ANS publishes resolution establishing classification of healthcare plan operators for proportional application of prudential regulation

On December 24, the Brazilian National Supplementary Health Agency (ANS) published Normative Resolution No. 475 (“Resolution 475/2021”), of December 23, 2021, establishing classification of healthcare plan operators for proportional application of prudential regulation. The main goal, according to the ANS itself, is to reduce regulation for operators with low prudential risk, providing a greater regulatory simplification, cost reduction and incentive to competition. Operators were divided into four different segments based on their respective risk.

We highlight the main aspects of the Resolution:

  • Division of Segments: healthcare plan operators must fit into segments S1, S2, S3 or S4, according to article 4, paragraphs1 to 7.
  • S1 segment: the S1 segment will be composed of operators that have, individually or together with other operators in the same prudential group, revenues equal to or greater than 2% of the total revenue of the entire supplementary health sector.
  • S2 segment: the S2 segment will be composed of operators that do not fit into S1 and that have (i) revenue equal to or greater than 0.14% of the total revenue of the entire supplementary health sector; or (ii) revenue lower than 0.14% of the total revenue of the entire supplementary health sector, in cases where it is the leader with more than 20% of market percentage in three or more relevant markets or two relevant markets, when operator with a general hospital in its own hospital network or that of its prudential group.
  • S3 segment: the S3 segment will be composed of: (i) operators with revenue lower than 0.14% of total revenue of the entire supplementary health sector, when not included in S2; (ii) of operators working exclusively with outpatient plans; (iii) benefit administrators, when not included in S1 or S2, who have income equal to or greater than 0.01% of the total income of the entire supplementary health sector; (iv) group dentistry and dental cooperatives, which have revenue equal to or greater than 0.14% of the total revenue of the entire supplementary health sector; or (v) self-management by human resources or with a sponsor, who have fifty thousand (50,000) or more beneficiaries of medical and hospital plans, with or without dentistry.
  • S4 segment: the S4 segment will be composed of: (i) benefit administrators, when not included in S1, S2 or S3; or (ii) group dentistry, dental cooperatives, self-management by human resources or self-management with a maintainer, when not covered in S3.
  • Change in classification: it should occur in two cases: (i) for a higher risk segment in relation to the current one, when the operator, individually or together with other operators of the same prudential group, as provided for in art. 3, comply with the provisions of art. 4 of this Normative Resolution for 2 (two) consecutive years; or (ii) for a lower risk segment in relation to the current one, when the operator, individually or together with other operators of the same prudential group, as provided for in art. 3, comply with the provisions of art. 4 of this Normative Resolution for 3 (three) consecutive years.
  • Opposition to the classification: operators may disagree with the preliminary classification, and may request a review before The Board of Regulation and Licensing of Operators – DIOPE within 30 days of disclosure, which will occur annually.

Demarest’s Life Sciences and Insurance team are entirely available should you need any further clarification on this matter.