Starting October 1, 2012, a carrier’s base rate changes will no longer be presumptively disapproved based on administrative expenses, surplus or Medical Loss Ratio (MLR). The Division of Insurance (DOI), however, will continue to have authority to disapprove a carrier’s proposed change to base rates that are excessive, inadequate or unreasonable. If a proposed rate has been disapproved, a health plan issuer must inform all employees and individuals covered under the small group product that the proposed rate has been disapproved.
The DOI Commissioner must hold a public hearing if a proposed base rate has been presumptively disapproved, at which the Attorney General may intervene. The DOI must notify carriers of a disapproved rate at least 45 days before the proposed effective date. Within 10 days, the carrier may request a hearing, which must be scheduled within 15 days and a decision must be issued within 30 days after the hearing.