Chapter 120
2003 -- H 6181 SUBSTITUTE B
Enacted 07/10/03
A N A C T
RELATING
TO INSURANCE -- SMALL EMPLOYER HEALTH INSURANCE
Introduced
By: Representatives Winfield, and Lewiss
Date
Introduced: March 12, 2003
It is
enacted by the General Assembly as follows:
SECTION
1. Sections 27-50-3, 27-50-5, 27-50-6, 27-50-7, 27-50-9, 27-50-10 and 27-50-
13
of the General Laws in Chapter 27-50 entitled "Small Employer Health
Insurance Availability
Act"
are hereby amended to read as follows:
27-50-3.
Definitions. -- (a) "Actuarial certification" means a written
statement signed by
a
member of the American Academy of Actuaries or other individual acceptable to
the director
that
a small employer carrier is in compliance with the provisions of section
27-50-5, based upon
the
person's examination and including a review of the appropriate records and the
actuarial
assumptions
and methods used by the small employer carrier in establishing premium rates
for
applicable
health benefit plans.
(b) "Adjusted community rating" means a method used to develop a
carrier's premium
which
spreads financial risk across the carrier's entire small group population in
accordance with
the
requirements in section 27-50-5.
(c) "Affiliate" or "affiliated" means any entity or person
who directly or indirectly
through
one or more intermediaries controls or is controlled by, or is under common
control with,
a
specified entity or person.
(d) "Affiliation period" means a period of time that must expire
before health insurance
coverage
provided by a carrier becomes effective, and during which the carrier is not
required to
provide
benefits.
(e) "Basic health benefit plan" means the health benefit plan
developed pursuant to the
provisions
of section 27-50-10.
(f)(e) "Bona fide association" means, with respect to
health benefit plans offered in this
state,
an association which:
(1) Has been actively in existence for at least five (5) years;
(2) Has been formed and maintained in good faith for purposes other than
obtaining
insurance;
(3) Does not condition membership in the association on any health-status
related factor
relating
to an individual (including an employee of an employer or a dependent of an
employee);
(4) Makes health insurance coverage offered through the association available
to all
members
regardless of any health status-related factor relating to those members (or
individuals
eligible
for coverage through a member);
(5) Does not make health insurance coverage offered through the association
available
other
than in connection with a member of the association;
(6) Is composed of persons having a common interest or calling;
(7) Has a constitution and bylaws; and
(8) Meets any additional requirements that the director may prescribe by
regulation.
(g)(f) "Carrier" or "small employer carrier"
means all entities licensed, or required to be
licensed,
in this state that offer health benefit plans covering eligible employees of
one or more
small
employers pursuant to this chapter. For the purposes of this chapter, carrier
includes an
insurance
company, a nonprofit hospital or medical service corporation, a fraternal
benefit
society,
a health maintenance organization as defined in chapter 41 of this title or as
defined in
chapter
62 of title 42, or any other entity providing a plan of health insurance or
health benefits
subject
to state insurance regulation.
(h)(g)
"Church plan" has the meaning given this term under section 3(33) of
the
Employee
Retirement Income Security Act of 1974 [29 U.S.C. section 1002(33)].
(i)(h) "Control" is defined in the same manner as in
chapter 35 of this title.
(j)(i) (1) "Creditable coverage" means, with respect to
an individual, health benefits or
coverage
provided under any of the following:
(i) A group health plan;
(ii) A health benefit plan;
(iii) Part A or part B of Title XVIII of the Social Security Act, 42 U.S.C.
section 1395c
et
seq. or 42 U.S.C. section 1395j et seq. (Medicare);
(iv) Title XIX of the Social Security Act, 42 U.S.C. section 1396 et seq.
(Medicaid),
other
than coverage consisting solely of benefits under 42 U.S.C. section 1396s (the
program for
distribution
of pediatric vaccines);
(v) 10 U.S.C. section 1071 et seq. (medical and dental care for members and
certain
former
members of the uniformed services, and for their dependents)(Civilian Health
and
Medical
Program of the Uniformed Services)(CHAMPUS). For purposes of 10 U.S.C. section
1071
et seq., "uniformed services" means the armed forces and the
commissioned corps of the
national
oceanic and atmospheric administration and of the public health service;
(vi) A medical care program of the Indian Health Service or of a tribal
organization;
(vii) A state health benefits risk pool;
(viii) A health plan offered under 5 U.S.C. section 8901 et seq. (Federal
Employees
Health
Benefits Program (FEHBP));
(ix) A public health plan, which for purposes of this chapter, means a plan
established or
maintained
by a state, county, or other political subdivision of a state that provides
health
insurance
coverage to individuals enrolled in the plan; or
(x) A health benefit plan under section 5(e) of the Peace Corps Act (22 U.S.C.
2504(e)).
(2) A period of creditable coverage shall not be counted, with respect to
enrollment of an
individual
under a group health plan, if, after the period and before the enrollment date,
the
individual
experiences a significant break in coverage.
(k)(j) "Dependent" means a spouse, an unmarried child
under the age of nineteen (19)
years,
an unmarried child who is a full-time student under the age of twenty-five (25)
years and
who
is financially dependent upon the parent, and an unmarried child of any age who
is medically
certified
as disabled and dependent upon the parent.
(l)(k) "Director" means the director of the department
of business regulation.
(m)(l) "Economy health plan" means a lower cost health
benefit plan developed pursuant
to
the provisions of section 27-50-10.
(n)(m) "Eligible employee" means an employee who works
on a full-time basis with a
normal
work week of thirty (30) or more hours, except that at the employer's sole
discretion, the
term
shall also include an employee who works on a full-time basis with a normal
work week of
anywhere
between at least seventeen and one-half (17.5) and thirty (30) hours, so long
as this
eligibility
criterion is applied uniformly among all of the employer's employees and
without
regard
to any health status-related factor. The term includes a self-employed
individual, a sole
proprietor,
a partner of a partnership, and may include an independent contractor, if the
self-
employed
individual, sole proprietor, partner, or independent contractor is included as
an
employee
under a health benefit plan of a small employer, but does not include an
employee who
works
on a temporary or substitute basis or who works less than seventeen and
one-half (17.5)
hours
per week. Persons covered under a health benefit plan pursuant to the
Consolidated
Omnibus
Budget Reconciliation Act of 1986 shall not be considered "eligible
employees" for
purposes
of minimum participation requirements pursuant to section 27- 50-7(d)(9).
(o)(n) "Enrollment date" means the first day of
coverage or, if there is a waiting period,
the
first day of the waiting period, whichever is earlier.
(p)(o) "Established geographic service area" means a
geographic area, as approved by
the
director and based on the carrier's certificate of authority to transact
insurance in this state,
within
which the carrier is authorized to provide coverage.
(q)(p) "Family composition" means:
(1) Enrollee;
(2) Enrollee, spouse and children;
(3) Enrollee and spouse; or
(4) Enrollee and children.
