New Hampshire Code of Administrative Rules
Ins - Commissioner, Insurance Department
Chapter Ins 1900 - ACCIDENT AND HEALTH INSURANCE
Part Ins 1908 - COVERAGE FOR INDIVIDUALS UNDER THE AGE OF 19
Section Ins 1908.04 - Risk Adjustment and Subsidization
Universal Citation: NH Admin Rules Ins 1908.04
Current through Register No. 12, March 21, 2024
(a) Risks shall be shared as follows:
(1) Sharing shall be
implemented through a risk adjustment and subsidization mechanism whereby all
carriers will subsidize losses of certain carriers issuing individual health
insurance policies to persons under 19 years old;
(2) Only individual policies with an age
rating factor equal to or lower than the lowest applicable age factor for ages
19 and over, and issued directly to persons under 19 years old, shall be
eligible for subsidy. For example, persons under 19 years old provided coverage
under a family policy issued in the individual market shall not be eligible for
subsidy.
(3) Only individual
policies issued with the maximum allowable health status factor shall be
eligible for subsidy; and
(4) Only
policies issued on or after September 23, 2010, the date on which carriers were
required under federal law to issue individual policies to persons under 19
years old, shall be eligible for subsidy.
(b) The subsidy eligibility calculation shall be performed as follows:
(1) Except as
provided in
Ins
1908.06, subsidy calculation shall be for experience
incurred during a calendar year;
(2) For purposes of the subsidy calculation,
the following additional definitions shall apply:
a. "Subsidizable incurred claims" means
claims incurred on subsidy eligible policies during the experience period and
paid through the reporting date;
b.
"Subsidizable gross earned premium" means earned premium accrued during the
experience period from subsidy eligible policies; and
c. "Experience period net premium" means
subsidizable earned premium times 0.90 less the smaller of:
1. 0.06 times subsidizable incurred claims;
or
2. 0.09 times subsidizable gross
earned premium;
(3) The subsidy shall be based on the amount
by which subsidizable incurred claims (SIC) exceed the experience period net
premium (EPNP);
(4) The subsidy
shall be calculated by adding the following:
a. 97 percent of SIC above 100 percent of
EPNP up to 140 percent of EPNP;
b.
93 percent of SIC above 140 percent of EPNP up to 170 percent of
EPNP;
c. 85 percent of SIC above
170 percent of EPNP up to 190 percent of EPNP; and
d. 75 percent of SIC above 190 percent of
EPNP;
(5) Carriers
eligible for risk sharing as described in (a) above shall be eligible for a
subsidy based upon experience of the prior calendar year provided that such
carrier was actively marketing individual health insurance child-only policies
during the experience period.
(c) Applications for a subsidy shall be made as follows:
(1) On or before
July 1 of each year, each eligible carrier wishing to apply for a subsidy with
respect to the prior year's experience shall make application to the
association, including in the application all data required under
Ins
1908.04(b) and a calculation of the
anticipated amount of the subsidy; and
(2) A carrier that has made application,
while an eligible carrier pursuant to (1) above, for a subsidy with respect to
the prior calendar year's experience, may submit a corrective application for a
corrective subsidy determination and payment based upon additional experience
for that calendar year. Such corrective application may be submitted only once,
shall be filed not later than 12 months after the July 1 date for initial
application, and shall be completed and contain data with respect to its
experience in this market during the current calendar year. A carrier shall not
need to be an eligible carrier at the time of such corrective application or at
the time of receipt of any corrective subsidy payment.
(3) Any errors in the subsidy application
shall be reported to the board immediately upon discovery.
#10023, eff 11-14-11
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