02/01/2010
New OIC rules impact finalization of community rates
Last August the Office of the Insurance Commissioner (OIC) issued a new interpretation of existing state law, regarding how and when we can issue final rates for community-rated groups. The OIC interpretation requires that final community (2-50) rates be based on a group's actual census as of their effective date. The OIC action applies to new and renewing community groups beginning with effective dates of April 1, 2010, and later. Since mailings for April renewals begin today, we wanted to inform you of changes to the renewal documentation.
To comply with the OIC's interpretation, we'll now provide tentative rates based on the census provided when the group submits renewal or enrollment documents. We'll confirm final rates about 10 weeks after the effective date. You and your clients will receive that confirmation much like you do today, whether the group's rates are changing or not.
When final rates are different from tentative rates, the bill that follows the rate confirmation will reflect the rate adjustment. If a group's final rates are significantly higher than their tentative rates, they can change plans when those final rates are provided, subject to timing and underwriting guidelines.
A new paragraph in our renewal cover letter and new language in the community underwriting general assumptions will explain this new policy to your clients.
We are working with our legislators on an amendment to the current legislation. We will keep you informed of pertinent developments.
If you have any questions, please talk to your Regence Sales contact.
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