SB 1071 Enacts the "Missouri Reinsurance Plan"
Sponsor: Wieland
LR Number: 6610S.01I Fiscal Notes
Committee: Insurance and Banking
Last Action: 3/8/2018 - Second Read and Referred S Insurance and Banking Committee Journal Page: S601
Title: Calendar Position:
Effective Date: August 28, 2018

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Current Bill Summary


SB 1071 - For purposes of this act, the term "eligible health carrier" refers to accident and sickness insurers, nonprofit health service plan corporations, and health maintenance organizations that offer individual health plans, incur claims costs for individual health plans, and incur claims costs for an individual enrollee's covered benefits in the applicable benefit year. (Section 374.900).

Eligible health carriers shall include as part of their rate filing a calculation of the premium amount the carrier would have charged if the Missouri Reinsurance Plan had not been established. The Director of the Department of Insurance, Financial Institutions, and Professional Registration shall consider this information as part of the rate review. (Section 374.905).

The Department shall monitor the board of directors of the reinsurance pool established under the act. The Department shall have the authority to apply for federal funds, and shall notify the relevant committees within 10 days of receiving such funds. The Department shall collect or access data from eligible health carriers necessary to determine reinsurance payments as specified in the act. For each benefit year, the Department shall notify eligible health carriers of reinsurance payments no later than June 30 of the year following the benefit year. On a quarterly basis during the benefit year, the Department shall provide each eligible health carrier with a calculation of total reinsurance payment requests. The Department shall disburse all applicable reinsurance payments to eligible health carriers no later than August 15 of the year following the applicable benefit year. (Section 374.910.1)

The board of directors of the Missouri reinsurance pool shall design and adjust payment parameters (the attachment point, reinsurance cap, and coinsurance rate) to ensure the parameters will support the individual market as specified in the act, and to take into account the total amounts available to fund the plan, including federal funds. (Section 374.910.2)

The board of directors shall determine the payment parameters for the next benefit year no later than January 15 of the year before the applicable benefit year. If the amount in the Missouri Reinsurance Fund, established under the act, is not anticipated to be adequate to fully fund the approved payment parameters as of July 1 of the year before the applicable benefit year, the Director of the Department of Insurance, Financial Institutions, and Professional Registration shall assess to insurers any additional funds due that exceed available reinsurance funds. Carriers may revise applicable rate filings based on the final payment parameters for the next benefit year. (Section 374.910.3)

Reinsurance payments are to be calculated for individual enrollees, and in the manner specified under the act. The board of directors shall ensure that reinsurance payments made to eligible health carriers do not exceed the total amount paid by the carrier for an eligible claim. (Section 374.910.4)

The act specifies when eligible health carriers may request reimbursement payments in accordance with Department rules, requires the carriers to provide certain data access by April 30 of the year following the applicable benefit year, specifies that certain records shall be retained for at least 6 years, and requires the carriers to make the records available to the Department for inspection. The act requires the Department to audit eligible health carriers for compliance with the act if there is evidence of noncompliance, and specifies corrective actions and an appeals process. (Section 374.910.5)

This act requires the Department to keep an accounting for each benefit year that illustrates the funds appropriated for reinsurance payments and administrative and operational expenses related to administration of the plan, requests for reinsurance payments received from eligible health carriers, and administrative and operational expenses incurred for the plan. The Director shall post on the Department's website a summary report of plan operations for each benefit year and shall make a summary of the report available by the later of November 1 of the year following the applicable benefit year, or 60 days following the final disbursement of payments for the applicable benefit year. (374.915.1 to 374.915.2)

The Department shall coordinate with a Certified Public Accountant (CPA) or CPA firm to audit the plan for each benefit year as specified in the act. The Department shall provide the Director with the results of the audit, identify to the Director any weaknesses or deficiencies identified in the audit, address in writing how the Department intends to correct any such weaknesses or deficiencies, and make the audit results public via their website to the extent the results contains government data that is public, including proposed corrective actions. The act requires the Department to report to the relevant legislative committees by December 1 of each year any finding of material weakness or significant deficiency uncovered in an audit. (Section 374.915.3 to 374.915.4)

This act creates the "Missouri Reinsurance Fund" which shall consist of funds collected under the act and shall be used to implement the act. (Section 374.920)

The Director shall apply to the federal government for an Affordable Care Act state innovation waiver as specified in the act. (Section 374.925)

State departments incurring administrative costs to implement any provision of this act which do not receive an appropriation for such purposes shall implement the act within the limits of existing appropriations. (Section 374.930)

If the Affordable Care Act state innovation waiver is not approved, the Department shall not administer the plan, nor provide reinsurance payments to the eligible health carriers. (Section 374.935)

The act modifies the former "state health insurance pool", commonly known as the "high risk pool", to create the "state reinsurance pool" and updates the applicable provisions of law. (Section 376.960)

This act is identical to HB 2539 (2018), and similar to HB 2064 (2018).

ERIC VANDER WEERD