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Who Approves New Jersey Health Insurance Rates

Post Date July 10, 2012 - Contrary to popular opinion, individual New Jersey Health Insurance Rates(IHIC)  in are decided solely by it’s NJ insurance companies. Of

Who Approves New Jersey Health Insurance Rates

Who Approves New Jersey Health Insurance Rates

course is true for all auto insurance rates and homeowners insurance rates.  Its only the insurance company which knows how much it needs in premium to pay claims and stay profitable.   The NJ Department of Banking and Insurance (DOBI) only has the authority to monitor and disapprove the proposed rates, but not to set them. In New Jersey,  New Jersey Health Insurance Rates  providers may increase their rates monthly, quarterly, or in a yearly basis provided that they comply with both New Jersey and Federal law.  Though New Jersey Insurance Department has no authority in setting  rates, Health Insurance Companies are still required to submit an informational rate filing  to the State of New Jersey before they can start charging their clients with the new rates.  New Jersey Health Insurance Rates increases and decreases may only be approved by DOBI for the following reasons:

a)       Increase filing is incomplete wherein the insurance provider failed to put all the necessary information as required by law;

b)       ) If rates increased does not comply with specific provision of the law such as when one provision requires that rates shall only vary by specific rating factors but the increase filing intends to use an “impermissible factor” like occupation; and

c)       If the increase filing will not meet New Jersey’s minimum loss ratio requirement which shall not be below 80%.

Who Approves New Jersey Health Insurance Rates

As the government agency tasked to regulate the insurance industry in New Jersey, the NJ DOBI has the responsibility to verify New Jersey Health Insurance Rates increases and to ensure that such increase is reasonable and must meet what is required by law. DOBI must see to it that the insurance provider’s assumption on the growing costs of medical services is appropriate and that the proposed rates shall meet the state’s minimum loss requirement of 80%, and all other legal requirements.

In addition, New Jersey Health Insurance rates providers who wished to increase their IHC premium rates to 10% or more are required to inform the United States Department of Health and Human Services. Health insurance rate increases is an avoidable occurrence. Rates may increase due to the increasing use and cost of medical services. As for particular policyholders, health insurance rates may also increase when there’s a change in the clients rating factors such as age and geographic area.


Michael E. Dortch
President &  Managing Agent
Corporate Home Office
618 South Broad Street
Lansdale, Pennsylvania  19446
(800) 807-0762