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.
AB416-ASA1, s. 30 14Section 30. 632.83 of the statutes is created to read:
AB416-ASA1,26,19 15632.83 Regulation of certain related policies. The commissioner may by
16rule prescribe standards for specified disease policies, hospital indemnity policies,
17as defined in s. 632.895 (1) (c), or limited benefit health policies, including prohibiting
18certain specified types of products, prescribing minimum coverage and establishing
19marketing or suitability standards.
AB416-ASA1, s. 31 20Section 31. 632.896 (4) of the statutes is amended to read:
AB416-ASA1,27,221 632.896 (4) Preexisting conditions. Notwithstanding s. ss. 632.745 (2) and
22632.76 (2) (a), a disability insurance policy that is subject to sub. (2) and that is in
23effect when a court makes a final order granting adoption or when the child is placed
24for adoption may not exclude or limit coverage of a disease or physical condition of

1the child on the ground that the disease or physical condition existed before coverage
2is required to begin under sub. (3).
AB416-ASA1, s. 32 3Section 32. 632.897 (2) (d) of the statutes is amended to read:
AB416-ASA1,27,204 632.897 (2) (d) If the employer is notified to terminate the coverage for any of
5the reasons provided under par. (b), the employer shall provide the terminated
6insured written notification of the right to continue group coverage or convert to
7individual coverage and the payment amounts required for either continued or
8converted coverage including the manner, place and time in which the payments
9shall be made. This notice shall be given not more than 5 days after the employer
10receives notice to terminate coverage. The payment amount for continued group
11coverage may not exceed the group rate in effect for a group member, including an
12employer's contribution, if any, for a group policy as defined in sub. (1) (c) 1. or 1m.
13or the equivalent value of the monthly contribution of a group member to a group
14policy as defined in sub. (1) (c) 2. or the equivalent value of the monthly premium for
15franchise insurance as defined in sub. (1) (c) 3. The premium for converted coverage
16shall be determined in accordance with the insurer's table of premium rates
17applicable to the age and class of risks of each person to be covered under that policy
18and to the type and amount of coverage provided, subject to s. 632.746 and any rules
19promulgated under s. 632.7465
. The notice may be sent to the terminated insured's
20home address as shown on the records of the employer.
AB416-ASA1, s. 33 21Section 33. 632.897 (9) (c) of the statutes is amended to read:
AB416-ASA1,28,922 632.897 (9) (c) When the insurer is notified that the coverage of a spouse may
23be terminated because of a divorce or annulment, the insurer shall provide the
24former spouse written notification of the right to obtain individual coverage under
25sub. (4), the premium amounts required and the manner, place and time in which

1premiums may be paid. This notice shall be given not less than 30 days before the
2former spouse's coverage would otherwise terminate. The premium shall be
3determined in accordance with the insurer's table of premium rates applicable to the
4age and class of risk of
every person to be covered and to the type and amount of
5coverage provided, subject to s. 632.746 and any rules promulgated under s.
6632.7465
. If the former spouse tenders the first monthly premium to the insurer
7within 30 days after the notice provided by this paragraph, sub. (4) shall apply and
8the former spouse shall receive individual coverage commencing immediately upon
9termination of his or her coverage under the insured's policy.
AB416-ASA1, s. 34 10Section 34. Chapter 635 (title) of the statutes is amended to read:
AB416-ASA1,28,1111 CHAPTER 635
AB416-ASA1,28,1312 SMALL EMPLOYER
13 HEALTH INSURANCE PLAN
AB416-ASA1, s. 35 14Section 35. Subchapter I of chapter 635 [precedes 635.01] of the statutes is
15repealed.
AB416-ASA1, s. 36 16Section 36. 635.20 (intro.) of the statutes is amended to read:
AB416-ASA1,28,17 17635.20 Definitions. (intro.) In this subchapter chapter:
AB416-ASA1, s. 37 18Section 37. Subchapter II (title) of chapter 635 [precedes 635.20] of the
19statutes is repealed.
AB416-ASA1, s. 38 20Section 38. 635.20 (1c) of the statutes is repealed and recreated to read:
AB416-ASA1,28,2421 635.20 (1c) "Dependent" means a spouse, an unmarried child under the age of
2219 years, an unmarried child who is a full-time student under the age of 21 years and
23who is financially dependent upon the parent, or an unmarried child of any age who
24is medically certified as disabled and who is dependent upon the parent.
