42 U.S.C. § 18063 — Risk adjustment

Page 9127 TITLE 42—THE PUBLIC HEALTH AND WELFARE § 18071 1 So in original. Probably should be followed by ‘‘be’’. 2 So in original. Probably should be ‘‘sections’’. the target amount, the plan shall pay to the Secretary an amount equal to the sum of 2.5 percent of the target amount plus 80 percent of the excess of 92 percent of the target amount over the allowable costs. (c) Definitions In this section: (1) Allowable costs (A) In general The amount of allowable costs of a plan for any year is an amount equal to the total costs (other than administrative costs) of the plan in providing benefits covered by the plan. (B) Reduction for risk adjustment and rein- surance payments Allowable costs shall 1 reduced by any risk adjustment and reinsurance payments re- ceived under section 2 18061 and 18063 of this title. (2) Target amount The target amount of a plan for any year is an amount equal to the total premiums (in- cluding any premium subsidies under any gov- ernmental program), reduced by the adminis- trative costs of the plan. (Pub. L. 111–148, title I, § 1342, Mar. 23, 2010, 124 Stat. 211.) Editorial Notes REFERENCES IN TEXT The Social Security Act, referred to in subsec. (a), is act Aug. 14, 1935, ch. 531, 49 Stat. 620. Part D of title XVIII of the Act is classified generally to part D (§ 1395w–101 et seq.) of subchapter XVIII of chapter 7 of this title. For complete classification of this Act to the Code, see section 1305 of this title and Tables. § 18063. Risk adjustment (a) In general (1) Low actuarial risk plans Using the criteria and methods developed under subsection (b), each State shall assess a charge on health plans and health insurance issuers (with respect to health insurance cov- erage) described in subsection (c) if the actu- arial risk of the enrollees of such plans or cov- erage for a year is less than the average actu- arial risk of all enrollees in all plans or cov- erage in such State for such year that are not self-insured group health plans (which are sub- ject to the provisions of the Employee Retire- ment Income Security Act of 1974 [29 U.S.C. 1001 et seq.]). (2) High actuarial risk plans Using the criteria and methods developed under subsection (b), each State shall provide a payment to health plans and health insur- ance issuers (with respect to health insurance coverage) described in subsection (c) if the ac- tuarial risk of the enrollees of such plans or coverage for a year is greater than the average actuarial risk of all enrollees in all plans and coverage in such State for such year that are not self-insured group health plans (which are subject to the provisions of the Employee Re- tirement Income Security Act of 1974). (b) Criteria and methods The Secretary, in consultation with States, shall establish criteria and methods to be used in carrying out the risk adjustment activities under this section. The Secretary may utilize criteria and methods similar to the criteria and methods utilized under part C or D of title XVIII of the Social Security Act [42 U.S.C. 1395w–21 et seq., 1395w–101 et seq.]. Such criteria and meth- ods shall be included in the standards and re- quirements the Secretary prescribes under sec- tion 18041 of this title. (c) Scope A health plan or a health insurance issuer is described in this subsection if such health plan or health insurance issuer provides coverage in the individual or small group market within the State. This subsection shall not apply to a grandfathered health plan or the issuer of a grandfathered health plan with respect to that plan. (Pub. L. 111–148, title I, § 1343, Mar. 23, 2010, 124 Stat. 212.) Editorial Notes REFERENCES IN TEXT The Employee Retirement Income Security Act of 1974, referred to in subsec. (a), is Pub. L. 93–406, Sept. 2, 1974, 88 Stat. 829, which is classified principally to chapter 18 (§ 1001 et seq.) of Title 29, Labor. For com- plete classification of this Act to the Code, see Short Title note set out under section 1001 of Title 29 and Ta- bles. The Social Security Act, referred to in subsec. (b), is act Aug. 14, 1935, ch. 531, 49 Stat. 620. Parts C and D of title XVIII of the Act are classified generally to parts C (§ 1395w–21 et seq.) and D (§ 1395w–101 et seq.), respec- tively, of subchapter XVIII of chapter 7 of this title. For complete classification of this Act to the Code, see section 1305 of this title and Tables. SUBCHAPTER IV—AFFORDABLE COVERAGE CHOICES FOR ALL AMERICANS PART A—PREMIUM TAX CREDITS AND COST- SHARING REDUCTIONS § 18071. Reduced cost-sharing for individuals en- rolling in qualified health plans (a) In general In the case of an eligible insured enrolled in a qualified health plan— (1) the Secretary shall notify the issuer of the plan of such eligibility; and (2) the issuer shall reduce the cost-sharing under the plan at the level and in the manner specified in subsection (c). (b) Eligible insured In this section, the term ‘‘eligible insured’’ means an individual— (1) who enrolls in a qualified health plan in the silver level of coverage in the individual market offered through an Exchange; and (2) whose household income exceeds 100 per- cent but does not exceed 400 percent of the poverty line for a family of the size involved.