Regulatory Advisory

HHS Releases Final Rule on Risk Adjustment, Reinsurance and Risk Corridors

The U.S. Department of Health and Human Services (HHS) released a final rule last week covering three programs to help ensure insurance plans compete on the basis of quality and service and not on attracting the healthiest individuals through health insurance exchanges. Through the risk adjustment program, premium differences caused by risk selection among plans will be reduced or eliminated.

The reinsurance program allows states the option to establish a reinsurance program to help stabilize premiums for coverage due to individuals with higher cost needs gaining insurance coverage during the first three years of exchange operation. The risk corridor program creates a cost-sharing mechanism for plans with costs less than or greater than 3 percent of projections for the first three years of exchange operation. A fact sheet describing the final rule is available at The final rule is attached. Contact: Anne McLeod, (916) 552-7536,; Alyssa Keefe, (202) 488-4688,