AB416-ASA1,8,723 631.01 (4) Group policies and annuities for eleemosynary institutions. This
24chapter, ch. 632 and the health insurance mandates under ch. 632 that apply to the
25plan under subch. II of ch. 635 do not apply to group policies or annuities provided

1on a basis as uniform nationally as state statutes permit to educational, scientific
2research, religious or charitable institutions organized without profit to any person,
3for the benefit of employes of such institutions. The commissioner may by order
4subject such contracts issued by a particular insurer to this chapter, ch. 632 or the
5health insurance mandates under ch. 632 that apply to the plan under subch. II of
6ch. 635 or any portion of those provisions upon a finding, after a hearing, that the
7interests of Wisconsin insureds or creditors or the public of this state so require.
AB416-ASA1, s. 21 8Section 21. 632.70 of the statutes is amended to read:
AB416-ASA1,8,12 9632.70 Exemption for plan under ch. 635. The health insurance mandates,
10as defined in s. 601.423 (1), that are provided under this subchapter apply to the
11small employer health insurance plan under subch. II of ch. 635 only to the extent
12determined by the small employer insurance board under s. 635.23 (1) (b).
AB416-ASA1, s. 22 13Section 22. 632.727 of the statutes is created to read:
AB416-ASA1,8,15 14632.727 Electronic claims capability. (1) Definition. In this section,
15"health care provider" has the meaning given in s. 146.81 (1) (a) to (m).
AB416-ASA1,8,19 16(2) Insurers. Beginning on January 1, 1996, every insurer that offers disability
17insurance must have and use the capability to accept all claims electronically and to
18allow electronic access to information on eligibility, claim status and remittance
19advice.
AB416-ASA1,8,22 20(3) Health care providers. (a) Beginning on January 1, 1996, every health
21care provider that has annual gross revenues of more than $1,000,000 must have and
22use the capability to electronically transmit disability insurance claims information.
AB416-ASA1,8,2523 (b) Beginning on January 1, 1998, every health care provider not specified in
24par. (a) must have and use the capability to electronically transmit disability
25insurance claims information.
AB416-ASA1, s. 23
1Section 23. 632.745 of the statutes is created to read:
AB416-ASA1,9,3 2632.745 Coverage requirements for health benefit plans. (1) Health
3insurance market reform; definitions.
In ss. 632.745 to 632.749:
AB416-ASA1,9,104 (a) "Eligible employe" means an employe who works on a permanent basis and
5has a normal work week of 30 or more hours. The term includes a sole proprietor,
6a business owner, including the owner of a farm business, a partner of a partnership,
7a member of a limited liability company and an independent contractor if the sole
8proprietor, business owner, partner, member or independent contractor is included
9as an employe under a health benefit plan of an employer, but the term does not
10include an employe who works on a temporary or substitute basis.
AB416-ASA1,9,1111 (b) "Employer" means any of the following:
AB416-ASA1,9,1412 1. An individual, firm, corporation, partnership, limited liability company or
13association that is actively engaged in a business enterprise in this state, including
14a farm business.
AB416-ASA1,9,1515 2. A municipality, as defined in s. 16.70 (8).
AB416-ASA1,9,1716 (c) "Established geographic service area" means a geographic area within
17which an insurer provides coverage and that has been approved by the commissioner.
AB416-ASA1,9,2418 (d) "Health benefit plan" means any hospital or medical policy or certificate,
19and includes a conversion health insurance policy. "Health benefit plan" does not
20include accident-only, credit, dental, vision, medicare supplement, medicare
21replacement, long-term care, or disability income insurance, coverage issued as a
22supplement to liability insurance, worker's compensation or similar insurance,
23automobile medical payment insurance, specified disease policies, hospital
24indemnity policies, as defined in s. 632.895 (1) (c), policies or certificates issued under

1the health insurance risk-sharing plan or an alternative plan under subch. II of ch.
2619 or other insurance exempted by rule of the commissioner.
