under the Mental Health Parity and Addiction Equity Act of 2008 (MHP AEA) ( 45 CFR Part 146 and 147) provide tests for determining "substantially all" and "predominant" medical/surgical benefits for reviewing the financial requirements and quantitative treatment limitations. Carriers must include demonstrations that each plan utilizing varying copays meets the substantially all and predominant tests. Such demonstration must also include a certification ofcompliance with mental health parity signed by a member ofthe American Academy of Actuaries. After the initial approval, such demonstration and certification must be made annually. Any carrier that substitutes a non-dollar limit on an essential health benefit as permitted by PPACA must file a certification and demonstration that such substitution is actuarially justified. Transparency Pursuant to Conn. Gen. Stat. § 1-21 O(b)(5)(B), the Connecticut Freedom oflnformation Act does not provide for an exemption for commercial or financial information that is required by statute. The information identified above as being required to enable the Department to fulfill its statutory rate review requirement is considered to be information required by statute and therefore, the Department will not grant any requests to hold these filings as confidential. Complete filings including all correspondence and documentation will be posted on the Department website and available for review and comment by the public. All public comments will be reviewed by the Department and considered as an additional element ofthe review determination. Questions Please contact the Insurance Department Life and Health Division at cid.lh@ct. gov with any questions. Katharine L. Wade Insurance Commissioner