LRBs0320/1
TJD:all
2017 - 2018 LEGISLATURE
SENATE SUBSTITUTE AMENDMENT 1,
TO SENATE BILL 770
February 13, 2018 - Offered by Joint Committee on Finance.
SB770-SSA1,1,8 1An Act to repeal subchapter VI (title) of chapter 601 [precedes 601.93]; to
2amend
601.45 (1); and to create 16.5285, 20.145 (5), 49.45 (2p), subchapter VII
3(title) of chapter 601 [precedes 601.80], 601.80, 601.83, 601.85 and subchapter
4VIII (title) of chapter 601 [precedes 601.93] of the statutes; relating to:
5Wisconsin Healthcare Stability Plan, reinsurance of health carriers,
6reallocating savings from health insurer fee, providing an exemption from
7emergency rule procedures, granting rule-making authority, and making
8appropriations.
Analysis by the Legislative Reference Bureau
This substitute amendment creates the Wisconsin Healthcare Stability Plan
(WIHSP), which is a state-based reinsurance program for health carriers, subject to
the approval of a waiver of the federal Patient Protection and Affordable Care Act.
WIHSP makes a reinsurance payment to a health carrier if the claims for an
individual who is enrolled in a health benefit plan of the carrier exceed a threshold
amount, known as the attachment point, in a benefit year. The commissioner of the
Office of the Commissioner of Insurance in this state administers WIHSP. After

consulting with an actuarial firm, the commissioner sets the payment parameters
for the reinsurance payment as specified under the substitute amendment. In
addition to the attachment point, the other payment parameters are the reinsurance
cap, which is the maximum amount of claims eligible for a reinsurance payment, and
the coinsurance rate, which is the percent of the claim amount eligible for a
reinsurance payment. The commissioner must design and adjust the payment
parameters with the goal to stabilize or reduce premium rates in the individual
health insurance market, increase participation by health carriers in the individual
market, improve access to health care providers and services for individuals
purchasing individual health insurance coverage, mitigate the impact high-risk
individuals have on premium rates in the individual market, and take into account
any federal funding and the total amount of funding available for the plan. If the
funding amounts available for expenditure are not anticipated to fully fund the
reinsurance payments as of July 1 of the year before the applicable benefit year, the
commissioner must adjust the payment parameters and then allow the health
carrier to adjust its filing of insurance premium rates. If funding is not available to
make all reinsurance payments in a benefit year, reinsurance payments will be made
proportional to the health carrier's share of aggregate individual health plan claims
costs eligible for reinsurance payments, as determined by the commissioner. Under
the substitute amendment, health carriers are required to calculate the rates the
carrier would have charged for a benefit year if WIHSP was not established and
submit those rates as part of its rate filing.
The commissioner must calculate a reinsurance payment to be made to a health
carrier as specified in the substitute amendment. If the claims cost amounts for an
individual enrollee of the health benefit plan do not exceed the attachment point
threshold, the commissioner may not make a reinsurance payment. If the costs
exceed the attachment point, then the commissioner makes a reinsurance payment
that is the coinsurance rate multiplied by whichever of the following is less 1) the
claims cost minus the attachment point or 2) the reinsurance cap minus the
attachment point. When a health carrier meets criteria set in the substitute
amendment and any requirements set by the commissioner, the carrier may request
a reinsurance payment. A health carrier, however, is not eligible to receive a
reinsurance payment unless the carrier agrees not to bring a lawsuit against the
commissioner or a state agency or employee over any delay in reinsurance payments
or reduction in the payments for insufficient funding. The commissioner must notify
the carrier of any reinsurance payments for the benefit year no later than June 30
of the year following that benefit year.
The substitute amendment requires health carriers to provide access to certain
data. The commissioner may also have a health carrier audited to assess the carrier's
compliance with requirements in this substitute amendment. The commissioner is
required to keep an accounting of certain payments and moneys available for
payments as specified in the substitute amendment.
The substitute amendment allows the commissioner to submit one or more
requests for a state innovation waiver under the federal Affordable Care Act, known
as a “1332 waiver,” to implement WIHSP. The substitute amendment specifies the

