(1) (a) A carrier subject to part 2, 3, 4, or 5 of this article 16 shall not establish rates for any sickness, accident, or health insurance policy, contract, certificate, or other evidence of coverage or dental coverage plan, as defined in section 10-16-165 (1)(b), issued or delivered to any policyholder, enrollee, subscriber, or member in Colorado that are excessive, inadequate, or unfairly discriminatory. To assure compliance with the requirements of this section that rates are not excessive in relation to benefits, the commissioner shall promulgate rules to require rate filings and, as part of the rules, may require the submission of adequate documentation and supporting information, including actuarial opinions or certifications and set expected benefits ratios. The carrier shall submit expected rate increases to the commissioner at least sixty days prior to the proposed implementation of the rates. If the commissioner does not approve or disapprove the rate filings within a sixty-day period, the carrier may implement and reasonably rely upon the rates on the condition that the commissioner may require correction of any deficiencies in the rate filing upon later review if the rate the carrier charged is excessive, inadequate, or unfairly discriminatory. A prospective rate adjustment is the sole remedy for rate deficiencies pursuant to this subsection (1). If the commissioner finds deficiencies in the rate filing after a sixty-day period, the commissioner shall provide notice to the carrier, and the carrier shall correct the rate on a prospective basis. (b) The commissioner may review expected rate filing increases filed with the commissioner and shall disapprove the rate increase and require the carrier to resubmit for approval if any of the provisions of subsection (3) of this section apply. Rate filings that do not involve a requested rate increase, or that involve a requested rate increase of less than five percent for dental insurance, do not require preapproval, and the carrier may implement the rate upon filing with the commissioner. (c) The filing requirements of this subsection (1) do not apply to nondeveloped rates, including rates for medicaid, medicare, and the children's basic health plan, as defined by the commissioner. (d) If the carrier fails to supply the information required by this section, the filing is incomplete. The commissioner shall make a determination of completeness no later than thirty days following submission of the filing for review. All filings not returned on or before the thirtieth day after receipt are considered complete. (e) The commissioner may review filings for substantive content and, if reviewed, shall identify and communicate to the filing carrier, on or before the forty-fifth day after receipt, any deficiency in the filing. The carrier shall apply a correction of a deficiency, including a deficiency identified after the forty-fifth day, on a prospective basis, and the commissioner shall not assess a penalty against the carrier if the violation identified was not willful. (f) Carriers shall file rate filings for insurance regulated under parts 1 to 5 of this article 16 electronically in a format made available by the division, unless exempted by rule for an emergency situation as determined by the commissioner. The division shall post on its website a rate filing summary for insurance regulated under parts 1 to 5 of this article 16 in order to provide notice to the public. (g) This section does not: (I) Limit the right of the public to inspect a rate filing and any supporting information pursuant to part 2 of article 72 of title 24, C.R.S.; or (II) Impair the commissioner's ability to review rates and determine whether the rates are excessive, inadequate, or unfairly discriminatory. (2) (a) (I) Rates for an individual health coverage plan issued or delivered to any policyholder, enrollee, subscriber, or member in Colorado by an insurer subject to part 2 of this article 16 or an entity subject to part 3, 4, or 5 of this article 16 shall not be excessive, inadequate, or unfairly discriminatory to assure compliance with the requirements of this section that rates are not excessive in relation to benefits. Rates are excessive if they are likely to produce a long run profit that is unreasonably high for the insurance provided or if expenses are unreasonably high in relation to services rendered. In determining if rates are excessive, the commissioner may consider: (A) The expected filed rates in relation to the actual rates charged; (B) Whether the carrier's products are affordable; and (C) Whether the carrier has implemented effective strategies to enhance the affordability of its products. (II) Rates are not inadequate unless clearly insufficient to sustain projected losses and expenses, or the use of the rates, if continued, will tend to create a monopoly in the market. (III) Rates are unfairly discriminatory if, after allowing for practical limitations, price differentials fail to reflect equitably the differences in expected losses and expenses. (b) Notwithstanding any other provision of this article 16, a carrier subject to part 2, 3, 4, or 5 of this article 16 shall not vary the premium rate for an individual health coverage plan due to the gender of the individual policyholder, enrollee, subscriber, or member. Any premium rate based on the gender of the individual policyholder, enrollee, subscriber, or