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Life Accident and Health > Small Employer Health Reinsurance Pool > Frequently Asked Questions
Small Employer Health Reinsurance Pool Frequently Asked Questions
These questions have been directed to the NH Small Employer Health Reinsurance Pool’s Board of Directors. For further information about SB 125, please refer to the Insurance Department’s Bulletins section.
  • Can you explain the mechanics of ceding an employee off anniversary?Carriers are encouraged to review the developed
    rating methodology. Adobe Acrobat Reader Symbol Page 5 explains that the rates that are to be used are the reinsurance rates that are effective as of the effective date of the group. For example, if the group’s anniversary date is 4/1 and there is a new hire on 11/1/06, then the reinsurance premium rate should be calculated using the rates that were effective on 4/1/06.

    In the original example, the new employee’s effective date of coverage is 1/1/06. There were no rates in effect on the group’s prior anniversary date of 4/1/05. In this special case, the reinsurance premium rates shall be calculated using the first set of rates that were in effect after the group’s anniversary date. The pool’s first set of reinsurance premium rates is effective 1/1/06. These are the rates that should be used.
    If the new employee is in a group in which the carrier has ceded the entire group’s risk to the pool, then reinsurance premium rate for the new employee shall be calculated using the whole group reinsurance rates. Otherwise, the reinsurance premium rate shall be calculated using the individual rates.
    SB 125 provides carriers the opportunity to make ceding decisions for each of the group’s that it renews in 2006 on that group’s anniversary date. See the Department’s FAQ’s for further information. If the new employee was ceded as an individual at his or her effective date, and then later in 2006, the carrier decides to cede the entire group, then the reinsurance premium for ceding that new employee would, as of the group’s anniversary date, be changed to be based on the whole group reinsurance rates.
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  • What is the intent of article XII, Section C, subsections 2b and 3b?
    These subsections have to deal with block transfers between carriers, e.g. if one carrier is transferring its entire small group business to another carrier. This is consistent with RSA 420-K:5 VIII. In the event that a carrier enters into an arrangement for a block transfer of this type of business, the transferring carrier will need to provide details of pool reinsurance coverage to the assuming carrier.
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  • My company doesn’t capture an accurate ICD9 code for Rx Claims. An ICD9 code is required by the Administrator to process a reinsurance claim. Carriers are instructed to provide whatever ICD9 code they carry with the Rx claim.
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  • How will the reinsurance pool ensure that the amounts requested for reinsurance recoveries by the carriers are accurate?
    The detailed answer to this question is in the Plan of Operation, Article XII, Section H. To summarize, the pool relies on carriers to self-adjudicate reinsurance claims. The pool does retain the right to inspect the records of the ceding carrier with respect to their reinsurance claims. Carriers are expected to consider amounts recovered under subrogation, coordination of benefits and other reinsurance recoveries in the determination of reinsurance claims submitted to the pool.
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  • Please clarify when the child rate should be used versus the under 25 rate.
    The child rate should be used for all dependent children ceded to the pool. The under 25 rate should be used for all ceded employees (aka subscribers or certificate holders) and for all ceded dependent spouses.
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  • Please clarify when the 65+ Med rate should be used versus the 65+ rate.
    The 65+ Med rate should be used for individuals ceded from a group who are 65 or older and where Medicare is primary and the group’s coverage is secondary. The 65+ rate should be used for individuals ceded from a group who are 65 or older and where the group’s coverage is primary. Medicare is primary for groups with fewer than 20 employees.
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New Hampshire Insurance Department | 21 South Fruit Street, Suite 14 | Concord, NH 03301
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