                                 CODE OF VIRGINIA

(EFFECTIVE JANUARY 1, 2026) RESTRICTIONS RELATING TO PREMIUM RATES (§
38.2-3447)

A. Notwithstanding any provision of § 38.2-3432.2, 38.2-3501, 38.2-4306, or any
other section of this title to the contrary, a health carrier offering a health
benefit plan providing individual or small group health insurance coverage shall
develop its premium rates based on the following:

   1. Whether the health benefit plan covers an individual or family;

   2. Rating areas, as may be established by the Commission;

   3. Age, except that the rate shall not vary by more than 3 to 1 for adults;
   and

   4. Tobacco use, except that the rate shall not vary by more than 1.5 to 1.

B. A premium rate shall not vary with respect to any particular health benefit
plan by any other factor not described in subsection A.

C. Rating variations for family coverage shall be applied based on the portion
of the premium that is attributable to each family member covered under the
health benefit plan.

D. If the proposed area rate factors set forth in a rate filing for individual
or small group health insurance coverage by a health carrier for a rating area
exceed by more than 15 percent the weighted average of the proposed area rate
factors among all rating areas in which the health carrier offers health benefit
plans in that market, then:

   1. The health carrier&#8217;s rate filing shall include in a publicly
   available and unredacted form:
   				a. A comparison of the area rate factor for individual and small group
   health benefit plans that utilize the same provider network and provider
   reimbursement levels of the health benefit plans that are subject to the
   filing;
   				b. A detailed disclosure of the area rate factor methodology, which
   disclosure shall include any third-party resources or representations from a
   person other than the signing actuary, on which the signing actuary relied,
   provided that disclosure of third-party resources shall address that the
   source data only reflects differences in unit cost and provider practice
   patterns; and
   				c. To the extent that the health carrier is deriving any area rate factor
   from experience data, by rating area for the experience period used:

      1. The (i) total enrollment; (ii) total premiums; (iii) allowed claims; (iv)
      incurred claims excluding anticipated or, if available, actual risk
      adjustment payments or receipts; (v) incurred claims including anticipated
      or, if available, actual risk adjustment payments or receipts; and (vi) loss
      ratio for each of their rating areas in that market; and

      2. Aggregated incurred claims for any health system exceeding 30 percent of
      total incurred claims for that rating area in that market.

   2. The Commission shall hold a public hearing on the proposed premium rates
   prior to the approval of the rate filing.

   3. The Commission shall not approve the proposed rate filing if (i) a variance
   in area rate factors, indexed to the same rating region for both the
   individual and small group markets, of 15 percent or more exists between
   health benefit plans a carrier intends to offer in the individual market and
   health benefit plans intended to be offered in the small group market, when
   those plans utilize the same provider network and provider reimbursement
   levels and (ii) the methodologies used to calculate the area rate factors are
   different between the two markets.

E. Beginning for plan year 2020, a health carrier with an approved rate filing
that contains at least one area rate factor that exceeds by more than 25 percent
the weighted average of the area rate factors among all rating areas in a market
in which the health carrier offers individual or small group health insurance
coverage shall file with the Commission for each calendar quarter during that
plan year a report that provides, for each rating area within the market in
which the health carrier operates, the plan&#8217;s (i) enrollment; (ii) total
premiums; (iii) allowed claims; (iv) incurred claims excluding anticipated or,
if available, actual risk adjustment payments or receipts; (v) incurred claims
including anticipated or, if available, actual risk adjustment payments or
receipts; (vi) loss ratio; and (vii) aggregate incurred claims, for each health
system exceeding 25 percent of total incurred claims for that rating area. The
health carrier shall make each such quarterly report publicly available, without
redaction, not later than 45 days after the end of the calendar quarter.

F. As used in subdivisions D and E:
			&#8220;Allowed claims&#8221; means the amount of claims of a covered person
for health care services that are owed pursuant to the terms of the covered
person&#8217;s health benefits plan, including payment made by the covered
person&#8217;s health carrier, and cost-sharing obligations owed by or on behalf
of the covered person.
			&#8220;Health system&#8221; means an organization that consists of either (i)
at least one hospital plus at least one group of physicians or (ii) more than
one group of physicians.
			&#8220;Incurred claims&#8221; means allowed claims less copayments,
deductible amounts, and other cost-sharing obligations owed by or on behalf of a
covered person.
			&#8220;Methodologies,&#8221; when referring to the calculation of area rate
factors, includes (i) the types of inputs, including experience period claims
data, third-party database, other sources of data, and (ii) the series of
calculations that are used to derive area rate factors. This definition shall
not preclude a health carrier from calculating area rate factors for rates for
the individual market, based on the cost and care delivery practices associated
with the providers expected to be utilized by covered persons that reside in a
given rating area, while calculating area rate factors for rates for the small
group market, based on those providers that are expected to be utilized by
individuals employed by small employers that are located in the rating area
without regard to where the covered persons reside.
			&#8220;Provider&#8221; means a health care provider, as defined in &#xA7;
38.2-3438, that is affiliated or in-network with a health carrier.
			&#8220;Weighted average,&#8221; when referring to area rate factors, means
the mean of the area rate factors when weighted based on the projected number of
covered persons distributed by rating area.

HISTORY: 2013, c. 751; 2019, cc. 439, 440; 2023, cc. 682, 683.