Virginia Code 38.2-6602: Commonwealth Health Reinsurance Program; established
A. The Commission shall implement a reinsurance program, known as the Commonwealth Health Reinsurance Program. Implementation and operation of the Program is contingent upon approval of the State Innovation Waiver submitted by the Commission in accordance with § 38.2-6606. If the State Innovation Waiver and federal funding request submitted by the Commission pursuant to § 38.2-6606 are approved, the Commission shall implement and operate the Program in accordance with this section.
Terms Used In Virginia Code 38.2-6602
- Attachment: A procedure by which a person's property is seized to pay judgments levied by the court.
- Attachment point: means the amount set by the Commission for claims costs incurred by an eligible carrier for a covered person's covered benefits in a benefit year, above which the claims costs for benefits are eligible for reinsurance payments under the Program. See Virginia Code 38.2-6600
- Benefit year: means the calendar year for which an eligible carrier provides coverage through an individual health benefit plan. See Virginia Code 38.2-6600
- Coinsurance rate: means the rate set by the Commission at which the Program will reimburse an eligible carrier for claims incurred for a covered person's covered benefits in a benefit year, which claims exceed the attachment point but are below the reinsurance cap. See Virginia Code 38.2-6600
- Commission: means the State Corporation Commission. See Virginia Code 38.2-100
- Covered person: means an individual covered under individual health insurance coverage that (i) is delivered or issued for delivery in the Commonwealth and (ii) is neither a grandfathered plan, student health insurance coverage, nor transitional coverage that the federal government allows under a nonenforcement policy. See Virginia Code 38.2-6600
- Eligible carrier: means a carrier that (i) offers individual health insurance coverage other than a grandfathered plan, student health insurance coverage, or transitional coverage that the federal government allows under a nonenforcement policy and (ii) incurs claims costs for a covered person's covered benefits in the applicable benefit year. See Virginia Code 38.2-6600
- Fund: means the Commonwealth Health Reinsurance Program Special Fund established by the Commission pursuant to § 38. See Virginia Code 38.2-6600
- Payment parameters: means the attachment point, reinsurance cap, and coinsurance rate for the Program. See Virginia Code 38.2-6600
- Person: means any association, aggregate of individuals, business, company, corporation, individual, joint-stock company, Lloyds type of organization, organization, partnership, receiver, reciprocal or interinsurance exchange, trustee or society. See Virginia Code 38.2-100
- Program: means the Commonwealth Health Reinsurance Program established pursuant to this chapter. See Virginia Code 38.2-6600
- rates: means any rate of premium, policy fee, membership fee or any other charge made by an insurer for or in connection with a contract or policy of insurance. See Virginia Code 38.2-100
- Reinsurance cap: means the amount set by the Commission for claims costs incurred by an eligible carrier for a covered person's covered benefits in a benefit year, above which the claims costs for benefits are no longer eligible for reinsurance payments under the Program. See Virginia Code 38.2-6600
- Reinsurance payment: means an amount paid to an eligible carrier under the Program. See Virginia Code 38.2-6600
- State: means any commonwealth, state, territory, district or insular possession of the United States. See Virginia Code 38.2-100
- State Innovation Waiver: means a waiver of one or more requirements of the Affordable Care Act authorized by § 1332 of the Affordable Care Act, 42 U. See Virginia Code 38.2-6600
- Total amount paid by the eligible carrier for any eligible claim: means the amount paid by the eligible carrier based on the allowed amount less any deductible, coinsurance, or copayment, as of the time applicable data is submitted or made accessible under subdivision C 1 of § 38. See Virginia Code 38.2-6600
B. The Commission or its designee shall collect or access data from an eligible carrier as necessary to determine reinsurance payments, according to the data requirements under subdivision C 1.
1. Unless an eligible carrier is notified otherwise by the Commission, on a quarterly basis during the applicable benefit year, each eligible carrier shall report to the Commission its claims costs that exceed the attachment point for that benefit year. For each applicable benefit year, the Commission shall notify eligible carriers of reinsurance payments to be made for the applicable benefit year no later than September 30 of the year following the applicable benefit year. By November 15 of the year following the applicable benefit year, the Commission shall disburse all applicable reinsurance payments to an eligible carrier.
2. For the 2023 benefit year and each benefit year thereafter, the Commission shall establish and publish the payment parameters for the applicable benefit year by May 1 of the year immediately preceding the applicable benefit year. In setting the payment parameters under this subsection, the Commission shall consider the following factors: (i) stabilized or reduced premium rates in the individual market, (ii) increased participation in the individual market, (iii) improved access to health care services and their providers for enrolled individuals, (iv) mitigation of the impact high-risk individuals have on premium rates in the individual market, (v) the availability of any federal funding available for the Program, and (vi) the total amount available to fund the Program.
3. If the Commission determines that all reinsurance payments for a covered person‘s covered benefits requested under the Program by eligible carriers for a benefit year will not be equal to the amount of funding allocated to the Program, the Commission shall determine a uniform pro rata adjustment to be applied to all such requests for reinsurance payments.
C. A carrier that meets the requirement of this subsection and subsection D shall be eligible to request reinsurance payments from the Program. An eligible carrier shall make requests for reinsurance payments in accordance with the requirements established by the Commission.
1. To receive reinsurance payments through the Program, an eligible carrier shall, by April 30 of the year following the benefit year for which reinsurance payments are requested, (i) provide the Commission with access to the data within the dedicated data environment established by the eligible carrier under the federal risk adjustment program under 42 U.S.C. § 18063 or access to other carrier-specific data if and where necessary and (ii) submit to the Commission an attestation that the carrier has complied with the dedicated data environments, data requirements, establishment and usage of masked enrollee identification numbers, and data submission deadlines.
2. An eligible carrier shall maintain documents and records sufficient to substantiate the requests for reinsurance payments made pursuant to this section for at least five years. An eligible carrier shall also make those documents and records available upon request from the Commission for purposes of verification, investigation, audit, or other review of reinsurance payment requests. The Commission may audit an eligible carrier to assess the carrier’s compliance with this section. The eligible carrier shall ensure that its contractors, subcontractors, and agents cooperate with any audit under this section.
D. The Commission or its designee shall calculate each reinsurance payment based on an eligible carrier’s incurred claims costs for a covered person‘s covered benefits in the applicable benefit year. If the claims costs for a covered person’s covered benefits in the applicable benefit year do not exceed the attachment point for the applicable benefit year, the carrier shall not be eligible for a reinsurance payment. If the claims costs exceed the attachment point for the applicable benefit year, the Commission shall calculate the reinsurance payment as the product of the coinsurance rate and the eligible carrier’s claims costs up to the reinsurance cap. A carrier shall be ineligible for reinsurance payments for claims costs for a covered person’s covered benefits in the applicable benefit year that exceed the reinsurance cap. The Commission shall ensure that reinsurance payments made to eligible carriers do not exceed the total amount paid by the eligible carrier for any eligible claim. An eligible carrier may request that the Commission reconsider a decision on the carrier’s request for reinsurance payments within 21 days after notice of the Commission’s decision.
E. The Commission shall require each eligible carrier that participates in the Program to file with the Commission, by a date and in a form and manner specified by the Commission by rule, the care management protocols the eligible carrier will use to manage claims within the payment parameters.