(r)(q) "Genetic information" means information about
genes, gene products, and
inherited
characteristics that may derive from the individual or a family member. This
includes
information
regarding carrier status and information derived from laboratory tests that
identify
mutations
in specific genes or chromosomes, physical medical examinations, family
histories, and
direct
analysis of genes or chromosomes.
(s)(r) "Governmental plan" has the meaning given the
term under section 3(32) of the
Employee
Retirement Income Security Act of 1974, 29 U.S.C. section 1002(32),and any
federal
governmental
plan.
(t)(s) (1) "Group health plan" means an employee
welfare benefit plan as defined in
section
3(1) of the Employee Retirement Income Security Act of 1974, 29 U.S.C. section
1002(1),
to the extent that the plan provides medical care, as defined in subsection
(z), and
including
items and services paid for as medical care to employees or their dependents as
defined
under
the terms of the plan directly or through insurance, reimbursement, or
otherwise.
(2) For purposes of this chapter:
(i) Any plan, fund, or program that would not be, but for PHSA section 2721(e),
42
U.S.C.
section 300gg(e), as added by Pub. L. No. 104-191, an employee welfare benefit
plan and
that
is established or maintained by a partnership, to the extent that the plan,
fund or program
provides
medical care, including items and services paid for as medical care, to present
or former
partners
in the partnership, or to their dependents, as defined under the terms of the
plan, fund or
program,
directly or through insurance, reimbursement or otherwise, shall be treated,
subject to
paragraph
(ii) of this subdivision, as an employee welfare benefit plan that is a group
health plan;
(ii) In the case of a group health plan, the term "employer" also
includes the partnership
in
relation to any partner; and
(iii) In the case of a group health plan, the term "participant" also
includes an individual
who
is, or may become, eligible to receive a benefit under the plan, or the
individual's beneficiary
who
is, or may become, eligible to receive a benefit under the plan, if:
(A) In connection with a group health plan maintained by a partnership, the
individual is
a
partner in relation to the partnership; or
(B) In connection with a group health plan maintained by a self-employed
individual,
under
which one or more employees are participants, the individual is the
self-employed
individual.
(u)(t) (1) "Health benefit plan" means any hospital or
medical policy or certificate, major
medical
expense insurance, hospital or medical service corporation subscriber contract,
or health
maintenance
organization subscriber contract. Health benefit plan includes short-term and
catastrophic
health insurance policies, and a policy that pays on a cost-incurred basis,
except as
otherwise
specifically exempted in this definition.
(2) "Health benefit plan" does not include one or more, or any
combination of, the
following:
(i) Coverage only for accident or disability income insurance, or any
combination of
those;
(ii) Coverage issued as a supplement to liability insurance;
(iii) Liability insurance, including general liability insurance and automobile
liability
insurance;
(iv) Workers' compensation or similar insurance;
(v) Automobile medical payment insurance;
(vi) Credit-only insurance;
(vii) Coverage for on-site medical clinics; and
(viii) Other similar insurance coverage, specified in federal regulations
issued pursuant
to
Pub. L. No. 104-191, under which benefits for medical care are secondary or
incidental to other
insurance
benefits.
(3) "Health benefit plan" does not include the following benefits if
they are provided
under
a separate policy, certificate, or contract of insurance or are otherwise not
an integral part
of
the plan:
(i) Limited scope dental or vision benefits;
(ii) Benefits for long-term care, nursing home care, home health care,
community-based
care,
or any combination of those; or
(iii) Other similar, limited benefits specified in federal regulations issued
pursuant to
Pub.
L. No. 104-191.
(4) "Health benefit plan" does not include the following benefits if
the benefits are
provided
under a separate policy, certificate or contract of insurance, there is no
coordination
between
the provision of the benefits and any exclusion of benefits under any group
health plan
maintained
by the same plan sponsor, and the benefits are paid with respect to an event
without
regard
to whether benefits are provided with respect to such an event under any group
health plan
maintained
by the same plan sponsor:
(i) Coverage only for a specified disease or illness; or
(ii) Hospital indemnity or other fixed indemnity insurance.
(5) "Health benefit plan" does not include the following if offered
as a separate policy,
certificate,
or contract of insurance:
(i) Medicare supplemental health insurance as defined under section 1882(g)(1)
of the
Social
Security Act, 42 U.S.C. section 1395ss(g)(1);
(ii) Coverage supplemental to the coverage provided under 10 U.S.C. section
1071 et
seq.;
or
(iii) Similar supplemental coverage provided to coverage under a group health
plan.
(6) A carrier offering policies or certificates of specified disease, hospital
confinement
indemnity,
or limited benefit health insurance shall comply with the following:
(i) The carrier files on or before March 1 of each year a certification with
the director
that
contains the statement and information described in paragraph (ii) of this
subdivision;
(ii) The certification required in paragraph (i) of this subdivision shall
contain the
following:
(A) A statement from the carrier certifying that policies or certificates
described in this
paragraph
are being offered and marketed as supplemental health insurance and not as a
substitute
for
hospital or medical expense insurance or major medical expense insurance; and
(B) A summary description of each policy or certificate described in this
paragraph,
including
the average annual premium rates (or range of premium rates in cases where
premiums
vary
by age or other factors) charged for those policies and certificates in this
state; and
(iii) In the case of a policy or certificate that is described in this
paragraph and that is
offered
for the first time in this state on or after July 13, 2000, the carrier shall
file with the
director
the information and statement required in paragraph (ii) of this subdivision at
least thirty
(30)
days prior to the date the policy or certificate is issued or delivered in this
state.
(v)(u) "Health maintenance organization" or
"HMO" means a health maintenance
organization
licensed under chapter 41 of this title.
(w)(v) "Health status-related factor" means any of the
following factors:
(1) Health status;
(2) Medical condition, including both physical and mental illnesses;
(3) Claims experience;
(4) Receipt of health care;
(5) Medical history;
(6) Genetic information;
(7) Evidence of insurability, including conditions arising out of acts of
domestic
violence;
or
(8) Disability.
(x)(w) (1) "Late enrollee" means an eligible employee
or dependent who requests
enrollment
in a health benefit plan of a small employer following the initial enrollment
period
during
which the individual is entitled to enroll under the terms of the health
benefit plan,
provided
that the initial enrollment period is a period of at least thirty (30) days.
(2) "Late enrollee" does not mean an eligible employee or dependent:
(i) Who meets each of the following provisions:
(A) The individual was covered under creditable coverage at the time of the
initial
enrollment;
(B) The individual lost creditable coverage as a result of cessation of
employer
contribution,
termination of employment or eligibility, reduction in the number of hours of
employment,
involuntary termination of creditable coverage, or death of a spouse, divorce
or
legal
separation, or the individual and/or dependents are determined to be eligible
for RIteCare
under
chapter 5.1 of title 40 or chapter 12.3 of title 42 or for RIteShare under
chapter 8.4 of title
40;
and
(C) The individual requests enrollment within thirty (30) days after
termination of the
creditable
coverage or the change in conditions that gave rise to the termination of
coverage;
(ii) If, where provided for in contract or where otherwise provided in state
law, the
individual
enrolls during the specified bona fide open enrollment period;
(iii) If the individual is employed by an employer which offers multiple health
benefit
plans
and the individual elects a different plan during an open enrollment period;
(iv) If a court has ordered coverage be provided for a spouse or minor or dependent
child
under
a covered employee's health benefit plan and a request for enrollment is made
within thirty
(30)
days after issuance of the court order;
(v) If the individual changes status from not being an eligible employee to
becoming an
eligible
employee and requests enrollment within thirty (30) days after the change in
status;
(vi) If the individual had coverage under a COBRA continuation provision and
the
coverage
under that provision has been exhausted; or
(vii) Who meets the requirements for special enrollment pursuant to section
27-50-7 or
27-50-8.