AB416-ASA1, s. 39 25Section 39. 635.20 (1m) of the statutes is repealed and recreated to read:
AB416-ASA1,29,8
1635.20 (1m) "Eligible employe" means an employe who works on a full-time
2basis and has a normal work week of 30 or more hours. "Eligible employe" includes
3a sole proprietor, a business owner, including the owner of a farm business, a partner
4of a partnership, a member of a limited liability company and an independent
5contractor if the sole proprietor, business owner, partner, member or independent
6contractor is included as an employe under a health benefit plan of a small employer,
7but "eligible employe" does not include an employe who works on a part-time,
8temporary or substitute basis.
AB416-ASA1, s. 40 9Section 40. 635.20 (10) of the statutes is amended to read:
AB416-ASA1,29,1210 635.20 (10) "Plan" means the health insurance plan for individuals employed
11by small employers that is created under s. 635.21 and that consists of a policy under
12this subchapter chapter containing the basic benefits.
AB416-ASA1, s. 41 13Section 41. 635.20 (13) of the statutes is repealed and recreated to read:
AB416-ASA1,29,2214 635.20 (13) "Small employer insurer" means an insurer that is authorized to do
15business in this state, in one or more lines of insurance that includes health
16insurance, and that offers group health benefit plans covering eligible employes of
17one or more small employers in this state, or that sells 3 or more individual health
18benefit plans to a small employer, covering eligible employes of the small employer.
19"Small employer insurer" includes a health maintenance organization, as defined in
20s. 609.01 (2), a preferred provider plan, as defined in s. 609.01 (4), and an insurer
21operating as a cooperative association organized under ss. 185.981 to 185.985, but
22does not include a limited service health organization, as defined in s. 609.01 (3).
AB416-ASA1, s. 42 23Section 42. 635.25 (1) (a) (intro.) of the statutes is amended to read:
AB416-ASA1,29,2524 635.25 (1) (a) (intro.) To be eligible to participate in the plan by purchasing a
25policy under this subchapter chapter containing the basic benefits, an employer:
AB416-ASA1, s. 43
1Section 43. 635.25 (1) (b) of the statutes is amended to read:
AB416-ASA1,30,52 635.25 (1) (b) Except as provided in ss. 645.43 and 646.35, an employer that
3purchases a policy under this subchapter chapter containing the basic benefits and
4that ceases to be eligible to participate in the plan during a policy period shall retain
5coverage under the plan to the end of the policy period.
AB416-ASA1, s. 44 6Section 44. 635.25 (1m) of the statutes is amended to read:
AB416-ASA1,30,97 635.25 (1m) Notwithstanding sub. (1), an employer is not eligible to participate
8in the plan if all of the individuals to be covered under the plan may be covered by
9a single one policy providing individual single or family coverage.
AB416-ASA1, s. 45 10Section 45. 635.254 (1) of the statutes is amended to read:
AB416-ASA1,30,1411 635.254 (1) An employer that participates in the plan shall pay a premium
12contribution of not less than 50% of the premium rate on behalf of an eligible employe
13with individual single coverage and not less than 40% of the premium rate on behalf
14of an eligible employe with family coverage.
AB416-ASA1, s. 46 15Section 46. 635.254 (3) of the statutes is amended to read:
AB416-ASA1,30,2016 635.254 (3) For an eligible employe who obtains coverage under the health
17insurance risk-sharing plan under s. 619.12 (2) (e) 2., an employer under sub. (1)
18shall pay a premium contribution to the health insurance risk-sharing plan that is
19equal to the amount that the employer would pay on behalf of the employe for
20coverage under the plan under this subchapter chapter.
AB416-ASA1, s. 47 21Section 47. 635.26 (1s) of the statutes is repealed.
AB416-ASA1, s. 48 22Section 48. 635.28 of the statutes is amended to read:
AB416-ASA1,31,2 23635.28 Liability of state and plan board. Neither the state nor the plan
24board is liable for any obligation arising under the plan. Plan board members are

1immune from civil liability for acts or omissions while performing their duties under
2this subchapter chapter.
