Health Insurance Rate Filing Submission Guidelines Bulletin

www.ct.gov/cid P.O. Box 816 Hartford, CT 06142 -0816 An Equal Opportunity Employer S T A T E O F C O N N E C T I C U T INSURANCE DEPARTMENT BULLETIN NO. HC- 81 -23 March, 10 2023 TO: RE: ALL INSURANCE COMPANIES, FRATERNAL BENEFIT SOCIETIES, HOSPITAL SERVICE CORPORATIONS, MEDICAL SERVICE CORPORATIONS AND HEALTH CARE CENTERS THAT DELIVER OR ISSUE INDIVIDUAL AND GROUP HEALTH INSURANCE POLICIES IN CONNECTICUT HEALTH INSURANCE RATE FILING SUBMISSION GUIDELINES This notice sets forth the requirements for all rate filing submissions made to the Insurance Department (Department) pursuant to sections 38a-183, 38a-208, 38a-218 and 38a-481 of the Connecticut General Statutes. All rate filings, including small group indemnity rate f ilings, must be filed with the Department pursuant to the requirements of the rate review regulations promulgated by the US Department of Hea lth and Human Services (HHS) pursuant to the Patient and Protection Act, P.L. 111-148, as amended (PPACA). A rate filing must accompany the forms approved by HHS to report unreasonable rate increa ses and will serve as the basis to determine if the unreasonable rates are justified. In accordance with the HHS final regulations at 45 CFR, Part 154, the company must provide a preliminary justification that consists of a Rate Increase Summary (Part I) and a written description justifying the rate increase (Part II) that is consistent with 45 CFR §154.215. Office of Health Strategy – Cost Growth Benchmark The Office of Health Strategy created a per annum rate-of-growth Cost Growth Benchmark for health care spending for calendar years 2021 through 2025 which uses a 20/80 weighting of the growth in CT Potential Gross State Product and the growth in CT Median Income. The Department will consider this Cost Growth Benchmark along with all other factors when performing its actuarial review of rate filings submitted in accorda nce with this Bulletin.

Filing Requirements While multiple market segments can be filed in one rate filing submission, the Department requests that the carrier include separate filings for each market segment (individual, small group and large group) that comply with the following information to assist the Department in its actuarial review: • A cover le tt er describing a ll policy forms affe cted by the requested rat e change as well as the effec ti ve date of the requested rat e change. • Historical experience from in cep tio n - to -d ate, t his includes earned pr emi um, paid clai ms, incurred claim s, m em bers, actual loss rati os and expected loss rat io s (annual experience is appropriate for all years; mo nth ly experience for the most recent two years). • A demo ns tra tio n that the experie nce data subm it ted is consi sten t with the most recent financial stat em ent fi le d with the Department pursuant to section 38a - 53 a of the Connecticut General Statutes. • Unit cost trend by broa d service category, including actual unit cost data and i mp act of provider contract changes from experience period to rating period (medical and prescription drug separately). • Util iz ati on trend by broad service category, including actual uti li zat ion data. • I mpact of cost sharing leverage on trend. • Medical tec hnology tr end. • Benefit buy-down a nalysis and i mp act on trend. • Cost of each new be nefit mandate or requirement due to change in law, separately ide nt ifi ed, from the experienc e period to the ra ti ng period. This includes re qu ir eme nt s of both st ate and federal law. • A compar ison of the proposed r et ent i on charge in the f il in g to the most recently f il ed st atu to ry financial st at emen t for the regulated enti ty for which th is fili ng is being made. • Claim lag trian gle s (separate tri an gle s for medical vs. Rx) • The current capital and surplus for the regulated ent it y for which this fil in g is being made. • A demo nst rati on that the increa se requested in t hi s rate fil i ng will generate an expected medical loss rati o, for rebate purposes, that is consistent with the 80% prescribed by the federal law for individual health insurance and smal l group or 85% for large group, whichever applies to th is rat e fi li ng. • Actuar ial ce rti fi cat io n signed by a Member of the American Academy of Actuaries (MAAA). • Any additional i nf orm atio n the Commissioner deems nece ssary for th e re view of ra tes. Carriers filing individual or small group rates must identify all estimates of which they a re aware, of the risk adjustment transfer amount (paid or received) for the previous ra ting year. This should include the date of all estimates rece ived, the source of those esti mates, and the actual PMPM amounts. In addition, provide the risk adjustment transfer amounts by market segment scheduled to be published by the Center for Consumer Infor mation & Insurance Oversight (CCIIO) in June of each year, as well as the most recent Risk Adjustment Data Validation (RADV) transfer amounts, if applicable. Explain any difference between the risk adjustment used in pricing and the latest published from CCIIO, if the CCIIO report is published prior to the rate filing due date. Please note the risk adjustments in the CCIIO report have already been reduced by the administrative expense of 14%.