(y)(x) "Limited benefit health insurance" means that
form of coverage that pays stated
predetermined
amounts for specific services or treatments or pays a stated predetermined
amount
per
day or confinement for one or more named conditions, named diseases or
accidental injury.
(z)(y) "Medical care" means amounts paid for:
(1) The diagnosis, care, mitigation, treatment, or prevention of disease, or
amounts paid
for
the purpose of affecting any structure or function of the body;
(2) Transportation primarily for and essential to medical care referred to in
subdivision
(1);
and
(3) Insurance covering medical care referred to in subdivisions (1) and (2) of
this
subsection.
(aa)(z) "Network plan" means a health benefit plan
issued by a carrier under which the
financing
and delivery of medical care, including items and services paid for as medical
care, are
provided,
in whole or in part, through a defined set of providers under contract with the
carrier.
(bb)(aa) "Person" means an individual, a corporation, a
partnership, an association, a
joint
venture, a joint stock company, a trust, an unincorporated organization, any
similar entity, or
any
combination of the foregoing.
(cc)(bb) "Plan sponsor" has the meaning given this term
under section 3(16)(B) of the
Employee
Retirement Income Security Act of 1974, 29 U.S.C. section 1002(16)(B).
(dd)(cc) (1) "Preexisting condition" means a condition,
regardless of the cause of the
condition,
for which medical advice, diagnosis, care, or treatment was recommended or
received
during
the six (6) months immediately preceding the enrollment date of the coverage.
(2) "Preexisting condition" does not mean a condition for which
medical advice,
diagnosis,
care, or treatment was recommended or received for the first time while the
covered
person
held creditable coverage and that was a covered benefit under the health
benefit plan,
provided
that the prior creditable coverage was continuous to a date not more than
ninety (90)
days
prior to the enrollment date of the new coverage.
(3) Genetic information shall not be treated as a condition under subdivision
(1) of this
subsection
for which a preexisting condition exclusion may be imposed in the absence of a
diagnosis
of the condition related to the information.
(ee)(dd) "Premium" means all moneys paid by a small
employer and eligible employees
as a
condition of receiving coverage from a small employer carrier, including any
fees or other
contributions
associated with the health benefit plan.
(ff)(ee) "Producer" means any insurance producer
licensed under chapter 2.4 of this title.
(gg)(ff) "Rating period" means the calendar period for
which premium rates established
by a
small employer carrier are assumed to be in effect.
(hh)(gg) "Restricted network provision" means any
provision of a health benefit plan
that
conditions the payment of benefits, in whole or in part, on the use of health
care providers
that
have entered into a contractual arrangement with the carrier pursuant to
provide health care
services
to covered individuals.
(ii)(hh) "Risk adjustment mechanism" means the
mechanism established pursuant to
section
27-50-16.
(jj)(ii) "Self-employed individual" means an individual
or sole proprietor who derives a
substantial
portion of his or her income from a trade or business through which the
individual or
sole
proprietor has attempted to earn taxable income and for which he or she has
filed the
appropriate
Internal Revenue Service Form 1040, Schedule C or F, for the previous taxable
year.
(kk)(jj) "Significant break in coverage" means a period
of ninety (90) consecutive days
during
all of which the individual does not have any creditable coverage, except that
neither a
waiting
period nor an affiliation period is taken into account in determining a
significant break in
coverage.
(ll)(kk) "Small employer" means, except for its use in
section 27-50-7, any person, firm,
corporation,
partnership, association, political subdivision, or self-employed individual
that is
actively
engaged in business including, but not limited to, a business or a corporation
organized
under
the Rhode Island Non-Profit Corporation Act, chapter 6 of title 7, or a similar
act of
another
state that, on at least fifty percent (50%) of its working days during the
preceding
calendar
quarter, employed no more than fifty (50) eligible employees, with a normal
work week
of
thirty (30) or more hours, the majority of whom were employed within this
state, and is not
formed
primarily for purposes of buying health insurance and in which a bona fide
employer-
employee
relationship exists. In determining the number of eligible employees, companies
that
are
affiliated companies, or that are eligible to file a combined tax return for
purposes of taxation
by
this state, shall be considered one employer. Subsequent to the issuance of a
health benefit
plan
to a small employer and for the purpose of determining continued eligibility,
the size of a
small
employer shall be determined annually. Except as otherwise specifically
provided,
provisions
of this chapter that apply to a small employer shall continue to apply at least
until the
plan
anniversary following the date the small employer no longer meets the
requirements of this
definition.
The term small employer includes a self-employed individual.
(mm)(ll) "Standard health benefit plan" means a health
benefit plan developed pursuant
to
the provisions of section 27-50-10.
(nn)(mm) "Waiting period" means, with respect to a
group health plan and an individual
who
is a potential enrollee in the plan, the period that must pass with respect to
the individual
before
the individual is eligible to be covered for benefits under the terms of the
plan. For
purposes
of calculating periods of creditable coverage pursuant to subsection (j)(2) of
this section,
a waiting
period shall not be considered a gap in coverage.
27-50-5.
Restrictions relating to premium rates. [Effective October 1, 2003.] --
(a)
Premium
rates for health benefit plans subject to this chapter are subject to the
following
provisions:
(1) Subject to subdivision (2) of this subsection, a small employer carrier
shall develop
its
rates based on an adjusted community rate and may only vary the adjusted
community rate for:
(i) Age;
(ii) Gender; and
(iii) Family composition.
(2) Until October 1, 2004, a small employer carrier who as of June 1, 2000,
varied rates
by
health status may vary the adjusted community rates for health status by ten
percent (10%),
provided
that the resulting rates comply with the other requirements of this section,
including
subdivision
(5) of this subsection. After October 1, 2004, no small employer carrier may
vary the
adjusted
community rate based on health status.
(3) The adjustment for age in paragraph (1)(i) of this subsection may not use
age
brackets
smaller than five (5) year increments and these shall begin with age thirty
(30) and end
with
age sixty-five (65).
(4) The small employer carriers are permitted to develop separate rates for
individuals
age
sixty-five (65) or older for coverage for which Medicare is the primary payer
and coverage
for
which Medicare is not the primary payer. Both rates are subject to the
requirements of this
subsection.
