South Carolina Code 38-71-940. Premium rates for health insurance plans; rating factors; involuntary business class transfer prohibited
(1) The index rate for a rating period for a class of business may not exceed the index rate for any other class of business by more than twenty percent.
Terms Used In South Carolina Code 38-71-940
- Employees: as used in this article includes, for the purposes of insurance hereunder, as employees of a single employer, the officers, managers, and employees of the employer and of subsidiary or affiliated corporations of a corporate employer and the individual proprietors, partners, and employees of individuals and firms the business of which is controlled by the insured employer through stock ownership, contract, or otherwise. See South Carolina Code 38-71-710
- Employer: as used in this article may include any municipal corporation or the proper officers, as such, of any unincorporated municipality or any department of the municipal corporation or unincorporated municipality determined by conditions pertaining to the employment. See South Carolina Code 38-71-710
- insurance: includes annuities. See South Carolina Code 38-1-20
- Insurer: includes a corporation, fraternal organization, burial association, other association, partnership, society, order, individual, or aggregation of individuals engaging or proposing or attempting to engage as principals in any kind of insurance or surety business, including the exchanging of reciprocal or interinsurance contracts between individuals, partnerships, and corporations. See South Carolina Code 38-1-20
- Premium: means payment given in consideration of a contract of insurance. See South Carolina Code 38-1-20
(2) 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 which could be charged to these employers under the rating system for that class of business, may not vary from the index rate by more than twenty-five percent of the index rate.
(3) The percentage increase in the renewal premium rate charged to a small employer for a new rating period may not exceed the sum of:
(a) 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 for which the small employer insurer is not issuing new policies, the insurer shall use the percentage change in the base premium rate. However, in the case of health insurance plans issued prior to the effective date of this section, if the change in the new business premium rate used to determine the maximum percentage increase in the premium rate is less than zero percent, then zero percent may be used as the percentage change in the new business premium rate during the first twelve-month period from the effective date of this section;
(b) 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 duration of coverage of the employees or dependents of the small employer as determined from the insurer’s rate manual for the class of business;
(c) any adjustment due to change in coverage or change in the case characteristics of the small employer as determined from the insurer’s rate manual for the class of business.
(4) A health insurance plan that contains a restricted network provision shall not be considered similar coverage to a health insurance plan that does not contain such a provision, provided that the restriction of benefits to network providers results in substantial differences in claim costs.
(5) If group size is used as a case characteristic by a small employer insurer, the highest rate factor associated with a group size classification may not exceed the lowest rate factor associated with such a classification by more than twenty percent.
(B) Nothing in this section is intended to affect the use by a small employer insurer of legitimate rating factors other than claim experience, health status, or duration of coverage in the determination of premium rates. Small employer insurers shall apply rating factors, including case characteristics, consistently with respect to all small employers within a class of business.
(C) Unless the small employer no longer meets the criteria established for its existing class of business:
(1) a small employer insurer may not transfer involuntarily a small employer into or out of a class of business; and
(2) a small employer insurer may not offer to transfer a small employer into or out of a class of business, unless the offer is made to transfer all small employers in the class of business without regard to case characteristics, claim experience, health status, or duration since issue.