Delaware § 7218 - Factors for premium rates; premium rate variations; premium rate adjustments; “stop-loss” policies prohibited.

§ 7218. Factors for premium rates; premium rate variations; premium rate adjustments; “stop-loss” policies prohibited.

(a) The only factors, other than plan design and family composition, that may be considered by a small employer carrier in setting premium rates for small employer health insurance are age, health status, and size of the group. “Health status” as used in this section means medical condition, including physical and mental illnesses; claims experience; receipt of health care; evidence of insurability; medical history; and unhealthy lifestyle choices as defined in § 7202 of this title.

(b) The maximum premium rate variation between high and low small employer health insurance risk groups of 2 to 50 employees is a ratio of 5 for the high risk groups to 1 for the low risk groups. The ratio of premium rate variation between high and low risk small employee groups of 2 to 50 employees must decrease by a factor of .5 for high risk groups annually on July 1, until the premium rate variation ratio is 3 for the high risk groups to 1 for the low risk groups.

(c) The maximum premium rate variation between high and low small employer health insurance risk groups of a single employee, known as “groups of one,” is a ratio of 6 for the high risk groups to 1 for the low risk groups. The ratio of premium rate variation between high and low risk small employer groups of 1 must decrease by a factor of .5 for high risk groups of 1 annually on July 1, until the premium rate variation ratio is 4 for the high risk groups to 1 for the low risk groups. Nothing in this provision may be construed to create separate risk pools for groups of one and groups of 2 to 50.

(d) A group may not receive a premium rate adjustment for a change in the health status of the members of the group that exceeds 15%, whether higher or lower, from the prior year.

(e) A small employer health insurance carrier may make available, issue, or renew a “stop loss” policy to a small employer if that small employer employs more than 5 eligible employees, the majority of whom are employed within this State, on at least 50% of its working days during the preceding calendar quarter.

(f) Nothing herein shall apply to any company licensed under Chapter 69 of this title.

77 Del. Laws, c. 388, §§  1, 2;  78 Del. Laws, c. 25, §  1;  81 Del. Laws, c. 420, § 1;