TO CREATE A RULE.
The Commissioner of Insurance proposes the following rule to create ch. Ins 19, relating to the Wisconsin Healthcare Stability Plan. The statement of scope for this rule SS 027-19, was approved by the Governor on February 22, 2019, was published in the Wisconsin Administrative Register No. 759A2 on March 11, 2019. The public hearing was held on March 21, 2019 and approved by the Commissioner on April 2, 2019. The proposed rule was approved by the Governor on June 10, 2021, to submit to the legislature, and submitted to the legislature on June 11, 2021. The rule passed through committees and JCRAR on October 29, 2021 with no action taken.
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 who are 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 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 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 that is established and published annually following a public hearing and comment period. In determining the eligible amount of 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, 2020, and April 30, 2021, 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:
Section 1341 of the ACA established a transitional reinsurance program to stabilize premiums in the individual market on and off the federal marketplace exchange. The transitional reinsurance program collected contributions from contributing entities to fund the reinsurance payments to issuers of non-grandfathered reinsurance-eligible individual marketplace for the plan years 2014 through 2016. The WIHSP program is similar to the extent that it is intended to help stabilize premiums in the Wisconsin individual market on and off the federal exchange.
Summary of any public comments and feedback on the statement of scope of the proposed rule that the agency received at any preliminary public hearing and comment period held under s. 227.136, Stat., and a description of how and to what extent the agency took those comments and that feedback into account in drafting the proposed rule. The overall comments were positive for the WIHSP rule draft and program. Commenters sought clarifications on the following components of the statute and rule: data collection and aggregate dissemination, EDGE server data capabilities and formats, confirmation on proportional payment distribution process, timing of payments from the WIHSP, setting and timing of future payment parameters, and additional information on audit processes. In response to comments the Office modified several of the reporting forms, affirmed and followed the separate payment parameters process for future plan years including for plan year 2020, and have modified timeframes for final data collection and reconciliation. A second public hearing was held on April 5, 2021, with the Office receiving a supportive letter from the Wisconsin Association of Health Plans stating that the WISHP has been “well-run, effective program and has contributed to year-over-year reductions in average premiums.” Further that comment stated that “the WISHP is a documented success that continues to be a valuable tool for lending stability to the individual market.”
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 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.
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
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. The commissioner will seek to maximize federal funding for the Wisconsin Healthcare Stability Plan. 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), Stats., and includes a verification and compliance audit conducted by OCI. (2) “CMS” means the Centers for Medicare & Medicaid Services within the U.S. department of health and human services.
(3) “Commissioner” has the meaning provided under s. 600.03 (11), Stats. (4) “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, as defined by the office.
(5) “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 is in compliance with CMS and guidance issued by the Office. A grandfathered plan is a health plan that has been continuously offered since March 23, 2010 and in compliance with CMS.
(6) “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 or the eligible health carrier is obligated to pay under law.
(7) “External Data Gathering Environment” or “EDGE server” means the server developed by the CMS in conjunction with the federally facilitated marketplace for health care insurers to submit claims information on enrolled individuals for claims paid for covered services or treatments.
(8) “Secure file transfer portal” or “FTP” means a manner of securely transferring requested information from the eligible health carrier to the commissioner in a manner specified by the commissioner.
(9) “Office” or “OCI” has the meaning provided under s. 600.03 (34), Stats. (10) “Wisconsin Healthcare Stability Plan” or “WIHSP” means the Wisconsin healthcare stability plan created under s. 601.83, Stats. 19.03 Payment Parameters. The commissioner shall annually establish the payment parameters for future benefit years through an established procedure that includes all of the following components:
(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 OCI 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. (4) The commissioner shall publish the final payment parameters in the Wisconsin Administrative Register and to the OCI website by May 15, of the calendar year prior to the applicable benefit year.
19.07 Eligible Claims. For claims to be eligible for reinsurance payment, the eligible health carrier shall comply with s. 601.83, Stats., and submit claims that comply with the following criteria: (1) The claims that were paid for as covered benefits by the eligible health carrier under the terms and conditions of the carrier’s compliant plan for the applicable benefit year including but not limited to medical, surgical, and prescription drug services and treatments.
(2) The claims that were paid by the eligible health carrier after January 1, of the applicable benefit year and before April 30, of the following calendar year, or a date established by the commissioner.
(3) The cumulative amount of the claims paid that exceeds the applicable attachment point. Claims reported shall not include any amount of cost sharing required to be paid by the enrolled individual or the person responsible for the payment of the enrolled individual’s cost sharing. Cost sharing may include any of the following; deductibles, co-insurance, co-payment, visit fees, or similar costs.
(4) The cumulative amount of paid claims shall be reduced by any reimbursement received by the eligible health carrier for the enrolled individual through subrogation, recoupment of overpayments from providers, application of negotiated rates reductions with providers, or recoupment of third-party payment including workers compensation or civil litigation.
19.10 Reporting requirements. All eligible health carriers shall provide all requested information as ordered by the commissioner pursuant to s. 601.42, Stats. Information collected under ss. Ins 19.07 and 19.11, may be used on an aggregate basis by the commissioner to satisfy federal and state reporting requirements. Additional data may be requested to inform federal and state reports including: second lowest cost silver rates by rating area demonstrating rates with and without reinsurance payments, actual average premium rates for compliant plans, and actual enrollment for compliant plans. 19.11 Quarterly reporting requirements. (1) Eligible health carriers shall provide the information required by this section to the commissioner within 45-days from the end of each financial quarter. The data shall be extracted from the health carrier’s claims systems or similar database that tracks enrolled individual’s claims.
(2) Each quarterly report shall be transmitted to the commissioner, pursuant to s. 601.42, Stats., through a secure file transfer portal in a format designated by the commissioner. Instructions for submission of required information shall be provided to the eligible health carriers by the commissioner. Information in the report shall include all of the following: (a) The total number of enrolled individuals as of the last day of the applicable quarter.
(b) The total amount of claims paid by the eligible health carrier in the applicable quarter.
(c) A unique identifier for each enrolled individual whose claims are submitted for reinsurance.
(d) For each identified enrolled individual, the total amount of eligible claims paid, consistent with s. Ins 19.07. (e) The dollar amount of paid claims eligible for reinsurance payment for each identified enrolled individual.
(f) Any additional information requested by the commissioner.
(3) The eligible health carrier shall use the same enrolled individual’s unique identifier in each quarterly and annual report to the commissioner. For enrolled individuals with claims in more than one quarter, the amounts submitted shall reflect the cumulative dollar amount of eligible claims for that enrolled individual.
(4) The eligible carrier shall report the information required by sub. (2) (a) and (b), and all applicable information for that reporting quarter even if an eligible health carrier does not have updated or eligible claims to identify.
(5) All eligible health carriers who submit quarterly reports in accordance with this section shall retain a copy of the data and all supporting claims and enrollment data in an auditable format for 6 years from the last day of the applicable benefit year.
(6) An authorized representative of the eligible health carrier shall complete an affirmation that the data submitted is accurate, complete, and in compliance with s. Ins 19.07. The affirmation shall be transmitted to the commissioner on the same date as the data file transfer in a format designated by the commissioner. Instructions for submission of required information shall be provided to the eligible health carriers by the commissioner.
