AB416-SSA1, s. 70 12Section 70. Chapter 635 (title) of the statutes is amended to read:
AB416-SSA1,25,1313 CHAPTER 635
AB416-SSA1,25,15 14SMALL EMPLOYER regulation
15of HEALTH INSURANCE
AB416-SSA1, s. 71 16Section 71. 635.01 of the statutes is repealed.
AB416-SSA1, s. 72 17Section 72. 635.02 of the statutes is repealed and recreated to read:
AB416-SSA1,25,18 18635.02 Definitions. In this subchapter:
AB416-SSA1,25,20 19(1) "Basic health benefit plan" means a small employer health insurance plan
20under subch. II.
AB416-SSA1,25,24 21(2) "Dependent" means a spouse, an unmarried child under the age of 19 years,
22an unmarried child who is a full-time student under the age of 21 years and who is
23financially dependent upon the parent, or an unmarried child of any age who is
24medically certified as disabled and who is dependent upon the parent.
AB416-SSA1,26,10
1(3) "Health benefit plan" means any hospital or medical policy or certificate.
2"Health benefit plan" does not include accident-only, credit accident or health,
3dental, vision, medicare supplement, medicare replacement, long-term care,
4disability income or short-term insurance, coverage issued as a supplement to
5liability insurance, worker's compensation or similar insurance, automobile medical
6payment insurance, student-only medical plans, policies issued to medicaid
7recipients, individual conversion policies, specified disease policies, hospital
8indemnity policies, as defined in s. 632.895 (1) (c), policies or certificates issued under
9the health insurance risk-sharing plan or an alternative plan under subch. II of ch.
10619 or other insurance exempted by rule of the commissioner.
AB416-SSA1,26,14 11(4) "Short-term insurance" means a temporary individual major medical or
12accident insurance policy issued for a term of 6 months or less, except that such a
13policy may be renewed one time at the expiration of the initial term for a term of 6
14months or less.
AB416-SSA1,26,19 15(5) "Student-only medical plan" means a limited nonmedically underwritten
16individual or group health benefit plan that is guaranteed renewable while the
17covered person is enrolled as a regular, full-time undergraduate or graduate student
18at an accredited technical or trade school, college or university and to which any of
19the following applied at issuance:
AB416-SSA1,26,2020 (a) The student was not insured under a health benefit plan.
AB416-SSA1,26,2321 (b) The student was eligible for coverage under a health benefit plan of his or
22her parent, stepparent or guardian but was unable to access the full health benefits
23of the plan due to limitations in the plan's geographic service area.
AB416-SSA1, s. 73 24Section 73. 635.03 of the statutes is created to read:
AB416-SSA1,27,2
1635.03 Coverage requirements for all group health benefit plans. (1)
2Definitions. In this section and s. 635.04:
AB416-SSA1,27,93 (a) 1. Except as provided in subd. 2., "eligible employe" means an employe who
4works on a permanent basis and has a normal workweek of 30 or more hours. The
5term includes a sole proprietor, a business owner, including the owner of a farm
6business, a partner of a partnership and a member of a limited liability company if
7the sole proprietor, business owner, partner or member is included as an employe
8under a health benefit plan of an employer, but the term does not include an employe
9who works on a temporary or substitute basis.
AB416-SSA1,27,1210 2. For purposes of a group health benefit plan, or a self-insured health plan,
11that is offered by the state under s. 40.51 (6) or by the group insurance board under
12s. 40.51 (7), "eligible employe" has the meaning given in s. 40.02 (25).
AB416-SSA1,27,1313 (b) "Employer" means any of the following:
AB416-SSA1,27,1614 1. An individual, firm, corporation, partnership, limited liability company or
15association that is actively engaged in a business enterprise in this state, including
16a farm business.
AB416-SSA1,27,1717 2. A municipality, as defined in s. 16.70 (8).
AB416-SSA1,27,1818 3. The state.
AB416-SSA1,27,2219 (c) "Group health benefit plan" means a health benefit plan that is issued by
20an insurer to an employer on behalf of a group consisting of eligible employes of the
21employer. The term includes individual health benefit plans covering eligible
22employes when 3 or more are sold to an employer.
