INDIVIDUAL HEALTH INSURANCE MARKET
404-G:5 Plan of Operation.
The board of directors of the association shall adopt a plan of operation which shall be the same plan of operation as that adopted pursuant to the order. Any amendments to the current plan of operation shall be approved by the commissioner. The plan of operation shall provide substantially the following:
I. Description of risks to be shared. Sharing shall be implemented through a risk adjustment and subsidization mechanism whereby writers in the group market will subsidize losses of writers in the individual market. The mechanism shall include parameters which will limit its costs and ensure proper claims management by the nongroup writers.
II. Subsidy determination for the risk sharing mechanism. For a given calendar year, the subsidy calculations for the risk sharing mechanism shall be based on the experience of the prior year. Only individual health insurance writers who are actively marketing individual health insurance, in accordance with the provisions of RSA 420-G, during the calendar year in which the subsidy is distributed shall be eligible for a subsidy. For companies that utilize health status factors, only individuals whose coverage is written at the maximum allowable health status factors under RSA 420-G and whose coverage was issued prior to July 1, 2002 shall be eligible for a subsidy. For companies that do not utilize varied health status factors, all individuals whose coverage is written under RSA 420-G and whose coverage was issued prior to July 1, 2002 shall be eligible for a subsidy. The subsidy determination process shall recognize and compensate writers based on the risk characteristics of coverage eligible for consideration in the subsidy relative to standards established by the association board. Nothing in this chapter shall preclude the commissioner from approving a subsidy mechanism that fully compensates individual health insurers for all costs incurred on subsidy-eligible coverages in excess of the premiums collected from subsidy-eligible coverages.
III. Assessment determination.
(a) Assessment liabilities shall commence on the effective date of this chapter.
(b) Assessments shall be calculated based on the number of covered lives. The number of covered lives shall be determined each month during the calendar year. The assessment shall be calculated as the number of covered lives times a specified amount. The specified amount shall be fixed throughout the calendar year and shall be determined by the board no later than the first day of November preceding the calendar year for which the amount is to be used. The amount shall be subject to approval by the commissioner. The board shall provide a basis for recommending the specified amount, including a projection of the calculated subsidy and consideration of any prior year shortfalls or overages. For the calendar years 1999 and 2000, the specified amount shall be 18 cents per covered life per month, provided, however, that the board may petition the commissioner for approval of a greater specified amount. The commissioner shall approve such amount if he or she finds, after consideration of the:
(1) Board's subsidy determination process;
(2) Number of subsidy-eligible lives;
(3) Size of the entire non-group market;
(4) Morbidity experience of the subsidy-eligible lives; and
(5) Morbidity experience of the entire non-group market; that the amount petitioned by the board is no greater than is necessary to fulfill the purposes of this chapter. For the purpose of making this determination, the commissioner may, at the expense of the association, seek independent actuarial certification of the need for the increase.
(c) Each covered life should be included in the assessment only once. The board shall adopt procedures by which affiliated carriers calculate their assessment on an aggregate basis and procedures to ensure that no covered life is counted more than once.
IV. Administrative matters. The plan of operation shall further provide for all of the following:
(a) Responsibility for the handling and accounting of funds and other assets of the association.
(b) The financial and other records required to be kept, including the annual report to be submitted to the commissioner.
(c) Such other administrative provisions as are necessary or proper for the execution of the powers and duties of the association.
Source. 1998, 340:6. 2001, 295:9, eff. July 1, 2001.