AB416-ASA1, s. 49 3Section 49. 635.29 of the statutes is amended to read:
AB416-ASA1,31,6 4635.29 (title) Applicability of health insurance mandates. The health
5insurance mandates apply to the plan under this subchapter chapter only to the
6extent determined by the plan board under s. 635.23 (1) (b).
AB416-ASA1, s. 50 7Section 50. 635.31 of the statutes is amended to read:
AB416-ASA1,31,10 8635.31 Chapters 600 to 655 applicable. Except as otherwise provided in this
9subchapter chapter, the plan shall comply with and be administered in compliance
10with chs. 600 to 655.
AB416-ASA1, s. 51 11Section 51. 646.35 (5) of the statutes is amended to read:
AB416-ASA1,31,2012 646.35 (5) Rate increases. The board may increase any rates or premiums on
13policies during continuation of coverage under sub. (2) (b) or (3) (b) to the extent the
14policies permit the insurer to increase the rates or premiums and subject to s.
15632.746 and any rules promulgated under s. 632.7465
. If the board determines that
16the rates or premiums on policies which do not permit an increase or the rates or
17premiums as increased to the extent permitted by the policies are inadequate under
18s. 625.11 (3), the board may offer the policyholders the option of terminating the
19coverage or continuing the coverage at adequate rates or premiums as determined
20by the board.
AB416-ASA1, s. 52 21Section 52 . Nonstatutory provisions.
AB416-ASA1,31,25 22(1)  Rules on risk adjustment mechanism. The commissioner of insurance
23shall submit proposed rules required under section 632.747 (4) (a) of the statutes, as
24created by this act, to the legislative council staff for review under section 227.15 (1)
25of the statutes no later than April 1, 1996.
AB416-ASA1, s. 53
1Section 53. Initial applicability.
AB416-ASA1,32,10 2(1) Except as provided in subsection (2), the treatment of sections 15.735 (1),
3185.981 (4t), 185.983 (1) (intro.) and (1g), 600.01 (2) (b), 601.424, 625.03 (6), 625.12
4(2), 625.15 (1), 625.22 (1) and (4), 628.34 (3) (c), 628.36 (2) (b) 1., 3. and 5., 631.01 (4),
5632.70, 632.745, 632.746, 632.7465, 632.747, 632.748, 632.749, 632.76 (2) (a),
6632.896 (4), 632.897 (2) (d) and (9) (c), 635.20 (intro.), (1c), (1m), (10) and (13), 635.25
7(1) (a) (intro.) and (b), 635.26 (1s), 635.28, 635.29, 635.31 and 646.35 (5), chapter 635
8(title) and subchapter I and subchapter II (title) of chapter 635 of the statutes first
9applies to health benefit plans issued or renewed on the effective date of this
10subsection.
AB416-ASA1,32,20 11(2) The treatment of sections 15.735 (1), 185.981 (4t), 185.983 (1) (intro.) and
12(1g), 600.01 (2) (b), 601.424, 625.03 (6), 625.12 (2), 625.15 (1), 625.22 (1) and (4),
13628.34 (3) (c), 628.36 (2) (b) 1., 3. and 5., 631.01 (4), 632.70, 632.745, 632.746,
14632.7465, 632.747, 632.748, 632.749, 632.76 (2) (a), 632.896 (4), 632.897 (2) (d) and
15(9) (c), 635.20 (intro.), (1c), (1m), (10) and (13), 635.25 (1) (a) (intro.) and (b), 635.26
16(1s), 635.28, 635.29, 635.31 and 646.35 (5), chapter 635 (title) and subchapter I and
17subchapter II (title) of chapter 635 of the statutes first applies to health benefit plans
18covering employes who are affected by a collective bargaining agreement containing
19provisions inconsistent with that treatment that are issued or renewed on the earlier
20of the following:
AB416-ASA1,32,2121 (a) The day on which the collective bargaining agreement expires.
AB416-ASA1,32,2322 (b)  The day on which the collective bargaining agreement is extended,
23modified or renewed.
AB416-ASA1, s. 54 24Section 54. Effective date. This act takes effect on October 1, 1996, except
25as follows:
AB416-ASA1,33,3
1(1)The treatment of sections 619.12 (1) (intro.), 632.727, 632.747 (4) and (5)
2and 632.83 of the statutes and Section 52 (1) of this act take effect on the day after
3publication.
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