Insights

Premium Rate Change Notice


On Sept. 23, 2016, Gov. Brown signed SB 908 into law. This law is meant to help alert consumers whenever state regulators consider increases to their health insurance premiums to be too high. Under current law, the California Department of Managed Health Care and the California Department of Insurance review premium rate increases proposed by insurers and health plans that each agency regulates. When the agencies conclude that an increase is unjustified, they can ask the insurer to rescind the increase, but the company is not legally obligated to comply. The agencies’ only recourse is to post the information on their websites.

Under this new legislation, insurers are required to send written notices to policyholders advising them that regulators found their small group premium rate increases to be unreasonable or unjustified. The notices must be sent at least 60 before the policy renewal date, or 10 days before the start of the next health insurance open enrollment period, thereby giving consumers time to shop for a new plan.

SB 908 is effective Jan. 1, 2017.

SB 908 »