CMS Releases Proposed Health Insurer Disclosure Notices for Premium Rate Increases

checklist2.JPGThe Centers for Medicare & Medicaid Services (CMS) has released proposed forms that health insurers will need to complete if they intend to increase their health care plan premiums beyond 10%. Section 1003 of the Affordable Care Act adds a new section to the Public Health Service (PHS) Act that directs the U.S. Department of Health and Human Services (HHS), in conjunction with the states, to establish a process for the annual review of “unreasonable increases in premiums for health insurance coverage.” Proposed regulations (pdf) implementing this requirement were issued in December 2010. Generally, insurers in the individual and small group market must complete and submit the aforementioned forms to the CMS to justify planned premium increases that exceed 10%, as well as disclose to consumers information about the proposed increase. After 2011, state-specific thresholds will be set for disclosure of rate increases.

The consumer disclosure notice included in the CMS materials requires the insurer to explain simply but in some detail the fact that it is seeking a rate increase over 10%, why and which projects and plans will be affected by the increase, how the increase will impact premiums, and to provide a breakdown of how the money will be spent, among other issues.

This entry was written by Ilyse Schuman.

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Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.