Burgum Signs Bill Establishing Reinsurance for North Dakota’s Individual Health Insurance Market

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Categories: Companies Consumers Department Health Care Reform Health Insurance Legislation Producers

BISMARCK, N.D. – Insurance Commissioner Jon Godfread today praised the signing of Insurance Department legislation House Bill 1106, relating to the establishment of an invisible reinsurance pool for the individual health insurance market, by Governor Doug Burgum. The bill was passed by a unanimous vote from the North Dakota House of Representatives and passed with a 46-1 vote from the Senate.

“I want to applaud the Governor and our Legislature for taking this step to help ease the heavy burdens our health insurance market is facing. Under this legislation, we will be able to provide some necessary health insurance premium relief to the individuals and families who need it most,” Godfread said. “HB 1106 is the result of a collaboration between the Department, North Dakota insurance companies and our legislative leaders working toward the betterment of our consumers.”

HB 1106 outlines a plan developed by the Department proposing the creation of a reinsurance mechanism called “invisible” reinsurance. The approach of invisible reinsurance allows enrollees to remain in the individual market with their current plan and carrier, while a portion of their claims are reimbursed by the reinsurance pool. The enrollee would not be aware that their claim is being paid via the reinsurance pool meaning there would be no effect on the enrollee as the task of ceding claims to the reinsurance pool is completed on the back end of the process and is without consequence to the enrollee. 

“We commend Commissioner Godfread for his leadership on this bill, which will help to lower costs and provide stability in the insurance marketplace,” Burgum said. “Building on this legislation, we must continue to find ways to innovate in our health care sector to reduce costs and expand options for consumers.”


The reinsurance program would cover 75% of paid claims per individual between $100,000 and $1,000,000 for 2020 and 2021.

A study conducted by the Department in 2018 shows that the invisible reinsurance pool would reduce premiums and provide a low-cost alternative for healthier individuals. This would result in more individuals with health insurance, a more stable individual market and protection for health insurance companies from unpredictable high cost claims. This would also result in companies being more willing to participate in the North Dakota individual insurance market. 

The reinsurance pool would be funded by a combination of federal funds and assessments. The assessments would be placed on insurance companies selling in North Dakota’s health insurance market.

With the passage of HB 1106, the Department will now finalize a 1332 waiver under the Affordable Care Act and seek approval from the federal government to implement this reinsurance program. Final approval is expected by the end of Sept. 2019.

“I want to thank Governor Burgum and the North Dakota Legislature for their overwhelming support of lowering premiums for North Dakotans who purchase their health insurance on the individual market. We look forward to submitting our final waiver application in the coming days and seek prompt federal approval, so we can provide much needed relief to our consumers,” Godfread said.

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