2016 Kentucky Revised Statutes CHAPTER 304 - INSURANCE CODE Subtitle 17B - Kentucky Access 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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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 insurer's 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)
(b)
(5)
Premiums paid by Kentucky Access enrollees;
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 assessment
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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.
2016-2018 Budget Reference. See State/Executive Branch Budget, 2016 Ky. Acts ch.
149, Pt. I, G, 11, (1) at 1078.
2016-2018 Budget Reference. See State/Executive Branch Budget, 2016 Ky. Acts ch.
149, Pt. III, 24 at 1132.
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