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New Jersey on Tuesday was awarded $4.1 million in federal Affordable Care Act aid to help fight what is described as unreasonable premium increases and protect consumers.

“We’re committed to fighting unreasonable premium increases and we know rate review works,” U.S. Health and Human Secretary Kathleen Sebelius said. “States continue to have the primary responsibility for reviewing insurance rates and these grants give them more resources to hold insurance companies accountable.”

As of Sept. 1, the U.S. Affordable Care Act requires health insurers seeking to increase their rates by 10 percent or more in the individual and small group market to submit their request to experts to determine whether the rates are unreasonable.

The Affordable Care Act also requires insurance companies to publicly justify “unreasonable” premium rate increases. The provisions are designed to bring greater transparency, accountability, and, in many cases, lower costs for families and small business owners who struggle to afford coverage.

The Affordable Care Act also provides states with $250 million in Health Insurance Rate Review Grants, $48 million of which has previously been awarded to 42 States, the District of Columbia and five territories.

New Jersey used federal rate review aid to improve its review of health insurance rate increases. Prior to receiving the funding, filing of comprehensive medical rates electronically in the individual, small group, and large group markets was optional and not widely observed. As a result of the funding, all rate filings are now received electronically, which has helped the state maintain filing information.

Additionally, in an effort to standardize filing submissions, for rates filed on or after next July 1, carriers will be required to submit two worksheets and a checklist to ensure all documents are properly submitted and in the correct format.

Finally, the state has partnered with the Rutgers Center for State Health Policy to engage stakeholders in a series of forums to understand the impact of rate increases and the type of information wanted by consumers.

The latest aid is designed to help states review proposed health insurance rates and hold insurance companies accountable for disclosing information about unjustified rate increases.

New Jersey is proposing to use the aid in the following ways:

• Introduce legislation: New Jersey will work with partners to review rate filing statutes and regulations and introduce legislation if necessary
• Improve rate filing requirements: New Jersey will work with an actuarial consultant to develop analytical tools and benchmarking tool, advise on the expansion of claims data requirement, make recommendations for standardization, and make recommendations on peer review of rate filings. Another actuarial consultant will make recommendations on standardizing filings for dental plans.
• Improve transparency and consumer interfaces: New Jersey will conduct three annual rate forums and will prepare a report on the effectiveness of its rate review process, training, and outreach efforts to stakeholders.

• Hire new staff: New Jersey plans to create 5 new positions with the aid.

• Improve IT: New Jersey will fund the System for Electronic Rate and Form Filing enhancements and other insurer reporting IT systems for enhanced claims reporting.

“The proposals from the states overwhelmingly demonstrate the need, and desire, for new resources and tools to hold insurance companies accountable,” Steve Larsen, director of the Center for Consumer Information and Insurance Oversight, said.