MCA Chapter 63

in effect

Miss. Code Ann. § 83-63-1 Application of chapter.

This chapter shall apply to any health benefit plan that provides coverage to the employees of a small employer in this state if any of the following conditions are met: Any portion of the premium or benefits is paid by or on behalf of the small employer; An eligible employee or dependent is reimbursed, whether through wage adjustments or otherwise, by or on behalf of the small employer for any portion of the premium; or The health benefit plan is treated by the employer or any of the eligible employees or dependents as part of a plan or program for the purposes of Section 162, Section 125 or Section 106 of the United States Internal Revenue Code. This chapter shall not apply to an employer whose only role is collecting through payroll deduction the premiums of individual policies on behalf of employees.

Miss. Code Ann. § 83-63-3 Definitions.

For purposes of this chapter, the following terms are defined as follows: “Actuarial certification” means a written statement by a member of the American Academy of Actuaries, or other individual acceptable to the commissioner, that a small employer carrier is in compliance with Section 83-63-7, based upon the person’s examination, including a review of the appropriate records and of the actuarial assumptions and methods used by the small employer carrier in establishing premium rates for applicable health benefit plans. “Base premium rate” means for each class of business as to a rating period, the lowest premium rate charged or which could have been charged under the rating system for that class of business, by the small employer carrier to small employers with similar case characteristics for health benefit plans with the same or similar coverage. “Carrier” means any entity that provides health insurance in this state such as an insurance company; a prepaid hospital or medical service plan; a nonprofit hospital, medical and surgical service corporation; a health maintenance organization; a fully insured multiple employer welfare arrangement; or any other entity providing a plan of health insurance subject to state insurance regulation. “Case characteristics” means demographic or other objective characteristics of a small employer that are considered by the small employer carrier in the determination of premium rates for the small employer, but claim experience, health status and duration of coverage are not case characteristics for the purposes of this chapter. “Class of business” means all or a separate grouping of small employers established pursuant to Section 83-63-5. “Commissioner” means the Commissioner of Insurance. “Eligible employee” means an employee who works on a full-time basis and has a normal work week of thirty-two (32) or more hours. The term includes a sole proprietor, a partner of a partnership and an independent contractor, if the sole proprietor, partner or independent contractor is included as an employee under a health benefit plan of a small employer, but does not include an employee who works on a part-time, temporary or substitute basis. “Established geographic service area” means a geographical area, as approved by the commissioner and based on the carrier’s certificate of authority to transact insurance in this state, within which the carrier is authorized to provide coverage. “Health benefit plan” or “plan” means any hospital or medical policy or certificate, hospital or medical service plan contract, or health maintenance organization subscriber contract. Health benefit plan does not include accident-only, specified disease, credit, dental, vision, Medicare supplement, long-term care, or disability income insurance; coverage issued as a supplement to liability insurance; workers’ compensation or similar insurance; or automobile medical-payment insurance. “Index rate” means for each class of business for small employees with similar case characteristics, the arithmetic average of the applicable base premium rate and the corresponding highest premium rate. “New business premium rate” means for each class of business as to a rating period, the premium rate charged or offered by the small employer carrier to small employers with similar case characteristics for newly issued health benefit plans with the same or similar coverage. “Rating period” means the calendar period for which premium rates established by a small employer carrier are assumed to be in effect. “Small employer” means any person, firm, corporation, partnership or association actively engaged in business which, on at least fifty percent (50%) of its working days during the preceding year, employed no more than fifty (50) eligible employees. In determining the number of eligible employees, companies which are affiliated companies or which are eligible to file a combined tax return for purposes of state taxation shall be considered one (1) employer. “Small employer carrier” means any carrier which offers health benefit plans covering eligible employees of one or more small employers in this state.

Miss. Code Ann. § 83-63-5 Limitation on establishment of classes of business by small employer carriers.

A small employer carrier may establish a class of business only to reflect substantial differences in expected claims experience or administrative costs related to the following reasons: The small employer carrier uses more than one (1) type of system for the marketing and sale of health benefit plans to small employers; The small employer carrier has acquired a class of business from another small employer carrier; or The small employer carrier provides coverage through an association with membership of not less than twenty-five (25) small employers which has been formed for purposes other than obtaining insurance. A small employer carrier may establish up to nine (9) separate classes of business under subsection (1). The commissioner may establish regulations to provide for a period of transition in order for a small employer carrier to come into compliance with subsection (2) in the instance of acquisition of an additional class of business from another small employer carrier. The commissioner may approve the establishment of additional classes of business upon application to the commissioner and a finding by the commissioner that such action would enhance the efficiency and fairness of the small employer marketplace.

Miss. Code Ann. § 83-63-6 Requirements for small employer carriers.

Any small employer carrier shall issue any health benefit plan to any small employer that applies for the plan and agrees to make the required premium payments and to satisfy the other reasonable provisions of the health benefit plan not inconsistent with this chapter. However, no carrier is required to issue a health benefit plan to a self-employed individual who is covered by, or is eligible for coverage under, a health benefit plan offered by an employer.

Miss. Code Ann. § 83-63-7 Procedures for premium rates and restrictions on premium rate increases; authority to establish regulations; restrictions on transfers or offers to transfer small employer into or out of class of business; suspension of application of index rate provision.

