40 Pa.C.S. Ch. 95

in effect

40 Pa.C.S. § 9501 Application.

(a) Application.--The department is authorized to apply to the United States Secretary of Health and Human Services under section 1332 of the Affordable Care Act (Public Law 111-148, 42 U.S.C. § 18052) for a state innovation waiver to: (1) Waive any applicable provisions of the Affordable Care Act with respect to health insurance coverage in this Commonwealth. (2) Establish a reinsurance program in accordance with an approved waiver. (3) Maximize Federal funding for the reinsurance program for plan years beginning on or after implementation of the program. (b) Public review.--On or before 180 days after the effective date of this section, the department shall make a draft application available for a 30-day public review and comment period. The department shall consider any comments in its final submitted application. (c) Amendment.--The department may amend the waiver application as necessary to carry out the provisions of this chapter. (d) Notification.--The department shall notify the chair and minority chair of the Appropriations Committee of the Senate, the chair and minority chair of the Appropriations Committee of the House of Representatives, the chair and minority chair of the Banking and Insurance Committee of the Senate and the chair and minority chair of the Insurance Committee of the House of Representatives promptly of any amendment to the waiver application and of any Federal actions regarding the waiver application. Cross References. Section 9501 is referred to in sections 9502, 9512 of this title.

40 Pa.C.S. § 9502 Implementation of waiver and establishment of reinsurance program.

(a) Implementation.--Upon approval of the department's application for an innovation waiver by the United States Department of Health and Human Services, the department shall implement a reinsurance program. (b) Establishment.--Contingent upon Federal approval, the Commonwealth Health Insurance Reinsurance Program is established in the department for the purposes of stabilizing the rates and premiums for health insurance policies in the individual market and providing greater financial certainty to consumers of health insurance in this Commonwealth. The reinsurance program shall be considered a reinsurance entity to carry out a reinsurance program under the Federal acts. (c) Operation.--Operation of a reinsurance program shall be contingent on Federal approval of the waiver application submitted pursuant to section 9501 (relating to application). Cross References. Section 9502 is referred to in sections 9103, 9305, 9510 of this title.

40 Pa.C.S. § 9503 Administration and operation of reinsurance program.

(a) General rule.--The department shall take all actions necessary to administer the approved reinsurance program in a manner consistent with applicable Federal and State law. (b) Functions.--The department shall perform all functions necessary and appropriate to carry out the operation of the reinsurance program and to effectuate the purposes for which the reinsurance program is organized, in accordance with the approved waiver. The functions include: (1) Establishing procedures for and performing administrative and accounting operations of the reinsurance program. (2) Seeking and receiving funding for the reinsurance program and to maximize Federal funding for the reinsurance program, including from: (i) The exchange authority. (ii) Federal funding that is or becomes available to states to support administration and implementation of state-based reinsurance programs. (iii) Other available sources. (3) Collecting data submissions and reinsurance payment requests by eligible insurers. (4) Making reinsurance payments to eligible insurers. (5) Resolving disputes related to the amount of reinsurance payments. (6) Suing or being sued, including taking any legal action necessary or proper for the recovery of money for reinsurance payments. (7) Submitting invoices or other requests for money as may be necessary and appropriate under the innovation waiver. (c) Delegation.--Except as prohibited by applicable Federal law and regulation, and as may be necessary or appropriate to carry out department duties, the department may administer the reinsurance program directly or through: (1) Other Federal agencies, Commonwealth agencies or other states' agencies. (2) Contracted persons or entities, including with legal, actuarial, economic, third-party administrator or other persons or entities, as the department deems appropriate, to provide consultation services and technical assistance in operating the reinsurance program. Contracted persons or entities shall submit regular reports to the department regarding the person's or entity's performance, the frequency, content and form of which shall be determined by the department. (d) Coordination with exchange authority.--The department shall coordinate with the exchange authority as may be necessary to fund and operate the reinsurance program.