2019 benefit year payment parameters to be used for submitting the waiver but
allows the commissioner to adjust the payment parameters to secure federal
approval of the waiver request. If the federal government does not approve WIHSP
as submitted or a substantially similar plan, the commissioner may not implement
WIHSP. Current federal law allows a state to apply for a waiver of certain provisions
of the Affordable Care Act, and the state is then eligible to receive moneys from the
federal government, known as pass-through funding, that the federal government
would have paid in premium tax credits, cost-sharing reductions, or small business
credits if the waiver had not been approved.
Under the substitute amendment, if a fee imposed under the Affordable Care
Act is no longer applicable to insurers participating in the state's group health
insurance program or the Medical Assistance program, the secretary of
administration must calculate the expected savings to state agencies from avoiding
the fee. The secretary must then adjust appropriations and transfer, in the biennium
in which the savings calculation is made, to the general fund the program revenue
based on the savings calculated, subject to limitations in the substitute amendment,
or adjust state agency employer contributions for state employee fringe benefit costs
in the biennium following the biennium in which the savings is calculated or both.
The substitute amendment prohibits the Department of Health Services from
expanding the Medical Assistance program under the federal Patient Protection and
Affordable Care Act unless legislation is in effect allowing the expansion.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
SB770-SSA1,1 1Section 1. 16.5285 of the statutes is created to read:
SB770-SSA1,3,3 216.5285 Health insurer fee savings. (1) In this section, “Affordable Care
3Act” has the meaning given in s. 601.80 (1).
SB770-SSA1,3,9 4(2) If the annual fee imposed under section 9010 of the Affordable Care Act is
5no longer applicable to insurers participating in the state's group health insurance
6program under s. 40.51 (6) or the Medical Assistance program under subch. IV of ch.
749 and if the state budget allocated an amount to expend on the annual insurer fee,
8the secretary shall calculate the expected state agency savings related to the
9avoidance of the fee.
SB770-SSA1,3,11 10(3) Based on the savings calculated under sub. (2), the secretary shall do one
11or more of the following:
SB770-SSA1,4,14
1(a) In the fiscal biennium in which the savings are calculated, reduce the
2estimated general purpose revenue and program revenue expenditures, excluding
3tuition and fee moneys from the University of Wisconsin System, for “Compensation
4Reserves” shown in the schedule under s. 20.005 (1) by an amount equal to the
5savings calculated under sub. (2) to the state's group health insurance program;
6subject to sub. (4), transfer to the general fund the related available balances in
7program revenue appropriation accounts related to the savings under sub. (2) to the
8state's group health insurance program in an amount equal to the calculated
9program revenue saved under sub. (2) to the state's group health insurance program;
10and, if the secretary of health services finds that a reduction would not result in a
11deficit to the Medical Assistance program, reduce the general purpose revenue
12expenditure amounts for the Medical Assistance program under s. 20.435 (4) (b) by
13an amount that is no greater than the amount of the savings calculated under sub.
14(2) to the Medical Assistance program.
SB770-SSA1,4,1715 (b) In the fiscal biennium following the fiscal biennium in which the savings
16are calculated, adjust state agency employer contributions for state employee fringe
17benefit costs.
SB770-SSA1,5,3 18(4) If the secretary intends to transfer to the general fund the related available
19balances in program revenue appropriation accounts related to the savings under
20sub. (2) to the state's group health insurance program, the secretary shall submit a
21request to the joint committee on finance stating the amounts the secretary
22calculates would be transferred from each program revenue appropriation account.
23If, within 14 days after the date of the secretary's request, the cochairpersons of the
24committee do not notify the department that the committee has scheduled a meeting
25to review the request, the transfers submitted are considered approved. If the

1cochairpersons notify the department within 14 days after the date of the secretary's
2request that the committee has scheduled a meeting to review the request, a transfer
3may be made only upon approval of the committee.
SB770-SSA1,2 4Section 2. 20.145 (5) of the statutes is created to read:
SB770-SSA1,5,75 20.145 (5) Wisconsin Healthcare Stability Plan. (b) Reinsurance plan; state
6subsidy.
A sum sufficient for the state subsidy of reinsurance payments for the
7reinsurance program under subch. VII of ch. 601.
SB770-SSA1,5,98 (m) Federal funds; reinsurance plan. All moneys received from the federal
9government for reinsurance for the purposes for which received.
SB770-SSA1,3 10Section 3. 49.45 (2p) of the statutes is created to read:
SB770-SSA1,5,1611 49.45 (2p) Approval of Medical Assistance program changes. After the
12effective date of this subsection .... [LRB inserts date], the department may not
13expand eligibility under section 2001 (a) (1) (C) of the Patient Protection and
14Affordable Care Act, P.L. 111-148, for the Medical Assistance program under this
15subchapter unless the state legislature has passed legislation to allow the expansion
16and that legislation is in effect.
SB770-SSA1,4 17Section 4. 601.45 (1) of the statutes is amended to read:
SB770-SSA1,6,218 601.45 (1) Costs to be paid by examinees. The reasonable costs of examinations
19and audits under ss. 601.43 and , 601.44, and 601.83 (5) (f) shall be paid by examinees
20except as provided in sub. (4), either on the basis of a system of billing for actual
21salaries and expenses of examiners and other apportionable expenses, including
22office overhead, or by a system of regular annual billings to cover the costs relating
23to a group of companies, or a combination of such systems, as the commissioner may
24by rule prescribe. Additional funding, if any, shall be governed by s. 601.32. The

