2017 ORS 743B.800¹
Risk adjustment procedures
  • rules

(1) As used in this section, “health benefit plan” means a health benefit plan, as defined in ORS 743B.005 (Definitions), that is offered in the individual or small group market.

(2) The Department of Consumer and Business Services may establish by rule a procedure for adjusting risk between insurers. If a procedure is established, the procedure may include:

(a) An assessment imposed on an insurer if the actuarial risk of the enrollees in the insurer’s health benefit plans is less than the average actuarial risk of all enrollees in all health benefit plans in this state; and

(b) Payments to insurers if the actuarial risk of the enrollees in the insurer’s health benefit plans is greater than the average actuarial risk of all enrollees in all health benefit plans in this state.

(3) A procedure established under this section must be consistent with 42 U.S.C. 18063 and regulations adopted by the Secretary of the United States Department of Health and Human Services to carry out 42 U.S.C. 18063 that are in effect on January 1, 2017. [Formerly 743.923; 2017 c.152 §14]

Note: 743B.800 (Risk adjustment procedures) was added to and made a part of the Insurance Code by legislative action but was not added to ORS chapter 743B or any series therein. See Preface to Oregon Revised Statutes for further explanation.

Note: Sections 17 to 21 and 48, chapter 538, Oregon Laws 2017, provide:

Sec. 17. Sections 18 to 21 of this 2017 Act are added to and made a part of the Insurance Code. [2017 c.538 §17]

Sec. 18. The Oregon Reinsurance Program is established in the Department of Consumer and Business Services for the purposes of stabilizing the rates and premiums for individual health benefit plans and providing greater financial certainty to consumers of health insurance in this state. [2017 c.538 §18]

Sec. 19. (1) As used in this section:

(a) “Attachment point” means the threshold dollar amount, adopted by the Department of Consumer and Business Services by rule, for claims costs incurred by a reinsurance eligible health benefit plan for an insured individual’s covered benefits in a benefit year, after which threshold the claims costs for the benefits are eligible for reinsurance payments.

(b) “Coinsurance rate” means the rate, adopted by the department by rule, at which the department will reimburse a reinsurance eligible health benefit plan for claims costs incurred for an insured individual’s covered benefits in a benefit year after the attachment point and before the reinsurance cap.

(c) “Health benefit plan” has the meaning given that term in ORS 743B.005 (Definitions).

(d) “Reinsurance cap” means the threshold dollar amount, adopted by the department by rule, for claims costs incurred by a reinsurance eligible health benefit plan for an insured individual’s covered benefits in a benefit year, after which threshold the claims costs for the benefits are no longer eligible for state reinsurance payments.

(e) “Reinsurance eligible health benefit plan” means a health benefit plan providing individual coverage that:

(A) Is delivered or issued for delivery in this state; and

(B) Is not a grandfathered health plan as defined in ORS 743B.005 (Definitions).

(f) “Reinsurance eligible individual” means an individual who is insured in a reinsurance eligible health benefit plan on or after January 1, 2018.

(2) An issuer of a reinsurance eligible health benefit plan becomes eligible for a reinsurance payment when the claims costs for a reinsurance eligible individual’s covered benefits in a calendar year exceed the attachment point. The amount of the payment shall be the product of the coinsurance rate and the issuer’s claims costs for the reinsurance eligible individual that exceed the attachment point, up to the reinsurance cap.

(3) After the department adopts by rule the attachment point, reinsurance cap or coinsurance rate, the department may not:

(a) Change the attachment point or the reinsurance cap during that benefit year; or

(b) Increase the coinsurance rate during the benefit year.

(4) The department may adopt rules necessary to carry out the provisions of this section including, but not limited to, rules prescribing:

(a) The amount, manner and frequency of reinsurance payments; and

(b) Reporting requirements for issuers of reinsurance eligible health benefit plans. [2017 c.538 §19]

Sec. 20. (1) As used in this section:

(a) “Health benefit plan” has the meaning given that term in ORS 743B.005 (Definitions).

