§ 26-19-307 — Small employer carrier reinsurance program

Wyoming § 26-19-307

• Jurisdiction: Wyoming
• Title 26: Insurance Code
• Ch. 19: GROUP AND BLANKET DISABILITY INSURANCE

Text

(a) There is hereby created a nonprofit entity to be known
as the "Wyoming small employer health reinsurance program" or
"WySEHRP."
(b) Within sixty (60) days of a written request by the
commissioner, each small employer carrier shall make a filing
with the commissioner containing the carrier's net health
insurance premium derived from health benefit plans delivered to
small employers in this state in the previous calendar year.
(c) Participating carriers shall nominate board members
which shall be subject to approval by the commissioner. The
board shall consist of at least three (3) and not more than
seven (7) representatives who shall serve three (3) year
staggered terms. To the extent possible, the board shall
include representation from carriers whose principal health
insurance business is in the small employer market, health
maintenance organizations and nonprofit health, hospital or
medical service corporations. Members of the board shall be
reimbursed from the assets of the program for expenses incurred
by them as members of the board but shall not otherwise be
compensated by the program for their services. The commissioner
or the commissioner's designee shall be an ex officio voting
member of the board. In approving the selection of the board,
the commissioner shall assure that all participating carriers
are fairly represented.
(d) If at any time there is no board, the commissioner may
appoint an initial board.
(e) Within one hundred eighty (180) days after the
selection or appointment of an initial board pursuant to
subsection (d) of this section, the board shall submit to the
commissioner a plan of operation and thereafter any amendments
necessary or suitable, to assure the fair, reasonable and
equitable administration of the program. The plan of operation
shall be effective upon approval in writing by the commissioner
consistent with the date on which the coverage under this
section is available. Any plan of operation or amendments
thereto, submitted to the commissioner by the board pursuant to
this subsection shall be deemed approved by the commissioner if
not expressly disapproved in writing by the commissioner within
ninety (90) days of its receipt by the commissioner.
(f) Repealed by Laws 2017, ch. 58, § 2.
(g) The plan of operation shall:
(i) Establish procedures for handling and accounting
of program assets and monies and for an annual fiscal reporting
to the commissioner;
(ii) Establish terms of office and procedures for
filling vacancies on the board, subject to the approval of the
commissioner;
(iii) Establish procedures for selecting an
administering carrier and setting forth the powers and duties of
the administering carrier;
(iv) Establish procedures for reinsuring risks in
accordance with the provisions of this act;
(v) Establish procedures for collecting assessments
from participating carriers to provide for claims reinsured by
the program and for administrative expenses incurred or
estimated to be incurred during the period for which the
assessment is made;
(vi) Provide for any additional matters at the
discretion of the board.
(h) The program shall have the general powers and
authority granted under the laws of this state to insurance
companies and health maintenance organizations licensed to
transact business, except the power to issue health benefit
plans directly to either groups or individuals. The program
shall also have the specific authority to:
(i) Enter into contracts necessary or proper to carry
out the provisions and purposes of this act, including the
authority, with the approval of the commissioner, to enter into
contracts with similar programs of other states for the joint
performance of common functions or with persons or other
organizations for the performance of administrative functions;
(ii) Sue or be sued, including taking any legal
actions necessary or proper for recovering any assessments and
penalties for, on behalf of, or against the program or any
participating carriers;
(iii) Take any legal action necessary to avoid the
payment of improper claims against the program;
(iv) Define the array of health coverage products for
which reinsurance will be provided, and to issue reinsurance
policies, in accordance with the requirements of this act;
(v) Establish rules, conditions and procedures
pertaining to the reinsurance of participating carrier's risks
by the program;
(vi) Establish actuarial functions as appropriate for
the operation of the program;
(vii) Assess participating carriers in accordance
with the provisions of subsection (g) of this section, and to
make advance interim assessments as may be reasonable and
necessary for organizational and interim operating expenses.
Any interim assessments shall be credited as offsets against any
regular assessments due following the close of the fiscal year;
(viii) Appoint appropriate legal, actuarial and other
committees as necessary to provide technical assistance in the
operation of the program, policy and other contract design, and
any other function within the authority of the program;
(ix) Borrow money to effect the purposes of the
program. Any notes or other indebtedness of the program not in
default shall be legal investments for carriers and may be
carried as admitted assets;
(x) Adjust the five thousand dollar ($5,000.00)
deductible reinsurance requirement contained in paragraph (j)(v)
of this section to reflect the effects of inflation. The board
annually shall adjust the deductible reinsurance requirement to
reflect increases in costs and utilization within the standard
market for health benefit plans within the state. The
adjustment shall not be less than the annual change in the
medical component of the "Consumer Price Index for all Urban
Consumers" of the department of labor, bureau of labor
statistics, unless the board proposes and the commissioner
approves a lower adjustment factor. Also, with the approval of
the commissioner the board may increase or decrease the amount
set forth in paragraph (j)(v) of this section and paragraphs
(k)(i) and (ii) of this section if it is necessary to effectuate
the purposes of this act and does not require participating
carriers to retain an unreasonable level of risk.
(j) A participating carrier may reinsure with the program
as provided for in this subsection:
(i) With respect to a basic health benefit plan or a
standard health benefit plan, the program shall reinsure the
level of coverage provided and, with respect to other plans, the
program shall reinsure up to the level of coverage provided in a
basic or standard health benefit plan;
(ii) Except in the case of a late enrollee, a
participating carrier may reinsure an eligible employee or
dependent within sixty (60) days of the commencement of the
coverage of the small employer. A newly eligible employee or
