Sec. 16. Premium rates for a health insurance plan are subject to the following:

(1) For all small employer business, the premium rates charged during a rating period to small employers with similar case characteristics for the same or similar benefit design characteristics, or the rates that could be charged to small employers under the rating system may not vary from the midpoint rate by more than thirty-five percent (35%) above or below the midpoint rate.

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Terms Used In Indiana Code 27-8-15-16

  • base premium rate: means the lowest premium rate charged or that could have been charged under a rating system by the small employer insurer to small employers with similar case characteristics and benefit design characteristics. See Indiana Code 27-8-15-4
  • benefit design characteristics: means the following:

    Indiana Code 27-8-15-5

  • case characteristics: means demographic or other relevant characteristics of a small employer, as determined by a small employer insurer, that are considered by the insurer in the determination of premium rates for the small employer. See Indiana Code 27-8-15-6
  • insurer: means any person who provides health insurance in Indiana. See Indiana Code 27-8-15-10
  • midpoint rate: means for small employers with similar case and benefit design characteristics the arithmetic average of the applicable base premium rate and the corresponding highest premium rate. See Indiana Code 27-8-15-11
  • new business premium rate: means the premium rate charged or offered by the small employer insurer to small employers with similar case characteristics and benefit design characteristics for newly issued health insurance plans. See Indiana Code 27-8-15-12
  • plan: means any:

    Indiana Code 27-8-15-9

  • rating period: means the calendar period for which premium rates established by a small employer insurer are assumed to be in effect, as determined by the small employer insurer. See Indiana Code 27-8-15-13
  • small employer: means any person, firm, corporation, limited liability company, partnership, or association actively engaged in business who, on at least fifty percent (50%) of the working days of the employer during the preceding calendar year, employed at least two (2) but not more than fifty (50) eligible employees, the majority of whom work in Indiana. See Indiana Code 27-8-15-14
  • small employer insurer: means any insurer that offers a health insurance plan covering the employees of a small employer. See Indiana Code 27-8-15-15
  • Year: means a calendar year, unless otherwise expressed. See Indiana Code 1-1-4-5
(2) 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 for a plan with the same or similar benefit design characteristics measured from the first day of the prior rating period to the first day of the new rating period. For a plan for which the small employer insurer is not issuing new policies, the insurer shall use the percentage change in the base premium rate.

(B) An 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.

(C) Any adjustment due to change in benefit design characteristics or change in the case characteristics of the small employer.

(3) For health insurance plans issued before July 1, 1992, a premium rate for a rating period may exceed the ranges described in subdivisions (1) and (2) for five (5) years following July 1, 1992. The percentage increase in the premium rate charged to a small employer in such a class of business for a new rating period may not exceed the sum of the following:

(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. For a plan for which the small employer insurer is not issuing new policies, the insurer shall use the percentage change in the base premium rate.

(B) Any adjustment due to change in benefit design characteristics or change in the case characteristics of the small employer.

As added by P.L.127-1992, SEC.1.