1commissioner shall schedule annual hearings under s. 601.41 (5) to review current
2problems in the area of examinations.
SB770-SSA1,5 3Section 5. Subchapter VII (title) of chapter 601 [precedes 601.80] of the
4statutes is created to read:
SB770-SSA1,6,55 Chapter 601
SB770-SSA1,6,66 Subchapter VII
SB770-SSA1,6,77 healthcare stability PLAN
SB770-SSA1,6 8Section 6. 601.80 of the statutes is created to read:
SB770-SSA1,6,9 9601.80 Definitions; healthcare stability plan. In this subchapter:
SB770-SSA1,6,13 10(1) “Affordable Care Act” means the federal Patient Protection and Affordable
11Care Act, P.L. 111-148, as amended by the federal Health Care and Education
12Reconciliation Act of 2010, P.L. 111-152, and any amendments to or regulations or
13guidance issued under those acts.
SB770-SSA1,6,17 14(2) “Attachment point” means the amount set under s. 601.83 (2) for the
15healthcare stability plan that is the threshold amount for claims costs incurred by
16an eligible health carrier for an enrolled individual's covered benefits in a benefit
17year, beyond which the claims costs are eligible for reinsurance payments.
SB770-SSA1,6,19 18(3) “Benefit year” means the calendar year for which an eligible health carrier
19provides coverage through an individual health plan.
SB770-SSA1,6,23 20(4) “Coinsurance rate” means the rate set under s. 601.83 (2) for the healthcare
21stability plan that is the rate at which the commissioner will reimburse an eligible
22health carrier for claims incurred for an enrolled individual's covered benefits in a
23benefit year above the attachment point and below the reinsurance cap.
SB770-SSA1,7,3
1(5) “Eligible health carrier” means an insurer, as defined in s. 632.745 (15) that
2offers an individual health plan and incurs claims costs for an enrolled individual's
3covered benefits in the applicable benefit year.
SB770-SSA1,7,6 4(6) “Grandfathered plan” means a health plan in which an individual was
5enrolled on March 23, 2010, for as long as it maintains that status in accordance with
6the Affordable Care Act.
SB770-SSA1,7,7 7(7) “Health benefit plan” has the meaning given in s. 632.745 (11).
SB770-SSA1,7,9 8(8) “Healthcare stability plan” means the state-based reinsurance program
9known as the Wisconsin Healthcare Stability Plan administered under s. 601.83 (1).
SB770-SSA1,7,11 10(9) “Individual health plan” means a health benefit plan that is not a group
11health plan, as defined in s. 632.745 (10), or a grandfathered plan.
SB770-SSA1,7,13 12(10) “Payment parameters” means the attachment point, reinsurance cap, and
13coinsurance rate for the healthcare stability plan.
SB770-SSA1,7,17 14(12) “Reinsurance cap” means the threshold amount set under s. 601.83 (2) for
15the healthcare stability plan for claims costs incurred by an eligible health carrier
16for an enrolled individual's covered benefits, after which the claims costs for benefits
17are no longer eligible for reinsurance payments.
SB770-SSA1,7,19 18(13) “Reinsurance payment” means an amount paid by the commissioner to an
19eligible health carrier under the healthcare stability plan.
SB770-SSA1,7 20Section 7. 601.83 of the statutes is created to read:
SB770-SSA1,7,23 21601.83 Healthcare stability plan; administration. (1) Plan established;
22general administration.
(a) Subject to par. (b), the commissioner shall administer
23a state-based reinsurance program known as the healthcare stability plan.
SB770-SSA1,8,324 (b) 1. The commissioner may submit a request to the federal department of
25health and human services for one or more waivers under 42 USC 18052 to

1implement the healthcare stability plan for benefit years beginning January 1, 2019.
2The commissioner may adjust the payment parameters under sub. (2) to the extent
3necessary to secure federal approval of the waiver request under this paragraph.
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