§18062 Establishment of Risk Corridors for Plans in Individual and Small Group Markets

Summary

The Secretary must create and run a risk-corridor program for calendar years 2014, 2015, and 2016. Qualified health plans sold in the individual and small-group markets must take part. The program adjusts payments based on how a plan’s allowable costs compare to its total premiums. It is modeled on the Part D regional participating provider organizations program under Medicare. If a plan’s allowable costs are more than 103% but not more than 108% of its target amount, the Secretary must pay the plan 50% of the amount over 103% of the target. If costs are more than 108% of the target, the Secretary must pay the plan 2.5% of the target plus 80% of the amount over 108% of the target. If a plan’s allowable costs are less than 97% but not less than 92% of the target, the plan must pay the Secretary 50% of the difference between 97% of the target and the allowable costs. If costs are less than 92% of the target, the plan must pay the Secretary 2.5% of the target plus 80% of the difference between 92% of the target and the allowable costs. "Allowable costs" means the plan’s total benefit costs (not administrative costs), reduced by any risk-adjustment and reinsurance payments received under sections 18061 and 18063. "Target amount" means the plan’s total premiums, including any government premium subsidies, minus administrative costs.