26-19-307. Small employer carrier reinsurance program.

(a) There is hereby created a nonprofit entity to be known as the "Wyoming small employer health reinsurance program" or "WySEHRP."

(b) Within sixty (60) days of a written request by the commissioner, each small employer carrier shall make a filing with the commissioner containing the carrier's net health insurance premium derived from health benefit plans delivered to small employers in this state in the previous calendar year.

(c) Participating carriers shall nominate board members which shall be subject to approval by the commissioner. The board shall consist of at least three (3) and not more than seven (7) representatives who shall serve three (3) year staggered terms. To the extent possible, the board shall include representation from carriers whose principal health insurance business is in the small employer market, health maintenance organizations and nonprofit health, hospital or medical service corporations. Members of the board shall be reimbursed from the assets of the program for expenses incurred by them as members of the board but shall not otherwise be compensated by the program for their services. The commissioner or the commissioner's designee shall be an ex officio voting member of the board. In approving the selection of the board, the commissioner shall assure that all participating carriers are fairly represented.

(d) If at any time there is no board, the commissioner may appoint an initial board.

(e) Within one hundred eighty (180) days after the selection or appointment of an initial board pursuant to subsection (d) of this section, the board shall submit to the commissioner a plan of operation and thereafter any amendments necessary or suitable, to assure the fair, reasonable and equitable administration of the program. The plan of operation shall be effective upon approval in writing by the commissioner consistent with the date on which the coverage under this section is available. Any plan of operation or amendments thereto, submitted to the commissioner by the board pursuant to this subsection shall be deemed approved by the commissioner if not expressly disapproved in writing by the commissioner within ninety (90) days of its receipt by the commissioner.

(f) Repealed by Laws 2017, ch. 58, § 2.

(g) The plan of operation shall:

(i) Establish procedures for handling and accounting of program assets and monies and for an annual fiscal reporting to the commissioner;

(ii) Establish terms of office and procedures for filling vacancies on the board, subject to the approval of the commissioner;

(iii) Establish procedures for selecting an administering carrier and setting forth the powers and duties of the administering carrier;

(iv) Establish procedures for reinsuring risks in accordance with the provisions of this act;

(v) Establish procedures for collecting assessments from participating carriers to provide for claims reinsured by the program and for administrative expenses incurred or estimated to be incurred during the period for which the assessment is made;

(vi) Provide for any additional matters at the discretion of the board.

(h) The program shall have the general powers and authority granted under the laws of this state to insurance companies and health maintenance organizations licensed to transact business, except the power to issue health benefit plans directly to either groups or individuals. The program shall also have the specific authority to:

(i) Enter into contracts necessary or proper to carry out the provisions and purposes of this act, including the authority, with the approval of the commissioner, to enter into contracts with similar programs of other states for the joint performance of common functions or with persons or other organizations for the performance of administrative functions;

(ii) Sue or be sued, including taking any legal actions necessary or proper for recovering any assessments and penalties for, on behalf of, or against the program or any participating carriers;

(iii) Take any legal action necessary to avoid the payment of improper claims against the program;

(iv) Define the array of health coverage products for which reinsurance will be provided, and to issue reinsurance policies, in accordance with the requirements of this act;

(v) Establish rules, conditions and procedures pertaining to the reinsurance of participating carrier's risks by the program;

(vi) Establish actuarial functions as appropriate for the operation of the program;

(vii) Assess participating carriers in accordance with the provisions of subsection (g) of this section, and to make advance interim assessments as may be reasonable and necessary for organizational and interim operating expenses. Any interim assessments shall be credited as offsets against any regular assessments due following the close of the fiscal year;

(viii) Appoint appropriate legal, actuarial and other committees as necessary to provide technical assistance in the operation of the program, policy and other contract design, and any other function within the authority of the program;

(ix) Borrow money to effect the purposes of the program. Any notes or other indebtedness of the program not in default shall be legal investments for carriers and may be carried as admitted assets;

(x) Adjust the five thousand dollar ($5,000.00) deductible reinsurance requirement contained in paragraph (j)(v) of this section to reflect the effects of inflation. The board annually shall adjust the deductible reinsurance requirement to reflect increases in costs and utilization within the standard market for health benefit plans within the state. The adjustment shall not be less than the annual change in the medical component of the "Consumer Price Index for all Urban Consumers" of the department of labor, bureau of labor statistics, unless the board proposes and the commissioner approves a lower adjustment factor. Also, with the approval of the commissioner the board may increase or decrease the amount set forth in paragraph (j)(v) of this section and paragraphs (k)(i) and (ii) of this section if it is necessary to effectuate the purposes of this act and does not require participating carriers to retain an unreasonable level of risk.