AB416-ASA1,10,113 (e) "Insurer" means an insurer that is authorized to do business in this state,
4in one or more lines of insurance that includes health insurance, and that offers
5group health benefit plans covering eligible employes of one or more employers in
6this state, or that sells individual health benefit plans to individuals who are
7residents of this state. The term includes a health maintenance organization, as
8defined in s. 609.01 (2), a preferred provider plan, as defined in s. 609.01 (4), and an
9insurer operating as a cooperative association organized under ss. 185.981 to
10185.985, but does not include a limited service health organization, as defined in s.
11609.01 (3).
AB416-ASA1,10,1312 (em) "Qualifying coverage" means benefits or coverage provided under any of
13the following:
AB416-ASA1,10,1414 1. Medicare or medicaid.
AB416-ASA1,10,1715 2. An employer-based health insurance or health benefit arrangement that
16provides benefits similar to or exceeding benefits provided under a small employer
17health insurance plan under ch. 635.
AB416-ASA1,10,2018 3. An individual health insurance policy that provides benefits similar to or
19exceeding benefits provided under a small employer health insurance plan under ch.
20635, if the policy has been in effect for at least one year.
AB416-ASA1,10,2221 4. The health insurance risk-sharing plan or an alternative plan under subch.
22II of ch. 619.
AB416-ASA1,11,523 (f) "Resident" means a person who has maintained his or her place of
24permanent abode in this state for a period of 180 days immediately preceding his or
25her application for coverage under a health benefit plan. Domiciliary intent is

1required to establish that a person is maintaining his or her place of permanent
2abode in this state. Mere ownership of property is not sufficient to establish
3domiciliary intent. Evidence of domiciliary intent includes, without limitation, the
4location where the person votes, pays personal income taxes or obtains a driver's
5license.
AB416-ASA1,11,96 (g) "Restricted network provision" means a provision of a health benefit plan
7that conditions the payment of benefits, in whole or in part, on obtaining services or
8articles from health care providers that have contracted with the insurer to provide
9health care services or articles to covered individuals.
AB416-ASA1,11,1310 (h) "Small employer" means an employer that employs in this state not fewer
11than 2 nor more than 25 eligible employes. In determining the number of eligible
12employes, employers that are affiliated, or that are eligible to file a combined tax
13return for purposes of state taxation, shall be considered one employer.
AB416-ASA1,11,18 14(2) Underwriting, portability and preexisting conditions. (a) A group or
15individual health benefit plan may not deny, exclude or limit benefits for a covered
16individual for losses incurred more than 12 months after the effective date of the
17individual's coverage due to a preexisting condition. A health benefit plan may not
18define a preexisting condition more restrictively than any of the following:
AB416-ASA1,11,2319 1. a. With respect to a group health benefit plan, a condition that would have
20caused an ordinarily prudent person to seek medical advice, diagnosis, care or
21treatment during the 6 months immediately preceding the effective date of coverage
22and for which the individual did not seek medical advice, diagnosis, care or
23treatment.
AB416-ASA1,12,324 b. With respect to an individual health benefit plan, a condition that would
25have caused an ordinarily prudent person to seek medical advice, diagnosis, care or

1treatment during the 12 months immediately preceding the effective date of
2coverage and for which the individual did not seek medical advice, diagnosis, care
3or treatment.
AB416-ASA1,12,64 2. a. With respect to a group health benefit plan, a condition for which medical
5advice, diagnosis, care or treatment was recommended or received during the 6
6months immediately preceding the effective date of coverage.
AB416-ASA1,12,97 b. With respect to an individual health benefit plan, a condition for which
8medical advice, diagnosis, care or treatment was recommended or received during
9the 12 months immediately preceding the effective date of coverage.
AB416-ASA1,12,1510 3. With respect to a group or individual health benefit plan, a pregnancy
11existing on the effective date of coverage, except that coverage may not be excluded
12for any covered prenatal care expenses related to such a pregnancy or for other
13covered expenses related to such a pregnancy that exceed the deductible amount
14prescribed by the commissioner under par. (ac). Coverage not excluded may be
15subject to any deductibles or copayments that apply generally under the policy.
