1332 Waiver Approved

Gov. Scott Walker announced this week that the U.S. Department of Health & Human Services (HHS) and Department of the Treasury have approved Wisconsin’s 1332 Waiver, the state plan for creating a reinsurance program for health carriers. HHS has waived the requirement for a single risk pool in the individual market under the Affordable Care Act from 2019-2023.

Under Act 138, the Wisconsin Health Care Stability Plan, the commissioner of insurance will set payment parameters by March 30 of the year before the applicable benefit year. If there is not enough money available to fully fund payment parameters as of July 1, the commissioner may adjust the payment parameters and allow health carriers to subsequently adjust their rates. If funding is ultimately not available to make all reinsurance payments, the commissioner will make payments based on health carriers’ share of aggregate health benefit plan premiums.

Reinsurance payments are calculated when an enrollee’s claim exceeds the attachment point. The reinsurance payment is the product of the coinsurance rate and whichever is less: the claims cost minus the attachment point or the reinsurance cap minus the attachment point. For 2019, the attachment point is $50,000 and the reinsurance cap is $250,000.

The Wisconsin Office of the Commissioner of Insurance submitted the waiver application to the federal government in April 2018.

For more information on the Health Care Stability Plan and health care in the 2017-18 session please visit our Health Care Issue Update.





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