By Order No. A16-106, dated April 18, 2016, the New Jersey Department of Banking and Insurance (Department) notified the marketplace of its determination to require rate and form filing for fully insured student health plans offered within New Jersey. Previously, the Department confirmed that such student health plans constituted individual health benefit plans as defined in the Individual Health Benefits Reform Act, N.J.S.A. 17B:27A-2 et seq. if a certificate is issued to an eligible person evidencing coverage under a policy or contract issued to a trust or association, regardless of the situs of delivery of the policy or contract and premium is paid by the eligible person who is not covered under the policy or contract pursuant to a continuation of benefits provision under applicable federal or state law. However, in recognition of the “unique characteristics and advantages of fully insured health benefit plans for students enrolled in an institution of higher education,” New Jersey nonetheless has allowed student health plans to be filed as discretionary group plans, rather than requiring them to be issued as individual health benefit plans. Accordingly, the Department has not previously required carriers offering Student Health Plans to comply with the informational rate filing requirements at N.J.S.A., 17B:27A-9 and N.J.A.C. 11:20-6.3.
In view of a recent determination by the Center for Medicare and Medicaid Services ("CMS") that New Jersey is an Effective Rate Review State under federal law, as well as a CMS directive that all Effective Rate Review States are expected to review rate filings for student health plans (defined by CMS as a type of individual health insurance coverage), see, 45 C.F.R. § 147.145, the Commissioner is now requiring student health plan forms and rates to be filed. The Department is providing a 90-day transition period so that all carriers (including insurance companies, health, hospital and medical corporations and health maintenance organizations) must submit separate rate and policy form filings in SERFF for each student health plan offered, identifying the filing using H22 Student Health Insurance TOI and H22.000 Student Health Insurance SubTOI. Filings must be made on or before July 1, 2016, and carriers must submit the forms at least 90 days prior to their proposed effective date of the policy, or 30 days after the date of Order No. A16-106, whichever is later. Finally, the carrier shall include a certification that the form complies with the Essential Health Benefits in the benchmark plan selected by New Jersey pursuant to 45 C.F.R. § 156.100; or, the carrier shall submit through SERFF, a certification that a previously filed form, identified in the certification by its form number and filing date, complies with the Essential Health Benefits as set forth in the benchmark plan. State benchmark plans are set forth at the link here.
With respect to rates, student health plans should be submitted at least 90 days before the effective date of the rates or 30 days from the effective date of the Department’s Order and shall be submitted for all rate changes. The detailed Rate Review Justification is fully explained at the in the link above.
The actuarial certification to support such rate filings must confirm that the rates for New Jersey do not subsidize the carrier’s student health plans in other states, and carriers shall also specify in the actuarial memorandum substantial detail which includes:
- rate increase by plan and explanation of variation if not the same for all plans;
- three years of experience and a description of the basis, which may be school specific;
- explanation of adjustments to base data for unusually high or low volume of large claims;
- a showing of the run-out date, and IBNR assumptions;
- support for the trend assumptions, including adjustment made for large claims amounts;
- services included in the “other” category;
- adjustments and support for certain factors as included in the Order linked here;
- credibility assigned to experience and credibility methodology used;
- source and development of manual rate if experience is not 100% credible;
- a rating example;
- quality improvement expenses;
- explanation of any variation in administrative costs by plan;
- AV screen shots demonstrating compliance with the 60% minimum requirements.
Student health plan rate filing questions may be directed to shpcarrierQs@dobi.nj.gov.
While the new filing rules were anticipated in view of CMS regulation, continued sale of Student Health Plans in New Jersey is likely to be significantly curtailed.