Sec. 14.35.17.04. Calculation of Reinsurance Payments Under the State Reinsurance Program

A. A carrier of a reinsurance-eligible plan, as provided for in Regulation .03 of this chapter, becomes eligible for reinsurance payments from the State Reinsurance Program when its claims costs for individual enrollees’ covered benefits in a benefit year exceed the attachment point established under the process identified in §B of this regulation.

B. Each year the Board shall set the payment parameters for the State Reinsurance Program by determining the following factors:

(1) An attachment point;

(2) A coinsurance rate;

(3) A reinsurance cap; and

(4) A market-level dampening factor provided by the Commissioner, if determined necessary by the Board.

C. For each benefit year after 2019, the Board shall set the estimated payment parameters for the State Reinsurance Program on or before April 1 of the calendar year proceeding the applicable plan year.

D. For each benefit year after 2019, the Board shall set the final payment parameters for the State Reinsurance Program before December 31 of the calendar year proceeding the applicable plan year.

E. The Exchange shall calculate each reinsurance payment made from the State Reinsurance Program as the product of the coinsurance rate multiplied by the carrier’s claims costs for an individual enrollee’s covered benefits that the carrier incurs in the applicable benefit year between the attachment point and reinsurance cap. The Exchange shall apply the carrier-specific adjustment factor provided in §B(4) of this regulation to the product calculated above to determine the adjusted reinsurance payment.

F. If the Individual Exchange determines that all reinsurance payments requested under the State Reinsurance Program by reinsurance-eligible plans in the State for a benefit year will not be equal to the amount of funding allocated to the State Reinsurance Program, the Individual Exchange shall determine a uniform pro rata adjustment to be applied to all such requests for reinsurance payments in the State.