(5) For each health benefit plan offered by a carrier, the highest premium
rate for each
family
composition type shall not exceed two (2) times the premium rate that could be
charged to
a
small employer with the lowest premium rate for that family composition type,
effective
October
1, 2004. Until October 1, 2004, the highest premium rate for each family
composition
type
shall not exceed four (4) times the premium rate that could be charged to a
small employer
with
the lowest premium rate for that family composition.
(6) [Effective until September 30, 2004.]Upon renewal of a health benefit
plan, the
premium
rate for each group shall not exceed the premium rate charged by that carrier
to that
group
during the prior rating period by more than: (i) cost and utilization trends
for that carrier;
plus
(ii) the sum of any premium changes due to changes in the size, age, gender or
family
composition
of the group; plus, (iii) ten percent (10%); plus (iv) the change in the
actuarial value
of
the benefits due to changes in the health benefit plan for that group. This
subdivision expires
on
September 30, 2004.
(7)(6) Premium rates for bona fide associations except for the
Rhode Island Builders'
Association
whose membership is limited to those who are actively involved in supporting
the
construction
industry in Rhode Island shall comply with the requirements of section 27-50-5.
(b) The premium charged for a health benefit plan may not be adjusted more
frequently
than
annually except that the rates may be changed to reflect:
(1) Changes to the enrollment of the small employer;
(2) Changes to the family composition of the employee; or
(3) Changes to the health benefit plan requested by the small employer.
(c) Premium rates for health benefit plans shall comply with the requirements
of this
section.
(d) Small employer carriers shall apply rating factors consistently with
respect to all
small
employers. Rating factors shall produce premiums for identical groups that
differ only by
the
amounts attributable to plan design and do not reflect differences due to the
nature of the
groups
assumed to select particular health benefit plans. Nothing in this section
shall be construed
to
prevent a group health plan and a health insurance carrier offering health insurance
coverage
from
establishing premium discounts or rebates or modifying otherwise applicable
copayments or
deductibles
in return for adherence to programs of health promotion and disease prevention,
provided
that the resulting rates comply with the other requirements of this section,
including
subdivision
(a)(5) of this section.
(e) For the purposes of this section, a health benefit plan that contains a
restricted
network
provision shall not be considered similar coverage to a health benefit plan
that does not
contain
such a provision, provided that the restriction of benefits to network
providers results in
substantial
differences in claim costs.
(f) The director may establish regulations to implement the provisions of this
section and
to
assure that rating practices used by small employer carriers are consistent
with the purposes of
this
chapter, including regulations that assure that differences in rates charged
for health benefit
plans
by small employer carriers are reasonable and reflect objective differences in
plan design or
coverage
(not including differences due to the nature of the groups assumed to select
particular
health
benefit plans or separate claim experience for individual health benefit
plans).
(g) In connection with the offering for sale of any health benefit plan to a
small
employer,
a small employer carrier shall make a reasonable disclosure, as part of its
solicitation
and
sales materials, of all of the following:
(1) The provisions of the health benefit plan concerning the small employer
carrier's
right
to change premium rates and the factors, other than claim experience, that
affect changes in
premium
rates;
(2) The provisions relating to renewability of policies and contracts;
(3) The provisions relating to any preexisting condition provision; and
(4) A listing of and descriptive information, including benefits and premiums,
about all
benefit
plans for which the small employer is qualified.
(h) (1) Each small employer carrier shall maintain at its principal place of
business a
complete
and detailed description of its rating practices and renewal underwriting
practices,
including
information and documentation that demonstrate that its rating methods and practices
are
based upon commonly accepted actuarial assumptions and are in accordance with
sound
actuarial
principles.
(2) Each small employer carrier shall file with the director annually on or
before March
15 an
actuarial certification certifying that the carrier is in compliance with this
chapter and that
the
rating methods of the small employer carrier are actuarially sound. The
certification shall be
in a
form and manner, and shall contain the information, specified by the director.
A copy of the
certification
shall be retained by the small employer carrier at its principal place of
business.
(3) A small employer carrier shall make the information and documentation
described in
subdivision
(1) of this subsection available to the director upon request. Except in cases
of
violations
of this chapter, the information shall be considered proprietary and trade
secret
information
and shall not be subject to disclosure by the director to persons outside of
the
department
except as agreed to by the small employer carrier or as ordered by a court of
competent
jurisdiction.
(i) The requirements of this section apply to all health benefit plans issued
or renewed on
or
after October 1, 2000.
27-50-6.
Renewability of coverage. -- (a) A health benefit plan subject to this
chapter is
renewable
with respect to all eligible employees or dependents, at the option of the
small
employer,
except in any of the following cases:
(1) The plan sponsor has failed to pay premiums or contributions in accordance
with the
terms
of the health benefit plan or the carrier has not received timely premium
payments;
(2) The plan sponsor or, with respect to coverage of individual insured under
the health
benefit
plan, the insured or the insured's representative has performed an act or
practice that
constitutes
fraud or made an intentional misrepresentation of material fact under the terms
of
coverage;
(3) Noncompliance with the carrier's minimum participation requirements;
(4) Noncompliance with the carrier's employer contribution requirements;
(5) The small employer carrier elects to discontinue offering all of its health
benefit
plans
delivered or issued for delivery to small employers in this state if the
carrier:
(i) Provides advance notice of its decision under this paragraph to the
commissioner in
each
state in which it is licensed; and
(ii) Provides notice of the decision to:
(A) All affected small employers and enrollees and their dependents; and
(B) The insurance commissioner in each state in which an affected insured
individual is
known
to reside at least one hundred and eighty (180) days prior to the nonrenewal of
any health
benefit
plans by the carrier, provided the notice to the commissioner under this
subparagraph is
sent
at least three (3) working days prior to the date the notice is sent to the
affected small
employers
and enrollees and their dependents;
(6) The director:
(i) Finds that the continuation of the coverage would not be in the best
interests of the
policyholders
or certificate holders or would impair the carrier's ability to meet its
contractual
obligations;
and
(ii) Assists affected small employers in finding replacement coverage;
(7) The director finds that the product form is obsolete and is being
replaced with
comparable
coverage and the
The small employer carrier decides to discontinue offering that
particular
type of health benefit plan (obsolete product form) in the state's small
employer market
if
the carrier:
(i) Provides advance notice of its decision under this paragraph to the
commissioner in
each
state in which it is licensed;
(ii)(i) Provides notice of the decision not to renew coverage at
least one hundred and
eighty
(180) ninety
(90) days prior to the nonrenewal of any health benefit plans to: (A)
All all
affected
small employers and enrollees and their dependents; and
(B)
The commissioner in each state in which an affected insured individual is known
to
reside,
provided the notice sent to the commissioner under this subparagraph is sent at
least three
(3)
working days prior to the date the notice is sent to the affected small
employers and enrollees
and
their dependents;
(iii)(ii) Offers to each small employer issued that particular
type of health benefit plan
(obsolete
product form)
the option to purchase all other health benefit plans currently being
offered
by the carrier to small employers in the state; and
(iv)(iii) In exercising this option to discontinue that
particular type of health benefit plan
(obsolete
product form)
and in offering the option of coverage pursuant to paragraph (7)(iii ii) of
this subsection
acts uniformly without regard to the claims experience of those small employers
or
any health status-related factor relating to any enrollee or dependent of an
enrollee or enrollees
and
their dependents covered or new enrollees and their dependents who may become
eligible for
coverage;
(8) In the case of health benefit plans that are made available in the small
group market
through
a network plan, there is no longer an employee of the small employer living,
working or
residing
within the carrier's established geographic service area and the carrier would
deny
enrollment
in the plan pursuant to section 27-50-7(e)(1)(ii); or
(9) In the case of a health benefit plan that is made available in the small
employer
market
only through one or more bona fide associations, the membership of an employer
in the
bona
fide association, on the basis of which the coverage is provided, ceases, but
only if the
coverage
is terminated under this paragraph uniformly without regard to any health status-related
factor
relating to any covered individual.
