45 CFR Chapter 154, Rate Increase Disclosure and Review, is another in a series of federal regulations relating to the implementation of the health insurance reforms contained in the federal Affordable Care Act (ACA). This regulation deals with, among other things, the requirements a state must meet in order to be certified as having an Effective Rate Review Program and the reporting requirements for insurers whose rate increases meet or exceed a certain threshold established in the regulation. Insurers that meet or exceed the threshold are subject to enhanced reporting requirements to either the federal government, the state insurance regulator in which the rate increase applies or both. The purpose of this bulletin is to provide insurers guidance regarding rate filings made to this office on or after September 1, 2011, and guidance to those insurers whose rate increases meet or exceed the threshold of a potential unreasonable rate increase under 45 CFR Chapter 154.
Effective September 1, 2011, and pursuant to s. 625.13, Wis. Stat., and s. 601.42, Wis. Stat., all health insurers authorized to write individual and small employer group health insurance in the state of Wisconsin shall make all initial and subsequent rate change filings at least 30 days prior to the effective date of the rates contained in the filing. The filings shall be made in a manner and form as prescribed by this office and shall include the data elements and the actuarial memorandum as attached to this bulletin. Instructions for submitting filings are in the System for Electronic Rate and Form Filing (SERFF) and on the web site at this link:
http://oci.wi.gov/company/forms-policy.htm. Insurers are encouraged to use SERFF in making their filings to the Office of the Commissioner of Insurance (OCI). Any questions concerning these new rate filing procedures should be directed to Rachel Donohue at
Pursuant to 45 CFR Chapter 154, for calendar year 2011 beginning on or after September 1, 2011, and pursuant to section 154.200 (a)(1), rate increases that meet or exceed a 10% threshold are subject to review for a possible finding as an unreasonable rate increase. In addition, pursuant to section 154.215, for a rate increase that is subject to section 154.200, the health insurer must submit a preliminary justification on a form and in the manner prescribed by the Department of Health and Human Services (HHS). The insurer is required to submit this information to HHS and to the state insurance department in which the rate increase applies and the state accepts such a submission. The Wisconsin Office of the Commissioner of Insurance will accept both individual and small employer group filings from those insurers whose rate increases meet or exceed the 10% threshold.
Since Wisconsin requires the filing of individual and small employer group health insurance rate filings prior to the effective date of the rates being filed, the above applies to rate increases that are filed on or after September 1, 2011. It is also important to note that section 154.200 (c) requires the insurer to look back 12 months from the effective date of any rate increase to determine whether the 10% threshold has been met. This means that a rate increase effective on or after September 1, 2011, that does not meet the 10% threshold may still be considered subject to review if rate increases filed 12 months prior to the current rate increase are combined with current rate increases resulting in a combined rate increase of 10% or more. It should also be noted that a rate increase is considered to meet or exceed the threshold if the weighted average increase for all enrollees subject to the rate increase meets or exceeds the threshold.
Section 154.220 sets forth the timing of filing the preliminary justification. Insurers must submit a preliminary justification to HHS and the OCI prior to the implementation of the rate increase. This applies to both individual and small employer group rate increase filings.
Should you have any questions regarding this bulletin, please contact Alison Fasching at
Data elements - individual insurance
Actuarial memorandum - individual insurance
Data elements - small group insurance
Actuarial memorandum - small group insurance