Bulletin 2011-11 New Rate Filing Procedures to Comply with 45 CFR Part 154

FROM: David Blac Director I BULLETIN NUIVIBER 2011-11 NIKKI R~ HALEY Governor I>A\11) BLACK SUBJECT: New Rate Filing Procedures to Comply with C.F.R. Part l as Promulgated by the Center Consumer Information and Insurance Oversight and Centers for Medicare & Medicaid Services (CMS) of the United States Department of Health and Human Services (HHS) as amended by CMS on September 6, 2011 DATE: October 18. 20 II I. PURPOSE The purpose of this bulletin is to inform South Carolina health insurance issuers of the new rate requirements and filing procedures that the Department is adopting to comply with 45 C.F.R. Part 154 as amended on September 6, 2011, and the related additional reporting requirements that must be met prior to implementing rate increases for association coverage issued or extended to residents of South Carolina. The Department is requiring this additional information in accordance with the Director's authority under South Carolina Code of Laws sections 38-13-160 and 38-71-750. This bulletin supersedes and replaces any and all other bulletins which did not require the submission of rate filings by associations or trusts. II. BACKGROUND AND DEFINITIONS issued to rate through an Group coverage marketed employers will be regulated as small group health insurance Further, the terms "health insurance issuers," "health insurance coverage," "small group market" and "individual market" shall have the meaning set forth in the Affordable Care Act ("ACA"). III. APPLICABILITY AND SCOPE On September 6, 2011, CMS amended the definitions of individual and small group markets in 45 C.F.R. §I I 03 to read as follows: Individual market has the meaning given the term under the applicable State's rate tiling laws, except that: (1) Where State law does not define the term, it has the meaning given in section 2791(e)(l)(A) ofthe PHS Act; and (2) Coverage that would be regulated as individual market coverage (as defined in section 279l(e)(l)(A)) if it were not sold through an association is subject to rate review as individual market coverage. has the meaning under the applicable rate filing laws, will product product IS through IV. ADDITIONAL REPORTING REQUIREMENTS At least 90 days in advance of the anticipated rate increase effective date for association coverage, all health insurance issuers shall submit the following information: (1) Rate Increase Summary (Part I), as described in 45 C.F.R §154.215 (e). The rate increase summary should be submitted in the standard excel format as provided by HHS. (3) Rate Filing Documentation (Part Ill), as set forth in 45 C.F.R. § 154.215 (g). The Department will use this information to evaluate the proposed rate increase and to make a determination as to whether the rate increase is unreasonable in accordance \\'ith the standards set forth in §38-71-310(8) for the individual market and §38-71-970 for the small group market The evaluation will include. but will not be limited to. an examination of the following: ( 1) The reasonableness of the the proposed rate llTH"\Tlf'lrlC' and • • used by the health insurance issuer to develop and the validity of the historical data underlying the to • • • • • • • • • • capital surplus Health insurance conducting these must submit any additional information required by the Department in All tllings and other submissions must be filed through the SERFF system. In addition to noting that the tlling is a rate increase tor association health insurance insurers must provide the following information tor each filing: • An indication as to whether the coverage is "Open" or "Closed" for new enrollees; • An indication as to whether the coverage is sold in the "Individual" market or the "Small Group" market; • If the coverage is sold in both the Individual market and the small group market, then the tlling should indicate that it is sold in both markets and be labeled as "Small Group": The Department will provide a link to the information contained in Parts I and II of the Preliminary Justitlcations for proposed rate increases that CMS makes available to the public on its website. Further, the Department will establish a dedicated electronic mailbox as a mechanism tor receiving public comments on those proposed rate increases. V. FILING INFORMATION Department shall VL EFFECTIVE DATE VIL QUESTIONS to: Andrew M. South Carolina Department 1 Suite 1