(b) (1) A small employer carrier that elects not to renew health benefit plan
coverage
pursuant
to subdivision (a)(2) of this section because of the small employer's fraud or
intentional
misrepresentation
of material fact under the terms of coverage may choose not to issue a health
benefit
plan to that small employer for one year after the date of nonrenewal.
(2) This subsection shall not be construed to affect the requirements of section
27-50-7
as to
the obligations of other small employer carriers to issue any health benefit
plan to the small
employer.
(c) (1) A small employer carrier that elects to discontinue offering health
benefit plans
under
subdivision (a)(5) of this section is prohibited from writing new business in
the small
employer
market in this state for a period of five (5) years beginning on the date the
carrier
ceased
offering new coverage in this state.
(2) In the case of a small employer carrier that ceases offering new coverage
in this state
pursuant
to subdivision (a)(5) of this section, the small employer carrier, as
determined by the
director,
may renew its existing business in the small employer market in the state or
may be
required
to nonrenew all of its existing business in the small employer market in the
state.
(d) A small employer carrier offering coverage through a network plan is not
required to
offer
coverage or accept applications pursuant to subsection (a) or (b) of this section
in the case of
the
following:
(1) To an eligible person who no longer resides, lives, or works in the service
area, or in
an
area for which the carrier is authorized to do business, but only if coverage
is terminated under
this
subdivision uniformly without regard to any health status-related factor of
covered
individuals;
or
(2) To a small employer that no longer has any enrollee in connection with the
plan who
lives,
resides, or works in the service area of the carrier, or the area for which the
carrier is
authorized
to do business.
(e)
At the time of coverage renewal, a small employer carrier may modify the health
insurance
coverage for a product offered to a group health plan if, for coverage that is
available in
the
small group market other than only through one or more bona fide associations,
such
modification
is consistent with otherwise applicable law and effective on a uniform basis
among
group
health plans with that product.
27-50-7.
Availability of coverage. -- (a) Until October 1, 2004, for purposes of
this
section,
"small employer" includes any person, firm, corporation, partnership,
association, or
political
subdivision that is actively engaged in business that on at least fifty percent
(50%) of its
working
days during the preceding calendar quarter, employed a combination of no more
than
fifty
(50) and no less than two (2) eligible employees and part-time employees, the
majority of
whom
were employed within this state, and is not formed primarily for purposes of
buying health
insurance
and in which a bona fide employer-employee relationship exists. After October
1, 2004,
for
the purposes of this section, "small employer" has the meaning used
in section 27-50-3( ll ).
(b) (1) Every small employer carrier shall, as a condition of transacting
business in this
state
with small employers, actively offer to small employers all health benefit
plans it actively
markets
to small employers in this state including at least three (3) two (2)
health benefit plans.
One
health benefit plan offered by each small employer carrier shall be a basic
health benefit
plan,
one plan shall be a
standard health benefit plan, and one plan shall be an economy health
benefit
plan. A small employer carrier shall be considered to be actively marketing a
health
benefit
plan if it offers that plan to any small employer not currently receiving a
health benefit
plan
from the small employer carrier.
(2) Subject to subdivision (1) of this subsection, a small employer carrier
shall issue any
health
benefit plan to any eligible small employer that applies for that plan and
agrees to make the
required
premium payments and to satisfy the other reasonable provisions of the health
benefit
plan
not inconsistent with this chapter. However, no carrier is required to issue a
health benefit
plan
to any self-employed individual who is covered by, or is eligible for coverage
under, a health
benefit
plan offered by an employer.
(c) (1) A small employer carrier shall file with the director, in a format and
manner
prescribed
by the director, the health benefit plans to be used by the carrier. A health
benefit plan
filed
pursuant to this subdivision may be used by a small employer carrier beginning
thirty (30)
days
after it is filed unless the director disapproves its use.
(2) The director may at any time may, after providing notice and an opportunity
for a
hearing
to the small employer carrier, disapprove the continued use by a small employer
carrier of
a health
benefit plan on the grounds that the plan does not meet the requirements of
this chapter.
(d) Health benefit plans covering small employers shall comply with the
following
provisions:
(1) A health benefit plan shall not deny, exclude, or limit benefits for a
covered
individual
for losses incurred more than six (6) months following the enrollment date of
the
individual's
coverage due to a preexisting condition, or the first date of the waiting
period for
enrollment
if that date is earlier than the enrollment date. A health benefit plan shall
not define a
preexisting
condition more restrictively than as defined in section 27-50-3.
(2) (i) Except as provided in subdivision (3) of this subsection, a small
employer carrier
shall
reduce the period of any preexisting condition exclusion by the aggregate of
the periods of
creditable
coverage without regard to the specific benefits covered during the period of
creditable
coverage,
provided that the last period of creditable coverage ended on a date not more
than
ninety
(90) days prior to the enrollment date of new coverage.
(ii) The aggregate period of creditable coverage does not include any waiting
period or
affiliation
period for the effective date of the new coverage applied by the employer or
the carrier,
or
for the normal application and enrollment process following employment or other
triggering
event
for eligibility.
(iii) A carrier that does not use preexisting condition limitations in any of
its health
benefit
plans may impose an affiliation period that:
(A) Does not exceed sixty (60) days for new entrants and not to exceed ninety
(90) days
for
late enrollees;
(B) During which the carrier charges no premiums and the coverage issued is not
effective;
and
(C) Is applied uniformly, without regard to any health status-related factor.
(iv) This section does not preclude application of any waiting period
applicable to all
new
enrollees under the health benefit plan, provided that any carrier-imposed
waiting period is
no
longer than sixty (60) days.
(3) (i) Instead of as provided in paragraph (2)(i) of this subsection, a small
employer
carrier
may elect to reduce the period of any preexisting condition exclusion based on
coverage of
benefits
within each of several classes or categories of benefits specified in federal
regulations.
(ii) A small employer electing to reduce the period of any preexisting
condition
exclusion
using the alternative method described in paragraph (i) of this subdivision
shall:
(A) Make the election on a uniform basis for all enrollees; and
(B) Count a period of creditable coverage with respect to any class or category
of
benefits
if any level of benefits is covered within the class or category.
