Risk Corridors (RC) FAQ
Guidance for FAQ regarding Calculations and Allocation of Payments and Charges to QHPs
Program Area: Risk Corridors (RC)
Question: Is there any reason to make the risk corridor calculations by each QHP? Or would consolidating by issuer for each single-risk pool result in the same ending value (assuming all expenses are proportionally allocated by premium)?
Answer: Yes, the calculation is the same if the issuer pools all of its allowable costs for its non-grandfathered, ACA compliant plans in the numerator of the risk corridors calculation, and pools the target amount in the denominator of the risk corridors calculation. The resulting ratio will indicate an overall risk corridors charge or payment amount, that will then be allocated pro-rata to a QHP based on the QHP's premium, in order to determine the actual risk corridor payment or charge amount that the issuer will receive or be obligated to pay.
Issued by: Centers for Medicare & Medicaid Services (CMS)
Issue Date: May 28, 2014
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