40 Pa.C.S. § 9504 Reinsurance parameters.

(a) Adoption of reinsurance terms.--The department shall, after consultation with all insurers then currently participating in the exchange, and not less than 60 days before final rates for health insurance policies are required to be submitted each year, determine and adopt the attachment point, reinsurance cap and coinsurance rate applicable to the reinsurance program for the following year. (b) Parameters.--In determining the attachment point, reinsurance cap and coinsurance rate applicable to the reinsurance program for the following year, the department shall seek to: (1) Manage the program within the amount of total program funding available to the department. (2) With respect to the individual market: (i) Mitigate the impact of high-cost claims on premium rates. (ii) Stabilize or reduce premium rates. (iii) Increase participation. (c) Publication and notice.--The department shall transmit notice of the adopted attachment point, reinsurance cap and coinsurance rate to the Legislative Reference Bureau for publication in the Pennsylvania Bulletin and shall: (1) Post notice on the department's publicly accessible Internet website. (2) Electronically send notice to the chair and minority chair of the Banking and Insurance Committee of the Senate and the chair and minority chair of the Insurance Committee of the House of Representatives. (3) Electronically send notice to each participating insurer via a contact person or electronic mailing address, as identified by the insurer. (d) Limitation.--After the department adopts the attachment point, reinsurance cap and coinsurance rate for the next year, the department may not, before or during that benefit year, change the attachment point, reinsurance cap or coinsurance rate in a manner less favorable to the insurers participating in the exchange at the time of adoption. Cross References. Section 9504 is referred to in sections 9506, 9512 of this title.

40 Pa.C.S. § 9505 Insurer eligibility and duties.

(a) Eligibility for payment.--An insurer shall be eligible for a reinsurance payment if: (1) The claims costs for a reinsurance-eligible enrollee's covered benefits in a benefit year exceed the attachment point. (2) The eligible insurer has implemented and documented reasonable care management practices for enrollees who are the subject of reinsurance claims through the reinsurance program. (3) The eligible insurer makes its requests for reinsurance payments in accordance with any requirements established by the department, including requirements related to the format, structure and timing for submission of claims for reinsurance payments. (4) The eligible insurer participated in the exchange, or is affiliated with an entity that participated in the exchange, in the benefit year in which the claims costs for which a reinsurance payment is sought were incurred. (b) Reporting requirement.--An insurer that seeks reinsurance payments under this chapter must report to the department, in the form and manner prescribed by the department, information about reinsurance-eligible enrollees insured by the insurer as necessary for the department to calculate reinsurance payments. (c) Confidentiality.--Reinsurance claims submitted under this section are confidential and are not subject to public disclosure, except as provided under section 9514 (relating to immunity). (d) Consideration for rate filings.--In a rate filing for a health insurance policy to be offered through the exchange, the impact of reinsurance payments under this chapter shall be identified. (e) Limitation.--The calculation of reinsurance payments due to an eligible insurer shall be net of all other available insurance payments applicable to a claim, including insurance accessible through subrogation or coordination of benefits.

40 Pa.C.S. § 9506 Payment of coverage and administrative costs.

(a) General rule.--Consistent with Federal requirements, the department shall pay the following from the Reinsurance Fund: (1) Administrative expenses of the reinsurance program, including the annual audit required under section 9508 (relating to annual audit). (2) Reinsurance payments for coverage of reinsurance-eligible enrollees. (b) Operations.--The department may promulgate regulations necessary and appropriate to establish processes for the settlement of reinsurance coverage claims and disbursement of reinsurance money. (c) Request for review.--An insurer that is aggrieved by a determination of the department relating to the amount of reinsurance payments due to the insurer may file a request for administrative review of the decision. The procedures and requirements of 2 Pa.C.S. Ch. 5 Subch. A (relating to practice and procedure of Commonwealth agencies) shall apply to requests for review filed under this section. Notwithstanding otherwise applicable time limitations, in order to permit timely finalization of rates for the open enrollment period for the exchange, a challenge to the department's determination of the attachment point, reinsurance cap and coinsurance rate published in the Pennsylvania Bulletin under section 9504(c) (relating to reinsurance parameters) must be made within 10 business days of the date of publication.

40 Pa.C.S. § 9507 Not an entitlement.

(a) No entitlement.--The provision of reinsurance program money or benefits accrued through the Reinsurance Fund may not constitute an entitlement derived from the Commonwealth or a claim on any other money of the Commonwealth. (b) Contingency with respect to Federal money.--Notwithstanding any provision of this chapter, the department shall have no responsibility to pay reinsurance amounts that would be payable out of Federal money if the Federal Government does not transmit sufficient money for the Reinsurance Fund to fully recompense those actions.

