OAR 836-011-0050: Requirements for Segregation of Premium Received for Coverage Not Eligible for Federal Subsidies

(1) As used in this rule, "health insurer" means any insurer, fraternal benefit society, health maintenance organization or health care service contractor authorized to transact health insurance in Oregon and offering health benefit plans through the Oregon Health Insurance Exchange. (2) All domestic, foreign or alien health insurers must: (a) Submit an annual assurance statement attesting that the insurer complies with the requirement of Section 1303 of the Affordable Care Act; and (b) If the health benefit plan provides coverage of services that are not eligible for federal funds furnished in the form of premium tax credits or cost-sharing reductions, the health insurer also must comply with sections (3) to (11) of this rule. (3) In addition to submitting an annual assurance statement, a health insurer that offers a health benefit plan that provides coverage of services that are not eligible for federal funds furnished in the form of premium tax credits or cost-sharing reductions must obtain the prior written approval of the director of the Department of Consumer and Business Services of the health insurer’s accounting practice methodology for segregating premium allocated to a termination of pregnancy benefit. This requirement applies only to qualified insurers certified through the Oregon Health Insurance Exchange Corporation, for qualified health plans issued on the Oregon Health Insurance Exchange. (4) The accounting methodology required under section (3) of this rule must: (a) Describe the accounting practices the insurer will use to ensure segregation of federal funds for premium and claims for nonexcepted termination of pregnancy benefits from other premium received from an enrollee who receives a premium tax benefit or cost-sharing subsidy pursuant to enrollment through the Oregon Health Insurance Exchange; (b) Allocate the two types of premium to separate accounts (allocation accounts); (c) Ensure that claims for the nonexcepted termination of pregnancy benefit are not paid from an allocation account into which federal funds are placed; and (d) Ensure strict separation of funds between the allocation accounts, and include at least one allocation account solely for the deposit of private premium dollars used to pay for abortion coverage, and a second allocation account to process premium dollars paid for all other covered benefits. (5) This rule does not require an insurer to conduct two separate premium transactions with enrollees. For purposes of approval by the director, the segregation of premium may occur solely as an accounting transaction. (6) A health insurer must submit its proposed methodology to the director in writing more than thirty days before the proposed effective date for implementing the methodology. The insurer may not implement the methodology until the director approves the plan in writing. For good cause, the director may reduce the time period. (7) A health insurer may not implement any changes or amendments to its accounting methodology prior to receiving the director's written approval. (8) Instructions as to how and where an insurer must send its request for approval of its segregation of premium accounting plan may be found on the Oregon Division of Financial Regulation website at dfr.oregon.gov. (9) An insurer submitting a proposed accounting methodology under this rule must include the following information: (a) The proposed effective date and the date of the first filed financial statement in which the proposed segregated account will be reported; (b) A description of accounting systems for processing premium payments for products on the Oregon Health Insurance Exchange that includes termination of pregnancy benefits, including: (A) The financial accounting systems, including documentation and internal controls, to ensure the appropriate segregation of payments received for coverage of nonexcepted termination of pregnancy benefits from those received for coverage of all other services, which may be supported by federal premium tax credits and cost-sharing reduction payments; (B) The financial accounting systems, including accounting documentation and internal controls, that ensure that all expenditures for nonexcepted termination of pregnancy benefits are reimbursed from the appropriate allocation account; and (C) An explanation of how the insurer's systems, including accounting documentation and internal controls meet the requirements for segregation accounts under the law. (10) After an accounting methodology for segregating premium has been approved, an insurer must file with its annual statement filed with the director on or before March 1st of each year all of the following: (a) Certification that the insurer is certified as a qualified insurer through the exchange. (b) An annual supplemental information schedule containing a reconciliation of all segregated account activity (beginning balance + receipts - disbursements = ending balance) for the year. The annual supplemental information schedule shall be electronically filed with the director in PDF format in compliance with the form and instructions contained on the Oregon Division of Financial Regulation website. (c) The annual supplemental information schedule shall contain an affirmation of the insurer's chief executive officer and chief financial officer (or equivalent position and title) that the financial accounting systems, including accounting documentation and internal controls, of the segregated account covered by the annual supplemental information schedule meet the requirements for segregated accounts under the P.L. 111-148 (111th Congress, 2010). (d) In addition to all other requirements of opinions, the annual audit of insurers conducted by independent certified public accountants and filed in accordance with OAR 836-011-0120 shall include an opinion on whether the supplementary information contained in the annual supplemental information schedule is fairly stated, and, if the segregated accounts financial accounting systems, including documentation and internal controls, comply with the requirements of the P.L. 111-148 (111th Congress, 2010). The certified public accountant’s report must be filed with the insurer’s annual audited financial statement filed with the director. (e) A statement of the amount of premium segregated for each product offered on the Oregon Health Insurance Exchange, calculated as if the coverage were included for the entire population of enrollees. The amount of premium must not be less than one dollar per enrollee, per month. (f) The number of enrollees, by plan for the benefit year, for whom premium was segregated pursuant to this rule, P.L. 111-148 (111th Congress, 2010), at Section 1303 (b)(2)(B) and (C), and 45 C.F.R. Sec. 156.280. (11) The director may periodically audit insurers and each product subject to this rule to verify compliance. The director will retain working papers and periodic audit reports for a period of not less than three years, and may make the reports available to the Oregon Health Insurance Exchange Corporation or the U.S. Department of Health and Human Services upon request.