Premium rates for health benefit plans subject to this chapter shall be subject to the following provisions: 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 (20%). 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 rates that 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 (25%) of the index rate. The percentage increase in the premium rate charged to a small employer for a new rating period may not exceed the sum of the following: 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 of business into which the small employer carrier is no longer enrolling new small employers, the small employer carrier shall use the percentage change in the base premium rate; Any adjustment, not to exceed fifteen percent (15%) annually and adjusted pro rata for rating periods of less than one (1) year, due to the claim experience, health status or duration of coverage of the employees or dependents of the small employer as determined from the small employer carrier’s rate manual for the class of business; and 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 of business. Adjustments in rates for claim experience, health status and duration of coverage shall not be charged to individual employees or dependents. Any such adjustment shall be applied uniformly to the rates charged for all employees and dependents of the small employer. In the case of health benefit plans issued prior to January 1, 1995, a premium rate for a rating period may exceed the ranges set forth in paragraphs (a) and (b) of this subsection until January 1, 1996. In such case, the percentage increase in the premium rate charged to a small employer in such a class of business for a new rating period shall not exceed the sum of the following: 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 of business into which the small employer carrier is no longer enrolling new small employers, the small employer carrier shall use the percentage change in the base premium rate; Any adjustment due to change in coverage or change in the case characteristics of the small employer, as determined from the carrier’s rate manual for the class of business; and Any adjustment needed to bring the premium rate of a small employer to the base premium rate for that class of business. If an employer not meeting the definition of “small employer” on the date of issue or last renewal of its plan falls within such definition on a subsequent renewal date, and its premium rate is less than the base premium rate for the small employer class of business into which it is assigned, the employer’s rate shall be the base premium rate for that class of business. Nothing in this section is intended to affect the use by a small employer carrier of legitimate rating factors other than claim experience, health status or duration of coverage in the determination of premium rates. Small employer carriers shall apply rating factors, including case characteristics, consistently with respect to all small employers in a class of business. The commissioner may establish regulations to implement the provisions of this section and to assure that rating practices used by small employer carriers are consistent with the purposes of this chapter, including: Assuring that differences in rates charged for health benefit plans by small employer carriers are reasonable and reflect objective differences in plan design, not including differences due to the nature of the groups assumed to select particular health benefit plans; and Prescribing the manner in which case characteristics may be used by small employer carriers. A small employer carrier shall not transfer a small employer involuntarily into or out of a class of business. A small employer carrier shall not offer to transfer a small employer into or out of a class of business unless such offer is made to transfer all small employers in the class of business without regard to case characteristics, claim experience, health status or duration of coverage. The commissioner may suspend for a specified period the application of subsection (1)(a) as to the premium rates applicable to one or more small employers included within a class of business of a small employer carrier for one or more rating periods upon a filing by the small employer carrier and a finding by the commissioner either that the suspension is reasonable in light of the financial condition of the small employer carrier or that the suspension would enhance the efficiency and fairness of the marketplace for small employer health insurance.

Miss. Code Ann. § 83-63-9 Disclosure requirements for solicitation and sales material for sale of health benefit plan; maintenance of description of rating practices and renewal underwriting practices; actuarial certification requirements; access to information and documentation by commissioner; confidentiality of information.

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: The extent to which premium rates for a specified small employer are established or adjusted based upon the actual or expected variation in claims costs or actual or expected variation in health status of the employees of the small employer and their dependents; The provisions of the health benefit plan concerning the small employer carrier’s right to change premium rates and factors, other than claim experience, that affect changes in premium rates; A description of the class of business in which the small employer is or will be included, including the applicable grouping of plans; The provisions relating to renewability of policies and contracts; and The provisions relating to any pre-existing condition provision. 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. 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. Such certification shall be in a form and manner, and shall contain such information, as specified by the commissioner. A copy of the certification shall be retained by the small employer carrier at its principal place of business. A small employer carrier shall make the information and documentation described in subsection (2) 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 commissioner to persons outside of the department except as agreed to by the small employer carrier or as ordered by a court of competent jurisdiction.

Miss. Code Ann. § 83-63-11 Renewal of health benefit plan at option of small employer; exceptions; right of carrier to cease to renew all plans under a class of business; restrictions; application of section to carrier operating in single geographic area.

A health benefit plan subject to this chapter shall be renewable with respect to all eligible employees and dependents, at the option of the small employer, except in any of the following cases: Nonpayment of the required premiums; Fraud or misrepresentation of the small employer, or with respect to coverage of individual insureds, the insureds or their representatives; Noncompliance with the carrier’s minimum participation requirements; Noncompliance with the carrier’s employer contribution requirements; Repeated misuse of a provider network provision; or The commissioner finds that the continuation of the coverage would: Not be in the best interests of the policyholders or certificate holders; or Impair the carrier’s ability to meet its contractual obligations. In such instance the commissioner shall assist affected small employers in finding replacement coverage. A small employer carrier may cease to renew all plans under a class of business. The carrier shall provide notice to all affected health benefit plans and to the Commissioner of Insurance in each state in which an affected insured individual is known to reside at least one hundred eighty (180) days prior to termination of coverage. A carrier which exercises its rights to cease to renew all plans in a class of business shall not: Establish a new class of business for a period of five (5) years after the nonrenewal of the plans without prior approval of the Commissioner of Insurance; or Transfer or otherwise provide coverage to any of the employers from the nonrenewed class of business unless the carrier offers to transfer or provide coverage to all affected employers and eligible employees and dependents without regard to case characteristics, claim experience, health status or duration of coverage. In the case of a small employer carrier doing business in one (1) established geographic service area of the state, the rules set forth in this section shall apply only to the carrier’s operations in such service area.