2017 - 2018 LEGISLATURE
February 5, 2018 - Introduced by Committee on Senate Organization, by request
of Governor Scott Walker. Referred to Joint Committee on Finance.
SB770,1,7 1An Act to repeal subchapter VI (title) of chapter 601 [precedes 601.93]; to
601.45 (1); and to create 16.5285, 20.145 (5), subchapter VII (title) of
3chapter 601 [precedes 601.80], 601.80, 601.83, 601.85 and subchapter VIII
4(title) of chapter 601 [precedes 601.93] of the statutes; relating to: Wisconsin
5Healthcare Stability Plan, reinsurance of health carriers, reallocating savings
6from health insurer fee, providing an exemption from emergency rule
7procedures, granting rule-making authority, and making appropriations.
Analysis by the Legislative Reference Bureau
This bill 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 bill. 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 state resident premiums, as determined by the
commissioner. Under the bill, 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 bill. 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 bill 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 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 bill 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 bill. The commissioner is required to keep an
accounting of certain payments and moneys available for payments as specified in
the bill.
The bill 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 bill 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
The bill requires the secretary of health services to ensure a lapse is made to
the general fund of up to $80,000,000, as determined by the secretary of
administration, from the general purpose revenue appropriation for the Medical
Assistance program.
Under the bill, 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 transfer, in the biennium in which the savings calculation is made, to the
general fund the program revenue based on the savings calculated 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
secretary may transfer any program revenue transferred based on calculated
savings to an appropriation account to be used for WIHSP or reinsurance.
For further information see the state fiscal estimate, which will be printed as
an appendix to this bill.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
SB770,1 1Section 1. 16.5285 of the statutes is created to read:
SB770,3,3 216.5285 Health insurer fee savings. (1) In this section, “Affordable Care
3Act” has the meaning given in s. 601.80 (1).
SB770,3,8 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, the secretary shall calculate the expected state agency savings related to the
8avoidance of the fee.
SB770,3,10 9(3) Based on the savings calculated under sub. (2), the secretary shall do one
10or more of the following:
SB770,4,611 (a) In the fiscal biennium in which the savings are calculated, reduce the
12estimated general purpose revenue and program revenue expenditures, excluding

1tuition and fee moneys from the University of Wisconsin System, for “Compensation
2Reserves” shown in the schedule under s. 20.005 (1) by an amount equal to the
3savings calculated under sub. (2), and transfer to the general fund the related
4available balances in program revenue appropriation accounts related to the savings
5under sub. (2) in an amount equal to the calculated program revenue saved under
6sub. (2).
SB770,4,97 (b) In the fiscal biennium following the fiscal biennium in which the savings
8are calculated, adjust state agency employer contributions for state employee fringe
9benefit costs.
SB770,4,12 10(4) The secretary may transfer any amounts transferred under sub. (3) (a)
11related to the savings under sub. (2) to the appropriation account under s. 20.145 (5)
SB770,2 13Section 2. 20.005 (3) (schedule) of the statutes: at the appropriate place, insert
14the following amounts for the purposes indicated: - See PDF for table PDF
SB770,3 15Section 3. 20.145 (5) of the statutes is created to read:
SB770,4,1816 20.145 (5) Wisconsin Healthcare Stability Plan. (b) Reinsurance plan; state
A sum sufficient for the state subsidy of reinsurance payments for the
18reinsurance program under subch. VII of ch. 601.
1(k) Interagency and intra-agency programs; reinsurance plan. All moneys
2received from other state agencies and all moneys transferred under s. 16.5285 (4)
3for the purposes of the healthcare stability plan under subch. VII of ch. 601 or for
SB770,5,65 (m) Federal funds; reinsurance plan. All moneys received from the federal
6government for reinsurance for the purposes for which received.
SB770,4 7Section 4 . 601.45 (1) of the statutes is amended to read:
SB770,5,168 601.45 (1) Costs to be paid by examinees. The reasonable costs of examinations
9and audits under ss. 601.43 and , 601.44, and 601.83 (5) (f) shall be paid by examinees
10except as provided in sub. (4), either on the basis of a system of billing for actual
11salaries and expenses of examiners and other apportionable expenses, including
12office overhead, or by a system of regular annual billings to cover the costs relating
13to a group of companies, or a combination of such systems, as the commissioner may
14by rule prescribe. Additional funding, if any, shall be governed by s. 601.32. The
15commissioner shall schedule annual hearings under s. 601.41 (5) to review current
16problems in the area of examinations.
SB770,5 17Section 5 . Subchapter VII (title) of chapter 601 [precedes 601.80] of the
18statutes is created to read:
SB770,5,1919 Chapter 601
SB770,5,2020 Subchapter VII
SB770,5,2121 healthcare stability PLAN
SB770,6 22Section 6. 601.80 of the statutes is created to read:
SB770,5,23 23601.80 Definitions; healthcare stability plan. In this subchapter:
SB770,6,2 24(1) “Affordable Care Act” means the federal Patient Protection and Affordable
25Care Act, P.L. 111-148, as amended by the federal Health Care and Education

1Reconciliation Act of 2010, P.L. 111-152, and any amendments to or regulations or
2guidance issued under those acts.
SB770,6,6 3(2) “Attachment point” means the amount set under s. 601.83 (2) for the
4healthcare stability plan that is the threshold amount for claims costs incurred by
5an eligible health carrier for an enrolled individual's covered benefits in a benefit
6year, beyond which the claims costs are eligible for reinsurance payments.
SB770,6,8 7(3) “Benefit year” means the calendar year for which an eligible health carrier
8provides coverage through an individual health plan.
SB770,6,12 9(4) “Coinsurance rate” means the rate set under s. 601.83 (2) for the healthcare
10stability plan that is the rate at which the commissioner will reimburse an eligible
11health carrier for claims incurred for an enrolled individual's covered benefits in a
12benefit year above the attachment point and below the reinsurance cap.
SB770,6,15 13(5) “Eligible health carrier” means an insurer, as defined in s. 632.745 (15) that
14offers an individual health plan and incurs claims costs for an enrolled individual's
15covered benefits in the applicable benefit year.
SB770,6,18 16(6) “Grandfathered plan” means a health plan in which an individual was
17enrolled on March 23, 2010, for as long as it maintains that status in accordance with
18the Affordable Care Act.
SB770,6,19 19(7) “Health benefit plan” has the meaning given in s. 632.745 (11).
SB770,6,21 20(8) “Healthcare stability plan” means the state-based reinsurance program
21known as the Wisconsin Healthcare Stability Plan administered under s. 601.83 (1).
SB770,6,23 22(9) “Individual health plan” means a health benefit plan that is not a group
23health plan, as defined in s. 632.745 (10), or a grandfathered plan.
SB770,6,25 24(10) “Payment parameters” means the attachment point, reinsurance cap, and
25coinsurance rate for the healthcare stability plan.
1(12) “Reinsurance cap” means the threshold amount set under s. 601.83 (2) for
2the healthcare stability plan for claims costs incurred by an eligible health carrier
3for an enrolled individual's covered benefits, after which the claims costs for benefits
4are no longer eligible for reinsurance payments.
SB770,7,6 5(13) “Reinsurance payment” means an amount paid by the commissioner to an
6eligible health carrier under the healthcare stability plan.
SB770,7 7Section 7. 601.83 of the statutes is created to read:
SB770,7,10 8601.83 Healthcare stability plan; administration. (1) Plan established;
9general administration.
(a) Subject to par. (b), the commissioner shall administer
10a state-based reinsurance program known as the healthcare stability plan.