1. (a) (1) Each participating health plan shall provide an annual estimate of the standard average individual rate for the minimum benefits provided for in the contract with the participating health plan for each risk category specified in section 2698.400. Without applying risk categories to dependents or dependent subscribers, each participating health plan shall also provide an estimate of the standard average rate for covering a subscriber in each risk category and the subscriber's dependents as follows:

   1. (A) A subscriber and one dependent; and
   2. (B) A subscriber and two or more dependents.

   3. (2) Notwithstanding paragraph (1) of this subsection, for plan years beginning on and after January 1, 2014, the Board shall calculate an annual estimate of the standard average individual rate for program benefits for each risk category specified in section 2698.400. Without applying risk categories to dependents or dependent subscribers, the Board shall also calculate an estimate of the standard average rate for covering a subscriber in each risk category and the subscriber's dependents as follows:

      1. (A) A subscriber and one dependent; and
      2. (B) A subscriber and two or more dependents.
2. (b) For plan years ending prior to January 1, 2014, for those participating health plans which have been offered through the program for two or more years, the Board shall calculate a loss ratio for each participating health plan for the prior calendar year. The loss ratio shall be calculated using 125 percent of the estimated rates provided by the participating plan as the denominator, and the sum of all medical costs for subscribers, dependent subscribers and dependents enrolled in the plan and all administration fees and risk payments to the plan as the numerator.
3. (c) For plan years ending prior to January 1, 2014, for those participating health plans which have been offered through the program for two or more years, the Board shall calculate a percentage average subsidy amount per subscriber dollar contributed for each participating health plan for the prior calendar year by subtracting 100 percent from the program loss ratio percentage.

4. (d) For plan years ending prior to January 1, 2014, the Board shall calculate the program loss ratio for the prior calendar year in the following manner:

   1. (1) Participating health plans with an average monthly number of enrollees of fewer than 1,000 in the prior calendar year shall be excluded from the calculation.
   2. (2) If a participating health plan's loss ratio is less than 100 percent it shall be deemed to be 100 percent for purposes of the calculation.
   3. (3) The weighted average of the participating health plans' loss ratios is the program loss ratio.
5. (e) For plan years ending prior to January 1, 2014, the Board shall calculate the program average subsidy for the prior calendar year by subtracting 100 percent from the program loss ratio percentage.
6. (f) For plan years ending prior to January 1, 2014, for each participating health plan with an average subsidy percentage amount higher than the program average subsidy percentage, that difference shall be called the excess subsidy.
7. (g) For plan years ending prior to January 1, 2014, the Board shall determine the subscriber contribution for each participating health plan that did not have an excess subsidy in the prior calendar year by multiplying the estimated rates provided by the participating health plan by 125 percent.

8. (h) For plan years ending prior to January 1, 2014, the Board shall determine the base subscriber contribution for each participating health plan that did have an excess subsidy in the prior calendar year by multiplying the estimated rates provided by the participating health plan by an additional 25 percent and then adding the excess subsidy amount. However, the actual subscriber contribution shall be subject to the following limitations:

   1. (1) No subscriber contribution will be more than 10 percent above 125 percent of the estimated rates provided by the participating plan. (See Title 10, section 2698.100(dd).)
   2. (2) If all participating health plans available in a county have an excess subsidy amount, the subscriber contribution for the plan with the lowest excess subsidy amount will not include the excess subsidy amount.
9. (i) For plan years ending prior to January 1, 2014, Subscriber contribution for participating health plans joining the program after January 1, 1997, shall be established at 125 percent of the estimated rates provided by the participating plan for the first two benefit years the plan participates in the program. (See Title 10, section 2698.100(dd).)
10. (j) Subscriber contributions shall be adjusted annually in accordance with this section.
11. (k) Subscribers and dependent subscribers shall be informed by the program of the annually adjusted subscriber contribution at least one month prior to the effective date of the rate change.
12. (l) Commencing calendar year 2013, the Board shall further subsidize the subscriber contribution so that subscribers shall not pay more than 100% of the standard average individual rates for comparable coverage.

Note: Authority cited: Sections 12711 and 12712, Insurance Code. Reference: Sections 12713, 12736, 12737 and 12738, Insurance Code.

History

1. New section filed 12-20-90 as an emergency; operative 12-20-90 (Register 91, No. 11). A Certificate of Compliance must be transmitted to OAL by 4-19-91 or emergency language will be repealed by operation of law on the following day.

2. Certificate of Compliance as to 12-20-90 order transmitted to OAL on 4-18-91 and filed 5-17-91 (Register 91, No. 27).

3. Repealer and new subsection (b), new subsections (c)-(i), subsection relettering, amendment of newly designated subsection (j), and amendment of Note filed 11-26-96 as an emergency; operative 1-1-97 (Register 96, No. 48). A Certificate of Compliance must be transmitted to OAL by 5-1-97 or emergency language will be repealed by operation of law on the following day.

4. Certificate of Compliance as to 11-26-96 order transmitted to OAL 3-3-97 and filed 3-31-97 (Register 97, No. 14).

5. Amendment of subsections (a)-(b), (h)(1), (i) and (k) filed 8-4-2003 as an emergency; operative 8-4-2003 (Register 2003, No. 32). Amendments to remain in effect for 180 days pursuant to section 21, chapter 794, Statutes of 2002 (AB 1401). A Certificate of Compliance must be transmitted to OAL by 2-2-2004 or emergency language will be repealed by operation of law on the following day.

6. Certificate of Compliance as to 8-4-2003 order transmitted to OAL 1-23-2004 and filed 3-1-2004 (Register 2004, No. 10).

7. New subsection (l) filed 11-19-2012; operative 11-19-2012. This filing is deemed an emergency and is exempt from review by OAL pursuant to Assembly Bill 1526, Chapter 855, Statutes of 2012, section 2 (Register 2012, No. 47).

8. Certificate of Compliance as to 11-19-2012 order transmitted to OAL 5-20-2013 and filed 6-25-2013 (Register 2013, No. 26).

9. Amendment filed 11-13-2013; operative 11-13-2013. This filing is deemed an emergency and is exempt from review by OAL pursuant to section 77 of Assembly Bill 82, chapter 23, Statutes of 2013 (Register 2013, No. 46).

10. Certificate of Compliance as to 11-13-2013 order transmitted to OAL 5-7-2014 and filed 6-4-2014 (Register 2014, No. 23).

11. Editorial correction removing duplicative set of history notes (Register 2014, No. 24).