Section 156.05 - Restrictions Relating to Premium RatesCarriers may develop Base Rates that are based on the collective experience of all Individuals, Group Associations, Small Groups, and Large Groups to which the Dental Benefit Plans are marketed, or Carriers may develop Base Rates for any single or combination of Individual, Group Association, Small Group, or Large Group Markets in which they offer Dental Benefit Plans. Premiums charged must satisfy the following requirements:
Premium Calculations
(1) In calculating the premium to be charged, a Carrier shall develop a Base Rate and may develop and use one or more Rating Adjustment Factors, provided that such Rating Adjustment Factors are used in connection with all products offered to those eligible within a Market. (a) Carriers may develop one Base Rate and set of Rating Adjustment Factors that apply to all Markets; or(b) Carriers may develop separate Base Rates and Rating Adjustment Factors for each or combination of each of the Markets in which it offers Dental Benefit Plans.(2) In calculating the premium to be charged, a Carrier shall develop a Base Rate and may develop and use only Rating Adjustment Factors that are based on sound actuarial principles about the segmentation of risk and are not discriminatory under state or federal law. (a)Age Rating Adjustment Factor. If a Carrier applies an age Rating Adjustment Factor, the Carrier must apply the age Rating Adjustment Factor in accordance with guidance provided by the Commissioner.(b)Area Rating Adjustment Factors. 1. The area Rating Adjustment Factor for each distinct region in 211 CMR 156.05(2)(b) must range from not less than 0.8 to not more than 1.2.2. The permissible regions are based on the following zip code groupings which refer to the first three digits of the zip code for each Business or Individual:v. 021 through 022 and 024;vii. 025 through 026, except that a Carrier may combine the zip code groupings outlined in 211 CMR 156.05(2)(b)2.ii., iii., and iv. into one region or combine the zip code groupings outlined in 211 CMR 156.05(2)(b)2.ii., iii., iv., and v. into one region for all of its Dental Benefit Plans subject to 211 CMR 156.00, or use regions based on groupings of counties that roughly approximate the zip code groupings.
3. If a Carrier chooses to establish area Rating Adjustment Factors, it must apply the Rating Adjustment Factors to all Members of a Market. The area Rating Adjustment Factor for an Employer Group will be based upon the head office location of the Employer Group and the area Rating Adjustment Factor for an Individual will be based on the location of the Individual's residence.(c)All Other Rating Adjustment Factors. All other Rating Adjustment Factors may only be used if based on an actuarially sound basis, are considered nondiscriminatory, and only when approved as part of a dental rate filing.Adopted by Mass Register Issue 1519, eff. 4/12/2024.