(b) “Oregon Reinsurance Program” means the program established in section 18 of this 2017 Act.

(c) “Reinsurance eligible individual” has the meaning given that term in section 19 of this 2017 Act.

(2) An insurer that offers a health benefit plan must report to the Department of Consumer and Business Services, in the form and manner prescribed by the department by rule, information about reinsurance eligible individuals insured by the health benefit plan as necessary for the department to calculate reinsurance payments under the Oregon Reinsurance Program. [2017 c.538 §20]

Sec. 21. In a rate filing under ORS 743.018 (Filing of rates for life and health insurance), an insurer must identify the impact of reinsurance payments under section 19 of this 2017 Act on projected claims costs and in the development of rates. [2017 c.538 §21]

Sec. 48. Sections 18 to 22 of this 2017 Act are repealed on January 2, 2024. [2017 c.538 §48]

Note: Section 2, chapter 26, Oregon Laws 2016, provides:

Sec. 2. The Department of Consumer and Business Services shall have sole authority to apply for a waiver for state innovation under 42 U.S.C. 18052. The department shall apply for a waiver to receive funding to implement the Oregon Reinsurance Program established in section 18 of this 2017 Act. [2016 c.26 §2; 2017 c.538 §24]

Note: Parts of chapter 538, Oregon Laws 2017, were referred to the people by referendum petition for their approval or rejection at a special election to be held throughout this state on January 23, 2018. See section 55, chapter 749, Oregon Laws 2017. The parts referred to the people are not in effect unless and until voters approve the ballot measure at the special election. If the ballot measure is approved, the referred parts, indicated as underlined text below, become effective February 22, 2018. See Article IV, section 1 (4)(d), of the Oregon Constitution.

Note: Sections 1 to 8, chapter 538, Oregon Laws 2017, provide:

Sec. 1. Sections 2 to 8 of this 2017 Act are added to and made a part of the Insurance Code. [2017 c.538 §1]

Sec. 2. (1) The Health System Fund is established in the State Treasury, separate and distinct from the General Fund. Interest earned by the Health System Fund shall be credited to the fund.

(2) Amounts in the Health System Fund are continuously appropriated to the Department of Consumer and Business Services for the purposes of:

(a) Administering the Oregon Reinsurance Program established in section 18 of this 2017 Act; and

(b) Transferring moneys to the Oregon Health Authority to:

(A) Provide medical assistance and other health services under ORS chapter 414.

(B) Pay refunds due under section 11 of this 2017 Act.

(C) Pay administrative costs incurred by the authority to administer the assessment described in section 9 of this 2017 Act. [2017 c.538 §2]

Sec. 3. (1) As used in this section:

(a) “Insured” means an eligible employee or family member, as defined in ORS 243.105 (Definitions for ORS 243.105 to 243.285), who is enrolled in a self-insured health benefit plan under ORS 243.105 (Definitions for ORS 243.105 to 243.285) to 243.285 (Salary deductions).

(b) “Premium equivalent” means a claim for reimbursement of the cost of a health care item or service provided to an eligible employee or family member, other than a dental or vision care item or service, and the administrative costs associated with the claim.

(2) No later than 45 days following the end of a calendar quarter, the Public Employees’ Benefit Board shall pay an assessment at the rate of 1.5 percent on the gross amount of premium equivalents received during the calendar quarter.

(3) The assessment shall be paid to the Department of Consumer and Business Services and shall be accompanied by a verified report, on a form prescribed by the department, together with any information required by the department.

(4) The assessment imposed under this section is in addition to and not in lieu of any tax, surcharge or other assessment imposed on the board.

(5) If the department determines that the assessment paid by the board under this section is incorrect, the department shall charge or credit to the board the difference between the correct amount of the assessment and the amount paid by the board.

(6) The board is entitled to notice and an opportunity for a contested case hearing under ORS chapter 183 to contest an action of the department taken pursuant to subsection (5) of this section.

