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.
AB416-ASA1,20,1512 (e) An insurer that offers health care coverage exclusively to a single category
13or limited categories of employers may, with prior approval of the commissioner, limit
14its compliance with subs. (1) and (2) to that single category or those limited categories
15of employers.
AB416-ASA1,20,1716 (f) The commissioner may exempt an insurer from the requirements of sub. (1)
17or (2) if the commissioner determines that any of the following applies:
AB416-ASA1,20,1918 1. It is inequitable to apply sub. (1) or (2) to the insurer due to its
19disproportionate share of groups or individuals with high claims experience.
AB416-ASA1,20,2120 2. It is in the public interest to exempt the insurer from the requirements under
21sub. (1) or (2) because the insurer is in financially hazardous condition.
AB416-ASA1,20,2322 (g) An insurer may limit its issuance of health benefit plans under subs. (1) and
23(2) to any of the following:
AB416-ASA1,20,2524 1. Group health benefit plans, and related individual conversion policies, to
25small employer groups.
AB416-ASA1,21,2
12. Group health benefit plans, and related individual conversion policies, to
2employer groups that are not small employer groups.
AB416-ASA1,21,33 3. Individual health benefit plans.
AB416-ASA1,21,6 4(4) Risk adjustment; rules. (a) The commissioner shall promulgate rules
5establishing a risk adjustment mechanism for insurers issuing health benefit plans
6under this section.
AB416-ASA1,21,77 (b) The rules promulgated under par. (a) shall do all of the following:
AB416-ASA1,21,98 1. Define "high-risk medical conditions", using diagnostic criteria and other
9criteria.
AB416-ASA1,21,1110 2. Place a dollar value on each high-risk medical condition based on the
11severity of the condition.
AB416-ASA1,21,1312 3. Determine the percentage of individuals with high-risk medical conditions
13covered by health benefit plans.
AB416-ASA1,21,1814 4. Provide for an annual assessment against each insurer insuring a lower
15percentage of individuals with high-risk medical conditions than the percentage
16established under subd. 3. Any moneys received from assessments imposed under
17the rules promulgated under this subdivision shall be credited to the appropriation
18under s. 20.145 (1) (h).
AB416-ASA1,21,2119 5. Provide for an annual reimbursement for each insurer insuring a higher
20percentage of individuals with high-risk medical conditions than the percentage
21established under subd. 3.
AB416-ASA1,22,2 22(5) Advisory committee. (a) The commissioner shall establish and appoint the
23members of an advisory committee to advise the commissioner on the contents of the
24rules to be promulgated under sub. (4) including definitions, assessments and
25reimbursements. The committee shall also review the rules developed under sub.

1(4) and submitted to the legislature under s. 227.19 (2) and make recommendations
2to the legislature on the rules.
AB416-ASA1,22,43 (b) The advisory committee established by the commissioner under par. (a)
4shall consist of the commissioner or his or her designee and all of the following:
AB416-ASA1,22,55 1. A representative of an insurer that issues individual health benefit plans.
AB416-ASA1,22,66 2. A representative of an insurer that issues group health benefit plans.
AB416-ASA1,22,77 3. A representative of a health maintenance organization.
AB416-ASA1,22,88 4. Two actuaries who are fellows of the American Academy of Actuaries.
AB416-ASA1,22,109 5. An underwriter employed by an insurer that issues individual health benefit
10plans.
AB416-ASA1,22,1211 6. An underwriter employed by an insurer that issues group health benefit
12plans.
AB416-ASA1,22,1313 7. A medical director.
AB416-ASA1, s. 27 14Section 27. 632.748 of the statutes is created to read:
AB416-ASA1,22,20 15632.748 Contract termination and renewability. (1) Midterm
16cancellation.
Notwithstanding s. 631.36 (2) to (4m), a health benefit plan may not
17be canceled by an insurer before the expiration of the agreed term, and shall be
18renewable to the policyholder and all insureds and dependents eligible under the
19terms of the health benefit plan at the expiration of the agreed term at the option of
20the policyholder, except for any of the following reasons:
AB416-ASA1,22,2121 (a) Failure to pay a premium when due.
AB416-ASA1,22,2322 (b) Fraud or misrepresentation by the policyholder or, with respect to coverage
23for an insured individual, fraud or misrepresentation by that insured individual.
AB416-ASA1,22,2424 (c) Substantial breaches of contractual duties, conditions or warranties.
AB416-ASA1,23,2
1(d) The number of individuals covered under the health benefit plan is less than
2the number required by the health benefit plan.
AB416-ASA1,23,43 (e) If the health benefit plan covers an employer group, the employer is no
4longer actively engaged in a business enterprise.
AB416-ASA1,23,6 5(2) Nonrenewal. Notwithstanding sub. (1), an insurer may elect not to renew
6a health benefit plan if the insurer complies with all of the following:
AB416-ASA1,23,87 (a) The insurer ceases to renew all other health benefit plans issued by the
8insurer.
AB416-ASA1,23,119 (b) The insurer provides notice to all affected policyholders and to the
10commissioner in each state in which an affected insured individual resides not later
11than one year before termination of coverage.
