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

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

(a) 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.

(b) The methodology for adjusting risk between insurers 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, 2019. [Formerly 743.923; 2017 c.152 § 14; 2019 c.285 § 10]

743B.800 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.

(Temporary provisions relating to the Oregon Reinsurance Program)

Sections 1 to 8, 17 to 21 and 48, chapter 538, Oregon Laws 2017, provide:

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

(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]

(1) As used in this section:

(a) ‘Insured’ means an eligible employee or family member, as defined in ORS § 243.105, who is enrolled in a self-insured health benefit plan under ORS § 243.105 to 243.285.

(b) ‘Premium equivalent’ means a claim for reimbursement of the cost of a health care item or service provided to an insured, 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 two 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, chapter 538, Oregon Laws 2017. [2017 c.538 § 3; 2019 c.2 § 4]

Section 3, chapter 538, Oregon Laws 2017, 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, 2020, through December 31, 2026. [2017 c.538 § 4; 2019 c.2 § 5]

(1) As used in this section:

(a) ‘Gross amount of premiums’ has the meaning given that term in ORS § 731.808.

(b) ‘Health plan’ means:

(A) A health benefit plan as defined in ORS § 743B.005; and

(B) Insurance described in ORS § 742.065.

(2) No later than 45 days following the end of a calendar quarter, an insurer shall pay an assessment at the rate of two percent of the gross amount of premiums earned by the insurer during that calendar quarter that were derived from health 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 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 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, chapter 538, Oregon Laws 2017. [2017 c.538 § 5; 2019 c.2 § 6]

(1) If the Public Employees’ Benefit Board fails to timely file a verified form or to pay an assessment required under section 3, chapter 538, Oregon Laws 2017, the Department of Consumer and Business Services shall impose a penalty on the board 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) If an insurer fails to timely file a verified form or to pay an assessment required under section 5, chapter 538, Oregon Laws 2017, the department shall impose a penalty on the insurer of the greater of:

(a) An amount determined under ORS § 731.988; or

(b) Five percent of the assessment due for the calendar quarter.

(3) Any penalty imposed under this section is in addition to and not in lieu of the assessment imposed under sections 3 and 5, chapter 538, Oregon Laws 2017. [2017 c.538 § 6; 2019 c.2 § 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]

Section 5, chapter 538, Oregon Laws 2017, applies to premiums earned by an insurer for the period beginning January 1, 2020, and ending December 31, 2026. [2017 c.538 § 8; 2019 c.2 § 8]

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

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]

(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.

(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.

(f) ‘Reinsurance eligible individual’ means an individual who is insured in a reinsurance eligible health benefit plan.

(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, only if necessary to pay out the full amount of funding budgeted for the Oregon Reinsurance Program when claims received are less than the amount of claims that were projected:

(a) Change the attachment point 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; 2019 c.2 § 1]

(1) As used in this section:

(a) ‘Health benefit plan’ has the meaning given that term in ORS § 743B.005.

(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]

In a rate filing under ORS § 743.018, 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]

Sections 18 to 22, chapter 538, Oregon Laws 2017, are repealed on January 2, 2028. [2017 c.538 § 48; 2019 c.2 § 3]

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

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, chapter 538, Oregon Laws 2017, and apply for subsequent renewals of the waiver to continue the program as long as revenue from the assessment under section 5, chapter 538, Oregon Laws 2017, is available. [2016 c.26 § 2; 2017 c.538 § 24; 2019 c.2 § 2]

MISCELLANEOUS