Premium rates for health benefit plans subject to this chapter shall be subject to the following provisions:

(1) The index rate for any class of business shall not exceed the index rate for similar coverage for any other class of business by more than 20 percent in any rating period.

(2) The premium rates for similar health benefit plans within a class of business shall not vary from the index rate by more than 35 percent, with:

a. An additional combined variation of no more than 10 percent for gender and geography; and

b. The actuarially justified adjustment for age and family composition,

provided, that the small employer carrier shall file a document as prescribed by the Commissioner setting out the age classes and family composition classes used pursuant to this paragraph, including actuarial certification of these classes.

(3) 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:

a. The percentage change in the new business premium rate calculated using premium rates on the first day of the prior rating period and the first day of the new rating period. In the case of a health benefit plan into which the small employer carrier is no longer enrolling new small employers, the small employer carrier shall use the percentage change in the new business premium rate for the most similar health benefit plan into which the small employer carrier is actively enrolling new small employers;

b. Any adjustment, not to exceed 15 percent annually and adjusted pro rata for rating periods of less than 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

c. 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.

(4) 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. This prohibition shall not be construed to prevent a carrier from establishing premium discounts or rebates or modifying otherwise applicable co-payments or deductibles in return for adherence to programs of health promotion and disease prevention, if otherwise allowed by law.

(5) Premium rates for health benefit plans shall comply with the requirements of this section notwithstanding any assessments paid or payable by small employer carriers pursuant to § 7210 of this title [repealed].

(6) A small employer carrier may utilize industry as a case characteristic in establishing premium rates, provided that the highest rate factor associated with any industry classification shall not exceed the lowest rate factor associated with any industry classification by more than 15 percent.

(7) In the case of health benefit plans delivered or issued for delivery prior to January 4, 1993, a premium rate for a rating period may exceed the ranges set forth in paragraphs (1) and (2) of this section for a period of 1 year following January 4, 1993. In such case, 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:

a. The percentage change in the new business premium rate calculated using premium rates on the first day of the prior rating period and the first day of the new rating period. In the case of a health benefit plan into which the small employer carrier is no longer enrolling new small employers, the small employer carrier shall use the percentage change in the new business premium rate for the most similar health benefit plan into which the small employer carrier is actively enrolling new small employers.

b. 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.

(8) a. Small employer carriers shall apply rating factors, including case characteristics, consistently with respect to all small employers in a class of business. Rating factors shall produce premiums for identical groups which differ only by the amounts attributable to plan design and do not reflect differences due to the nature of the groups assumed to select particular health benefit plans.

b. A small employer carrier shall treat all health benefit plans issued or renewed in the same calendar month as having the same rating period.

(9) For purposes of this subsection, a health benefit plan that utilizes a restricted provider network shall not be considered similar coverage to a health benefit plan that does not utilize such a network, provided that utilization of the restricted provider network results in substantial differences in claims costs.

68 Del. Laws, c. 175, § ?1; 68 Del. Laws, c. 340, § ?1; 71 Del. Laws, c. 143, § ?6;

Terms Used In Delaware Code Title 18 Sec. 7205

  • 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 the provisions of § 7205 of this title, based upon an examination and including a review of the appropriate records and the actuarial assumptions and methods used by the small employer carrier in establishing premium rates for applicable health benefit plans. See Delaware Code Title 18 Sec. 7202
  • Carrier: means any entity that provides health insurance in this State. See Delaware Code Title 18 Sec. 7202
  • 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, provided that claim experience, health status and duration of coverage shall not be case characteristics for the purposes of this chapter. See Delaware Code Title 18 Sec. 7202
  • Class of business: means all of a carrier's business unless more than 1 class is established pursuant to § 7204 of this title. See Delaware Code Title 18 Sec. 7202
  • Commissioner: means the Insurance Commissioner of this State. See Delaware Code Title 18 Sec. 7202
  • Health benefit plan: means any hospital or medical expense policy or certificate, hospital or medical service corporation contract, health maintenance organization or health service corporation subscriber contract or any other similar health contract, including a high deductible medical expense policy used in conjunction with a medical savings account, subject to the jurisdiction of the Commissioner available for use, offered or sold to an individual in the State of Delaware. See Delaware Code Title 18 Sec. 7202
  • Index rate: means , for each class of business as to a rating period for small employers, the arithmetic average of the applicable base premium rate and the corresponding highest premium rate. See Delaware Code Title 18 Sec. 7202
  • Month: means a calendar month, unless otherwise expressed. See Delaware Code Title 1 Sec. 302
  • New business premium rate: means , for each class of business as to a rating period, the lowest premium rate charged or offered or which could have been 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. See Delaware Code Title 18 Sec. 7202
  • Premium: means all moneys paid by a small employer and eligible employees as a condition of receiving coverage from a small employer carrier, including any fees or other contributions associated with the health benefit plan. See Delaware Code Title 18 Sec. 7202
  • Rating period: means the calendar period for which premium rates established by a small employer carrier are assumed to be in effect. See Delaware Code Title 18 Sec. 7202
  • Small employer: means any person, firm, corporation, partnership or association that is actively engaged in business that, on at least 50% of its working days during the preceding calendar quarter, employed no more than 50 eligible employees, the majority of whom were employed within this State. See Delaware Code Title 18 Sec. 7202
  • Small employer carrier: means a carrier that offers health benefit plans covering eligible employees of 1 or more small employers in this State. See Delaware Code Title 18 Sec. 7202
  • Year: means a calendar year, and is equivalent to the words "year of our Lord. See Delaware Code Title 1 Sec. 302
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