Chapter 283

2006 -- H 7926 SUBSTITUTE A

Enacted 07/03/06

A N A C T

RELATING TO INSURANCE - THE RHODE ISLAND HEALTH CARE AFFORDABILITY ACT OF 2006 - PART IV - HIGH RISK POOL

Introduced By: Representatives Costantino, Slater, and Naughton

Date Introduced: March 22, 2006

It is enacted by the General Assembly as follows:

     SECTION 1. Section 27-18.5-3 of the General Laws in Chapter 27-18.5 entitled

"Individual Health Insurance Coverage" is hereby amended to read as follows:

27-18.5-3. Guaranteed availability to certain individuals. -- (a) Notwithstanding any

of the provisions of this title to the contrary, all health insurance carriers that offer health

insurance coverage in the individual market in this state shall provide for the guaranteed

availability of coverage to an eligible individual or an individual who has had health insurance

coverage, including coverage in the individual market, or coverage under a group health plan or

coverage under 5 U.S.C. section 8901 et seq. and had that coverage continuously for at least

twelve (12) consecutive months and who applies for coverage in the individual market no later

than sixty-three (63) days following termination of the coverage, desiring to enroll in individual

health insurance coverage, and who is not eligible for coverage under a group health plan, part A

or part B or title XVIII of the Social Security Act, 42 U.S.C. section 1395c et seq. or 42 U.S.C.

section 1395j et seq., or any state plan under title XIX of the Social Security Act, 42 U.S.C.

section 1396 et seq. (or any successor program) and does not have other health insurance

coverage (provided, that eligibility for the other coverage shall not disqualify an individual with

twelve (12) months of consecutive coverage if that individual applies for coverage in the

individual market for the primary purpose of obtaining coverage for a specific pre-existing

condition, and the other available coverage excludes coverage for that pre-existing condition) and

may not:

      (1) Decline to offer the coverage to, or deny enrollment of, the individual; or

      (2) Impose any preexisting condition exclusion with respect to the coverage.

      (b) (1) All health insurance carriers that offer health insurance coverage in the individual

market in this state shall offer all policy forms of health insurance coverage. Provided, the carrier

may elect to limit the coverage offered so long as it offers at least two (2) different policy forms

of health insurance coverage (policy forms which have different cost-sharing arrangements or

different riders shall be considered to be different policy forms) both of which:

      (i) Are designed for, made generally available to, and actively market to, and enroll both

eligible and other individuals by the carrier; and

      (ii) Meet the requirements of subparagraph (A) or (B) of this paragraph as elected by the

carrier:

      (A) If the carrier offers the policy forms with the largest, and next to the largest,

premium volume of all the policy forms offered by the carrier in this state; or

      (B) If the carrier offers a choice of two (2) policy forms with representative coverage,

consisting of a lower-level coverage policy form and a higher-level coverage policy form each of

which includes benefits substantially similar to other individual health insurance coverage offered

by the carrier in this state and each of which is covered under a method that provides for risk

adjustment, risk spreading, or financial subsidization.

      (2) For the purposes of this subsection, "lower-level coverage" means a policy form for

which the actuarial value of the benefits under the coverage is at least eighty-five percent (85%)

but not greater than one hundred percent (100%) of the policy form weighted average.

      (3) For the purposes of this subsection, "higher-level coverage" means a policy form for

which the actuarial value of the benefits under the coverage is at least fifteen percent (15%)

greater than the actuarial value of lower-level coverage offered by the carrier in this state, and the

actuarial value of the benefits under the coverage is at least one hundred percent (100%) but not

greater than one hundred twenty percent (120%) of the policy form weighted average.

      (4) For the purposes of this subsection, "policy form weighted average" means the

average actuarial value of the benefits provided by all the health insurance coverage issued (as

elected by the carrier) either by that carrier or, if the data are available, by all carriers in this state

in the individual market during the previous year (not including coverage issued under this

subsection), weighted by enrollment for the different coverage. The actuarial value of benefits

shall be calculated based on a standardized population and a set of standardized utilization and

cost factors.

      (5) The carrier elections under this subsection shall apply uniformly to all eligible

individuals in this state for that carrier. The election shall be effective for policies offered during

a period of not shorter than two (2) years.

      (c) (1) A carrier may deny health insurance coverage in the individual market to an

eligible individual if the carrier has demonstrated to the director that:

      (i) It does not have the financial reserves necessary to underwrite additional coverage;

and

      (ii) It is applying this subsection uniformly to all individuals in the individual market in

this state consistent with applicable state law and without regard to any health status-related

factor of the individuals and without regard to whether the individuals are eligible individuals.

      (2) A carrier upon denying individual health insurance coverage in this state in

accordance with this subsection may not offer that coverage in the individual market in this state

for a period of one hundred eighty (180) days after the date the coverage is denied or until the

carrier has demonstrated to the director that the carrier has sufficient financial reserves to

underwrite additional coverage, whichever is later.

      (d) Nothing in this section shall be construed to require that a carrier offering health

insurance coverage only in connection with group health plans or through one or more bona fide

associations, or both, offer health insurance coverage in the individual market.

      (e) A carrier offering health insurance coverage in connection with group health plans

under this title shall not be deemed to be a health insurance carrier offering individual health

insurance coverage solely because the carrier offers a conversion policy.

      (f) Nothing Except for any high risk pool rating rules to be established by the Office of

the Health Insurance Commissioner (OHIC) as described in this section, nothing in this section

shall be construed to create additional restrictions on the amount of premium rates that a carrier

may charge an individual for health insurance coverage provided in the individual market; or to

prevent a health insurance carrier offering health insurance coverage in the individual market

from establishing premium rates or modifying applicable copayments or deductibles in return for

adherence to programs of health promotion and disease prevention.

(g) OHIC may pursue federal funding in support of the development of a high risk pool

for the individual market, as defined in section 27-18.5-2, contingent upon a thorough assessment

of any financial obligation of the state related to the receipt of said federal funding being

presented to, and approved by, the general assembly by passage of concurrent general assembly

resolution. The components of the high risk pool program, including, but not limited to, rating

rules, eligibility requirements and administrative processes, shall be designed in accordance with

Section 2745 of the Public Health Service Act (42 U.S.C. 300gg-45) also known as the State

High Risk Pool Funding Extension Act of 2006 and defined in regulations promulgated by the

office of the health insurance commissioner on or before October 1, 2007.

(g)(h)(1) In the case of a health insurance carrier that offers health insurance coverage in

the individual market through a network plan, the carrier may limit the individuals who may be

enrolled under that coverage to those who live, reside, or work within the service areas for the

network plan; and within the service areas of the plan, deny coverage to individuals if the carrier

has demonstrated to the director that:

      (i) It will not have the capacity to deliver services adequately to additional individual

enrollees because of its obligations to existing group contract holders and enrollees and individual

enrollees; and

      (ii) It is applying this subsection uniformly to individuals without regard to any health

status-related factor of the individuals and without regard to whether the individuals are eligible

individuals.

      (2) Upon denying health insurance coverage in any service area in accordance with the

terms of this subsection, a carrier may not offer coverage in the individual market within the

service area for a period of one hundred eighty (180) days after the coverage is denied.

     SECTION 2. This act shall take effect upon passage.

=======

LC02734/SUB A

=======