AB416-SSA1,38,54 1. The number of high-risk individuals covered by the insurer at least equals
5the threshold level determined under par. (e) 3.
AB416-SSA1,38,126 2. The insurer applies for exemption from the requirement under sub. (2) by
7certifying its qualification under subd. 1. to the commissioner and the commissioner,
8within 30 days after the insurer submits its certifying information, makes no
9objection and does not request additional information. If the commissioner does
10timely object or request additional information, the insurer shall be exempt from the
11requirements under sub. (2) 30 days after the commissioner objects or the insurer
12submits the additional information if the commissioner takes no further action.
AB416-SSA1,38,1613 (c) Whenever an insurer becomes exempt from the requirement under sub. (2)
14by satisfying the criteria under par. (b), the commissioner shall provide notice of that
15exemption to all insurers to which this section applies and to all insurance agents
16listed under s. 628.11 by the insurers to which this section applies.
AB416-SSA1,38,1917 (d) An insurer that satisfies the criterion under par. (b) 1. is not required to
18apply for exemption from the requirement under sub. (2). An insurer that does not
19apply for exemption shall remain subject to the requirement under sub. (2).
AB416-SSA1,38,2220 (e) In consultation with the committee on risk adjustment, the commissioner
21shall promulgate rules for the operation of the risk adjustment mechanism under
22this subsection, including rules that specify at least all of the following:
AB416-SSA1,38,2423 1. What diagnostic conditions constitute high risk medical conditions for
24purposes of the definition of a high-risk individual.
AB416-SSA1,39,2
12. How to determine an insurer's highest premium rate level for purposes of
2the definition of a high-risk individual.
AB416-SSA1,39,43 3. What percentage of an insurer's total enrollment under group health benefit
4plans issued by the insurer constitutes the threshold level for purposes of par. (b) 1.
AB416-SSA1, s. 77 5Section 77. 635.09 of the statutes is repealed and recreated to read:
AB416-SSA1,39,8 6635.09 Rate regulation for individual and certain group health benefit
7plans.
Notwithstanding ch. 625, the commissioner shall promulgate rules that do
8all of the following:
AB416-SSA1,39,13 9(1) Establish restrictions on premium rates that an insurer may charge an
10employer for coverage under a group health benefit plan such that the premium rates
11charged to employers with similar case characteristics for the same or similar benefit
12design characteristics do not vary from the midpoint rate for those employers by
13more than 30% of that midpoint rate.
AB416-SSA1,39,18 14(1m) Establish restrictions on premium rates that an insurer may charge an
15individual for coverage under an individual health benefit plan such that the
16premium rates charged to individuals with similar case characteristics for the same
17or similar benefit design characteristics do not vary from the midpoint rate for those
18individuals by more than 35% of that midpoint rate.
AB416-SSA1,39,20 19(2) Establish restrictions on increases in premium rates that an insurer may
20charge an employer for coverage under a group health benefit plan such that:
AB416-SSA1,39,2221 (a) The percentage increase in the premium rate for a new rating period does
22not exceed the sum of the following:
AB416-SSA1,39,2423 1. The percentage change in the new business premium rate measured from
24the first day of the prior rating period to the first day of the new rating period.
AB416-SSA1,40,5
12. An adjustment, not to exceed 15% per year for employers with 2 to 50 eligible
2employes or 25% per year for employers with 51 to 100 eligible employes, adjusted
3proportionally for rating periods of less than one year, for such rating factors as
4claims experience, health condition and duration of coverage, determined in
5accordance with the insurer's rate manual or rating procedures.
AB416-SSA1,40,86 3. An adjustment for a change in case characteristics or in benefit design
7characteristics, determined in accordance with the insurer's rate manual or rating
8procedures.
AB416-SSA1,40,129 (b) The percentage increase in the premium rate for a new rating period for a
10group health benefit plan issued before the effective date of this paragraph ....
11[revisor inserts date], does not exceed the sum of par. (a) 1. and 3., unless premium
12rates are in compliance with the rules promulgated under sub. (1).
AB416-SSA1,40,16 13(3) Require the premium rate of a health benefit plan issued before the effective
14date of this subsection .... [revisor inserts date], to comply with the rules promulgated
15under sub. (1) or (1m) no later than 2 years after the effective date of this subsection
16.... [revisor inserts date].
AB416-SSA1,40,17 17(4) Define the terms necessary for compliance with this section.
AB416-SSA1,40,18 18(5) Ensure that employers are classified using objective criteria.
AB416-SSA1,40,20 19(6) Ensure that rating factors are applied objectively and consistently to
20employers with 2 to 50 eligible employes.