All rate filings must be submitted via the National Association of Insura nce Commissioners System for Electronic Rate and Form Filings (SERFF). All fields in SERFF added for reporting requirements to HHS in accordance with PPACA must be populated. Inc omplete submissions may be rejected. Carriers should submit the Uniform Rate Review Template (URRT), the Par t III Actuarial Memorandum and the HIOS rate tables in a PDF format. In addition, the URRT, the HIOS rate tables and the trend data should be submitted in excel format as well. Carriers should also provide a summary of benefits for each plan design along with the Actuar ial Value calculator output that confirms compliance with the corresponding metal tier. Indicate the HIOS plan ID and the co rresponding plan name on the summary of benefit s for each plan. Any changes submitted aft er the initial filing should include a red -lined version as well as a clean copy to facilitate the review. For new products other than policies subject to the re quirements of PPACA, the rates should be filed with the form filing in one submission using the Filing Type FORM/RATE. Policies subject to PPACA should file separate submissions for form and rate filings for new products or amendments. Rate increases should be filed as a separate rate f iling submission for all products. Every rate filing submission that includes an increase of previously approved ra tes shall include a summary of the rate increase s requested and should be clearly marked as Appendix A. The appendix should include the following, but not be limited to: • For Small Group F ilings, the overall requested increase should be s tat ed as the average annual increase across all quarters of the new rate year and not li m it ed to the annual increase from Quarter 1 of the previous rat e year to Quarter 1 of the new rat e year. • The requested inc rease for each plan contained within the rat e fil in g and the effective date of those p roposed r at e increase s. Th e requested i nc re as e for each plan should be ide nt ifi ed as a sp eci fic percent increase. • Number of c overed individuals for each product; number of covered policyholders; minimum current premium on a per member per month (PMPM) basis; minimum proposed premium on a PMPM basis; maximum current premium on a PMPM basis; maximum proposed premium on a PMPM basis and the percentage change. • Each c omponent of the increase including trend, experience ad ju st men ts and any other factors that are a component of the requested increase. Th es e can be ide nt ifi ed as a sp eci fic percent or if appropriate a percent r ange. • A footnote lis ti ng any other factors that can have an im pact on premium rates that have not been sp ecif ic all y identi fied in the appendix, including but not li mi ted to age bands, gender, geographic area, smoking, etc. • A summ ary statem ent on age bands, geographic area factors and/or smoking factors; spe cif ica ll y i f they have changed or rem ai n the same since the last approved f i li ng.

Annual Certifications to be Included as Part of the Rate Filing Carriers must provide a demonstration of compliance with mental health parity for each plan that utilizes varying copays within a service category as allowed in Bulletin HC-124. The Final Rules under the Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) (45 CF R Part 146 and 147) provide tests for determining "substantially all" and "predominant" medical/surgical benefits for reviewing the financial re quirements and quantitative treatment limitations. Carriers must include demonstra tions that each plan utilizing varying copays meets the substantially all and predominant tests. Such demonstration must also include a certification of compliance with mental health parity signed by a member of the American Academy of Actuaries. After the initial approval, such demonstration and certific ation must be made annually. Any carrier that substitutes a non-dollar limit on an essential health benefit as permitted by PPACA must file a certification and demonstration that such substitution is actuar ially justified. Transparency Pursuant to Conn. Gen. Stat. §1-210(b)(5)(B), the Connecticut Freedom of Information Act does not provide for an exemption for commercial or financial information that is required by statute. The information identified above as being required to enable the Depa rtment to fulfill its statutory rate review requirement is considered to be information required by statute and therefore, the Department will not grant any requests to hold these filings as confidentia l. Complete filings including all corre spondence and documentation will be posted on the Department website and available for review and comment by the public. All public comments will be reviewed by the Department. Questions Please contact the Insurance De partment Life and Health Division at cid.lh@ct.gov with any questions. _______________________ Andrew N. Mais Insurance Commissioner