Sec. 14.35.17.02. Definitions

A. In this chapter, the following terms have the meanings indicated.

B. Terms Defined.

(1) “Affordable Care Act (ACA)” means the Patient Protection and Affordable Care Act of 2010 (Pub. L. 111-148), as amended, including by the Health Care and Education Reconciliation Act of 2010 (Pub. L. 111-152), and the regulations issued under it.

(2) “Annual Letter to Issuers” means a written communication, issued by the Individual and SHOP Exchange, that:

(a) Provides guidance on how the Exchange will interpret laws and regulations, issues reminders regarding requirements of and compliance with relevant laws and regulations, and provides notification of policy developments; and

(b) Instructs issuers on how to meet compliance with QHP certification standards, establishes timelines on implementation, and details Exchange expectations of issuer compliance with such certification standards.

(3) “Attachment point” means the threshold dollar amount for claims costs incurred by a health insurance carrier for an enrolled individual’s covered benefits in a benefit year, after which threshold the claims costs for such benefits are eligible for reinsurance payments.

(4) “Benefit year” means a calendar year for which a health plan provides coverage for health benefits.

(5) “Board” has the meaning stated in Insurance Article, §31-101, Annotated Code of Maryland.

(6) “Carrier business agreement” means the annual agreement between the Exchange and the carrier that contains terms and conditions governing compliance with the Annotated Code of Maryland, and State and federal regulations.

(7) “Carrier Reference Manual” means the document developed by the Exchange that provides business rules and operational instructions to authorized carriers participating on the Individual and SHOP Exchange.

(8) “Carrier-specific adjustment factors” means a set of coefficients that modify payments under the State Reinsurance Program and that replicate the modified payments that would occur by applying the Dampening Factor to the Federal Risk Adjustment Program.

(9) “Claims-to-premium ratio” means the resulting ratio produced by dividing total claims incurred (less State Reinsurance Program payments, federal risk adjustment payments, and federal high risk pool reinsurance payments) by the premium amount collected for a reinsurance-eligible plan.

(10) “Coinsurance rate” means the rate at which the applicable reinsurance entity will reimburse the health insurance issuer for claims costs incurred for an enrolled individual’s covered benefits in a benefit year after the attachment point and before the reinsurance cap.

(11) “Dampening factor” means a coefficient that modifies payments under the State Reinsurance Program to account for RA/RI program interaction to the extent that the claims-to-premium ratio between payers and receivers under the risk adjustment is normalized.

(12) “Individual Exchange” has the meaning stated in Insurance Article, §31-101(h), Annotated Code of Maryland.

(13) Payment Parameters.

(a) “Payment parameters” means the attachment point, coinsurance rate, and reinsurance cap for reinsurance payments.

(b) “Payment parameters” includes a dampening factor, if determined appropriate by the Board.

(14) “Qualified health plan (QHP)" has the meaning stated in Insurance Article, §31-101, Annotated Code of Maryland.

(15) “RA/RI program interaction” refers to payments received by a carrier for the enrolled population whose risk and claims experience would be eligible for payments under both the Federal Risk Adjustment Program and the State Reinsurance Program, such that the resulting full payment would result in a normalized claims-to-premium ratio, for the enrolled population identified in this definition, that is less than one.

(16) “Reinsurance cap” means the threshold dollar amount for total claims costs paid by a health insurance issuer for an enrolled individual’s covered benefits, after which, the claims costs for such benefits are no longer eligible for reinsurance payments.

(17) “Reinsurance-eligible plan” means any health benefit plan offered in the individual market, except for the limitations and exceptions provided in Regulation .03 of this chapter.

(18) “Risk adjustment covered plan” means, for the purpose of the risk adjustment program, any health insurance coverage offered in the individual or small group market with the exception of grandfathered health plans, group health insurance coverage described in 45 CFR §146.145(c), individual health insurance coverage described in 45 CFR §148.220, and any plan determined not to be a risk adjustment covered plan in the applicable federally certified risk adjustment methodology.

(19) “Section 1332 State Innovation Waiver” means the waiver for state innovation filed by the State of Maryland, pursuant to 42 U.S. Code §18052.

(20) “State Reinsurance Program” means the market stabilization program identified in Insurance Article, §31-117, Annotated Code of Maryland.