§3958. Reinsurance; premium rates
1. Reinsurance amount. A member insurer offering an individual health plan under section 2736‑C must be reinsured by the association to the level of coverage provided in this subsection and is liable to the association for any applicable reinsurance premium at the rate established in accordance with subsection 2. For calendar year 2023 and subsequent calendar years, the association shall also reinsure member insurers for small group health plans issued under section 2808‑B, unless otherwise provided in rules adopted by the superintendent pursuant to section 2792, subsection 5.
A. Beginning July 1, 2012, except as otherwise provided in paragraph A‑1, the association shall reimburse a member insurer for claims incurred with respect to a person designated for reinsurance by the member insurer pursuant to section 3959 after the insurer has incurred an initial level of claims for that person of $7,500 for covered benefits in a calendar year. In addition, the insurer is responsible for 10% of the next $25,000 of claims paid during a calendar year. The amount of reimbursement is 90% of the amount incurred between $7,500 and $32,500 and 100% of the amount incurred in excess of $32,500 for claims incurred in that calendar year with respect to that person. For calendar year 2012, only claims incurred on or after July 1st are considered in determining the member insurer's reimbursement. With the approval of the superintendent, the association may annually adjust the initial level of claims and the maximum limit to be retained by the insurer to reflect changes in costs, utilization, available funding and any other factors affecting the sustainable operation of the association. [PL 2019, c. 653, Pt. B, §18 (AMD).]
A-1. In any plan year in which a pooled market is operating in accordance with section 2792, the association shall operate a retrospective reinsurance program providing coverage to member insurers for all individual and small group health plans issued in this State in that plan year. For plan years beginning in 2022, if the pooled market has not been implemented pursuant to section 2792, subsection 5, the association may operate a retrospective reinsurance program for individual health plans, subject to the approval of the superintendent.
(1) The association shall reimburse member insurers based on the total eligible claims paid during a calendar year for a single individual in excess of the attachment point specified by the board. The board may establish multiple layers of coverage with different attachment points and different percentages of claims payments to be reimbursed by the association.
(2) Eligible claims by all individuals enrolled in individual or small group health plans in this State may not be disqualified for reimbursement on the basis of health conditions, predesignation by the member insurer or any other differentiating factor.
(3) The board shall annually review the attachment points and coinsurance percentages and make any adjustments that are necessary to ensure that the retrospective reinsurance program operates on an actuarially sound basis.
(4) The board shall ensure that any surplus in the retrospective reinsurance program at the conclusion of a plan year is used to lower attachment points, increase coinsurance rates or both for that plan year, consistent with its responsibility to ensure that the program operates on an actuarially sound basis. [PL 2019, c. 653, Pt. B, §18 (NEW).]
B. A member insurer shall apply all managed care, utilization review, case management, preferred provider arrangements, claims processing and other methods of operation without regard to whether claims paid for coverage are reinsured under this subsection. A member insurer shall report for each plan year the name of each high-priced item or service for which its payment exceeded the amount allowed for eligible claims and the name of the provider that received this payment. The association shall annually compile and publish a list of all reported names. [PL 2019, c. 653, Pt. B, §18 (AMD).]
[PL 2021, c. 361, §5 (AMD).]
2. Premium rates. The association, as part of the plan of operation under section 3953, subsection 3, shall establish a methodology for determining premium rates to be charged member insurers to reinsure persons eligible for coverage under this chapter. The methodology must include a system for classification of persons eligible for coverage that reflects the types of case characteristics used by insurers for individual health plans pursuant to section 2736-C, together with any additional rating factors the association determines to be appropriate. The methodology must provide for the development of base reinsurance premium rates, subject to approval of the superintendent, set at levels that, together with other funds available to the association, will be sufficient to meet the anticipated costs of the association. The association shall periodically review the methodology established under this subsection and may make changes to the methodology as needed with the approval of the superintendent. The association may consider adjustments to the premium rates charged for reinsurance to reflect the use of effective cost containment and managed care arrangements by an insurer. This subsection does not apply to reinsurance with respect to any calendar year for which the association operates a retrospective reinsurance program under subsection 1, paragraph A-1. With the approval of the superintendent, the association's plan of operation for a retrospective reinsurance program may include a provision for charging premium on an equitable basis to all member insurers.
[PL 2019, c. 653, Pt. B, §18 (AMD).]
SECTION HISTORY
PL 2011, c. 90, Pt. B, §8 (NEW). PL 2011, c. 621, §§4, 5 (AMD). PL 2019, c. 653, Pt. B, §18 (AMD). PL 2021, c. 361, §5 (AMD).