2018 -- S 2934

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LC005817

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2018

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A N   A C T

RELATING TO STATE AFFAIRS AND GOVERNMENT -- HEALTH CARE--HEALTH

INSURANCE

     Introduced By: Senator Joshua Miller

     Date Introduced: May 29, 2018

     Referred To: Senate Health & Human Services

     It is enacted by the General Assembly as follows:

     SECTION 1. Title 42 of the General Laws entitled "STATE AFFAIRS AND

GOVERNMENT" is hereby amended by adding thereto the following chapter:

CHAPTER 157.1

RHODE ISLAND MARKET STABILITY AND REINSURANCE ACT

     42-157.1-1. Short title and purpose.

     (a) This chapter shall be known and may be cited as the "Rhode Island Market Stability

and Reinsurance Act."

     (b) The purpose of this chapter is to authorize the director to create the Rhode Island

reinsurance program to stabilize health insurance rates and premiums in the individual market and

provide greater financial certainty to consumers of health insurance in this state.

     (c) Nothing in this chapter shall be construed as obligating the state to appropriate funds

or make payments to carriers.

     42-157.1-2. Definitions.

     As used in this chapter:

     (1) "Director" means the director of the Rhode Island health benefits exchange.

     (2) "Exchange" means the Rhode Island health benefits exchange established within the

department of administration by § 42-157-1.

     (3) "Health insurance carrier" or "carrier" has the same meaning as it does in § 27-18.5-2.

     (4) "Health insurance coverage" has the same meaning as it does in § 27-18.5-2.

     (5) "Individual market" has the same meaning as it does in §27-18.5-2.

     (6) "Office of the health insurance commissioner" means the entity established by § 42-

14.5-1 within the department of business regulation.

     (7) "Program" means the Rhode Island reinsurance program established by § 42-157.1-3.

     (8) "Program fund" or "fund" means the fund established by § 42-157.1-5.

     (9) "State" means the state of Rhode Island.

     42-157.1-3. Establishment of the Rhode Island reinsurance program.

     (a) The director is authorized to establish and implement a state-based reinsurance

program, to be known as the Rhode Island reinsurance program:

     (1) To provide reinsurance to carriers that offer health insurance coverage on the

individual market in the state;

     (2) That meets the requirements of a waiver approved under 42 U.S.C. § 18052; and

     (3) That is consistent with state and federal law.

     (b) The program is intended to mitigate the impact of high-risk individuals on health

insurance rates offered in the individual insurance market on and off of the exchange.

     (c) The director is authorized to establish reinsurance payment parameters for calendar

year 2020 and each subsequent calendar year that include:

     (1) An attachment point;

     (2) A coinsurance rate; and

     (3) A coinsurance cap.

     (d) Carriers must provide the exchange and the office of the health insurance

commissioner with data the director prescribes by rules and regulations as necessary to determine

reinsurance payments in a time and manner determined by the director.

     (e) The director may alter the parameters established in accordance with §§ 42-157.1-3(c)

and 42-157.1-3 (d) as necessary to secure federal approval for a waiver submitted in accordance

with § 42-157.1-6.

     42-157.1-4. Powers of the director.

     (a) The director may:

     (1) Contract with the federal government or another unit of government to ensure

coordination of the program;

     (2) Apply for any available federal funding for the program;

     (3) Undertake, directly or through contracts with other persons or entities, studies or

demonstration programs to develop awareness of the benefits of this chapter; and

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     (4) Formulate general policy and adopt rules and regulations that are reasonably

necessary to administer this chapter, including regulations establishing a reinsurance program to

mitigate the impact of high-risk individuals on health insurance rates.

     42-157.1-5. Establishment of program fund.

     (a) A fund shall be established to provide funding for the operation and administration of

the program in carrying out the purposes of the program under this chapter.

     (b) The director is authorized to administer the fund.

     (c) The general assembly may appropriate general revenue to support the annual budget

for the program.

     (d) The fund shall consist of:

     (1) Any pass-through funds received from the federal government under a waiver

approved under 42 U.S.C. § 18052;

     (2) Any funds designated by the federal government to provide reinsurance to carriers

that offer individual health benefit plans in the state;

     (3) Any funds designated by the state to provide reinsurance to carriers that offer

individual health benefit plans in the state; and

     (4) Any other money from any other source accepted for the benefit of the fund.

     (e) A restricted receipt account shall be established for the fund which may be used for

the establishment and operation of the program and shall be exempt from the indirect cost

recovery provisions of § 35-4-27.

     (f) Nothing in this chapter shall be construed as obligating the state to appropriate funds

or make payments to carriers.

     42-157.1-6. State innovation waiver.

     In accordance with § 42-157-5, the director may apply to the United States Secretary of

Health and Human Services under 42 U.S.C. § 18052, for a state innovation waiver to implement

the program and seek federal pass-through funding for calendar years beginning January 1, 2020,

and future years, to maximize federal funding.

     42-157.1-7. Program contingent on federal waiver and appropriation of state

funding.

