4.__Criteria for special rate hearings.__Any filing of rates, rating formulas and modifications that satisfies the criteria set forth in this subsection is subject to the provisions of subsection 5.

A.__The rate increase for any small group health plan may not exceed the index of inflation multiplied by 1.5 excluding any approved rate differential based on age.__For the purposes of this subsection, "index of inflation" means the rate of increase in medical costs for a section of the United States selected by the superintendent that includes the State for the most recent 12-month period immediately preceding the date of the filing for which data are available.

B.__The carrier must demonstrate in accordance with generally accepted actuarial principles and practices consistently applied that, as of a date no more than 210 days prior to the filing, the ratios of benefits incurred to premiums earned for those products average no less than 80% for the previous 12-month period.

5.__Special rate hearing.__A rate hearing conducted with respect to filings that meet the criteria in subsection 3 is subject to this subsection.

A.__A person requesting a hearing shall provide the superintendent with a written statement detailing the circumstances that justify a hearing notwithstanding the satisfaction of the criteria in subsection 4.

B.__If the superintendent decides to hold a hearing, the superintendent shall issue a written statement detailing the circumstances that justify a hearing notwithstanding the satisfaction of the criteria in subsection 4.

C.__In any hearing conducted under this subsection, the bureau and any party asserting that the rates are excessive have the burden of establishing that the rates are excessive.__The burden of proving that rates are adequate and not unfairly discriminatory remains with the carrier.

Sec. 5. 24-A MRSA §4204, sub-§2-A, śN, as amended by 1995, c. 332, Pt. I, §2, is further amended to read:

N. Beginning July 1, 1995, a health maintenance organization that offers coverage to groups in the State shall offer coverage for purchase by individuals. A health maintenance organization offering individual coverage shall provide the bureau with a marketing plan, updated annually, to increase public awareness of that coverage and maximize use of insurance producers, agents or brokers.

SUMMARY

This bill amends the laws governing nongroup and small group insureds as follows.

1. It requires that insurers provide written notice of rate filing.

2. It repeals the repealers on the sections of law governing special rate hearings.

3. It enacts requirements regarding rate filings on small group health plans similar to the requirements regarding rate filings on individual health insurance policies.

4. It requires that health maintenance organizations offering individual coverage provide an annual marketing plan to the Department of Administrative and Financial Services, Bureau of Insurance.