AB416-SSA1,28,423 (d) "Insurer" means an insurer that is authorized to do business in this state,
24in one or more lines of insurance that includes health insurance, and that offers
25group health benefit plans covering eligible employes of one or more employers in

1this state. The term includes a health maintenance organization, as defined in s.
2609.01 (2), a preferred provider plan, as defined in s. 609.01 (4), an insurer operating
3as a cooperative association organized under ss. 185.981 to 185.985 and a limited
4service health organization, as defined in s. 609.01 (3).
AB416-SSA1,28,65 (e) 1. "Qualifying coverage" means benefits or coverage provided under any of
6the following:
AB416-SSA1,28,77 a. Medicare or medicaid.
AB416-SSA1,28,108 b. A group health benefit plan or an employer-based health benefit
9arrangement that provides benefits similar to or exceeding benefits provided under
10a basic health benefit plan.
AB416-SSA1,28,1311 c. An individual health benefit plan that provides benefits similar to or
12exceeding benefits provided under a basic health benefit plan, if the individual
13health benefit plan has been in effect for at least one year.
AB416-SSA1,28,1614 2. Notwithstanding subd. 1. b. and c., "qualifying coverage" does not include
15catastrophic coverage that is linked to a tax-preferred savings plan for payment of
16medical expenses.
AB416-SSA1,28,1817 (f) "Self-insured health plan" means a self-insured health plan of the state or
18a county, city, village, town or school district.
AB416-SSA1,28,22 19(2) Preexisting conditions. (a) A group health benefit plan, or a self-insured
20health plan, may not deny, exclude or limit benefits for a covered individual for losses
21incurred more than 12 months after the effective date of the individual's coverage
22due to a preexisting condition.
AB416-SSA1,28,2523 (b) Except as provided in par. (c), a group health benefit plan, or a self-insured
24health plan, may not define a preexisting condition more restrictively than any of the
25following:
AB416-SSA1,29,4
11. A condition that would have caused an ordinarily prudent person to seek
2medical advice, diagnosis, care or treatment during the 6 months immediately
3preceding the effective date of coverage and for which the individual did not seek
4medical advice, diagnosis, care or treatment.
AB416-SSA1,29,75 2. A condition for which medical advice, diagnosis, care or treatment was
6recommended or received during the 6 months immediately preceding the effective
7date of coverage.
AB416-SSA1,29,118 (c) Notwithstanding par. (b) 1. and 2., a group health benefit plan, or a
9self-insured health plan, shall exclude pregnancy from the definition of a preexisting
10condition for the purpose of coverage of expenses related to prenatal and postnatal
11care, delivery and any complications of pregnancy.
AB416-SSA1,29,18 12(3) Portability. (a) A group health benefit plan, or a self-insured health plan,
13shall waive any period applicable to a preexisting condition exclusion or limitation
14period with respect to particular services for the period that an individual was
15previously covered by qualifying coverage that was not sponsored by the employer
16sponsoring the group health benefit plan or the self-insured health plan and that
17provided benefits with respect to such services, if the qualifying coverage terminated
18not more than 60 days before the effective date of the new coverage.
AB416-SSA1,29,2319 (b) Paragraph (a) does not prohibit the application of a waiting period to all new
20enrollees under a group health benefit plan or a self-insured health plan; however,
21a waiting period may not be applied when determining whether the qualifying
22coverage terminated not more than 60 days before the effective date of the new
23coverage.
AB416-SSA1,30,4 24(4) Minimum participation of employes. (a) Except as provided in par. (d),
25requirements used by an insurer in determining whether to provide coverage under

1a group health benefit plan to an employer, including requirements for minimum
2participation of eligible employes and minimum employer contributions, shall be
3applied uniformly among all employers that apply for or receive coverage from the
4insurer.
AB416-SSA1,30,75 (b) An insurer may vary its minimum participation requirements and
6minimum employer contribution requirements only by the size of the employer group
7based on the number of eligible employes.
AB416-SSA1,30,138 (c) In applying minimum participation requirements with respect to an
9employer, an insurer may not count eligible employes who have other coverage that
10is qualifying coverage in determining whether the applicable percentage of
11participation is met, except that an insurer may count eligible employes who have
12coverage under another health benefit plan that is sponsored by that employer and
13that is qualifying coverage.
