KRS 304.17A-0954: Premium rate guidelines for employer-organized association plans.

(1) Notwithstanding any other provision of this chapter, the amount or rate of

premiums for an employer -organized association health plan may be determined,

subject to the restrictions of subsection (2) of this section, based upon the

experience or project ed experience of the employer -organized associations whose

employers obtain group coverage under the plan.

(2) The following restrictions shall be applied in calculating the permissible amount or

rate of premiums for an employer -organized association healt h insurance plan

issued to an employer-organized association as defined in KRS 304.17A-005(12)(a)

to (c):

(a) The premium rates charged during a rating period to members of the

employer-organized association with similar characteristics for the same or

similar coverage, or the premium rates that could be charged to a member of

the employer-organized association under the rating system for that class of

business, shall not vary from its own index rate by more than fifty percent

(50%) of its own index rate;

(b) The percentage increase in the premium rate charged to an employer member

of an employer-organized association for a new rating period shall not exceed

the sum of the following:

1. The percentage change in the new business premium rate for the

employer-organized association measured from the first day of the prior

rating period to the first day of the new rating period;

2. Any adjustment, not to exceed twenty percent (20%) annually and

adjusted pro rata for rating period of less than one (1) year, due to the

claims experience, mental and physical condition, including medical

condition, medical history, and health service utilization, or duration of

coverage of the member as determined from the insurer's rate manual;

and

3. Any adjustment due to change in coverage or change in the case

characteristics of the member as determined by the insurer's rate manual;

(c) In utilizing case characteristics, the ratio of the highest rate factor to the

lowest rate factor within a class of business shall not exceed five to one (5:1).

For purpose of this limitation, case characteristics include age, gender,

occupation or industry, and geographic area; and

(d) Unless the written consent of the employer -organized association is filed with

the department, the index rate for t he employer-organized association shall be

calculated solely with respect to that employer-organized association and shall

not be tied to, linked to, or otherwise adversely affected by any other index

rate used by the issuing insurer.

(3) For the purpose o f this section, a health insurance contract that utilizes a restricted

provider network shall not be considered similar coverage to a health insurance

contract that does not utilize a restricted provider network if utilization of the

restricted provider network results in measurable differences in claims costs.