TO CREATE A RULE.
The Commissioner of Insurance proposes the following rule to create ch. Ins 19, the Wisconsin Healthcare Stability Plan and affecting small business. The statement of scope for this rule SS 068-18, was approved by the Governor on May 25, 2018, published in Register No. 750A1, on June 5, 2018, and approved by the Deputy Commissioner on June 18, 2018. The proposed emergency rule was approved by the Governor on November 27, 2018 to submit for publication.
Analysis prepared by the Office of the Commissioner of Insurance (OCI).
Statutes interpreted:
Statutory authority:
Explanation of OCI’s authority to promulgate the proposed rule:
2017 Wis. Act 138 requires the commissioner to establish through regulations the Wisconsin Healthcare Stability Plan (WIHSP). Specifically, s. 601.83 (1) (g), Stats., allows the Commissioner to promulgate any rules necessary to implement the WIHSP including establishment of the payment parameters. Further, s. 601.41 (3) (a), Stats., grants the Commissioner “rule-making authority under s. 227.11 (2).” Section 601.42 (1g), Stats., gives the Commissioner the authority to require from those subject to this regulation, among other things, “statements, reports, answers to questionnaires, and other information, and evidence thereof, in whatever reasonable form the commissioner designates, and at such reasonable intervals as the commissioner chooses, or from time to time.” Finally, s. 601.42 (2), Stats., states that [T]he commissioner may prescribe forms from the reports under subs. (1g) and (1r) and specify who shall execute or certify such reports.” The proposed rule will require insurers to provide OCI with the necessary enrollment data and aggregate claims data in a timely manner and in a specific form prescribed by the Commissioner in order for OCI to comply with the statutory requirements contained in 2017 Wis. Act 138. These provisions both permit and require the commissioner to promulgate rules governing the WIHSP. Related statutes or rules:
2017 Wis. Act 138 created ch. 601 subchpt. VII, to permit OCI to submit a 1332 State Innovation Waiver allowing for the operation of a state-based reinsurance plan. The waiver was approved by the US Department of Health and Human Services and the US Department of the Treasury on July 29, 2018 and is effective beginning January 1, 2019. Plain language analysis:
The proposed rule implements 2017 Wis. Act 138 by establishing the payment parameters for calendar year 2019 and the process by which the payment parameters will be set in future years. The OCI will receive claims information and other utilization data from insurers doing health insurance business in the state that will be analyzed with the assistance of the OCI’s consultants to develop preliminary and final payment parameters. The OCI will issue public notice and invite public input prior to establishing and publishing the final parameters for each benefit year. Consistent with the authorizing statute, the proposed rule clarifies the OCI’s requirements for insurers offering individual comprehensive health insurance on the federally facilitated marketplace and offered generally in the state. The benefits covered by compliant plans must provide ACA compliant benefits including; coverage of preexisting conditions, essential health benefits, and Wisconsin health insurance requirements, without discrimination or imposition of annual or lifetime limitations. Additionally, to be eligible for reinsurance payments, the claims paid by the eligible carriers on behalf of an insured individual must exceed the attachment point of $50,000. In determining the amount of eligible claims, the insurer must comply with the cost sharing provisions of the plan and apply provider contracted rates.
The proposed rule delineates the claim submission process by setting forth the claim reporting requirements, timing and content of quarterly and annual reports, and final reconciliation of claims data. The proposed rule also identifies the review and audit process of submitted claims and establishes timelines for submission of data and other information required by the commissioner. The information gathered by the commissioner will be used in aggregate to complete required reporting to the federal government and notices to eligible carriers. Claims paid by the carriers between January 1, 2019, and April 30, 2020, may be submitted to the commissioner for reinsurance payment in accordance with the payment parameters and payment calculation set forth in s. 601.83 (4), Stats. Reinsurance payments to eligible carriers for compliant claims will be issued by August 15 of the year following the applicable benefit year. Summary of and comparison with any existing or proposed federal statutes and regulations:
None
Comparison with rules in adjacent states:
Illinois: NA
Iowa: NA
Michigan: NA
Minnesota: Minn. Stat. s. 62E.23 (2018) contains the law creating the Minnesota Premium Security Plan on which the Wisconsin law was based.
A summary of the factual data and analytical methodologies that OCI used in support of the proposed rule:
The OCI, with the assistance of its consultants, surveyed insurers doing individual health insurance business in the state and analyzed state and national data to ascertain the benefit to Wisconsin’s individual health insurance marketplace from implementation of the Wisconsin Healthcare Stability Plan.
Analysis and supporting documentation that OCI used in support of the OCI’s determination of the rule’s effect on small business or in preparation of an economic impact analysis:
The OCI, with the assistance of its consultants, surveyed insurers doing individual health insurance business in the state and analyzed state and national data to ascertain the economic impact of implementing the 1332 waiver as to consumers and insurers. Maximizing the funds from the federal government will minimize financial impact on the state, will assist consumers by reducing premium increases from insurers who can offset high-cost claims with reinsurance dollars rather than through use of premium dollars.
