2017 - 2018 LEGISLATURE
February 5, 2018 - Introduced by
Committee on Senate Organization, by request
of Governor Scott Walker. Referred to Joint Committee on Finance.
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 3
chapter 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 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
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:
16.5285 of the statutes is created to read:
216.5285 Health insurer fee savings.
In this section, “Affordable Care 3
Act” has the meaning given in s. 601.80 (1).
If the annual fee imposed under section 9010 of the Affordable Care Act is 5
no longer applicable to insurers participating in the state's group health insurance 6
program under s. 40.51 (6) or the Medical Assistance program under subch. IV of ch. 7
49, the secretary shall calculate the expected state agency savings related to the 8
avoidance of the fee.
Based on the savings calculated under sub. (2), the secretary shall do one 10
or more of the following:
(a) In the fiscal biennium in which the savings are calculated, reduce the 12
estimated general purpose revenue and program revenue expenditures, excluding
tuition and fee moneys from the University of Wisconsin System, for “Compensation 2
Reserves” shown in the schedule under s. 20.005 (1) by an amount equal to the 3
savings calculated under sub. (2), and transfer to the general fund the related 4
available balances in program revenue appropriation accounts related to the savings 5
under sub. (2) in an amount equal to the calculated program revenue saved under 6
(b) In the fiscal biennium following the fiscal biennium in which the savings 8
are calculated, adjust state agency employer contributions for state employee fringe 9
The secretary may transfer any amounts transferred under sub. (3) (a) 11
related to the savings under sub. (2) to the appropriation account under s. 20.145 (5) 12
20.005 (3) (schedule) of the statutes: at the appropriate place, insert 14
the following amounts for the purposes indicated:
- See PDF for table
20.145 (5) of the statutes is created to read:
20.145 (5) Wisconsin Healthcare Stability Plan.
(b) Reinsurance plan; state
A sum sufficient for the state subsidy of reinsurance payments for the 18
reinsurance program under subch. VII of ch. 601.
(k) Interagency and intra-agency programs; reinsurance plan.
All moneys 2
received from other state agencies and all moneys transferred under s. 16.5285 (4) 3
for the purposes of the healthcare stability plan under subch. VII of ch. 601 or for 4
(m) Federal funds; reinsurance plan.
All moneys received from the federal 6
government for reinsurance for the purposes for which received.
601.45 (1) of the statutes is amended to read:
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 10
except as provided in sub. (4), either on the basis of a system of billing for actual 11
salaries and expenses of examiners and other apportionable expenses, including 12
office overhead, or by a system of regular annual billings to cover the costs relating 13
to a group of companies, or a combination of such systems, as the commissioner may 14
by rule prescribe. Additional funding, if any, shall be governed by s. 601.32. The 15
commissioner shall schedule annual hearings under s. 601.41 (5) to review current 16
problems in the area of examinations.
Subchapter VII (title) of chapter 601 [precedes 601.80] of the 18
statutes is created to read:
healthcare stability PLAN
601.80 of the statutes is created to read:
23601.80 Definitions; healthcare stability plan.
In this subchapter:
“Affordable Care Act” means the federal Patient Protection and Affordable 25
Care Act, P.L. 111-148
, as amended by the federal Health Care and Education
Reconciliation Act of 2010, P.L. 111-152
, and any amendments to or regulations or 2
guidance issued under those acts.
“Attachment point” means the amount set under s. 601.83 (2) for the 4
healthcare stability plan that is the threshold amount for claims costs incurred by 5
an eligible health carrier for an enrolled individual's covered benefits in a benefit 6
year, beyond which the claims costs are eligible for reinsurance payments.
“Benefit year” means the calendar year for which an eligible health carrier 8
provides coverage through an individual health plan.
“Coinsurance rate” means the rate set under s. 601.83 (2) for the healthcare 10
stability plan that is the rate at which the commissioner will reimburse an eligible 11
health carrier for claims incurred for an enrolled individual's covered benefits in a 12
benefit year above the attachment point and below the reinsurance cap.
“Eligible health carrier” means an insurer, as defined in s. 632.745 (15) that 14
offers an individual health plan and incurs claims costs for an enrolled individual's 15
covered benefits in the applicable benefit year.
