(i) the Federal risk adjustment program results in inflated risk scores and payment transfers in this State because the calculation is based in part upon a medical loss ratio computation that includes administrative expenses, profits and claims rather than only using claims;

(ii) the Federal risk adjustment program results in inflated risk scores and payment transfers in this State because the program does not appropriately address this State’s rating tier structure. For this State, the Federal risk adjustment program alters the definition of billable member months to include a maximum of one child per contract in the billable member month count. This understatement of billable member month counts:

(iii) other factors, including, without limitation, the disparate impact of the Federal risk adjustment program on this State, this State’s demographic diversity and geographic rating, carriers’ networks and plan designs, carriers’ solvency and financial conditions, and market stability.

(i) ameliorate the disproportionate impact that the Federal risk adjustment program may have on carriers;

(ii) address the unique aspects of the individual health insurance market in this State; and

(iii) prevent unnecessary instability for carriers participating in the individual health insurance market in this State, other than for Medicare supplement insurance.

(i) ameliorate the disproportionate impact that the Federal risk adjustment program may have on carriers;

(ii) address the unique aspects of the small group health insurance market in this State; and

(iii) prevent unnecessary instability for carriers participating in the small group health insurance market in this State, other than for Medicare supplement insurance.

(i) For plan year 2018, the uniform percentage adjustment for the individual and small group health insurance markets is expected to be, but shall not exceed, 26 percent of the amount to be received from the Federal risk adjustment program prior to the 14 percent adjustment described in the following sentence. The uniform percentage shall be in addition to the 14 percent adjustment due to the Federal government’s removal of non-claims-based administrative expenses from the Federal risk adjustment calculation. (The department’s market stabilization for the small group market for plan year 2017 (section 361.91 of this Part) authorizes adjustments to the Federal risk adjustment transfers up to 30 percent. The 14 percent adjustment due to the Center for Medicaid and Medicare Services’s removal of non-claims based administrative expenses from the Federal risk adjustment calculation is not applicable to the 2017 plan year.)

(ii) For plan year 2019 and beyond, the superintendent will provide guidance to carriers, within a reasonable time before the date on which rate applications shall be submitted to the department, as to the assumptions for the Federal risk adjustment program they should include in developing premium rates for the applicable plan year. The guidance may also specify the relevant uniform percentage adjustment for the individual health insurance or small group health insurance market.

(i) the superintendent shall send a billing invoice to each carrier required to make a payment into the applicable market stabilization pool after the federal risk adjustment results are released pursuant to 45 CFR section 153.310(c);

(ii) each carrier shall remit its payment to the superintendent within 10 business days of the later of its receipt of the invoice from the superintendent or receipt of its risk adjustment payment from the Secretary of the United States Department of Health and Human Services pursuant to 42 U.S.C. section 18063; and

(iii) payments remitted by a carrier after the due date shall include the amount due plus compound interest at the rate of one percent per month, or portion thereof, beyond the date the payment was due; and

(ii) In the event the payments received by the superintendent pursuant to subdivision (h) of this section are less than the amounts payable pursuant to this paragraph, the amount payable to each carrier pursuant to this section shall be reduced proportionally to match the funds available in the applicable pool.