Issued by: Centers for Medicare & Medicaid Services (CMS)

Issue Date: October 28, 2014

Program Area: Risk Corridors (RC)

Question: For Risk Corridors reporting and calculation, how should issuers classify reinsurance contributions made for Individual Insured Products (Ceded Premium payments) and does it increase 'Allowable Costs,' 'Taxes/Fees' or 'Premium Earned'?

Answer: Issuers should treat Transitional Reinsurance Program contributions as a regulatory fee in order to calculate the Risk Corridors target amount (reinsurance contributions are an adjustment to premium reported for the risk corridors calculation), not as an adjustment to risk corridors 'Allowable Costs.'

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