AB416-ASA1,23,1312 (c) The insurer does not issue a health benefit plan earlier than 5 years after
13the nonrenewal of the health benefit plans.
AB416-ASA1,23,1714 (d) The insurer does not transfer or otherwise provide coverage to a
15policyholder from the nonrenewed business unless the insurer offers to transfer or
16provide coverage to all affected policyholders from the nonrenewed business without
17regard to claims experience, health condition or duration of coverage.
AB416-ASA1,23,19 18(3) Insurer in liquidation. This section does not apply to a health benefit plan
19if the insurer that issued the health benefit plan is in liquidation.
AB416-ASA1, s. 28 20Section 28. 632.749 of the statutes is created to read:
AB416-ASA1,23,23 21632.749 Fair marketing standards. (1) Active marketing. Every insurer
22shall actively market health benefit plan coverage to employers and individuals in
23this state.
AB416-ASA1,24,3
1(2) Prohibitions related to case characteristics. (a) 1. Except as provided
2in subd. 2., an insurer or an intermediary may not directly or indirectly do any of the
3following:
AB416-ASA1,24,74 a. Discourage an employer or an individual from applying, or direct an
5employer or an individual not to apply, for coverage with the insurer because of the
6health condition, claims experience, industry, occupation or geographic area of the
7employer or individual.
AB416-ASA1,24,108 b. Encourage or direct an employer or an individual to seek coverage from
9another insurer because of the health condition, claims experience, industry,
10occupation or geographic area of the employer or individual.
AB416-ASA1,24,1311 2. Subdivision 1. does not prohibit an insurer or an intermediary from
12providing an employer or an individual with information about an established
13geographic service area or a restricted network provision of the insurer.
AB416-ASA1,24,1914 (b) 1. Except as provided in subd. 2., an insurer may not directly or indirectly
15enter into any contract, agreement or arrangement with an intermediary that
16provides for or results in compensation to the intermediary for the sale of a health
17benefit plan that varies according to the health condition, claims experience,
18industry, occupation or geographic area of an employer, any of the employer's covered
19employes, an insured individual or any dependents.
AB416-ASA1,24,2320 2. Payment of compensation on the basis of percentage of premium is not a
21violation of subd. 1. if the percentage does not vary based on the health condition,
22claims experience, industry, occupation or geographic area of an employer, any of the
23employer's covered employes, an insured individual or any dependents.
AB416-ASA1,25,324 (c) An insurer may not terminate, fail to renew or limit its contract or
25agreement of representation with an intermediary for any reason related to the

1health condition, claims experience, industry, occupation or geographic area of the
2employers, covered employes, insured individuals or dependents placed by the
3intermediary with the insurer.
AB416-ASA1,25,7 4(3) Prohibition related to excluding employe. An insurer or an intermediary
5may not induce or otherwise encourage an employer to separate or otherwise exclude
6an employe from health coverage or benefits provided in connection with the
7employe's employment.
AB416-ASA1,25,10 8(4) Written denial required. Denial by an insurer of an application for
9coverage from an employer shall be in writing and shall state the reason or reasons
10for the denial.
AB416-ASA1,25,15 11(5) Third-party administrators. A 3rd-party administrator that enters into
12a contract, agreement or other arrangement with an insurer to provide
13administrative, marketing or other services related to the offering of health benefit
14plans to employers or individuals in this state is subject to this section as if it were
15an insurer.
AB416-ASA1,25,19 16(6) Insurer ceasing to issue. (a) An insurer that has in force one or more health
17benefit plans that are included in a category under s. 632.747 (3) (g) 1. to 3. shall
18actively market and issue health benefit plans in that category, as provided in s.
19632.747, unless the insurer complies with all of the following:
AB416-ASA1,25,2120 1. Files notice with the commissioner that the insurer is ceasing to issue health
21benefit plans in that category.
AB416-ASA1,25,2222 2. Ceases to issue health benefit plans in that category for not less than 5 years.
AB416-ASA1,25,2523 3. Does not commence marketing or issuing health benefit plans in that
24category until the insurer files notice with the commissioner that the insurer intends
25to market and issue such health benefit plans.
AB416-ASA1,26,3
1(b) An insurer may not cease to actively market or issue health benefit plans
2in all categories under s. 632.747 (3) (g) 1. to 3. unless the insurer complies with s.
3632.748 (2).
AB416-ASA1,26,6 4(7) Additional standards by rule. The commissioner may by rule establish
5additional standards to provide for the fair marketing and broad availability of
6health benefit plans to employers and individuals in this state.
AB416-ASA1, s. 29 7Section 29. 632.76 (2) (a) of the statutes is amended to read:
AB416-ASA1,26,138 632.76 (2) (a) No claim for loss incurred or disability commencing after 2 years
9from the date of issue of the policy may be reduced or denied on the ground that a
10disease or physical condition existed prior to the effective date of coverage, unless the
11condition was excluded from coverage by name or specific description by a provision
12effective on the date of loss. This paragraph does not apply to a health benefit plan,
13as defined in s. 632.745 (1) (d), which is subject to s. 632.745.
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