AB416-ASA1,12,2216 (ac) The commissioner shall by rule prescribe a separate deductible for covered
17expenses related to a pregnancy existing on the effective date of coverage, excluding
18covered prenatal care expenses. The rule shall provide for a sliding scale deductible
19that does not exceed $5,000 and that is determined on the basis of the stage of the
20pregnancy on the effective date of the coverage, so that the deductible is lower if
21coverage is obtained early in the pregnancy and higher if coverage is obtained late
22in the pregnancy.
AB416-ASA1,13,323 (am) Notwithstanding par. (a), a group or individual health benefit plan may
24not deny, exclude or limit benefits for a covered individual who is a resident or for a
25covered employe who has satisfied any waiting period imposed by his or her employer

1or for any of the covered dependents of the individual or employe for losses due to a
2preexisting condition if the individual, employe or employe's employer applies for
3coverage:
AB416-ASA1,13,44 1. During the 45-day period beginning on October 1, 1996.
AB416-ASA1,13,55 2. Within 30 days after the later of the following:
AB416-ASA1,13,66 a. The date on which the individual or employe becomes 18 years of age.
AB416-ASA1,13,87 b. The date on which the individual's or employe's coverage as a dependent
8under a health benefit plan ceases.
AB416-ASA1,13,109 3. During a 30-day enrollment period specified by the commissioner by rule
10under par. (ar).
AB416-ASA1,13,1411 (ar) The commissioner shall by rule specify a biennial 30-day enrollment
12period during which an individual or employe may obtain coverage under a group or
13individual health benefit plan without any preexisting condition exclusion or
14limitation.
AB416-ASA1,13,1615 (aw) An individual or employe may obtain coverage without a preexisting
16condition exclusion or limitation under par. (am) only once every 10 years.
AB416-ASA1,13,2217 (b) 1. A group or individual health benefit plan shall waive any period
18applicable to a preexisting condition exclusion or limitation period with respect to
19particular services for the period that an individual was previously covered by
20qualifying coverage that provided benefits with respect to such services, if the
21qualifying coverage terminated not more than 60 days before the effective date of the
22new coverage.
AB416-ASA1,14,323 2. Subdivision 1. does not prohibit the application of a waiting period to all new
24enrollees under a health benefit plan issued to an employer; however, a waiting
25period may not be counted when determining whether the qualifying coverage

1terminated not more than 60 days before the effective date of the new coverage. For
2the purpose of subd. 1., the new coverage shall be considered effective as of the date
3that it would be effective but for the waiting period.
AB416-ASA1,14,54 (c) This subsection does not apply to a conversion health insurance policy,
5which is subject to s. 632.897 (4) (a).
AB416-ASA1,14,11 6(3) Minimum participation of employes. (a) Except as provided in par. (d),
7requirements used by an insurer in determining whether to provide coverage to an
8employer, including requirements for minimum participation of eligible employes
9and minimum employer contributions, shall be applied uniformly among all
10employers that apply for or receive coverage from the insurer and that have the same
11number of eligible employes.
AB416-ASA1,14,1412 (b) An insurer may vary its minimum participation requirements and
13minimum employer contribution requirements only by the size of the employer
14group.
AB416-ASA1,14,1815 (c) 1. Except as provided in subd. 2., in applying minimum participation
16requirements with respect to an employer, an insurer may not count eligible
17employes or their dependents who have other coverage that is qualifying coverage
18in determining whether the applicable percentage of participation is met.
AB416-ASA1,14,2319 2. If an employer has 10 or fewer eligible employes, an insurer may count
20eligible employes or their dependents who have coverage under another health
21benefit plan sponsored by that employer in applying minimum participation
22requirements to determine whether the applicable percentage of participation is
23met.
AB416-ASA1,15,3
1(d) An insurer may not increase a requirement for minimum employe
2participation or a requirement for minimum employer contribution that applies to
3an employer after the employer has been accepted for coverage.
AB416-ASA1, s. 24 4Section 24. 632.746 of the statutes is created to read:
AB416-ASA1,15,5 5632.746 Community rating. (1) Definitions. In this section:
AB416-ASA1,15,126 (a) "Community rate" means a uniform rate charged by an insurer that is
7determined in such a manner that all insured individuals with the same level of
8coverage and plan design in the same community, as that term is defined by the
9commissioner by rule under sub. (6), pay the same rate for that coverage without
10regard to claims experience, health condition, duration of coverage or such
11demographic, actuarially based characteristics as age, gender, occupation or
12geographic area within the insured individual's community.
