Signed by Governor Jared Polis

Vote Smart's Synopsis:

Vote to pass with amendment a bill that establishes a plan for a statewide reinsurance program for decreasing insurance premiums.

Highlights:

• Establishes within the division of insurance, the Colorado Reinsurance Program, contingent upon approval of the state innovation waiver provided by the Affordable Care Act, or a federal funding request (Sec. 1).

• Defines “attachment point” as the amount set for claims costs incurred by an insurance carrier for a covered person’s benefits, above which the claims costs are eligible for reinsurance payments (Sec. 1).

• Defines “benefit year” as the calendar year for which an insurance carrier provides coverage through an individual health benefit plan (Sec. 1). 

• Authorizes the commissioner of insurance to issue revenue bonds for the expenses of the program (Sec. 1). 

• Requires each eligible carrier to report to the commissioner its claims costs that exceed the attachment point on a quarterly basis (Sec. 1).

• Requires the commissioner, for each applicable benefit year, to notify eligible carriers about reinsurance payments to be made for the applicable benefit year, no later than June 30th of the year following the applicable benefit year, and to disburse all applicable reinsurance payments to an eligible carrier no later than August 15th of that year (Sec. 1).

• Requires the commissioner to set payment parameters at amounts meant to achieve reduced claims costs, with higher reductions emphasized in rural areas (Sec. 1).

• Specifies that the following factors should be considered in setting payment parameters (Sec. 1):

• Participation and competition by carriers and providers in the individual market;

• Enrollment across all income levels and morbidity in the individual market; and

• Rates in the individual market.

• Requires eligible carriers to request reinsurance payments by April 30th of the year following the benefit year, and to maintain records sufficient to substantiate requests (Sec. 1).

• Authorizes the commissioner to have a carrier audited to assess its compliance with this section (Sec. 1).

• Authorizes a carrier to request a reconsideration of the commissioner's decision within 30 days of the notice of the decision (Sec. 1).

• Requires each eligible carrier to file the care management protocols it will use to manage claims within the payment parameters (Sec. 1).

• Requires the commissioner to maintain accounting records of all expenses, payments, and requests for payment within the reinsurance program (Sec. 1).

• Establishes the Reinsurance Program Cash Fund, which consists of all federal grants, special fees assessed against hospitals and carriers, and money transferred from the general fund for the purpose of the program (Sec. 1). 

• Authorizes the commissioner to assess special fees against hospitals between $40 million and the maximum amount allowed under 42 CFR 433.68, to provide funding of up to 25% required for the program (Sec. 1). 

• Prohibits hospitals from passing fees on to consumers through increased fees or charges (Sec. 1). 

• Authorizes the commissioner to assess special fees against carriers in an amount equal to any fees assessed against hospitals that are suspended by the federal government and specifies that this subsection does not apply to benefits provided under Medicare, Medicaid, or the Children’s Basic Health Plan (Sec. 1).  

• Appropriates $785,904 to the department of regulatory agencies for use by the division of insurance for the 2019-2020 fiscal year (Sec. 3).

Full Bill Text

Vote Smart's Synopsis:

Vote to pass with amendment a bill that establishes a plan for a statewide reinsurance program for decreasing insurance premiums.

Highlights:

• Establishes within the division of insurance, the Colorado Reinsurance Program, contingent upon approval of the state innovation waiver provided by the Affordable Care Act, or a federal funding request (Sec. 1).

• Defines “attachment point” as the amount set for claims costs incurred by an insurance carrier for a covered person’s benefits, above which the claims costs are eligible for reinsurance payments (Sec. 1).

• Defines “benefit year” as the calendar year for which an insurance carrier provides coverage through an individual health benefit plan (Sec. 1). 

• Authorizes the commissioner of insurance to issue revenue bonds for the expenses of the program (Sec. 1). 

• Requires each eligible carrier to report to the commissioner its claims costs that exceed the attachment point on a quarterly basis (Sec. 1).

• Requires the commissioner, for each applicable benefit year, to notify eligible carriers about reinsurance payments to be made for the applicable benefit year, no later than June 30th of the year following the applicable benefit year, and to disburse all applicable reinsurance payments to an eligible carrier no later than August 15th of that year (Sec. 1).

• Requires the commissioner to set payment parameters at amounts meant to achieve reduced claims costs, with higher reductions emphasized in rural areas (Sec. 1).

• Specifies that the following factors should be considered in setting payment parameters (Sec. 1):

• Participation and competition by carriers and providers in the individual market;

• Enrollment across all income levels and morbidity in the individual market; and

• Rates in the individual market.

• Requires eligible carriers to request reinsurance payments by April 30th of the year following the benefit year, and to maintain records sufficient to substantiate requests (Sec. 1).

• Authorizes the commissioner to have a carrier audited to assess its compliance with this section (Sec. 1).

• Authorizes a carrier to request a reconsideration of the commissioner's decision within 30 days of the notice of the decision (Sec. 1).

• Requires each eligible carrier to file the care management protocols it will use to manage claims within the payment parameters (Sec. 1).

• Requires the commissioner to maintain accounting records of all expenses, payments, and requests for payment within the reinsurance program (Sec. 1).

• Establishes the Reinsurance Program Cash Fund, which consists of all federal grants, special fees assessed against hospitals and carriers, and money transferred from the general fund for the purpose of the program (Sec. 1). 

• Authorizes the commissioner to assess special fees against hospitals between $40 million and the maximum amount allowed under 42 CFR 433.68, to provide funding of up to 25% required for the program (Sec. 1). 

• Prohibits hospitals from passing fees on to consumers through increased fees or charges (Sec. 1). 

• Authorizes the commissioner to assess special fees against carriers in an amount equal to any fees assessed against hospitals that are suspended by the federal government and specifies that this subsection does not apply to benefits provided under Medicare, Medicaid, or the Children’s Basic Health Plan (Sec. 1).  

• Appropriates $785,904 to the department of regulatory agencies for use by the division of insurance for the 2019-2020 fiscal year (Sec. 3).

Full Bill Text