State Codes and Statutes

Statutes > New-jersey > Title-17 > Section-17-48a > 17-48a-7-9

17:48A-7.9.  Adjustment of rates;  experience rating formula;  approval
    Group contracts, covering at least 50 employees or members, may provide for  the adjustment of the rate of premium at the end of the first year or any subsequent year of insurance thereunder based on the experience thereunder both  past and contemplated.  No medical service corporation shall use any form of  experience rating plan until it shall have filed with the commissioner the  formulas to be used and the classes of groups to which they are to apply.  The  commissioner may disapprove the formulas or classes at any time if he finds  that the rates produced thereby are excessive, inadequate or unfairly  discriminatory or that the rates, formulas or classes are such as to prejudice  the interests of persons who are eligible for medical services under contracts  with the medical service corporation which are not subject to experience  rating.  Excluding those rating formulas applicable to groups the employees or  members of which are located in more than one State and which are underwritten  in participation with other corporation(s) of other State(s), no rating formula  shall be approved by the commissioner unless it provides that the groups with  better than average experience will be assessed a reasonable community charge.   Any such rating formula may provide for the allowance of an equitable discount in the event the policyholder agrees to perform certain administrative and record keeping functions in connection with the routine maintenance of the group account.

    Nothing in this section shall preclude the medical service corporation from  incorporating in the rate formula such claim cost and utilization trend factors  as it deems necessary in its discretion so long as the rates produced are  self-supporting and the formulas for classes do not prejudice the interests of  persons who are eligible for medical services under contracts with the medical  service corporation which are not subject to experience rating.

    For experience rated groups of 50 to 99 employees or members, the commissioner will have the authority to determine that rates charged depart from community rates in such a way as to assure continuity of rating principles  with the community rated and experience rated groups of 100 or more.

     L.1970, c. 114, s. 1, eff. June 26, 1970.  Amended by L.1979, c. 177, s. 1, eff. Aug. 29, 1979.