§18062 Establishment of risk corridors for plans in individual and small group markets

Summary

The Secretary must set up and run a risk-corridor program for calendar years 2014, 2015, and 2016 for qualified health plans sold in the individual and small-group markets. Plans take part in a payment adjustment system that compares a plan’s allowable costs to its target amount (based on its premiums). If a plan’s costs are over 103% but at most 108% of the target, the government pays the plan 50% of the amount over 103%. If costs exceed 108% of the target, the government pays 2.5% of the target plus 80% of the amount over 108%. If a plan’s costs are below 97% but at least 92% of the target, the plan must pay 50% of the shortfall between 97% of the target and its costs. If costs are under 92% of the target, the plan must pay 2.5% of the target plus 80% of the shortfall between 92% of the target and its costs. “Allowable costs” means the plan’s total benefit costs (not administrative costs), reduced by any risk‑adjustment or reinsurance payments received under sections 18061 and 18063. “Target amount” means total premiums (including any government premium subsidies) minus administrative costs.