Risk Corridors (RC) FAQ
Guidance for FAQ regarding Policy and Other
Program Area: Risk Corridors (RC)
Question: Should premiums earned during the development of the Risk Corridors target amount include payments made under the Risk Adjustment, Risk Corridor, and Reinsurance programs, as referenced in 158.130 (b) (5) of the Federal Register?
Answer: Section 1342 of the Affordable Care Act requires that Risk Adjustment and Reinsurance payments received by a Qualified Health Plan (QHP) issuer must be deducted from the calculation of that issuer's allowable costs in the numerator of the Risk Corridors calculation. Reinsurance Contribution amounts are considered administrative costs that are deducted from premiums, which is part of the target amount in the denominator of the Risk Corridors calculation.
Issued by: Centers for Medicare & Medicaid Services (CMS)
Issue Date: February 02, 2015
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