AB416-SSA1,30,1614 (d) An insurer may not increase a requirement for minimum employe
15participation or a requirement for minimum employer contribution that applies to
16an employer after the employer has been accepted for coverage.
AB416-SSA1,30,1817 (e) This subsection does not apply to a group health benefit plan offered by the
18state under s. 40.51 (6) or by the group insurance board under s. 40.51 (7).
AB416-SSA1,30,25 19(5) Prohibited coverage practices. (a) 1. Except as provided in rules
20promulgated under subd. 3., if an insurer offers a group health benefit plan to an
21employer, the insurer shall offer coverage to all of the eligible employes of the
22employer and their dependents. Except as provided in rules promulgated under
23subd. 3., an insurer may not offer coverage to only certain individuals in an employer
24group or to only part of the group, except for an eligible employe who has not yet
25satisfied an applicable waiting period, if any.
AB416-SSA1,31,7
12. Except as provided in rules promulgated under subd. 3., if the state or a
2county, city, village, town or school district offers coverage under a self-insured
3health plan, it shall offer coverage to all of its eligible employes and their dependents.
4Except as provided in rules promulgated under subd. 3., the state or a county, city,
5village, town or school district may not offer coverage to only certain individuals in
6the employer group or to only part of the group, except for an eligible employe who
7has not yet satisfied an applicable waiting period, if any.
AB416-SSA1,31,148 3. The secretary of employe trust funds, with the approval of the group
9insurance board, shall promulgate rules related to offering coverage to eligible
10employes under a group health benefit plan, or a self-insured health plan, offered
11by the state under s. 40.51 (6) or by the group insurance board under s. 40.51 (7). The
12rules shall conform to the intent of subds. 1. and 2. and may not allow the state or
13the group insurance board to refuse to offer coverage to an eligible employe or
14dependent for reasons related to health condition.
AB416-SSA1,31,1815 (b) 1. An insurer may not modify a group health benefit plan with respect to
16an employer or an eligible employe or dependent, through riders, endorsements or
17otherwise, to restrict or exclude coverage for certain diseases or medical conditions
18otherwise covered by the group health benefit plan.
AB416-SSA1,31,2219 2. The state or a county, city, village, town or school district may not modify a
20self-insured health plan with respect to an eligible employe or dependent, through
21riders, endorsements or otherwise, to restrict or exclude coverage for certain diseases
22or medical conditions otherwise covered by the self-insured health plan.
AB416-SSA1,32,223 3. Nothing in this paragraph limits the authority of the group insurance board
24to fulfill its obligations as trustee under s. 40.03 (6) (d) or to design or modify

1procedures or provisions pertaining to enrollment, premium transmitted or coverage
2of eligible employes for health care benefits under s. 40.51 (1).
AB416-SSA1, s. 74 3Section 74. 635.04 of the statutes is created to read:
AB416-SSA1,32,9 4635.04 Guaranteed acceptance. (1) Employe becomes eligible after
5commencement of coverage.
If an insurer provides coverage under a group health
6benefit plan, the insurer shall provide coverage under the group health benefit plan
7to an eligible employe who becomes eligible for coverage after the commencement of
8the employer's coverage, and to the eligible employe's dependents, regardless of
9health condition or claims experience, if all of the following apply:
AB416-SSA1,32,1010 (a) The employe has satisfied any applicable waiting period.
AB416-SSA1,32,1211 (b) The employer agrees to pay the premium required for coverage of the
12employe under the group health benefit plan.
AB416-SSA1,32,18 13(2) Employe waived coverage previously. If an insurer provides coverage
14under a group health benefit plan, the insurer shall provide coverage under the
15group health benefit plan to an eligible employe who waived coverage during an
16enrollment period during which the employe was entitled to enroll in the group
17health benefit plan, regardless of health condition or claims experience, if all of the
18following apply:
AB416-SSA1,32,2019 (a) The eligible employe was covered as a dependent under qualifying coverage
20when he or she waived coverage under the group health benefit plan.