AB416-ASA1,15,1513 (b) "Federal metropolitan statistical area" means an area defined by the federal
14office of management and budget under 44 USC 3504 (d) (3) as a metropolitan
15statistical area or a primary metropolitan statistical area.
AB416-ASA1,15,2216 (c) "Trade association" means an association or other organization of
17businesses or of a profession or trade that is solely organized and controlled by, and
18solely operated for the benefit of, the members of the association or other
19organization and that sponsors a health benefit plan that covers at least 500
20residents who are either members of the association or other organization or
21employes of at least 3 different employers that are members of the association or
22organization.
AB416-ASA1,15,25 23(2) Mandatory use. (a) Except as provided in par. (b) and sub. (3), an insurer
24shall charge a community rate for coverage under a health benefit plan that is issued
25or renewed on or after October 1, 1996.
AB416-ASA1,16,3
1(b) Subject to rate bands prescribed by the commissioner by rule, an insurer
2may modify the community rate under par. (a) by taking into account any of the
3following factors:
AB416-ASA1,16,44 1. The insured's age.
AB416-ASA1,16,55 2. Whether the insured's coverage is single or a type of family coverage.
AB416-ASA1,16,66 3. The insured's gender.
AB416-ASA1,16,97 (bm) For each of the following factors, the rate bands prescribed by the
8commissioner by rule shall restrict the ratio of the highest variance to the lowest
9variance to a ratio that is not more than the ratio shown after each factor:
AB416-ASA1,16,1010 (a) For age, a ratio of 2.5.
AB416-ASA1,16,1111 (b) For gender, a ratio of 1.2.
AB416-ASA1,16,1412 (c) If an insurer raises a community rate for a health benefit plan, the insurer
13shall raise all community rates for that health benefit plan and for all other health
14benefit plans offered by the insurer by the same percentage.
AB416-ASA1,16,20 15(3) Trade association rate reductions. (a) For a health benefit plan issued
16to a trade association, the commissioner may allow an insurer to reduce the
17community rate required under sub. (2) (a) and modifiable under sub. (2) (b) if the
18commissioner determines that a rate reduction is justified because of a reduction in
19the cost of coverage due to functions performed by the trade association, such as
20administrative or managed care functions.
AB416-ASA1,17,221 (b) A trade association may submit an application for a rate reduction under
22par. (a) for a health benefit plan that it sponsors. The commissioner shall review the
23application and approve or disapprove a complete application within 30 days after
24it is received. The commissioner shall allow a rate reduction of up to 20% under par.

1(a) if the trade association establishes that it performs one or more material
2functions with respect to the health benefit plan that it sponsors.
AB416-ASA1,17,73 (c) The commissioner may by rule or order exclude any trade association or
4category or class of trade associations from the application of pars. (a) and (b) if the
5commissioner determines that the trade association or category or class of trade
6associations is organized for a purpose that is inconsistent with the purposes of this
7chapter.
AB416-ASA1,17,11 8(4) Rate service organizations. If an insurer uses rates for health benefit plans
9that are prepared by a rate service organization designated under s. 625.15, rates
10filed by the rate service organization on behalf of the insurer shall comply with this
11section.
AB416-ASA1,17,15 12(5) Certification of compliance. An insurer that issues or renews a health
13benefit plan on or after October 1, 1996, shall file with the commissioner on or before
14May 1 annually an actuarial opinion by a member of the American Academy of
15Actuaries certifying all of the following:
AB416-ASA1,17,1616 (a) That the insurer is in compliance with the rate provisions of this section.
AB416-ASA1,17,1817 (b) That the insurer's rating methods are based on generally accepted and
18sound actuarial principles, policies and procedures.
AB416-ASA1,17,2119 (c) That the opinion is based on the actuary's examination of the insurer's
20records and a review of the insurer's actuarial assumptions and statistical methods
21used in setting rates and procedures used in implementing rating plans.
AB416-ASA1,18,2 22(6) Commissioner defines community. The commissioner shall by rule define
23"community" for purposes of the definition of "community rate" under sub. (1) (a).