40 Pa.C.S. § 9508 Annual audit.

(a) Annual audit.--The reinsurance program shall be examined and audited annually by an independent certified public accounting firm. The audit shall, at a minimum: (1) Assess compliance with the requirements of this chapter. (2) Identify any material weaknesses or significant deficiencies and identify and implement solutions to correct the material weaknesses or deficiencies. (b) Sharing of audit.--By December 31 of each year, the department shall electronically share the audit of the preceding fiscal year required under subsection (a) and related documents by: (1) Posting the following on the department's publicly accessible Internet website: (i) The audit. (ii) A summary of the audit, including any material weakness or significant deficiency identified and how the department intends to correct the material weakness or significant deficiency. (2) Providing an electronic link to the posted audit under paragraph (1)(i) to the Secretary of the Senate and the Chief Clerk of the House of Representatives. (c) Payment.--The cost of the annual audit required under subsection (a) shall be paid for from money in the Reinsurance Fund. Cross References. Section 9508 is referred to in sections 9506, 9513 of this title.

40 Pa.C.S. § 9509 Annual report of operations.

(a) Report.--No later than November 1 of the year following the applicable benefit year or 60 calendar days following the final disbursement of reinsurance payments for the applicable benefit year, whichever is later, the department shall prepare a financial report for the applicable benefit year. The report must include, at a minimum, the following information for the benefit year that is the subject of the report: (1) Money deposited into the Reinsurance Fund. (2) Requests for reinsurance payments received from eligible insurers. (3) Reinsurance payments made to eligible insurers. (4) Administrative and operational expenses incurred for the reinsurance program. (b) Comparative report.--No later than 60 days after individual market health insurance rates are final, the department shall prepare a report summarizing the quantifiable impact of the reinsurance program on individual market health insurance rates for the following plan year. (c) Distribution of reports.--The department shall: (1) Electronically transmit the reports under this section to: (i) The President pro tempore of the Senate. (ii) The Minority Leader of the Senate. (iii) The Speaker of the House of Representatives. (iv) The Minority Leader of the House of Representatives. (v) The chair and minority chair of the Appropriations Committee of the Senate and the chair and minority chair of the Appropriations Committee of the House of Representatives. (vi) The chair and minority chair of the Banking and Insurance Committee of the Senate and the chair and minority chair of the Insurance Committee of the House of Representatives. (2) Post the reports under this section on the department's publicly accessible Internet website. Cross References. Section 9509 is referred to in section 9513 of this title.

40 Pa.C.S. § 9510 Reinsurance Fund.

(a) Establishment and administration of Reinsurance Fund.--The Reinsurance Fund is established as a special fund within the State Treasury. The Reinsurance Fund shall be administered by the department for the purposes set forth in this chapter, including the deposit of Federal money and all other money received pursuant to and disbursements permitted by this chapter. (b) Exclusive purpose.--The Reinsurance Fund shall be dedicated exclusively for the reinsurance program established under section 9502(b) (relating to implementation of waiver and establishment of reinsurance program). (c) Use.--The following apply: (1) Expenditures from the Reinsurance Fund shall be used to: (i) Implement and operate the reinsurance program. (ii) Make reinsurance payments to eligible insurers under the reinsurance program. Payments to insurers shall be calculated and made on a pro rata basis. (2) In making expenditures from the Reinsurance Fund, available Federal money must be expended first. (3) Pending disbursement, money in the Reinsurance Fund shall be invested or reinvested in the same manner as money in the custody of the State Treasurer. All earnings received from the investment or reinvestment of money shall be credited to the Reinsurance Fund. (d) Expenses.--All costs and expenses of the reinsurance program shall be paid from the Reinsurance Fund, including compensation of employees and any independent contractors or consultants hired by the department. (e) Nonlapsing and revolving fund.--The following apply: (1) The Reinsurance Fund shall be a nonlapsing fund. All money placed in the Reinsurance Fund and interest accrued are appropriated to the department for expenditure consistent with the provisions of this chapter. (2) Nothing in this section shall prevent money in the Reinsurance Fund from being used as a revolving fund to cover necessary expenditures if Federal money is requested and committed but not yet received or if other money is committed but not yet received. (f) Limitations.--The following limitations apply: (1) In each fiscal year, the total amount of annual expenditures from the Reinsurance Fund, including administrative and consulting expenses, may not exceed the amount of expected Federal and other money budgeted for deposit in the Reinsurance Fund in that fiscal year. (2) Notwithstanding any general or specific powers granted to the department under this chapter, whether express or implied, the department may not pledge, in favor of the reinsurance program, the credit or taxing power of the Commonwealth or any political subdivision. Cross References. Section 9510 is referred to in section 9305 of this title.

40 Pa.C.S. § 9511 Procurements within one year.

Notwithstanding any other provision of law and for the limited purpose of fulfilling the requirements under this chapter, procurement of contracts and agreements for the implementation and operation of the reinsurance program initiated within one year of the effective date of this section shall not be subject to the provisions of 62 Pa.C.S. (relating to procurement). No contract or agreement entered into under this section may exceed a term of five years.

