Funding. [Effective Until June 30, 2025. See the Compiler's notes.]
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The program shall be funded in the manner set forth as follows:
Premiums.
The board shall establish premium rates for program coverage as provided in subdivision (1)(B). Separate schedules of premium rates based on age, tobacco use and weight may apply for individual risks. Premium rates and schedules shall be submitted to the commissioner for approval prior to use.
The board, with the assistance of the commissioner, shall determine a standard risk rate by considering the premium rates charged by other insurers offering health insurance coverage to individuals. The standard risk rate shall be established using reasonable actuarial techniques, and shall reflect anticipated experience and expenses for the coverage. Initial rates for program coverage shall not be less than one hundred fifty percent (150%) of rates established as applicable for individual standard risks. Subject to the limits provided in this subdivision (a)(1)(B), subsequent rates shall be established to provide fully for the expected costs of claims, including recovery of prior losses, expenses of operation, investment income of claim reserves, and any other cost factors subject to the limitations described herein. In no event shall program rates exceed two hundred percent (200%) of rates applicable to individual standard risks.
Following the close of each fiscal year, the commissioner shall prepare a report analyzing the program's projected revenues and expenditures and funding requirements. The commissioner shall present this report, together with the board's comments, to the governor with a recommendation for the funding of the program.
Sources of Additional Revenue.
The deficit incurred by the program, reported by the insurer or administrator pursuant to § 56-7-2909(g), shall be funded through state appropriations and an assessment on insurers, insurance arrangements and third party administrators.
The board is authorized to determine the amount and allocation of any assessments and advance interim assessments on insurers, insurance arrangements and third party administrators in accordance with this section and subject to approval by the commissioner. The commissioner shall have the authority to assess insurers, insurance arrangements, and third party administrators, and to make advance interim assessments as may be reasonable and necessary for the program's organizational and interim operating expenses. Any interim assessments are to be credited as offsets against any regular assessments due following the close of the fiscal year. The assessments must be presented to the department of commerce and insurance to advise whether the assessment will create a hazardous operational or financial condition for the insurer, insurance arrangement, or third party administrator.
The assessment for each individual insurer, insurance arrangement and third party administrator shall be determined by multiplying the total assessment of all insurers, insurance arrangements and third party administrators as determined in subdivision (a)(2)(B) by a fraction, the numerator of which equals the number of individuals in Tennessee covered by each individual insurer, insurance arrangement and third party administrator, and the denominator of which equals the total number of all individuals in Tennessee covered by insurers, insurance arrangements and third party administrators, all determined as of the end of the prior calendar year.
The board shall make reasonable efforts designed to ensure that each individual covered by insurers, insurance arrangements and third party administrators is counted only once with respect to any assessment. For that purpose, the board shall:
Require each insurer and insurance arrangement that obtains excess or stop loss insurance to include in its count of insured individuals all individuals whose coverage is reinsured, including by way of excess or stop loss coverage, in whole or part;
Require each insurer and insurance arrangement that contracts with a third party administrator to include in its count of insured individuals all individuals whose coverage is administered in whole or part by a third party administrator;
Require each insurer that is an excess or stop loss insurer to include in its count of insured individuals all individuals covered through an insurance arrangement;
Require each third party administrator to include in its count of insured individuals all individuals covered through an insurance arrangement;
Permit an insurer who is an excess or stop loss insurer to exclude from its number of insured individuals those who have been counted by the primary insurer or by the primary reinsurer or primary excess or stop loss insurer for the purpose of determining its assessment under this subdivision (a)(2);
Permit a third party administrator to exclude from its number of insured individuals those who have been counted by an insurer; and
Permit an insurance arrangement to exclude from its number of insured individuals those who have been counted by an excess or stop loss insurer or third party administrator.
The amount of the assessment of each insurer, insurance arrangement or third party administrator shall be determined by the board based on annual statements and other reports deemed to be necessary by the board and filed by the participating insurer with the board or through other reporting mechanisms established by the department of commerce and insurance. The board may use any reasonable method of estimating the number of individuals covered by an insurer or insurance arrangement if the specific number is unknown. With respect to insurers that are reinsurers or excess or stop loss insurers, the board may use any reasonable method of estimating the number of persons insured by each reinsurer or excess or stop loss insurer. The commissioner shall approve and may make modifications to the board's determination of amounts and allocations of the assessments, and shall have the authority to issue and collect the assessments.
An insurer, insurance arrangement or third party administrator may petition the commissioner for an abatement or deferment of all or part of an assessment imposed pursuant to this section. The commissioner, in consultation with the commissioner of commerce and insurance, may abate or defer, in whole or in part, the assessment if, in the opinion of the commissioner, payments of the assessment would endanger the ability of the insurer, insurance arrangement or third party administrator to fulfill its contractual obligations. In the event an assessment against an insurer, insurance arrangement or third party administrator is abated or deferred in whole or in part, the amount by which the assessment is abated or deferred may be assessed against the other insurers, insurance arrangements and third party administrators in a manner consistent with the basis for assessments set forth in this subsection (a). The insurer, insurance arrangement or third party administrator receiving the abatement or deferment shall remain liable to the program for the deficiency for four (4) years.
The board shall operate the program in a manner so that the estimated cost of providing health insurance coverage during any fiscal year will not exceed total income the program expects to receive from policy premiums, assessments, funds appropriated by the state legislature, and moneys received under subsection (c). After determining the amount of funds appropriated to it for a fiscal year, the board shall estimate the number of new policies it believes the program has the financial capacity to insure during that year so that costs do not exceed income. The board shall take steps necessary to assure that program enrollment does not exceed the number of residents it has estimated it has the financial capacity to insure.
The board may make application for any federal grants or other federal sources under which the program may be eligible to receive moneys.
Program Fund.
The Access Tennessee health insurance program fund shall be established as a separate account in the state treasury.
Moneys in the fund, including interest earned on the moneys, shall be invested by the state treasurer, pursuant to §§ 9-4-602 and 9-4-603 for the sole benefit of the fund.
Any moneys remaining in the fund at the end of the fiscal year shall not revert to the general fund, but shall be brought forward to the next fiscal year for the exclusive benefit of the fund's payment of future expenses.
The fund shall be subject to audit by the comptroller of the treasury.