(j) A participating carrier may reinsure with the program as provided for in this subsection:

(i) With respect to a basic health benefit plan or a standard health benefit plan, the program shall reinsure the level of coverage provided and, with respect to other plans, the program shall reinsure up to the level of coverage provided in a basic or standard health benefit plan;

(ii) Except in the case of a late enrollee, a participating carrier may reinsure an eligible employee or dependent within sixty (60) days of the commencement of the coverage of the small employer. A newly eligible employee or dependent may be reinsured within sixty (60) days of the commencement of his coverage;

(iii) A participating carrier may reinsure an entire employer group within sixty (60) days of the commencement of the group's coverage under the plan. The carrier may choose to reinsure newly eligible employees and dependents of a reinsured group pursuant to paragraph (ii) of this subsection;

(iv) Any eligible small employer group business in force before a program's plan of operation becomes effective shall be reinsured by the program only if the board determines that sufficient funding sources are available. The board shall adopt rules and regulations providing conditions under which reinsurance will be issued on employers, employees, or dependents who were subject to riders, endorsements or other contract provisions which restricted or excluded coverage or benefits for specified diseases, medical conditions or services otherwise covered by the plans if the provisions were in force prior to the effective date of the program's plan of operation. The reinsurance may be limited to coverage for the specified diseases, medical conditions or services that had previously been restricted or excluded by the riders, endorsements or other provisions;

(v) The program shall not reimburse a participating carrier with respect to the claims of a reinsured employee or dependent until the carrier has paid a deductible of five thousand dollars ($5,000.00) in a calendar year for benefits covered by the program. A participating carrier's liability under this paragraph shall not exceed a maximum limit of five thousand dollars ($5,000.00), in any one (1) calendar year with respect to any one (1) person reinsured. The amounts stated in this paragraph shall be increased in accordance with inflation adjustments made by the board under paragraph (h)(x) of this section;

(vi) A participating carrier may terminate reinsurance for all of the reinsured employees or dependents of a small employer on any plan anniversary;

(vii) Premium rates charged for reinsurance by the program to a health maintenance organization which is federally qualified under 42 U.S.C. § 300 e(c)(2)(A) or a similar section subsequently enacted, and as such is subject to requirements that limit the amount of risk that may be ceded to the program that is more restrictive than paragraph (v) of this subsection, shall be reduced to reflect that portion of the risk above the amount set forth in paragraph (v) of this subsection that shall not be ceded to the program, if any;

(viii) The board may consider adjustments to the premium rates charged for reinsurance by the program for carriers using effective cost containment, including high-cost case management, as defined by the board;

(ix) A participating carrier shall apply its case management and claims handling techniques, including but not limited to utilization review, individual case management, preferred provider provisions, other managed care provisions or methods of operation, consistently with both reinsured and nonreinsured business.

(k) The board, as part of the plan of operation, shall establish a methodology for determining premium rates to be charged by the program for reinsuring small employers and individuals pursuant to this section. The methodology shall include a system for classification of small employers that reflects the types of case characteristics commonly used by small employer carriers in the state. The methodology shall provide for the development of base reinsurance premium rates, which shall be multiplied by the factors set forth in paragraphs (i) and (ii) of this subsection to determine the premium rates for the program. The base reinsurance premium rates and number and type of insured groupings shall be established by the board, subject to the approval of the commissioner, and shall be set at levels which reasonably approximate gross premiums charged to small employers by small employer carriers. The board periodically shall review the methodology established under this subsection, including the system of classification and any rating factors, to assure that it reasonably reflects the claims experience of the program. The board may propose changes to the methodology which shall be subject to the approval of the commissioner. The board shall take steps to expand the usage of the reinsurance program and to reduce the impacts of high risk individuals on any particular group. Premiums for the program shall be as follows:

(i) An entire small employer group may be reinsured for a rate that is between one and one-tenth (1.1) and one and one-half (1.5) times the base reinsurance premium rate for the group established pursuant to this subsection;

(ii) An eligible employee or dependent may be reinsured for a rate that is between one and one-half (1.5) and five (5) times the base reinsurance premium rate for the individual established pursuant to this subsection;

(iii) The premiums shall be kept as close as practical to the lower limits provided by this subsection except to the extent needed to keep the assessments needed within the forty percent (40%) of premium tax limit pursuant to W.S. 26-19-312(b).

(m) In any case where a health benefit plan for a small employer is entirely or partially reinsured with the program, the premium charged to the small employer for any rating period for the coverage issued shall be consistent with the requirements relating to premium rates set forth in W.S. 26-19-304(a).

(n) Assessments and other fees required by the program shall be made in accordance with this subsection:

(i) Repealed By Laws 2006, Chapter 120, § 3.

(ii) Repealed By Laws 2006, Chapter 120, § 3.

(iii) Repealed By Laws 2006, Chapter 120, § 3.

(iv) Repealed By Laws 2006, Chapter 120, § 3.

(v) Provisions shall be made in the plan of operation for the imposition of an interest penalty for late payment of assessments;

(vi) A participating carrier may seek from the commissioner a deferment in whole or in part, from any assessment issued by the board. The commissioner may defer, in whole or in part, the assessment of a participating carrier if, in the opinion of the commissioner, the payment of the assessment would place the participating carrier in a financially impaired condition. In the event an assessment against a participating carrier is deferred in whole or in part, the amount by which the assessment is deferred may be assessed against the other participating carriers in a manner consistent with the basis for the assessment set forth in this section. The participating carrier receiving a deferment shall remain liable to the program for the amount deferred.

(o) Neither the participation in the program, the establishment of procedures, nor any other joint or collective action required by this act shall be the basis of any legal action, criminal or civil liability, or penalty against the program or any participating carriers either jointly or separately.

(p) The program shall be exempt from any and all taxes.