AB416-SSA1,32,2521 (b) The eligible employe's coverage under the qualifying coverage has
22terminated or will terminate due to a divorce from the insured under the qualifying
23coverage, the death of the insured under the qualifying coverage, loss of employment
24by the insured under the qualifying coverage or involuntary loss of coverage under
25the qualifying coverage by the insured under the qualifying coverage.
AB416-SSA1,33,3
1(c) The eligible employe applies for coverage under the group health benefit
2plan not more than 30 days after termination of his or her coverage under the
3qualifying coverage.
AB416-SSA1,33,54 (d) The employer agrees to pay the premium required for coverage of the
5employe under the group health benefit plan.
AB416-SSA1,33,11 6(3) State or municipal self-insured plans. If the state or a county, city, village,
7town or school district provides coverage under a self-insured health plan, it shall
8provide coverage under the self-insured health plan to an eligible employe who
9waived coverage during an enrollment period during which the employe was entitled
10to enroll in the self-insured health plan, regardless of health condition or claims
11experience, if all of the following apply:
AB416-SSA1,33,1312 (a) The eligible employe was covered as a dependent under qualifying coverage
13when he or she waived coverage under the self-insured health plan.
AB416-SSA1,33,1814 (b) The eligible employe's coverage under the qualifying coverage has
15terminated or will terminate due to a divorce from the insured under the qualifying
16coverage, the death of the insured under the qualifying coverage, loss of employment
17by the insured under the qualifying coverage or involuntary loss of coverage under
18the qualifying coverage by the insured under the qualifying coverage.
AB416-SSA1,33,2119 (c) The eligible employe applies for coverage under the self-insured health plan
20not more than 30 days after termination of his or her coverage under the qualifying
21coverage.
AB416-SSA1, s. 75 22Section 75. 635.05 of the statutes is repealed.
AB416-SSA1, s. 76 23Section 76. 635.07 of the statutes is repealed and recreated to read:
AB416-SSA1,33,25 24635.07 Guaranteed issue for certain group health benefit plans. (1)
25Definitions. In this section and ss. 635.09 to 635.15:
AB416-SSA1,34,3
1(a) "Base premium rate" means the lowest premium rate chargeable under a
2rating system to employers or individuals with similar case characteristics and the
3same or similar benefit design characteristics.
AB416-SSA1,34,64 (b) "Benefit design characteristics" means covered services, cost sharing,
5utilization management, managed care networks and other features that
6differentiate plan or coverage designs.
AB416-SSA1,34,87 (c) "Case characteristics" means the age, gender, geographic location and
8tobacco use of the individuals covered under a health benefit plan.
AB416-SSA1,34,159 (d) "Eligible employe" means an employe who works on a permanent basis and
10has a normal workweek of 30 or more hours. The term includes a sole proprietor, a
11business owner, including the owner of a farm business, a partner of a partnership
12and a member of a limited liability company if the sole proprietor, business owner,
13partner or member is included as an employe under a health benefit plan of an
14employer, but the term does not include an employe who works on a temporary or
15substitute basis.
AB416-SSA1,34,1616 (e) "Employer" means any of the following:
AB416-SSA1,34,2217 1. An individual, firm, corporation, partnership, limited liability company or
18association that is actively engaged in a business enterprise in this state, including
19a farm business, and that employs in this state not fewer than 2 nor more than 100
20eligible employes. In determining the number of eligible employes, employers that
21are affiliated, or that are eligible to file a combined tax return for purposes of state
22taxation, shall be considered one employer.
AB416-SSA1,34,2423 2. A municipality, as defined in s. 16.70 (8), that employs not fewer than 2 nor
24more than 100 eligible employes.
AB416-SSA1,35,4
1(f) "Group health benefit plan" means a health benefit plan that is issued by
2an insurer to an employer on behalf of a group consisting of eligible employes of the
3employer. The term includes individual health benefit plans covering eligible
4employes when 3 or more are sold to an employer.
AB416-SSA1,35,125 (g) "Insurer" means an insurer that is authorized to do business in this state,
6in one or more lines of insurance that includes health insurance, and that offers
7group health benefit plans covering eligible employes of one or more employers in
8this state, or that sells individual health benefit plans to individuals who are
9residents of this state. The term includes a health maintenance organization, as
10defined in s. 609.01 (2), a preferred provider plan, as defined in s. 609.01 (4), an
11insurer operating as a cooperative association organized under ss. 185.981 to
12185.985 and a limited service health organization, as defined in s. 609.01 (3).
