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The following definitions apply to this subpart:
Adjustment percentage means, with respect to a QHP:
(1) For benefit year 2014—
(i) For a QHP offered by a health insurance issuer with allowable costs of at least 80 percent of after-tax premium in a transitional State, the percentage specified by HHS for such QHPs in the transitional State; and otherwise
(ii) Zero percent.
(2) For benefit year 2015, for a QHP offered by a health insurance issuer in any State, 2 percent.
(3) For benefit year 2016—
(i) For a QHP offered by a health insurance issuer with allowable costs of at least 80 percent of after-tax premium, the percentage specified by HHS; and otherwise
(ii) Zero percent.
Administrative costs mean, with respect to a QHP, total non-claims costs incurred by the QHP issuer for the QHP, including taxes and regulatory fees.
After-tax premiums earned mean, with respect to a QHP, premiums earned with respect to the QHP minus taxes and regulatory fees.
Allowable administrative costs mean, with respect to a QHP, the sum of administrative costs of the QHP, other than taxes and regulatory fees, plus profits earned by the QHP, which sum is limited to the sum of 20 percent and the adjustment percentage of after-tax premiums earned with respect to the QHP (including any premium tax credit under any governmental program), plus taxes and regulatory fees.
Allowable costs means, with respect to a QHP, an amount qual to the pro rata portion of the sum of incurred claims within the meaning of §158.140 of this subchapter (including adjustments for any direct and indirect remuneration), expenditures by the QHP issuer for the QHP for activities that improve health care quality as set forth in §158.150 of this subchapter, expenditures by the QHP issuer for the QHP related to health information technology and meaningful use requirements as set forth in §158.151 of this subchapter, and the adjustments set forth in §153.530(b); in each case for all of the QHP issuer's non-grandfathered health plans in a market within a State, allocated to the QHP based on premiums earned.
Charge means the flow of funds from QHP issuers to HHS.
Direct and indirect remuneration means prescription drug rebates received by a QHP issuer within the meaning of §158.140(b)(1)(i) of this subchapter.
Payment means the flow of funds from HHS to QHP issuers.
Premiums earned mean, with respect to a QHP, all monies paid by or for enrollees with respect to that plan as a condition of receiving coverage, including any fees or other contributions paid by or for enrollees, within the meaning of §158.130 of this subchapter.
Profits mean, with respect to a QHP, the greater of:
(1) The sum of three percent and the adjustment percentage of after-tax premiums earned; and
(2) Premiums earned of the QHP minus the sum of allowable costs and administrative costs of the QHP.
Qualified health plan or QHP means, with respect to the risk corridors program only—
(1) A qualified health plan, as defined at §155.20 of this subchapter;
(2) A health plan offered outside the Exchange by an issuer that is the same plan as a qualified health plan, as defined at §155.20 of this subchapter, offered through the Exchange by the issuer. To be the same plan as a qualified health plan (as defined at §155.20 of this subchapter) means that the health plan offered outside the Exchange has identical benefits, premium, cost-sharing structure, provider network, and service area as the qualified health plan (as defined at §155.20 of this subchapter); or
(3) A health plan offered outside the Exchange that is substantially the same as a qualified health plan, as defined at §155.20 of this subchapter, offered through the Exchange by the issuer. To be substantially the same as a qualified health plan (as defined at §155.20 of this subchapter) means that the health plan meets the criteria set forth in paragraph (2) of this definition with respect to the qualified health plan, except that its benefits, premium, cost-sharing structure, and provider network may differ from those of the qualified health plan (as defined at §155.20 of this subchapter) provided that such differences are tied directly and exclusively to Federal or State requirements or prohibitions on the coverage of benefits that apply differently to plans depending on whether they are offered through or outside an Exchange.
Risk corridors means any payment adjustment system based on the ratio of allowable costs of a plan to the plan’s target amount.
Target amount means, with respect to a QHP, an amount equal to the total premiums earned with respect to a QHP, including any premium tax credit under any governmental program, reduced by the allowable administrative costs of the plan.
Taxes and regulatory fees mean, with respect to a QHP, Federal and State licensing and regulatory fees paid with respect to the QHP as described in §158.161(a) of this subchapter, and Federal and State taxes and assessments paid with respect to the QHP as described in §158.162(a)(1) and (b)(1) of this subchapter.
Transitional State means a State that does not enforce compliance with §§147.102, 147.104, 147.106, 147.150, 156.80, or subpart B of part 156 of this subchapter for individual market and small group health plans that renew for a policy year starting between January 1, 2014, and October 1, 2014, in accordance with the transitional policy outlined in the CMS letter dated November 14, 2013.
[77 FR 17251, March 23, 2012; 78 FR 15551, March 11, 2013; 78 FR 15530, March 11, 2013; 78 FR 54133, Aug. 30, 2013; 79 FR 13835, March 11, 2014; 79 FR 30341, May 27, 2014; 80 FR 10863, Feb. 27, 2015]