dependent may be reinsured within sixty (60) days of the
commencement of his coverage;
(iii) A participating carrier may reinsure an entire
employer group within sixty (60) days of the commencement of the
group's coverage under the plan. The carrier may choose to
reinsure newly eligible employees and dependents of a reinsured
group pursuant to paragraph (ii) of this subsection;
(iv) Any eligible small employer group business in
force before a program's plan of operation becomes effective
shall be reinsured by the program only if the board determines
that sufficient funding sources are available. The board shall
adopt rules and regulations providing conditions under which
reinsurance will be issued on employers, employees, or
dependents who were subject to riders, endorsements or other
contract provisions which restricted or excluded coverage or
benefits for specified diseases, medical conditions or services
otherwise covered by the plans if the provisions were in force
prior to the effective date of the program's plan of operation.
The reinsurance may be limited to coverage for the specified
diseases, medical conditions or services that had previously
been restricted or excluded by the riders, endorsements or other
provisions;
(v) The program shall not reimburse a participating
carrier with respect to the claims of a reinsured employee or
dependent until the carrier has paid a deductible of five
thousand dollars ($5,000.00) in a calendar year for benefits
covered by the program. A participating carrier's liability
under this paragraph shall not exceed a maximum limit of five
thousand dollars ($5,000.00), in any one (1) calendar year with
respect to any one (1) person reinsured. The amounts stated in
this paragraph shall be increased in accordance with inflation
adjustments made by the board under paragraph (h)(x) of this
section;
(vi) A participating carrier may terminate
reinsurance for all of the reinsured employees or dependents of
a small employer on any plan anniversary;
(vii) Premium rates charged for reinsurance by the
program to a health maintenance organization which is federally
qualified under 42 U.S.C. § 300 e(c)(2)(A) or a similar section
subsequently enacted, and as such is subject to requirements
that limit the amount of risk that may be ceded to the program
that is more restrictive than paragraph (v) of this subsection,
shall be reduced to reflect that portion of the risk above the
amount set forth in paragraph (v) of this subsection that shall
not be ceded to the program, if any;
(viii) The board may consider adjustments to the
premium rates charged for reinsurance by the program for
carriers using effective cost containment, including high-cost
case management, as defined by the board;
(ix) A participating carrier shall apply its case
management and claims handling techniques, including but not
limited to utilization review, individual case management,
preferred provider provisions, other managed care provisions or
methods of operation, consistently with both reinsured and
nonreinsured business.
(k) The board, as part of the plan of operation, shall
establish a methodology for determining premium rates to be
charged by the program for reinsuring small employers and
individuals pursuant to this section. The methodology shall
include a system for classification of small employers that
reflects the types of case characteristics commonly used by
small employer carriers in the state. The methodology shall
provide for the development of base reinsurance premium rates,
which shall be multiplied by the factors set forth in paragraphs
(i) and (ii) of this subsection to determine the premium rates
for the program. The base reinsurance premium rates and number
and type of insured groupings shall be established by the board,
subject to the approval of the commissioner, and shall be set at
levels which reasonably approximate gross premiums charged to
small employers by small employer carriers. The board
periodically shall review the methodology established under this
subsection, including the system of classification and any
rating factors, to assure that it reasonably reflects the claims
experience of the program. The board may propose changes to the
methodology which shall be subject to the approval of the
commissioner. The board shall take steps to expand the usage of
the reinsurance program and to reduce the impacts of high risk
individuals on any particular group. Premiums for the program
shall be as follows:
(i) An entire small employer group may be reinsured
for a rate that is between one and one-tenth (1.1) and one and
one-half (1.5) times the base reinsurance premium rate for the
group established pursuant to this subsection;
(ii) An eligible employee or dependent may be
reinsured for a rate that is between one and one-half (1.5) and
five (5) times the base reinsurance premium rate for the
individual established pursuant to this subsection;
(iii) The premiums shall be kept as close as
practical to the lower limits provided by this subsection except
to the extent needed to keep the assessments needed within the
forty percent (40%) of premium tax limit pursuant to W.S.
26-19-312(b).
(m) In any case where a health benefit plan for a small
employer is entirely or partially reinsured with the program,
the premium charged to the small employer for any rating period
for the coverage issued shall be consistent with the
requirements relating to premium rates set forth in W.S.
26-19-304(a).
(n) Assessments and other fees required by the program
shall be made in accordance with this subsection:
(i) Repealed By Laws 2006, Chapter 120, § 3.
(ii) Repealed By Laws 2006, Chapter 120, § 3.
(iii) Repealed By Laws 2006, Chapter 120, § 3.
(iv) Repealed By Laws 2006, Chapter 120, § 3.
(v) Provisions shall be made in the plan of operation
for the imposition of an interest penalty for late payment of
assessments;
(vi) A participating carrier may seek from the
commissioner a deferment in whole or in part, from any
assessment issued by the board. The commissioner may defer, in
whole or in part, the assessment of a participating carrier if,
in the opinion of the commissioner, the payment of the
assessment would place the participating carrier in a
financially impaired condition. In the event an assessment
against a participating carrier is deferred in whole or in part,
the amount by which the assessment is deferred may be assessed
against the other participating carriers in a manner consistent
with the basis for the assessment set forth in this section.
The participating carrier receiving a deferment shall remain
liable to the program for the amount deferred.
(o) Neither the participation in the program, the
establishment of procedures, nor any other joint or collective
action required by this act shall be the basis of any legal
action, criminal or civil liability, or penalty against the
program or any participating carriers either jointly or
separately.
(p) The program shall be exempt from any and all taxes.