AB416-SSA1,35,1413 (h) "Midpoint rate" means the arithmetic average of the base premium rate and
14the corresponding highest premium rate.
AB416-SSA1,35,1715 (i) "New business premium rate" means the premium rate charged or offered
16to employers or individuals with similar case characteristics for newly issued health
17insurance with the same or similar benefit design characteristics.
AB416-SSA1,35,1918 (j) "Rating period" means the period, determined by an insurer, during which
19a premium rate established by the insurer remains in effect.
AB416-SSA1,35,23 20(2) Requirement. Except as provided in subs. (3) and (4), an insurer shall
21provide coverage under a group health benefit plan to an employer and to all of the
22employer's eligible employes and their dependents, regardless of health condition or
23claims experience, if all of the following apply:
AB416-SSA1,35,2424 (a) The insurer has in force a group health benefit plan.
AB416-SSA1,36,2
1(b) The employer agrees to pay the premium required for coverage under the
2group health benefit plan.
AB416-SSA1,36,53 (c) The employer agrees to comply with all other provisions of the group health
4benefit plan that apply generally to a policyholder or an insured without regard to
5health condition or claims experience.
AB416-SSA1,36,8 6(2m) Payment security provisions allowed. An insurer that provides coverage
7under sub. (2) may impose payment security provisions that are reasonably related
8to the risk covered.
AB416-SSA1,36,13 9(3) Exceptions to guaranteed issue. (a) An insurer that is otherwise required
10to provide coverage under sub. (2) may refuse to issue a group health benefit plan to
11an employer if all of the individuals in the employer group that are to be covered
12under the group health benefit plan may be covered under one individual health
13benefit plan providing family coverage.
AB416-SSA1,36,1614 (b) Subsection (2) does not require an insurer to issue coverage that the insurer
15is not authorized to issue under its bylaws, charter or certificate of incorporation or
16authority.
AB416-SSA1,36,2017 (c) Subsection (2) does not require an insurer that provides coverage to an
18employer under a group health benefit plan to issue a different group health benefit
19plan to the employer before the expiration of the agreed term of the group health
20benefit plan under which the employer has coverage.
AB416-SSA1,36,2421 (d) An insurer that offers health care coverage exclusively to a single category
22or limited categories of employers may, with prior approval of the commissioner, limit
23its compliance with sub. (2) to that single category or those limited categories of
24employers.
AB416-SSA1,37,4
1(e) The commissioner may exempt an insurer from the requirements of sub. (2)
2if the commissioner determines that it is in the public interest to exempt the insurer
3from the requirements under sub. (2) because the insurer is in financially hazardous
4condition.
AB416-SSA1,37,95 (f) If an employer loses coverage under a group health benefit plan for failure
6to pay a premium when due, an insurer that is otherwise required to provide
7coverage under sub. (2) may refuse to issue a group health benefit plan to that
8employer during the 12-month period after the date on which the employer lost
9coverage.
AB416-SSA1,37,1410 (g) 1. In this paragraph, "small employer" means an employer that employs in
11this state not fewer than 2 nor more than 25 eligible employes. In determining the
12number of eligible employes, employers that are affiliated, or that are eligible to file
13a combined tax return for purposes of state taxation, shall be considered one
14employer.
AB416-SSA1,37,2015 2. An insurer that previously issued group health benefit plans but, prior to the
16effective date of this subdivision .... [revisor inserts date], discontinued offering such
17plans to small employers, shall within 60 days after the effective date of this
18subdivision .... [revisor inserts date], again offer group health benefit plans to small
19employers or be subject to the requirements under s. 635.17 (2) (a) as if the insurer
20had elected to not renew a group health benefit plan.
AB416-SSA1,37,24 21(4) Group risk adjustment mechanism. (a) In this subsection, "high-risk
22individual" means an individual with a high-risk medical condition who has
23coverage under a group health benefit plan with a premium rate at the insurer's
24highest premium rate level.
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