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HHS Rates Increase on Large Health Insurance Premium
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HHS Rate Reviews on Large Health Insurance Premium Increases
On May 19, 2011, the Department of Health and Human Services (HHS), issued final regulation to implement rate review regulation for health insurance renewals on individual and small group policies. This rate review provision has been brought about as a requirement under Section 1003 of the Affordable Care Act. This section of the Act mandates the Secretary of the Department of Health and Human Services, in conjunction with the States, establish a process for the annual review of “unreasonable increases in premiums for health insurance coverage.”
What this means to you:
Effective September 1, 2011 justification for renewal rate increases of 10% or more must be disclosed by the insuring carrier.
The stated justifications for the increase will then be reviewed by independent experts to guarantee the increase is reasonable and warranted. These experts are charged to closely examine recent trends and flag instances when they determine increases to be unjustified.
Insurance companies will be required to publish their justifications for these increases on their websites. The HHS will also publish these justifications on their web site: www.hhs.gov.
The bill requires these justifications be made available to consumers in a simple and easy to understand format. As such, the HHS will regulate these publications.
Please review document CMS‐10379. This is the proposed template released by the HHS for these consumer disclosures and can be located at the following link: http://www.cms.gov/paperworkreductionactof1995/pral/itemdetail.asp?itemid=CMS1245637
This new requirement applies to all non‐grandfathered individual or small group plans. A small group is defined as an employer with 50 or fewer employees.
Effective September 1, 2012 each State will mandate a State‐specific threshold based on data on health care cost trends particular to that State. The HHS will work with States in developing these thresholds.
This new level of transparency to health insurance rate increases is intended to make sure rates are based on reasonable cost assumptions regarding health care cost trends and utilization.
For more information please visit the HHS New Release on this topic at: http://www.hhs.gov/news/press/2011pres/05/20110519a.html
The information contained in this document is for information purposes only, and may not apply to your situation. The author, publisher, distributor and provider provide no warranty about the content or accuracy of content enclosed. Information provided is subjective. Keep this in mind when reviewing this guide. Neither the publisher nor author shall be liable for any loss of profit or any other commercial damages resulting from use of this guide.
If you have any questions or need any additional information, please contact Mark Jackson.
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