member is unfairly discriminatory and is not allowed. (3) (a) The commissioner shall disapprove the requested rate increase if any of the following apply: (I) The benefits provided are not reasonable in relation to the premiums charged; (II) The requested rate increase contains a provision or provisions that are excessive, inadequate, unfairly discriminatory, or otherwise do not comply with the provisions of this title; (III) The requested rate increase is excessive or inadequate. In determining if the rate is excessive or inadequate, the commissioner may consider profits, dividends, annual rate reports, annual financial statements, subrogation funds credited, investment income or losses, unearned premium reserve and reserve for losses, surpluses, executive salaries, expected benefits ratios, any factors in section 10-16-111, and any other appropriate actuarial factors as determined by current actuarial standards of practice. (IV) The actuarial reasons and data based upon Colorado claims experience and data, when available, do not justify the necessity for the requested rate increase; (V) The rate filing is incomplete; (VI) The rate filing fails to demonstrate compliance with the MHPAEA. The commissioner shall adopt rules to establish the process and timeline for carriers to demonstrate compliance with the MHPAEA in establishing their rates. (VII) The rate filing reflects a cost shift between the standardized plan, as defined in section 10-16-1303 (14), offered by the carrier and the health benefit plan for which rate approval is being sought. The commissioner may consider the total cost of health care in making this determination. (b) In determining whether to approve or disapprove a rate filing, the commissioner may consider, without limitation, the expected benefits ratio for a health benefit plan or any other cost category determined appropriate by the commissioner. If the carrier achieves a benefits ratio of eighty-five percent or higher for large group insurance, eighty percent for small group insurance, and eighty percent for individual insurance, the commissioner may expedite the review of the approval process for the carrier. (c) The commissioner shall adopt rules that establish the benefits ratio for carriers to use for rate filing purposes for health benefit plans, other than grandfathered health benefit plans. The rules must include, as supplemental criteria that will be considered during review, requirements for carriers to provide information on activities to improve health-care quality as set forth under the authority of section 2718 of the federal "Public Health Service Act", as amended, and in 45 CFR 158.150 and expenditures related to health information technology and meaningful use as set forth in 45 CFR 158.151. (3.5) The commissioner shall promulgate rules establishing affordability standards. These standards must include appropriate targets for carrier investments in primary care. In developing these standards, the commissioner shall consider the recommendations of the primary care payment reform collaborative created in section 10-16-150. (4) The commissioner may require the submission of any relevant information the commissioner deems necessary in determining whether to approve or disapprove a filing made pursuant to this section. (5) (a) (I) With respect to the premium rates charged by a carrier offering an individual or small employer health benefit plan, the carrier shall develop its premium rates based on, and vary the premium rates with respect to the particular plan or coverage only by the following case characteristics: (A) Whether the plan or coverage covers an individual or family; (B) Geographic rating area, established in accordance with federal law; (C) Age, except that the rate must not vary by more than three to one for adults; and (D) Tobacco use, except that the rate must not vary by more than one and one-fifteenth to one. (II) The carrier shall not vary a premium rate with respect to any particular individual or small employer health benefit plan by any factor other than the factors described in subparagraph (I) of this paragraph (a). (III) With respect to family coverage under an individual or small employer health benefit plan, the carrier shall apply the rating variations permitted under sub-subparagraphs (C) and (D) of subparagraph (I) of this paragraph (a) based on the portion of the premium that is attributable to each family member covered under the plan in accordance with rules of the commissioner. (b) The carrier shall not adjust the premium charged with respect to any particular individual or small employer health benefit plan more frequently than annually; except that the carrier may change the premium rates to reflect: (I) With respect to a small employer health benefit plan, changes to the enrollment of the small employer; (II) Changes to the family composition of the policyholder or employee; (III) With respect to an individual health benefit plan, changes in geographic rating area of the policyholder, as provided in sub-subparagraph (B) of subparagraph (I) of paragraph (a) of this subsection (5); (IV) Changes in tobacco use, as provided in sub-subparagraph (D) of subparagraph (I) of paragraph (a) of this subsection (5); (V) Changes to the health benefit plan requested by the policyholder or small employer; or (VI) Other changes required by federal law or regulations or otherwise expressly