     (a) The state shall not implement the program or provide reinsurance payments to eligible

carriers, without a dedicated appropriation of state funding.

     (b) If the state innovation waiver request in § 42-157.1-6 is not approved, the director

shall not implement the program or provide reinsurance payments to eligible carriers.

     SECTION 2. Section 35-4-27 of the General Laws in Chapter 35-4 entitled "State Funds"

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is hereby amended to read as follows:

     35-4-27. Indirect cost recoveries on restricted receipt accounts.

     Indirect cost recoveries of ten percent (10%) of cash receipts shall be transferred from all

restricted-receipt accounts, to be recorded as general revenues in the general fund. However, there

shall be no transfer from cash receipts with restrictions received exclusively: (1) From

contributions from non-profit charitable organizations; (2) From the assessment of indirect cost-

recovery rates on federal grant funds; or (3) Through transfers from state agencies to the

department of administration for the payment of debt service. These indirect cost recoveries shall

be applied to all accounts, unless prohibited by federal law or regulation, court order, or court

settlement. The following restricted receipt accounts shall not be subject to the provisions of this

section:

     Executive Office of Health and Human Services

     Organ Transplant Fund

     HIV Care Grant Drug Rebates

     Department of Human Services

     Veterans' home -- Restricted account

     Veterans' home -- Resident benefits

     Pharmaceutical Rebates Account

     Demand Side Management Grants

     Veteran's Cemetery Memorial Fund

     Donations -- New Veterans' Home Construction

     Department of Health

     Pandemic medications and equipment account

     Miscellaneous Donations/Grants from Non-Profits

     State Loan Repayment Match

     Department of Behavioral Healthcare, Developmental Disabilities and Hospitals

     Eleanor Slater non-Medicaid third-party payor account

     Hospital Medicare Part D Receipts

     RICLAS Group Home Operations

     Commission on the Deaf and Hard of Hearing

     Emergency and public communication access account

     Department of Environmental Management

     National heritage revolving fund

     Environmental response fund II

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     Underground storage tanks registration fees

     Rhode Island Historical Preservation and Heritage Commission

     Historic preservation revolving loan fund

     Historic Preservation loan fund -- Interest revenue

     Department of Public Safety

     Forfeited property -- Retained

     Forfeitures -- Federal

     Forfeited property -- Gambling

     Donation -- Polygraph and Law Enforcement Training

     Rhode Island State Firefighter's League Training Account

     Fire Academy Training Fees Account

     Attorney General

     Forfeiture of property

     Federal forfeitures

     Attorney General multi-state account

     Forfeited property -- Gambling

     Department of Administration

     OER Reconciliation Funding

     RI Health Benefits Exchange

     RI Health Benefits Exchange -- Rhode Island Reinsurance Program Fund

     Information Technology Investment Fund

     Restore and replacement -- Insurance coverage

     Convention Center Authority rental payments

     Investment Receipts -- TANS

     OPEB System Restricted Receipt Account

     Car Rental Tax/Surcharge-Warwick Share

     Executive Office of Commerce

     Housing Resources Commission Restricted Account

     Department of Revenue

     DMV Modernization Project

     Jobs Tax Credit Redemption Fund

     Legislature

     Audit of federal assisted programs

     Department of Children, Youth and Families

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     Children's Trust Accounts -- SSI

     Military Staff

     RI Military Family Relief Fund

     RI National Guard Counterdrug Program

     Treasury

     Admin. Expenses -- State Retirement System

     Retirement -- Treasury Investment Options

     Defined Contribution -- Administration - RR

     Violent Crimes Compensation -- Refunds

     Treasury Research Fellowship

     Business Regulation

     Banking Division Reimbursement Account

     Office of the Health Insurance Commissioner Reimbursement Account

     Securities Division Reimbursement Account

     Commercial Licensing and Racing and Athletics Division Reimbursement Account

     Insurance Division Reimbursement Account

     Historic Preservation Tax Credit Account

     Judiciary

     Arbitration Fund Restricted Receipt Account

     Third-Party Grants

     RI Judiciary Technology Surcharge Account

     Department of Elementary and Secondary Education

     Statewide Student Transportation Services Account

     School for the Deaf Fee-for-Service Account

     Davies Career and Technical School Local Education Aid Account

     Davies -- National School Breakfast & Lunch Program

     Office of the Postsecondary Commissioner

     Westerly Higher Education and Industry Center

     Department of Labor and Training

     Job Development Fund

     SECTION 3. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO STATE AFFAIRS AND GOVERNMENT -- HEALTH CARE--HEALTH

INSURANCE

***

     This act would establish the Rhode Island reinsurance program that will provide

reinsurance to insurance carriers that offer health insurance coverage on the individual market, to

mitigate the impact of high-risk individuals on health insurance rates. The director of the Rhode

Island health benefits exchange would be authorized to establish payment parameters for this

program. A restricted receipt fund consisting of federal funds would be designated to provide

reinsurance to carriers that offer individual health benefit plans that are established and

administered by the director.

     This act would take effect upon passage.

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