Section 66.07 - Restrictions Relating to Premium RatesPremiums charged to Eligible Small Groups and Eligible Individuals shall be based on the collective experience of the covered small groups and individuals. Premiums charged to every Eligible Small Business or Eligible Individual for a Health Benefit Plan, whether through a trust or association or through an Intermediary or Group Purchasing Cooperative, or through the Connector, or directly, also must satisfy the following requirements:
(1)Premium Calculations.(a) In calculating the premium to be charged to each Eligible Small Group or Eligible Individual, a Carrier shall develop a Group Base Premium Rate and may develop and use one or more of the Rating Adjustment Factors, provided that such Rating Adjustment Factors are used in connection with all products offered to Eligible Small Groups and Eligible Individuals.(b) In calculating the premium to be charged to each Eligible Small Group or Eligible Individual, a Carrier shall develop a Group Base Premium Rate and may develop and use only the Rating Adjustment Factors set forth in 211 CMR 66.07(1)(b): 1.Age Rating Adjustment Factor. If a Carrier applies an age Rating Adjustment Factor to Eligible Individuals or Eligible Small Groups, the Carrier must apply the Age Rating Adjustment Factor in accordance with both the ACA and any guidance provided by the Commissioner such that the ratio of the highest factor for adults older than 20 years of age compared to the lowest factor for adults older than 20 years of age shall not exceed a ratio of 2-to-1.2.Area Rating Adjustment Factors.a. The area Rating Adjustment Factor for each distinct region in 211 CMR 66.07(1)(b)2. must range from not less than 0.8 to not more than 1.2.b. The permissible regions are based on the following zip code groupings which refer to the first three digits of the zip code for each Eligible Small Business or Eligible 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 66.07(1)(b)2.b.iii. and iv. into one region or combine the zip code groupings outlined in 211 CMR 66.07(1)(b)2.b.iii. through v. into one region for all of its Health Benefit Plans subject to 211 CMR 66.00, or use regions based on groupings of counties that roughly approximate the zip code groupings.
c. If a Carrier chooses to establish an area Rating Adjustment Factor, it must apply the Rating Adjustment Factor to every Eligible Small Business and Eligible Individual within each area. The area Rating Adjustment Factor for an Eligible Small Group will be based upon the head office location of the Eligible Small Group and the area Rating Adjustment Factor for an Eligible Individual will be based on the primary residence of the Eligible Individual.3.Tobacco Use Rating Adjustment Factor.a. The tobacco use Rating Adjustment Factor, which may only be applied when expressly permitted by the Commissioner, will consistently apply to all Eligible Individuals and Eligible Small Groups.b. Eligible Individuals and Eligible Small Groups must certify, in a method approved by the Commissioner, that Eligible Individuals and/or their Eligible Dependents or Eligible Small Group employees and/or their Eligible Dependents have not used Tobacco Products during the previous 12 months.4.Benefit Level Rating Adjustment Factor. If a Carrier chooses to establish a Benefit Level Rating Adjustment Factor, it must apply the Rating Adjustment Factor with respect to every Eligible Individual and Eligible Small Business.(2)Premium Rate Calculation Not Experience Based. No Carrier may charge a premium rate to an Eligible Individual or Eligible Small Business that is based upon the Eligible Individual's or Eligible Small Business's Eligible Employees' or Eligible Dependents' health status, duration of coverage, or actual or expected claims experience.(3)Additional Information regarding Premium Rate Calculation. The premium charged by a Carrier to each Eligible Individual or Eligible Small Business on the date the Eligible Individual's or Eligible Small Business' Health Benefit Plan is issued or renewed shall be established as follows: the Group Base Premium Rate;
multiplied by the Benefit Level Rating Adjustment Factor;
multiplied by the area Rating Adjustment Factor;
multiplied by the age Rating Adjustment Factor.
Amended by Mass Register Issue 1349, eff. 10/6/2017.Amended by Mass Register Issue 1487, eff. 1/20/2023.