permitted by state law or commissioner rule. (c) (I) A carrier shall consider all individuals in all individual health benefit plans, other than grandfathered health benefit plans, offered by the carrier, including those individuals who do not enroll in the plans through an exchange established under article 22 of this title, to be members of a single risk pool. (II) A carrier shall consider all covered persons in all small employer health benefit plans, other than grandfathered health benefit plans, offered by the carrier, including those covered persons who do not enroll in the plans through an exchange established under article 22 of this title, to be members of a single risk pool. (d) Any individual who does not qualify for a lower rate based on tobacco use may be offered the option of participating in a bona fide wellness program, as defined under the federal "Health Insurance Portability and Accountability Act of 1996", as amended. A carrier may allow any individual who participates in a bona fide wellness program the lower rate. The carrier shall disclose the availability of a tobacco rating adjustment and any bona fide wellness program to each potential insured. The provisions of this paragraph (d) are applicable only if allowed under federal law. (e) The commissioner may adopt rules to implement and administer this subsection (5) and to assure that rating practices used by carriers are consistent with the purposes of this article. (f) A carrier shall make a reasonable disclosure, as part of its solicitation and sales materials, of all of the following: (I) How premium rates are established; (II) The provisions of the coverage concerning the carrier's right to change premium rates, the factors that may affect changes in premium rates, and the frequency with which the carrier may change premium rates; and (III) (A) With respect to individual health benefit plans, a listing of and descriptive information about, including benefits and premiums, all individual health benefit plans offered by the carrier and the availability of the plans for which the individual is qualified; and (B) With respect to small employer health benefit plans, a listing of and descriptive information about, including benefits and premiums, all small employer health benefit plans for which the small employer is qualified. (g) (I) Each carrier shall maintain at its principal place of business a complete and detailed description of its rating practices, including information and documentation that demonstrate that its rating methods and practices are based upon commonly accepted actuarial assumptions and are in accordance with sound actuarial principles. (II) Each carrier shall annually file with the commissioner, on or before March 15, an actuarial certification certifying that the carrier is in compliance with this article and that the rating methods of the carrier are actuarially sound. The certification must be in a form and manner and must contain information as specified by the commissioner. The carrier shall retain a copy of the certification at its principal place of business. (III) (A) A carrier shall make the information and documentation described in subparagraph (I) of this paragraph (g) available to the commissioner upon request. (B) Except in cases of violations of this section, the information is considered proprietary and trade secret information and is not subject to disclosure by the commissioner to persons outside of the division except as agreed to by the carrier or as ordered by a court of competent jurisdiction. (6) (a) The carrier shall use the applicable index rate for the premium rate for all of the carrier's individual and small group health benefit plans and shall adjust the applicable index rate for total expected market-wide payments and charges under the risk adjustment and reinsurance programs in the state, subject only to the adjustments permitted in federal and state law. The commissioner may establish, by rule, the components and adjustments that carriers are able to use and make to the index rate. (b) A carrier shall treat all health benefit plans issued or renewed in the same calendar month as having the same rating period. (c) For the purposes of this subsection (6), a health benefit plan that contains a restricted network provision is not similar coverage to a health benefit plan that does not contain a restricted network provision if the restriction of benefits to network providers results in substantial differences in claim costs. (7) Starting in 2021, as part of the rate filing required pursuant to this section, each carrier shall provide to the commissioner, in a form and manner determined by the commissioner, information concerning the utilization of out-of-network providers and facilities and the aggregate cost savings as a result of the implementation of section 10-16-704 (3)(d)(I) and (5.5)(b)(I). (8) (a) The commissioner may adopt rules designed to: (I) Maximize the purchasing power of exchange consumers whose household income is up to four hundred percent of the federal poverty line; and (II) Assure premium pricing that complies with the requirements in the federal act for modified community rating. (b) In adopting these rules, the commissioner may consider the results of the evaluation and study of the reinsurance program conducted pursuant to section 10-16-1104 (2).
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