“Grandfathered plan” means a health plan in which an individual was 17
enrolled on March 23, 2010, for as long as it maintains that status in accordance with 18
the Affordable Care Act.
“Health benefit plan” has the meaning given in s. 632.745 (11).
“Healthcare stability plan” means the state-based reinsurance program 21
known as the Wisconsin Healthcare Stability Plan administered under s. 601.83 (1).
“Individual health plan” means a health benefit plan that is not a group 23
health plan, as defined in s. 632.745 (10), or a grandfathered plan.
“Payment parameters” means the attachment point, reinsurance cap, and 25
coinsurance rate for the healthcare stability plan.
“Reinsurance cap” means the threshold amount set under s. 601.83 (2) for 2
the healthcare stability plan for claims costs incurred by an eligible health carrier 3
for an enrolled individual's covered benefits, after which the claims costs for benefits 4
are no longer eligible for reinsurance payments.
“Reinsurance payment” means an amount paid by the commissioner to an 6
eligible health carrier under the healthcare stability plan.
601.83 of the statutes is created to read:
8601.83 Healthcare stability plan; administration. (1) Plan established;
(a) Subject to par. (b), the commissioner shall administer 10
a state-based reinsurance program known as the healthcare stability plan.
(b) 1. The commissioner may submit a request to the federal department of 12
health and human services for one or more waivers under 42 USC 18052
implement the healthcare stability plan for benefit years beginning January 1, 2019. 14
The commissioner may adjust the payment parameters under sub. (2) to the extent 15
necessary to secure federal approval of the waiver request under this paragraph.
2. If the federal department of health and human services does not approve the 17
healthcare stability plan in the waiver request submitted under subd. 1. or a 18
substantially similar healthcare stability plan, the commissioner may not 19
implement the healthcare stability plan.
(c) If the federal government enacts into law Senate Bill 1835 of the 115th 21
Congress or a similar bill providing support to states to establish reinsurance 22
programs, the commissioner shall seek, if necessary, and receive federal moneys for 23
the purpose of reinsurance programs that result from that enacted law to expend for 24
the purposes of this subchapter.
(d) In accordance with sub. (5) (c), the commissioner shall collect the data from 2
an eligible health carrier as necessary to determine reinsurance payments.
(e) Beginning on a date determined by the commissioner, the commissioner 4
shall require each eligible health carrier to calculate the rates the eligible health 5
carrier would have charged for a benefit year if the healthcare stability plan had not 6
been established and submit the calculated rates as part of its rate filing submitted 7
to the commissioner. The commissioner shall consider the calculated rate 8
information provided under this paragraph as part of the rate filing review.
(f) 1. For each applicable benefit year, the commissioner shall notify eligible 10
health carriers of reinsurance payments to be made for the applicable benefit year 11
no later than June 30 of the calendar year following the applicable benefit year.
2. Quarterly during the applicable benefit year, the commissioner shall provide 13
each eligible health carrier with the calculation of total amounts of reinsurance 14
3. By August 15 of the calendar year following the applicable benefit year, the 16
commissioner shall disburse all applicable reinsurance payments to an eligible 17
(g) The commissioner may promulgate any rules necessary to implement the 19
healthcare stability plan under this section. The commissioner may promulgate 20
rules necessary to implement this section as emergency rules under s. 227.24. 21
Notwithstanding s. 227.24 (1) (a) and (3), the commissioner is not required to provide 22
evidence that promulgating a rule under this paragraph as an emergency rule is 23
necessary for the preservation of the public peace, health, safety, or welfare and is 24
not required to provide a finding of emergency for a rule promulgated under this 25
1(2) Payment parameters.
The commissioner, after consulting with an actuarial 2
firm, shall design and adjust payment parameters with the goal to do all of the 3
(a) Stabilize or reduce premium rates in the individual market.
(b) Increase participation by health carriers in the individual market.
(c) Improve access to health care providers and services for individuals 7
purchasing coverage in the individual market.
(d) Mitigate the impact high-risk individuals have on premium rates in the 9
(e) Take into account any federal funding available for the plan.