Source document: https://docs-lawep.s3.us-east-2.amazonaws.com/1697804482149.pdf (Ireland)
___________ An Bille Árachais Sláinte (Leasú), 2021 Health Insurance (Amendment) Bill 2021 ___________ Meabhrán Míniúcháin agus Airgeadais Explanatory and Financial Memorandum ___________ ____________ AN BILLE ÁRACHAIS SLÁINTE (LEASÚ), 2021 HEALTH INSURANCE (AMENDMENT) BILL 2021 ____________ EXPLANATORY AND FINANCIAL MEMORANDUM ____________ Risk equalisation is a mechanism designed to support the objective of a community rated health insurance market, whereby customers pay the same net premium (adjusted to reflect any loadings applicable under lifetime community rating) for the same health insurance product, irrespective of age, gender or health status.
The Health Insurance Acts 1994 to 2020 provide for a Risk Equalisation Scheme for the health insurance market since 1 January 2013.

Under the Scheme, insurers receive risk equalisation credits to compensate for the additional cost of insuring older and less healthy members.

The credits are funded by stamp duty levies payable by open market insurers in respect of each insured life covered.
The stamp duty levies are collected by the Revenue Commissioners and transferred to a Risk Equalisation Fund administered by the Health Insurance Authority.

Legislation is required each year to revise the applicable risk equalisation credits and the corresponding stamp duty levies necessary to fund them.
Financial Implications of the Bill The Risk Equalisation Scheme is designed to be Exchequer neutral, with the amount of the stamp duty levy calculated to offset the costs associated with the provision of the risk equalisation credits.

Any surpluses or deficits that arise under the Scheme are rolled over to the following year and are taken into account when recommending revised risk equalisation credits and corresponding stamp duty levies.
Objects of the Bill The purpose of this Bill is to specify the amount of risk equalisation credits to be paid from the Risk Equalisation Fund in respect of age, gender and level of cover from 1 April 2022 and to make consequential amendments to the Stamp Duties Consolidation Act 1999 to revise the community rating stamp duty levies required to fund the risk equalisation credits.
The Bill also strengthens the health status measure and thus the effectiveness of the Scheme by introducing a high cost claims credit to the Risk Equalisation Scheme.

In addition, technical amendments to the Health Insurance Acts relating to the overcompensation test and the addition of a time limit to claim risk equalisation credits are also included.

Section 1 defines the Principal Act as the Health Insurance Act 1994.
Section 2 amends section 6A of the Principal Act in subsection (1) to amend the definition of risk equalisation credits, to include high cost claim credits which the insurer is entitled to have paid on behalf of an insured 1 person.

This section also proposes to insert new definitions for high cost claim, high cost claim credit, high cost claim quota share and high cost claims threshold.
Section 3 amends section 7E of the Principal Act in subsection (1A) by the addition of paragraph (c) to provide in the case of high cost claims the Minister may require the Authority to furnish a report relating to the high cost claims credit parameters.

Section 4 amends Section 7F of the Principal Act in subsection (4A) by the proposed substitution of the amount for the benchmark for reasonable profit and also includes the addition of paragraph (c) to take account of the periods and the rates to apply.
This section is amended for the purposes of assessing if an insurer has been overcompensated by the scheme.

This section also provides for transitional arrangements for the new benchmark which will take effect for 2022.

Section 5 amends section 11C of the Principal Act to provide for 1 April 2022 as the effective date for revised credits payable from the Risk Equalisation Fund.
This section also provides for the introduction of a time limit for which Risk Equalisation Credits can be claimed from the Risk Equalisation Fund with the addition of subsection (2A).

Section 6 replaces Table 2 in Schedule 4 to the Principal Act with effect from 1 April 2022 whereby the applicable risk equalisation credits are payable from the Risk Equalisation Fund in respect of certain classes of insured persons are revised.
Section 7 amends the Principal Act by the addition of Schedule 5 which provides the parameters, namely the “high cost claim threshold” and “high cost claim quota share” for eligible high cost claims.

Section 8 amends section 125A of the Stamp Duties Consolidation Act 1999 to specify the applicable stamp duty rates for (i) 1 January 2022 to 31 March 2022 and (ii) 1 April 2022 onwards.

Section 9 provides for the short title, commencement, collective citation and construction of the Bill.
An Roinn Sláinte, Nollaig, 2021.

Wt.

—.

270.

12/21.

Essentra.

(90428).

Gr.

30-15.

2