While I don't see much benefit from this rule for our clients in the Northwest, I don't see any harm either. In my opinion, this will not impact premiums unless they extend the rule to include association plans.  Here's what it does:

Health insurers that ask for a price increase of 10% or more in the individual or small group markets will face scrutiny by federal officials under newly finalized rate regulation announced in May by Health & Human Services. In many states like Washington and Oregon, health insurance rates are already regulated by state insurance officials. This new federal rule requires that any proposed increase of 10% or more for non-grandfathered health plans sold to individuals and small businesses must be reviewed in all states. Starting in September 2012, the 10% threshold will be replaced by state-specific rules to reflect the varied cost trends in different states.

This rule won't change much in Washington state simply because we already have a comprehensive regulatory system in place through the Office of the Insurance Commissioner (OIC). The same is true in Oregon with the Insurance Division of the Department of Consumer & Business Services.

The new federal regulation, however, will make some aspects of rate filing much more open to public scrutiny. Additionally, HHS is also looking into whether it should review association plan rates, something I feel could produce positive results for those employers who purchase their health insurance through a multiple employer arrangement like BIAW, AWC, WAHIT, WCIP and others.

No action is required on your part, but if you get questions from your people about a new rule that limits health insurance renewals to 10%, you can now set them straight!

Click here for our Legislative Brief on this topic.

Sincerely,

 

 

 

Dan Fisher, CEO
EmSpring Corporation