(iii) A small employer carrier electing to reduce the period of any preexisting
condition
exclusion
using the alternative method described under paragraph (i) of this subdivision
shall:
(A) Prominently state that the election has been made in any disclosure
statements
concerning
coverage under the health benefit plan to each enrollee at the time of
enrollment under
the
plan and to each small employer at the time of the offer or sale of the
coverage; and
(B) Include in the disclosure statements the effect of the election.
(4) (i) A health benefit plan shall accept late enrollees, but may exclude
coverage for late
enrollees
for preexisting conditions for a period not to exceed twelve (12) months.
(ii) A small employer carrier shall reduce the period of any preexisting
condition
exclusion
pursuant to subdivision (2) or (3) of this subsection.
(5) A small employer carrier shall not impose a preexisting condition
exclusion:
(i) Relating to pregnancy as a preexisting condition; or
(ii) With regard to a child who is covered under any creditable coverage within
thirty
(30)
days of birth, adoption, or placement for adoption, provided that the child
does not
experience
a significant break in coverage, and provided that the child was adopted or
placed for
adoption
before attaining eighteen (18) years of age.
(6) A small employer carrier shall not impose a preexisting condition exclusion
in the
case
of a condition for which medical advice, diagnosis, care or treatment was
recommended or
received
for the first time while the covered person held creditable coverage, and the
medical
advice,
diagnosis, care or treatment was a covered benefit under the plan, provided
that the
creditable
coverage was continuous to a date not more than ninety (90) days prior to the
enrollment
date of the new coverage.
(7) (i) A small employer carrier shall permit an employee or a dependent of the
employee,
who is eligible, but not enrolled, to enroll for coverage under the terms of
the group
health
plan of the small employer during a special enrollment period if:
(A) The employee or dependent was covered under a group health plan or had
coverage
under
a health benefit plan at the time coverage was previously offered to the
employee or
dependent;
(B) The employee stated in writing at the time coverage was previously offered
that
coverage
under a group health plan or other health benefit plan was the reason for
declining
enrollment,
but only if the plan sponsor or carrier, if applicable, required that statement
at the
time
coverage was previously offered and provided notice to the employee of the
requirement and
the
consequences of the requirement at that time;
(C) The employee's or dependent's coverage described under subparagraph (A) of
this
paragraph:
(I) Was under a COBRA continuation provision and the coverage under this
provision
has
been exhausted; or
(II) Was not under a COBRA continuation provision and that other coverage has
been
terminated
as a result of loss of eligibility for coverage, including as a result of a
legal separation,
divorce,
death, termination of employment, or reduction in the number of hours of
employment or
employer
contributions towards that other coverage have been terminated; and
(D) Under terms of the group health plan, the employee requests enrollment not
later
than
thirty (30) days after the date of exhaustion of coverage described in item
(C)(I) of this
paragraph
or termination of coverage or employer contribution described in item (C)(II)
of this
paragraph.
(ii) If an employee requests enrollment pursuant to subparagraph (i)(D) of this
subdivision,
the enrollment is effective not later than the first day of the first calendar
month
beginning
after the date the completed request for enrollment is received.
(8) (i) A small employer carrier that makes coverage available under a group
health plan
with
respect to a dependent of an individual shall provide for a dependent special
enrollment
period
described in paragraph (ii) of this subdivision during which the person or, if
not enrolled,
the
individual may be enrolled under the group health plan as a dependent of the
individual and,
in
the case of the birth or adoption of a child, the spouse of the individual may
be enrolled as a
dependent
of the individual if the spouse is eligible for coverage if:
(A) The individual is a participant under the health benefit plan or has met
any waiting
period
applicable to becoming a participant under the plan and is eligible to be
enrolled under the
plan,
but for a failure to enroll during a previous enrollment period; and
(B) A person becomes a dependent of the individual through marriage, birth, or
adoption
or
placement for adoption.
(ii) The special enrollment period for individuals that meet the provisions of
paragraph
(i)
of this subdivision is a period of not less than thirty (30) days and begins on
the later of:
(A) The date dependent coverage is made available; or
(B) The date of the marriage, birth, or adoption or placement for adoption
described in
subparagraph
(i)(B) of this subdivision.
(iii) If an individual seeks to enroll a dependent during the first thirty (30)
days of the
dependent
special enrollment period described under paragraph (ii) of this subdivision,
the
coverage
of the dependent is effective:
(A) In the case of marriage, not later than the first day of the first month
beginning after
the
date the completed request for enrollment is received;
(B) In the case of a dependent's birth, as of the date of birth; and
(C) In the case of a dependent's adoption or placement for adoption, the date
of the
adoption
or placement for adoption.
(9) (i) Except as provided in this subdivision, requirements used by a small
employer
carrier
in determining whether to provide coverage to a small employer, including
requirements
for
minimum participation of eligible employees and minimum employer contributions,
shall be
applied
uniformly among all small employers applying for coverage or receiving coverage
from
the
small employer carrier.
(ii) For health benefit plans issued or renewed on or after October 1, 2000, a
small
employer
carrier shall not require a minimum participation level greater than:
(A) One hundred percent (100%) of eligible employees working for groups of ten
(10) or
less
employees; and
(B) Seventy-five percent (75%) of eligible employees working for groups with
more
than
ten (10) employees.
(iii) In applying minimum participation requirements with respect to a small
employer, a
small
employer carrier shall not consider employees or dependents who have creditable
coverage
in
determining whether the applicable percentage of participation is met.
(iv) A small employer carrier shall not increase any requirement for minimum
employee
participation
or modify any requirement for minimum employer contribution applicable to a
small
employer
at any time after the small employer has been accepted for coverage.
(10) (i) If a small employer carrier offers coverage to a small employer, the
small
employer
carrier shall offer coverage to all of the eligible employees of a small
employer and
their
dependents who apply for enrollment during the period in which the employee
first becomes
eligible
to enroll under the terms of the plan. A small employer carrier shall not offer
coverage to
only
certain individuals or dependents in a small employer group or to only part of
the group.
(ii) A small employer carrier shall not place any restriction in regard to any
health status-
related
factor on an eligible employee or dependent with respect to enrollment or plan
participation.
(iii) Except as permitted under subdivision (1) and (4) of this subsection, a
small
employer
carrier shall not modify a health benefit plan with respect to a small employer
or any
eligible
employee or dependent, through riders, endorsements, or otherwise, to restrict
or exclude
coverage
or benefits for specific diseases, medical conditions, or services covered by
the plan.
(e) (1) Subject to subdivision (3) of this subsection, a small employer carrier
is not
required
to offer coverage or accept applications pursuant to subsection (b) of this
section in the
case
of the following:
(i) To a small employer, where the small employer does not have eligible
individuals
who
live, work, or reside in the established geographic service area for the
network plan;
(ii) To an employee, when the employee does not live, work, or reside within
the
carrier's
established geographic service area; or
(iii) Within an area where the small employer carrier reasonably anticipates,
and
demonstrates
to the satisfaction of the director, that it will not have the capacity within
its
established
geographic service area to deliver services adequately to enrollees of any
additional
groups
because of its obligations to existing group policyholders and enrollees.
