Questions and Answers: HNE’s Settlement with the Division of Insurance
Posted on August 20, 2010
| Q: | Why did HNE agree to settle with the Division of Insurance (DOI)? |
| A: | HNE decided to settle our case to bring certainty to our rate structure. The agreement will end the upheaval experienced by individuals and small businesses over the last few months. We also believe that the settlement will set the scene for a more constructive statewide conversation about health-care costs. We look forward to resuming our work to find meaningful and sustainable ways to address the drivers of health care costs. |
| Q: | What are the rate increases that have been approved as part of this agreement? |
| A: | Premium base rates approved in this settlement are between 5.5% and 14.9% with an effective date of September 1, 2010. Final rates will be based on plan type and effective date of the renewal. |
| Q: | What does the range mean? |
| A: | Rate increases will be in the range of 5.5% and 14.9% and will vary based on plan design. |
| Q: | Is 14.9% the maximum increase? |
| A: | Rates will still reflect demographic adjustments for 2010. Age band adjustments were made to the 2010 rate model; therefore, there may be some changes that result in rates that are higher than 14.9%. |
| Q: | How will groups and brokers be notified of the settlement? |
| A: | HNE will provide groups with a notification letter. Brokers will receive a letter with a proposal sheet identifying the group’s current plan(s). |
| Q: | How will groups know what the new premiums are? |
| A: | Groups will receive the new rates in their October premium bill. The new rates will be reflected beginning with October premium bills. October bills will also include an amount which makes up the difference between the September interim premium bill and the premium agreed to in the settlement. |
| Q: | When will I get my re-rate for my September quote? |
| A: | HNE’s goal is to have all final rates to brokers and groups during the week of August 23, 2010. |
| Q: | Will census shifts affect the rate increase for September? |
| A: | Based on DOI agreement, your final rate is based on your census from your date of renewal. The group’s anniversary date will remain the same. If the group requires HNE to re-rate with new census we will do so as needed. |
| Q: | Is the DOI settlement a qualifying event for open enrollment? |
| A: | No, this does not qualify for an open enrollment period. |
| Q: | Is the rate increase retroactive to the employer group’s original anniversary date? |
| A: | No, the rate increase is effective September 1, 2010 |
| Q: | Can a group buy-down? |
| A: | Yes, if requested, a group can buy down. The effective date of their plan will be the 1st day of the following month and their original anniversary date will not change. HNE will not make retroactive plan changes. |
| Q: | Will HNE collect the back due premium all at once? |
| A: | Yes, the September premium differential will be due with the October premium. Rates will change as of September 1, 2010. |
| Q: | Will HNE retro bill for premiums prior to September? |
| A: | No, the agreement states “effective September 1, 2010”. The September premium differential will be due with the October premium. |
| Q: | When will HNEDirect be ready for on-line quoting? |
| A: | HNE anticipates HNEDirect will be available by the end of August for on-line quoting. |
| Q: | Why was HNE able to lower its premium rates from its original rate filings? |
| A: | HNE removed the profit margin from the small group business, meaning we will not make a profit on small group businesses in 2010. |
| Q: | Why are your percentage increases higher than your competitors? |
| A: | HNE’s increase is higher than our competitors because, in some cases, our starting base rates were lower than some of our competitors. HNE has always been committed to providing cost effective rates to our groups and the % increase approved by the DOI reflects our lower rates. |
| Q: | What are the primary drivers for health insurance premiums? |
| A: | Health care costs are rising for a variety of reasons: an aging and increasingly obese society, new and more expensive technologies, and a propensity to use expensive treatments instead of less expensive alternatives. |
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