OAR 836-053-0065: Rating for Grandfathered Small Group Plans

The following provisions relating to rating apply to grandfathered health benefit plans offered to small employers: (1) A small employer carrier shall file a single geographic average rate for each grandfathered health benefit plan that is offered to small employers within a geographic area and for each category of family composition. The geographic average rate must be determined on a pooled basis and the pool shall include all of the carrier's grandfathered business in the small employer market. (2) There shall be one rating class for each small employer carrier. All grandfathered small employer health benefit plans of the carrier shall be rated in that class. A rating of a grandfathered health benefit plan is subject to adjustments reflecting the level of benefits provided and differences in family composition and age. (3) The variation in geographic average rates among different grandfathered small employer health benefit plans offered by a carrier must be based solely on objective differences in plan design or coverage. The variation shall not include differences based on the risk characteristics or claims experience of the actual or expected enrollees in a particular plan, except that a carrier may make further adjustment at renewal to reflect the expected claims experience of the covered small employer; however, this adjustment may not exceed five percent of the annual premium otherwise payable by the small employer, is not cumulative year to year, and may be based only on the carrier’s claims experience with the small employer. A variation based on the level of contribution by the small employer or on the level of participation by eligible employees, or on both, must be actuarially sound. (4) A small employer carrier shall file its geographic average rates for grandfathered small employer health benefit plans in accordance with the rate filing requirements of OAR 836-053-0910. (5) A small employer carrier shall assess administrative expenses in a uniform manner to all grandfathered small employer health benefit plans. Administrative expenses shall be expressed as a percentage of premium and the percentage may not vary with the size of the small employer. (6) Grandfathered small employer plans shall be rated within the following geographic areas comprising counties as follows: (a) Area 1 shall include: Clackamas, Multnomah, Washington and Yamhill. (b) Area 2 shall include: Benton, Lane and Linn. (c) Area 3 shall include: Marion and Polk. (d) Area 4 shall include: Deschutes, Klamath and Lake. (e) Area 5 shall include: Clatsop, Columbia, Coos, Curry, Lincoln and Tillamook. (f) Area 6 shall include: Baker, Crook, Gilliam, Grant, Harney, Hood River, Jefferson, Malheur, Morrow, Sherman, Umatilla, Union, Wallowa, Wasco and Wheeler. (g) Area 7 shall include: Douglas, Jackson and Josephine. (7) For grandfathered small employer plans, a small employer carrier may use five digit zip code groupings to define the carrier's geographic areas. The zip code groupings may vary from the county areas defined in section (6) of this rule by no more than ten percent of the population of a county. The small employer carrier must use either the zip code system or the county system and shall not modify the geographic areas in any other manner. (8) For grandfathered small employer plans, a small employer carrier may use the same geographic average rate for multiple rating areas. (9) For grandfathered small employer plans, a small employer carrier may deviate from the variation described in section (1) of this rule for coverage that extends to a geographic area outside the state of Oregon. The carrier must do so in a reasonable fashion and maintain records regarding the basis for the rate charged in the small employer's file. (10) The premium rates charged during a rating period for a grandfathered health benefit plan issued to a small employer may not vary from the geographic average rate by more than 50 percent (11) The variations in premium rates described in section (10) of this rule may be based on one or more of the following factors as determined by the carrier: (a) The ages of enrolled employees and their dependents; (b) The level at which the small employer contributes to the premiums payable for enrolled employees and their dependents; (c) The level at which eligible employees participate in the health benefit plan; (d) The level at which enrolled employees and their dependents engage in tobacco use; (e) The level at which enrolled employees and their dependents engage in health promotion, disease prevention or wellness programs; (f) The period of time during which a small employer retains uninterrupted coverage in force with the same small employer carrier; and (g) Adjustments to reflect the level of benefits provided and differences in family composition. (12) The premium rate determined in accordance with this rule may be further adjusted to reflect expected claims experience of a small employer but may not exceed five percent of the annual premium rate. The adjustment is not cumulative year to year.