2014 Kentucky Revised Statutes CHAPTER 304 - INSURANCE CODE Subtitle 17B - Kentucky Access 17B.17B-021 Assessment of insurers -- Kentucky Access fund -- Reimbursement of GAP losses -- Examination of insurers and stop-loss carriers to determine accuracy of information provided.
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304.17B-021
Assessment of insurers -- Kentucky Access fund -Reimbursement of GAP losses -- Examination of insurers and stop-loss
carriers to determine accuracy of information provided.
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In addition to the other powers enumerated in KRS 304.17B-001 to
304.17B-031, the department shall assess insurers in the amounts specified in
this section. The assessment shall be used for the purpose of funding GAP
losses and Kentucky Access.
(a) The amount of the assessment for each calendar year shall be as follows:
1.
From each stop-loss carrier, an amount that is equal to two dollars
($2) upon each one hundred dollars ($100) of health insurance
stop-loss premiums;
2.
From all insurers, an amount based on the total amount of all health
benefit plan premiums earned during the prior assessment period
and paid by all insurers who received any of the health benefit plan
premiums on which the annual assessment is based. The
percentage rate used for the annual assessment shall be the same
percentage rate as calculated in the GAP risk adjustment process
for the six (6) month period of July 1, 1998, through December 31,
1998;
3.
If determined necessary by the department, a second assessment
may be assessed in the same manner as the annual assessment in
subparagraph 2. of this paragraph; and
4.
In no event shall the sum of the first assessment provided for in
subparagraph 2. of this paragraph and the second assessment
provided for in subparagraph 3. of this paragraph be greater than
one percent (1%) of the total amount of all assessable health benefit
plan premiums earned during the prior assessment period.
(b) The first assessment shall be for the period from January 1, 2000,
through December 31, 2000, and shall be paid on or before March 31,
2001. Subsequent annual assessments shall be paid on or before March
31 of the year following the assessment period.
Every supporting insurer shall report to the department, in a form and at the
time as the department may specify, the following information for the specified
period:
(a) The insurers total stop-loss premiums and health benefit plan premiums
in the individual, small group, large group, and association markets; and
(b) Other information as the department may require.
As part of the assessment process, the department shall establish and
maintain the Kentucky Access fund. All funds shall be held at interest, in a
single depository designated in accordance with KRS 304.8-090(1) under a
written trust agreement in accordance with KRS 304.8-095. All expense and
revenue transactions of the fund shall be posted to the Management
Administrative Reporting System (MARS) and its successors.
The Kentucky Access fund shall be funded from the following sources:
(a) Premiums paid by Kentucky Access enrollees;
(b)
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The funds designated for Kentucky Access in the Kentucky Health Care
Improvement fund;
(c) Appropriations from the General Assembly;
(d) All premium taxes collected under KRS Chapter 136 from any insurer,
and any retaliatory taxes collected under KRS 304.3-270 from any
insurer, for accident and health premiums that are in excess of the
amount of the premium taxes and retaliatory taxes collected for the
calendar year 1997;
(e) Annual assessments from supporting insurers;
(f) A second assessment from supporting insurers;
(g) Gifts, grants, or other voluntary contributions;
(h) Interest or other earnings on the investment of the moneys held in the
account; and
(i) Any funds remaining on January 1, 2001, in the guaranteed acceptance
program account may be transferred to the Kentucky Access fund.
The department shall determine on behalf of Kentucky Access the premiums,
the expenses for administration, the incurred losses, taking into account
investment income and other amounts needed to satisfy reserves, estimated
claim liabilities, and other obligations for each calendar year. The department
shall also determine the amount of the actual guaranteed acceptance program
plan losses for each calendar year. The department shall assess insurers as
follows:
(a) On or before March 31 of each year, the amount set forth in subsection
(1)(a)1. and (1)(a)2. of this section.
(b) If the amount of actual guaranteed acceptance program plan losses
exceeds the assessment provided for in paragraph (a) of this subsection,
a second assessment shall be authorized under subsection (1)(a)3. of this
section. If the amount of GAP losses exceeds the assessments provided
under subsection (1)(a)1., subsection (1)(a)2., and subsection (1)(a)3. of
this section, moneys received and available from the Kentucky Health
Care Improvement Fund after the department determines available
funding for Kentucky Access for the current calendar year pursuant to
subsection (6) of this section, shall be used to reimburse GAP
participating insurers for any actual guaranteed acceptance program
losses. If the amount of GAP losses exceeds the amount in the Kentucky
Health Care Improvement Fund after reserving sufficient funds for
Kentucky Access for the current year, each GAP participating insurer
shall be reimbursed up to the amount of its proportional share of actual
guaranteed acceptance program plan losses from the fund. Effective for
any assessment on or after January 1, 2001, in calculating GAP losses,
total premiums and total claims of the GAP participating insurer shall be
used. Actual guaranteed acceptance program losses shall be calculated
as the difference between the total GAP claims and the total GAP
premiums on an aggregate basis.
(c) If GAP losses are fully covered by the assessment process provided for
in subsection (1)(a)1. and (1)(a)2. of this section and the second
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assessment provided for in subsection (1)(a)3. of this section is not
necessary to cover GAP losses, and as determined by the department
using reasonable actuarial principles Kentucky Access funding is needed,
a second assessment provided for in subsection (1)(a)3. of this section
shall be completed.
After the end of each calendar year, GAP losses shall be reimbursed only after
the department determines that appropriate funding is available for Kentucky
Access for the current calendar year. GAP losses shall be reimbursed after
reserving sufficient funds for Kentucky Access.
With respect to a GAP participating insurer who reasonably will be expected
both to pay assessments and to receive payments from the assessment fund,
the department shall calculate the net amount owed to or to be received from
the fund, and the department shall only collect assessments for or make
payments from the fund based upon net amounts.
Insurers paying an assessment may include in any health insurance rate filing
the amount of these assessments as provided for in Subtitle 17A of this
chapter.
Insurers shall pay any assessment amounts authorized in KRS 304.17B-001 to
304.17B-031 within thirty (30) days of receiving notice from the department of
the assessment amount.
Any surpluses remaining in the Kentucky Access fund after completion of the
assessment process for a calendar year shall be maintained for use in the
assessment process for future calendar years and such funds shall not lapse.
The general fund appropriations to the Kentucky Access fund shall not lapse.
Assessments on health benefit plan premiums that are required under KRS
304.17B-001 to 304.17B-031 shall not be applied to premiums received by an
insurer for state employees, Medicaid recipients, Medicare beneficiaries, and
CHAMPUS insureds.
The department shall direct that receipts of Kentucky Access be held at
interest, and may be used to offset future losses or to reduce plan premiums in
accordance with the terms of KRS 304.17B-001 to 304.17B-031. As used in
this subsection, "future losses" may include reserves for incurred but not
reported claims.
The department shall conduct examinations of insurers and stop-loss carriers
reasonably necessary to determine if the information provided by the insurers
or stop-loss carriers is accurate.
The insurer, as a condition of conducting health insurance business in
Kentucky, shall pay the assessments specified in KRS 304.17B-001 to
304.17B-031.
The stop-loss carrier, as a condition of doing health insurance business in
Kentucky, shall pay the assessments specified in KRS 304.17B-001 to
304.17B-031.
Effective:July 15, 2010
History: Amended 2010 Ky. Acts ch. 24, sec. 1283, effective July 15, 2010. -Created 2000 Ky. Acts ch. 476, sec. 11, effective July 14, 2000.
2014-2016 Budget Reference. See State/Executive Branch Budget, 2014 Ky. Acts
ch. 117, Pt. III, 24 at 741.
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