40 Pa.C.S. § 9512 Access to information and records.

(a) Reports and access.--An insurer shall, without charge, report information and provide access to and furnish records as the department requests in order for the department to: (1) Prepare the State innovation waiver application submitted under section 9501(a) (relating to application). (2) Determine reinsurance parameters under section 9504 (relating to reinsurance parameters). (3) Determine the reinsurance payments due to each insurer. (4) Monitor costs and revenues associated with the reinsurance program. (5) Administer the reinsurance program. (6) Assure compliance with applicable Federal and State law. (b) Time period.--The information and records requested under subsection (a) shall be provided to the department within 30 days of receipt by an insurer of the written request, unless required at an earlier date for department compliance with a request from a Federal or other State agency. (c) Use.--Information and records provided to the department under subsection (a) may only be used for the purposes specified in subsection (a). (d) Exemptions.--Any instructions, forms or reports issued by the department and required to be completed by an insurer under this section shall not be subject to: (1) The act of July 31, 1968 (P.L.769, No.240), referred to as the Commonwealth Documents Law. (2) The act of October 15, 1980 (P.L.950, No.164), known as the Commonwealth Attorneys Act. (3) The act of June 25, 1982 (P.L.633, No.181), known as the Regulatory Review Act.

40 Pa.C.S. § 9513 Confidentiality and information disclosure.

(a) General rule.--Except as provided for in this section, all working papers, recorded information, documents and copies of working papers, recorded information and documents produced by, obtained by or disclosed to the department or any other person in the course of exercising the department's powers and duties under this chapter: (1) shall be confidential; (2) shall not be subject to subpoena; (3) shall not be subject to the act of February 14, 2008 (P.L.6, No.3), known as the Right-to-Know Law; (4) shall not be subject to discovery or admissible in evidence in any private civil action; and (5) may not be made public by the department or any other person. (b) Personal health and financial information.--The department shall protect personally identifiable health and financial information in accordance with Federal and State laws and regulations, including the Health Insurance Portability and Accountability Act of 1996 (Public Law 104-191, 110 Stat. 1936), the Health Information Technology for Economic and Clinical Health Act (Public Law 111-5, 123 Stat. 226-279 and 467-496) and implementing regulations. (c) Information disclosure.--Subject to the confidentiality provisions of this section: (1) Information shall be shared as follows: (i) Between the department and the Centers for Medicare and Medicaid Services for purposes of compliance with the Federal acts. (ii) Between the department and each insurer participating in the reinsurance program. (iii) Between the department and the exchange authority. (2) Information may be disclosed as follows: (i) As necessary to comply with the audit requirements of section 9508 (relating to annual audit) and the reporting requirements of section 9509 (relating to annual report of operations), only in an aggregated and de-identified form. (ii) In any circumstance other than as described in paragraph (1) or subparagraph (i), only if the prior written consent of the company or person to which the information pertains is obtained. (d) Construction.--Nothing in this section shall be construed to prohibit the department from accessing the information reasonably required to carry out its responsibilities in accordance with law.

40 Pa.C.S. § 9514 Immunity.

(a) General rule.--Except as provided in subsection (b), the department, a Commonwealth agency or person or entity under contract with the department for the reinsurance program, or an authorized representative, agent or employee of any of them, may not be subject to civil or criminal liability and no cause of action of any nature shall arise for any action taken or not taken, including any discretionary decision or failure to make a discretionary decision, when the action or inaction is done in good faith and in the performance of the powers and duties under this chapter, or for the reasonable and good faith use of any information pertaining to the reinsurance program. (b) Exception.--This section shall not prohibit legal actions against the reinsurance program to enforce the reinsurance program's statutory or contractual duties or obligations. Cross References. Section 9514 is referred to in section 9505 of this title.

40 Pa.C.S. § 9515 Regulation of insurers.

Nothing in this chapter shall be construed to limit or supersede the regulatory authority vested with the department to regulate the business of insurance within this Commonwealth, including health insurance policies offered on or off the exchange.

40 Pa.C.S. § 9516 Expiration.

Upon publication of the notice under section 9703(b) (relating to action by commissioner), the department shall initiate steps to cease operation of the reinsurance program and shall cease operation of the reinsurance program no later than 15 months after publication of the notice.

Source: Open US Law by Vaquill AI (CC BY 4.0)URL: https://www.palegis.us/statutes/consolidated/view-statute?txtType=HTM&ttl=40Fetched: 10/16/2026