OCI 1332 Waiver Notice of Completion

On May 9, the federal Centers for Medicare and Medicaid Services (CMS) sent Wisconsin a letter noting that CMS has determined the Officer of Commissioner of Insurance’s 1332 Waiver application to be complete. The 1332 Waiver is the state plan for creating a reinsurance program for health carriers. The notice of completion triggers the beginning of the federal notice process and 180-day federal decision-making process. CMS will be accepting public comments on the waiver application until June 8. While CMS is required to make a decision on the waiver in 180 days, OCI anticipates a decision will be made much sooner. OCI submitted the waiver in April.

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.

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