24The commissioner may not define "community" as a geographical area that includes

1less than an entire federal metropolitan statistical area or an entire county,
2whichever is larger.
AB416-ASA1, s. 25 3Section 25. 632.7465 of the statutes is created to read:
AB416-ASA1,18,10 4632.7465 Transition by rule. Notwithstanding s. 632.746 (1) and (2), the
5commissioner may promulgate rules that permit an insurer to vary from the
6community rate required under s. 632.746 (2) (a) and modified under s. 632.746 (2)
7(b) within restrictions provided in the rules. The restrictions provided in the rules
8shall be reasonably designed to provide for an orderly transition to the community
9rates required under s. 632.746 (2) (a) and modified under s. 632.746 (2) (b) by no
10later than October 1, 1997.
AB416-ASA1, s. 26 11Section 26. 632.747 of the statutes is created to read:
AB416-ASA1,18,17 12632.747 Guaranteed issue. (1) Group health benefit plans. (a) Except as
13provided in sub. (3), an insurer shall provide coverage under a group health benefit
14plan to an employer, to all of the employer's eligible employes and their dependents,
15and to any of the employer's other employes for whom the employer desires to provide
16coverage and their dependents, regardless of health condition or claims experience,
17if all of the following apply:
AB416-ASA1,18,1818 1. The insurer has in force a health benefit plan.
AB416-ASA1,18,2019 2. The employer group meets the insurer's minimum participation
20requirements.
AB416-ASA1,18,2221 3. The employer agrees to pay the premium required for coverage under the
22group health benefit plan.
AB416-ASA1,18,2523 4. The employer agrees to comply with all other provisions of the group health
24benefit plan that apply generally to a policyholder or an insured without regard to
25health condition or claims experience.
AB416-ASA1,19,5
1(b) An insurer shall provide coverage under a group health benefit plan to an
2eligible employe, or to any other employe for whom the employer desires to provide
3coverage, who becomes eligible for coverage according to the employer's
4requirements after the commencement of the employer's coverage, and to the eligible
5or other employe's dependents, regardless of health condition or claims experience.
AB416-ASA1,19,10 6(2) Individual health benefit plans. Except as provided in sub. (3) and
7notwithstanding s. 632.897 (4) (d), an insurer shall provide coverage under an
8individual health benefit plan to an individual who is a resident and to the
9individual's dependents, regardless of health condition or claims experience, if all of
10the following apply:
AB416-ASA1,19,1111 (a) The insurer has in force a health benefit plan.
AB416-ASA1,19,1312 (b) The individual agrees to pay the premium required for coverage under the
13individual health benefit plan.
AB416-ASA1,19,1614 (c) The individual agrees to comply with all other provisions of the individual
15health benefit plan that apply generally to a policyholder or an insured without
16regard to health condition or claims experience.
AB416-ASA1,19,21 17(3) Exceptions to guaranteed issue. (a) An insurer that is otherwise required
18to provide coverage under sub. (1) may refuse to issue a group health benefit plan to
19an employer if all of the individuals in the employer group that are to be covered
20under the group health benefit plan may be covered under an individual health
21benefit plan providing single or family coverage.
AB416-ASA1,19,2522 (b) An insurer that is otherwise required to provide coverage under sub. (2) may
23refuse to provide coverage to an individual if the individual was excluded from
24coverage under an employer's health benefit plan or self-funded health care plan for
25reasons related to the individual's health condition.
AB416-ASA1,20,4
1(c) An insurer that is otherwise required to provide coverage under sub. (2) may
2refuse to provide coverage to an individual if the individual waived coverage under
3an employer's health benefit plan or self-funded health care plan for reasons related
4to the individual's health condition.
AB416-ASA1,20,65 (d) 1. In this paragraph, "municipal" means county, city, village, town or school
6district.
AB416-ASA1,20,117 2. Subsections (1) and (2) do not require an insurer to issue coverage that the
8insurer is not authorized to issue under its bylaws, charter or certificate of
9incorporation or authority if the insurer is authorized under its bylaws, charter or
10certificate of incorporation or authority to issue coverage only to state or municipal
11employes and former employes and their dependents.
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