(2) A small employer carrier that cannot offer coverage pursuant to paragraph
(1)(iii) of
this
subsection may not offer coverage in the applicable area to new cases of
employer groups
until
the later of one hundred and eighty (180) days following each refusal or the
date on which
the
carrier notifies the director that it has regained capacity to deliver services
to new employer
groups.
(3) A small employer carrier shall apply the provisions of this subsection
uniformly to all
small
employers without regard to the claims experience of a small employer and its
employees
and
their dependents or any health status-related factor relating to the employees
and their
dependents.
(f) (1) A small employer carrier is not required to provide coverage to small
employers
pursuant
to subsection (b) of this section if:
(i) For any period of time the director determines the small employer carrier
does not
have
the financial reserves necessary to underwrite additional coverage; and
(ii) The small employer carrier is applying this subsection uniformly to all
small
employers
in the small group market in this state consistent with applicable state law
and without
regard
to the claims experience of a small employer and its employees and their
dependents or
any
health status-related factor relating to the employees and their dependents.
(2) A small employer carrier that denies coverage in accordance with
subdivision (1) of
this
subsection may not offer coverage in the small group market for the later of:
(i) A period of one hundred and eighty (180) days after the date the coverage
is denied;
or
(ii) Until the small employer has demonstrated to the director that it has
sufficient
financial
reserves to underwrite additional coverage.
(g) (1) A small employer carrier is not required to provide coverage to small
employers
pursuant
to subsection (b) of this section if the small employer carrier elects not to
offer new
coverage
to small employers in this state.
(2) A small employer carrier that elects not to offer new coverage to small
employers
under
this subsection may be allowed, as determined by the director, to maintain its
existing
policies
in this state.
(3) A small employer carrier that elects not to offer new coverage to small
employers
under
subdivision (g)(1) shall provide at least one hundred and twenty (120) days
notice of its
election
to the director and is prohibited from writing new business in the small
employer market
in
this state for a period of five (5) years beginning on the date the carrier
ceased offering new
coverage
in this state.
27-50-9.
Periodic market evaluation. -- Within three (3) months after March 31,
2002,
September
30, 2003,
and every thirty-six (36) months after this, the director shall obtain an
independent
actuarial study and report. The director shall assess a fee to the health plans
to
commission
the report. The report shall analyze the effectiveness of the chapter in
promoting rate
stability,
product availability, and coverage affordability. The report may contain
recommendations
for actions to improve the overall effectiveness, efficiency, and fairness of
the
small
group health insurance marketplace. The report shall address whether carriers
and
producers
are fairly actively marketing or issuing health benefit plans to small
employers in
fulfillment
of the purposes of the chapter. The report may contain recommendations for
market
conduct
or other regulatory standards or action.
27-50-10.
Basic, standard, and economy health benefit plans. -- 27-50-10.
Standard
and
economy health benefit plans. -- (a) No provision contained in this chapter
prohibits the
sale
of health benefit plans which differ from the basic, standard,
and economy health benefit
plans
provided for in this section. Only tThe standard and
economy health benefit plans are
exempted
from the mandated benefits as provided for in section 27-50-13.
(b) (1) The standard health benefit plan shall include:
(i) Inpatient hospital care up to twenty (20) days per year;
(ii) Outpatient hospital care including, but not limited to, surgery and
anesthesia,
preadmission
testing, radiation therapy, and chemotherapy;
(iii) Emergency care through emergency room care and emergency admissions to a
hospital,
excluding care for conditions that are not lifethreatening;
(iv) Pediatric care and well baby exams, with up to six (6) visits in a child's
first year,
and
childhood immunizations until age eight (8);
(v) Physician office visits or community health center visits for primary or
sick care, up
to four
(4) visits per year, and laboratory fees, surgery and anesthesia, diagnostic
x-rays, and
physician
care in a hospital inpatient or outpatient setting;
(vi) Maternity care including prenatal office visits, care in the hospital for
mother, and
child
and newborn nursery care;
(vii) Newborn metabolic and sickle cell screening, mammography, and pap tests;
(viii) Psychiatric care and substance abuse care up to twenty (20) outpatient
visits per
year;
inpatient psychiatric care and inpatient substance abuse care shall be included
in the twenty
(20)
days provided by paragraph (i) of this subdivision. The lifetime substance
abuse benefit is a
maximum
of forty-five (45) inpatient days; and
(ix) Home nursing care in lieu of or to reduce hospital length of stay, up to
twenty (20)
visits
per year.
(2) The term "physician" includes doctors of medicine, osteopathy,
and optometry.
(3) Standard health care benefits include the following copayments:
(i) A twenty percent (20%) copayment will be charged for all services except
for
inpatient
hospitalization;
(ii) A two hundred dollar ($200) per day copayment will be charged for each day
of
inpatient
hospitalization in any acute care hospital or psychiatric care or substance
abuse care
treatment
facility;
(iii) A twenty percent (20%) copayment will be charged for any covered
emergency
room
visit, except that when a patient is admitted to the hospital as an inpatient,
the copayment
shall
be waived; and
(iv) There shall be an annual out of pocket stop loss of two thousand five
hundred dollars
($2,500)
per individual and five thousand dollars ($5,000) per family. After the stop
loss amount
has
been reached, no additional copayments shall be charged until the beginning of
the next
contract
year.
(4) Cost containment mechanisms may be used for all services to include, but
not be
limited
to, the following:
(i) Primary care gatekeepers;
(ii) Preadmission certification;
(iii) Mandatory second opinion prior to elective surgery;
(iv) Preauthorization for specified services;
(v) Concurrent utilization review and management;
(vi) Discharge planning for hospital care;
(vii) Design and implementation of a structure of copayments as described in
this
chapter;
and
(viii) Less costly alternatives to inpatient care.
(c) (1) The economy health benefit plan shall include:
(i) Inpatient hospital care up to twenty (20) days per year;
(ii) Outpatient hospital care including, but not limited to, surgery and
anesthesia,
preadmission
testing, radiation therapy, and chemotherapy;
(iii) Emergency care through emergency room care and emergency admissions to a
hospital
excluding care for conditions that are not life threatening;
(iv) Pediatric care and well baby exams, with up to six (6) visits in a child's
first year,
and
childhood immunizations until age eight (8);
(v) Physician office visits or community health center visits for primary or
sick care, up
to
four (4) visits per year, and laboratory fees, surgery and anesthesia,
diagnostic x-rays, and
physician
care in a hospital inpatient or outpatient setting;
(vi) Maternity care including prenatal office visits, care in the hospital for
mother and
child,
and newborn nursery care;
(vii) Newborn metabolic and sickle cell screening, mammography, and pap tests;
(viii) Psychiatric care and substance abuse care up to twenty (20) outpatient
visits per
year;
inpatient psychiatric care and inpatient substance abuse care shall be included
in the twenty
(20)
days provided by paragraph (i) of this subdivision. The lifetime substance
abuse benefit shall
be a
maximum of forty-five (45) inpatient days; and
(ix) Home nursing care in lieu of or to reduce hospital length of stay, up to
twenty (20)
visits
per year.