(7) Moneys received by the department under this section shall be paid into the State Treasury and credited to the Health System Fund established under section 2 of this 2017 Act. [2017 c.538 §3]

Sec. 4. Section 3 of this 2017 Act applies to premium equivalents received by the Public Employees’ Benefit Board, or a third party administrator that contracts with the board to administer a self-insured health benefit plan, during the period from January 1, 2018, through December 31, 2019. [2017 c.538 §4]

Sec. 5. (1) As used in this section:

(a) “Gross amount of premiums” has the meaning given that term in ORS 731.808 (“Gross amount of premiums” defined).

(b) “Health benefit plan” has the meaning given that term in ORS 743B.005 (Definitions).

(2) No later than 45 days following the end of a calendar quarter, an insurer shall pay an assessment at the rate of 1.5 percent of the gross amount of premiums earned by the insurer during that calendar quarter that were derived from health benefit plans delivered or issued for delivery in Oregon.

(3) The assessment shall be paid to the Department of Consumer and Business Services and shall be accompanied by a verified form prescribed by the department together with any information required by the department, that reports:

(a) All health benefit plans issued or renewed by the insurer during the calendar quarter for which the assessment is paid; and

(b) The gross amount of premiums by line of insurance, derived by the insurer from all health benefit plans issued or renewed by the insurer during the calendar quarter for which the assessment is paid.

(4) The assessment imposed under this section is in addition to and not in lieu of any tax, surcharge or other assessment imposed on an insurer.

(5) Any rate filed for the department’s approval may include amounts paid by the insurer under this section as a valid element of administrative expense or retention.

(6) Moneys received by the department under this section shall be paid into the State Treasury and credited to the Health System Fund established under section 2 of this 2017 Act. [2017 c.538 §5]

Sec. 6. (1) If the Public Employees’ Benefit Board or an insurer fails to timely file a verified form or to pay an assessment required under section 3 or 5 of this 2017 Act, the Department of Consumer and Business Services shall impose a penalty on the board or insurer of up to $500 per day of delinquency. The total amount of penalties imposed under this section for a calendar quarter may not exceed five percent of the assessment due for that calendar quarter.

(2) Any penalty imposed under this section is in addition to and not in lieu of the assessment imposed under sections 3 and 5 of this 2017 Act. [2017 c.538 §6]

Sec. 7. (1) If the Department of Consumer and Business Services determines that the assessment paid by the insurer under section 5 of this 2017 Act is incorrect, the department shall charge or credit to the insurer the difference between the correct amount of the assessment and the amount paid by the insurer.

(2) An insurer that is aggrieved by an action of the department taken pursuant to subsection (1) of this section shall be entitled to notice and an opportunity for a contested case hearing under ORS chapter 183. [2017 c.538 §7]

Sec. 8. (1) Section 5 of this 2017 Act applies to premiums earned by an insurer for a period of eight calendar quarters beginning on the date, on or after January 1, 2018, that the policy or certificate for which the premiums are paid is issued or renewed.

(2) Notwithstanding any provision of contract or statute, including ORS 743B.013 (Requirements for small employer health benefit plans) and 743.022 (Premium rates for individual health benefit plans), insurers may increase their premium rate on policies or certificates that are subject to the assessment under section 5 of this 2017 Act by 1.5 percent. If an insurer increases its rates under this subsection, the insurer may include in its billings for health benefit plans a notice, as prescribed by the Department of Consumer and Business Services, explaining that the increase is due to the assessment under section 5 of this 2017 Act. [2017 c.538 §8]

1 Legislative Counsel Committee, CHAPTER 743B—Health Benefit Plans: Individual and Group, https://­www.­oregonlegislature.­gov/­bills_laws/­ors/­ors743B.­html (2017) (last ac­cessed Mar. 30, 2018).
 
2 OregonLaws.org contains the con­tents of Volume 21 of the ORS, inserted along­side the per­tin­ent statutes. See the preface to the ORS An­no­ta­tions for more information.
 
3 OregonLaws.org assembles these lists by analyzing references between Sections. Each listed item refers back to the current Section in its own text. The result reveals relationships in the code that may not have otherwise been apparent.