Effect on small business:
No effect on small business is anticipated by this rule. The rule provides reinsurance to insurers offering compliant, comprehensive individual health insurance. The insurers do not meet the definition of a small business. Further the intended benefit of this rule is to make individual health insurance coverage more affordable for individuals in Wisconsin and is not targeted for small employer health insurance coverage nor is an impact on small business employers anticipated.
A copy of any comments and opinion prepared by the Board of Veterans Affairs under s. 45.03 (2m), Stats., for rule proposed by the Department of Veterans Affairs. None.
Agency contact person:
A copy of the full text of the proposed rule changes, analysis and fiscal estimate may be obtained from the website at:
or by contacting Karyn Culver, Paralegal, at:
Phone: (608) 267-9586
Address: 125 South Webster St – 2nd Floor, Madison WI 53703-3474
Mail: PO Box 7873, Madison, WI 53707-7873
Place where comments are to be submitted and deadline for submission:
A public hearing will be held in compliance with s. 227.14 (4m) and 227.24 (4), Stats., on December 18, 2018, in room 227 at the Office of the Commissioner of Insurance. Deadline for submitting comments is 4:00 pm on December 28, 2018.
Mailing address:
Julie E. Walsh
Legal Unit - OCI Rule Comment for Rule ch. Ins 19 Office of the Commissioner of Insurance
PO Box 7873
Madison WI 53707-7873
Street address:
Julie E. Walsh
Legal Unit - OCI Rule Comment for Rule ch. Ins 19 Office of the Commissioner of Insurance
125 South Webster St – 2nd Floor
Madison WI 53703-3474
Email address:
Julie E. Walsh
The proposed rule changes are:
SECTION 1. Chapter Ins 19 (title) and ch. Ins 19 are created to read: CHAPTER INS 19
WISCONSIN HEALTHCARE STABILITY PLAN.
Ins 19.01 Purpose. The commissioner implements 2017 Wis. Act 138 for the purposes of establishing the Wisconsin Healthcare Stability Plan (WIHSP). The commissioner will seek to maximize federal funding for the WIHSP. The commissioner shall design and adjust the payment parameters with the goal to stabilize or reduce premium rates, increase participation by health insurers, improve access to health care providers and services, and mitigate the impact of high-risk individuals participating in the individual health insurance market. 19.02 Definitions. In addition to definitions contained in s. 601.80, Stats., the following definitions shall apply in this chapter: (1) “Audit” has the meaning provided under s. 601.83 (5) (f), and includes a verification and compliance audit conducted by the office. (2) “Commissioner” has the meaning provided under s. 600.03 (11), Stats. (3) “Compliant plan” means an individual health benefit plan offered by an eligible health carrier that conforms with regulations set forth in the Affordable Care Act, as applicable, or an individual health benefit plan that provides substantially similar benefits as required by the Affordable Care Act effective July 1, 2018.
(4) “Eligible health carrier” means an insurer offering a compliant plan either on or off the federally-facilitated marketplace that was issued after January 1, 2014, and is not a grandfathered plan or transitional plan. A transitional plan is a health plan in effect on October 1, 2013, and that may not be renewed after December 31, 2018.
(5) “Enrolled individual” means an insured member of an eligible health carrier during the applicable benefit year for at least one day and who has paid all premium owed for the period in which claims eligible for reinsurance payment were incurred.
(6) “External Data Gathering Environment” or “EDGE server” means the server developed by the Centers for Medicare and Medicaid Services (CMS) in conjunction with the federally-facilitated marketplace for health care insurers to submit financial and medical claims information on enrolled individuals.
(7) “Office” or “OCI” has the meaning provided under s. 600.03 (34), Stats. 19.03 Benefit Year 2019 Payment Parameters. (1) For the 2019 benefit year the payment parameters are the following:
(a) Attachment point. The attachment point is $50,000.
(b) Coinsurance rate. The coinsurance rate is 50 percent.
(c) Reinsurance cap. The reinsurance cap is $250,000.
19.04 Setting Payment Parameters Beginning for Benefit Year 2020. Beginning in 2019, the commissioner shall annually establish the payment parameters for future years, beginning with benefit year 2020.
(1) The commissioner shall request, under s. 601.42, Stats., all eligible health carriers to submit data and information from prior and current benefit years including: compliant plan membership, premium experience at a metal and federally-facilitated marketplace status level, advanced premium tax credit enrollee information, and other information as requested by the commissioner. (2) The commissioner shall publish the preliminary payment parameters and a public hearing notice in the Wisconsin Administrative Register and to the office website. The commissioner shall hold a public hearing seeking public comment regarding the preliminary payment parameters for the subsequent benefit year.
(3) The commissioner shall set the final payment parameters after consultation with an actuarial firm, consideration of comments received from the public hearing, the goals established in s. 601.83 (2), Stats., and any additional information as appropriate.