(2) The term "physician" includes doctors of medicine, osteopathy,
and optometry;
(3) Economy health care benefits include the following copayments:
(i) A twenty percent (20%) copayment shall be charged for any covered service
contained
in paragraphs (1)(iv), (1)(vi), (1)(vii), and (1)(ix) of this subsection;
(ii) A three hundred dollar ($300) per day copayment will be charged for each
day of
inpatient
hospitalization in any acute care hospital or psychiatric care or substance
abuse care
treatment
facility;
(iii) A fifty percent (50%) copayment shall be charged for any covered service
contained
in
paragraphs (1)(ii), (1)(iii), (1)(v), and (1)(viii) of this subsection, except
that when a patient is
admitted
to the hospital from the emergency room, the copayment shall be waived; and
(iv) There shall be an annual out of pocket stop loss of two thousand five
hundred dollars
($2,500)
per individual and five thousand dollars ($5,000) per family. After the stop
loss amount
has
been reached, no additional copayments shall be charged until the beginning of
the next
contract
year.
(4) Cost containment mechanisms may be used for all services to include, but
not be
limited
to, the following:
(i) Primary care gatekeepers;
(ii) Preadmission certification;
(iii) Mandatory second opinion prior to elective surgery;
(iv) Preauthorization for specified services;
(v) Concurrent utilization review and management;
(vi) Discharge planning for hospital care;
(vii) Design and implementation of a structure of copayments as described in
this
chapter;
and
(viii) Less costly alternatives to inpatient care.
(d) The basic health benefit plan shall be developed by regulation by the
director in
consultation
with the department of human services, including, but not limited to, benefit
levels,
cost-sharing
levels, exclusions and limitations. The plan may include cost containment
features
such
as those specified in subdivisions (b)(4) and (c)(4) of this section. The plan
shall be made
available
as required by regulation.
27-50-13.
Waiver of certain state laws. -- No law requiring the coverage of a
health
care
service or benefit, or requiring the reimbursement, utilization, or inclusion
of a specific
category
of licensed health care practitioner, applies to a basic, an
economy, or standard health
benefit
plan delivered or issued for delivery to small employers in this state pursuant
to this
chapter.
SECTION
2. Section 27-18.6-5 of the General Laws in Chapter 27-18.6 entitled
"Large
Group
Health Insurance Coverage" is hereby amended to read as follows:
27-18.6-5.
Continuation of coverage -- Renewability. -- (a) Notwithstanding any of
the
provisions
of this title to the contrary, a health insurance carrier that offers health
insurance
coverage
in the large group market in this state in connection with a group health plan
shall renew
or
continue in force that coverage at the option of the plan sponsor of the plan.
(b) A health insurance carrier may nonrenew or discontinue health insurance
coverage
offered
in connection with a group health plan in the large group market based only on
one or
more
of the following:
(1) The plan sponsor has failed to pay premiums or contributions in accordance
with the
terms
of the health insurance coverage or the carrier has not received timely premium
payments;
(2) The plan sponsor has performed an act or practice that constitutes fraud or
made an
intentional
misrepresentation of material fact under the terms of the coverage;
(3) The plan sponsor has failed to comply with a material plan provision
relating to
employer
contribution or group participation rules, as permitted by the director
pursuant to rule or
regulation;
(4) The carrier is ceasing to offer coverage in accordance with subsections (c)
and (d) of
this
section;
(5) The director finds that the continuation of the coverage would:
(i) Not be in the best interests of the policyholders or certificate holders;
or
(ii) Impair the carrier's ability to meet its contractual obligations;
(6) In the case of a health insurance carrier that offers health insurance
coverage in the
large
group market through a network plan, there is no longer any enrollee in
connection with that
plan
who resides, lives, or works in the service area of the carrier (or in an area for
which the
carrier
is authorized to do business); and
(7) In the case of health insurance coverage that is made available in the
large group
market
only through one or more bona fide associations, the membership of an employer
in the
association
(on the basis of which the coverage is provided) ceases, but only if the
coverage is
terminated
under this section uniformly without regard to any health status-related factor
relating
to
any covered individual.
(c) In any case in which a carrier decides to discontinue offering a particular
type of
group
health insurance coverage offered in the large group market, and the
director finds that that
product
form is obsolete and is being replaced with comparable coverage, coverage of that type
may be
discontinued by the carrier only if:
(1) The carrier provides advance notice of its decision to the insurance
commissioner in
each
state in which it is licensed;
(2)(1) The carrier provides notice of the decision to all
affected plan sponsors,
participants,
and beneficiaries, and to the insurance commissioner in each state in which
an
affected
insured individual is known to reside, at least one hundred eighty (180) ninety
(90) days
prior
to the date of discontinuation of coverage. Notice to the insurance
commissioner shall be
provided
at least three (3) working days prior to the notice to the affected plan
sponsors,
participants,
and beneficiaries;
(3)(2) The carrier offers to each plan sponsor provided coverage
of this type in the large
group
market the option to purchase any other health insurance coverage currently
being offered
by
the carrier to a group health plan in the market; and
(4)(3) In exercising this option to discontinue coverage of this
type and in offering the
option
of coverage under subdivision (3) of this subsection, the carrier acts
uniformly without
regard
to the claims experience of those plan sponsors or any health status-related
factor relating
to
any participants or beneficiaries covered or new participants or beneficiaries
who may become
eligible
for coverage.
(d) In any case in which a carrier elects to discontinue offering and to
nonrenew all of its
health
insurance coverage in the large group market in this state, the carrier shall:
(1) Provide advance notice to the director, to the insurance commissioner in
each state in
which
the carrier is licensed, and to each plan sponsor (and participants and
beneficiaries covered
under
that coverage and to the insurance commissioner in each state in which an
affected insured
individual
is known to reside) of the decision at least one hundred eighty (180) days
prior to the
date
of the discontinuation of coverage. Notice to the insurance commissioner shall
be provided
at
least three (3) working days prior to the notice to the affected plan sponsors,
participants, and
beneficiaries;
and
(2) Discontinue all health insurance issued or delivered for issuance in this
state's large
group
market and not renew coverage under any health insurance coverage issued to a
large
employer.
(e) In the case of a discontinuation under subsection (d) of this section, the
carrier shall
be
prohibited from the issuance of any health insurance coverage in the large
group market in this
state
for a period of five (5) years from the date of notice to the director.
(f) At the time of coverage renewal, a health insurance carrier may modify the
health
insurance
coverage for a product offered to a group health plan in the large group
market.
(g) In applying this section in the case of health insurance coverage that is
made
available
by a carrier in the large group market to employers only through one or more
associations,
a reference to a "plan sponsor" is deemed, with respect to coverage
provided to an
employer
member of the association, to include a reference to that employer.
SECTION
3. This act shall take effect upon passage.
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LC02577/SUB
B
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