Section 1332 of the Affordable Care Act (ACA) permits a state to apply for a State Innovation Waiver to pursue innovative strategies for providing their residents with access to high quality, affordable health insurance while retaining the basic protections of the ACA. Recently several states have applied for waivers and have been approved. Among these is the State of Maine, which sought to reestablish the Maine Guaranteed Access Reinsurance Association – MGARA (originally established in 2012 but later suspended in light of the ACA’s transitional reinsurance program which expired in 2016). Maine’s Section 1332 waiver to reestablish MGARA was approved by the Department of Health and Human Services earlier this year. MGARA is a state instituted reinsurance program that automatically cedes high-risk enrollees with one of eight conditions (including various types of cancer, congestive heart failure, HIV and rheumatoid arthritis) and voluntary cedes other high-risk enrollees to the pool in an attempt to help stabilize individual medical premiums by about 9 percent each year beginning in 2019. The program is slated to initially run from January, 2019 through December, 2023. The Governor’s Office pushed to get the program up and running by January, 2019 in an attempt to substantially lower premiums in the individual market.
One of the funding sources supporting MGARA’s operations is a quarterly assessment due from each insured and self-insured plan that writes or otherwise provides medical insurance in Maine (other than federal or state government plans) beginning in 2019 at $4.00 per month for each covered person enrolled under each such policy or plan. Only federal and state employees are exempt from the assessment. The 2019 Quarterly Assessment will apply to policies and plans initiated or renewed on or after January 1, 2019, with the first assessment due on May 15, 2019, and 45 days from the end of each calendar quarter thereafter. Self-funded plans using a Third Party Administrator (TPA) will be assessed and reported through their TPA similar to other state assessments.
Diversified Group will collect and report the MGARA on behalf of our self-insured clients who have members residing in Maine.
In a recent legislative update from SIIA, it was noted that the New Jersey Department of Banking and Insurance (DOBI) approved regulations lowering minimum stop-loss attachment points for large groups of 51 lives and above, effective in late August.
This move allows the large group individual attachment points to be $20,000 per individual, reduced from $25,000 and sets the minimum aggregate attachment point at 110% of expected claims, down from 125%. These changes broaden the levels of stop-loss or excess risk coverage available to self-funded health plans and brings New Jersey’s definition in line with the NAIC Stop Loss Insurance Model Act.
The article below was published on October 24, 2017 by Self-Insurance Institute of America, Inc., written by Wrenne Bartlett.
The Self-Insurance Institute of America, Inc. (SIIA) is pleased to announce that Governor Andrew Cuomo has signed A.8264 into law, allowing grandfathered stop-loss contracts for groups of 51-100 to renew until January 1, 2019.
As background, in late 2015 and early 2016, the New York legislature passed and the governor signed three laws allowing existing stop-loss contracts of 51-100 to be renewed for a period of up to three years. Without these changes, New York State law would have prohibited stop-loss contacts to be issued to any employer classified as a “small employer,” which increased to 100 employees on January 1, 2016.
As part of the series of laws, the New York State Department of Financial Services has contracted with an independent consulting firm to study the employer use of stop-loss in the state and will be issuing a report in March 2018. In speaking to legislators and regulators, it was clear that they wanted to see the report before re-opening the 51-100 stop-loss market. To protect plan sponsors with grandfathered stop-loss policies, we suggested that the legislature extended grandfathering protection for an additional year and allow stakeholders to review the comprehensive report.
SIIA is confident that the report will conclude that smaller employers need continued access to stop-loss insurance as the most cost effective way to provide high-quality self-insured health care benefits. While the report remains ongoing, SIIA continues to press the legislature to pass a permanent fix for smaller employer stop-loss access in 2018.
If you have any questions, please contact Adam Brackemyre, vice president of state government relations at firstname.lastname@example.org or (202) 595-0641.
In New York, industry efforts to support self-funding for smaller groups have led to legislation extending the grandfathering of existing stop-loss policies for groups of 51 to 100 for an additional year, through January 1, 2019.
Other legislation impacting access to stop-loss insurance products by smaller groups has taken effect in Minnesota and is slated to become effective in New Mexico on July 1st. Attachment points are still being discussed in New Mexico and it appears that new opportunities for smaller groups may emerge in Minnesota as well. Since our last newsletter, legislation prohibiting small group stop-loss failed to advance beyond committee debate in the State of Maine.