AB416-SSA1, s. 78 21Section 78. 635.11 (intro.) of the statutes is amended to read:
AB416-SSA1,40,25 22635.11 (title) Disclosure of rating factors and renewability provisions
23for certain group health benefit plans. (intro.) Before the sale of a group health
24benefit
plan or policy subject to this subchapter, a small employer, an insurer shall
25disclose to a small an employer all of the following:
AB416-SSA1, s. 79
1Section 79. 635.11 (1) of the statutes is amended to read:
AB416-SSA1,41,32 635.11 (1) The small employer insurer's right to increase premium rates and
3the factors limiting the amount of increase.
AB416-SSA1, s. 80 4Section 80. 635.11 (4) of the statutes is amended to read:
AB416-SSA1,41,55 635.11 (4) The small employer's renewability rights.
AB416-SSA1, s. 81 6Section 81. 635.13 of the statutes is amended to read:
AB416-SSA1,41,13 7635.13 (title) Annual certification of  compliance for certain group
8health benefit plans
. (1) Records. A small employer An insurer that issues group
9health benefit plans
shall maintain at its principal place of business complete and
10detailed records with respect to those group health benefit plans relating to its rating
11methods and practices and its renewal underwriting methods and practices, and
12shall make the records available to the commissioner and the small employer
13insurance board
upon request.
AB416-SSA1,41,17 14(2) Certification. A small employer An insurer that issues group health
15benefit plans
shall file with the commissioner on or before May 1 annually an
16actuarial opinion by a member of the American academy of actuaries certifying all
17of the following with respect to those group health benefit plans:
AB416-SSA1,41,1918 (a) That the small employer insurer is in compliance with the rate provisions
19of s. 635.05 635.09.
AB416-SSA1,41,2120 (b) That the small employer insurer's rating methods are based on generally
21accepted and sound actuarial principles, policies and procedures.
AB416-SSA1,41,2522 (c) That the opinion is based on the actuary's examination of the small employer
23insurer's records and a review of the small employer insurer's actuarial assumptions
24and statistical methods used in setting rates and procedures used in implementing
25rating plans.
AB416-SSA1, s. 82
1Section 82. 635.15 of the statutes is amended to read:
AB416-SSA1,42,9 2635.15 (title) Temporary suspension of rate regulation for individual
3and certain group health benefit plans
. The commissioner may suspend the
4operation of all or any part of s. 635.05 635.09 with respect to one or more small
5employers or one or more individuals for one or more rating periods upon the written
6request of a small employer an insurer and a finding by the commissioner that the
7suspension is necessary in light of the financial condition of the small employer
8insurer or that the suspension would enhance the efficiency and fairness of the small
9employer
health insurance market.
AB416-SSA1, s. 83 10Section 83. 635.16 of the statutes is created to read:
AB416-SSA1,42,12 11635.16 Coverage requirements for individual health benefit plans. (1)
12Definitions. In this section:
AB416-SSA1,42,1313 (a) "Employer" has the meaning given in s. 635.03 (1) (b).
AB416-SSA1,42,1414 (b) "Group health benefit plan" has the meaning given in s. 635.03 (1) (c).
AB416-SSA1,42,2115 (c) "Insurer" means an insurer that is authorized to do business in this state,
16in one or more lines of insurance that includes health insurance, and that sells
17individual health benefit plans to individuals who are residents of this state. The
18term includes a health maintenance organization, as defined in s. 609.01 (2), a
19preferred provider plan, as defined in s. 609.01 (4), an insurer operating as a
20cooperative association organized under ss. 185.981 to 185.985 and a limited service
21health organization, as defined in s. 609.01 (3).
AB416-SSA1,42,2322 (d) 1. "Qualifying coverage" means benefits or coverage provided under any of
23the following:
AB416-SSA1,43,3
1a. A group health benefit plan or an employer-based health benefit
2arrangement that provides benefits similar to or exceeding benefits provided under
3the health benefit plan for which the individual is applying.
AB416-SSA1,43,74 b. An individual health benefit plan that provides benefits similar to or
5exceeding benefits provided under the health benefit plan for which the individual
6is applying, if the individual health benefit plan has been in effect for at least one
7year.
AB416-SSA1,43,108 2. Notwithstanding subd. 1. a. and b., "qualifying coverage" does not include
9catastrophic coverage that is linked to a tax-preferred savings plan for payment of
10medical expenses.
AB416-SSA1,43,14 11(2) Preexisting conditions. (a) An individual health benefit plan may not
12deny, exclude or limit benefits for a covered individual for losses incurred more than
1312 months after the effective date of the individual's coverage due to a preexisting
14condition.
AB416-SSA1,43,1615 (b) An individual health benefit plan may not define a preexisting condition
16more restrictively than any of the following:
AB416-SSA1,43,2017 1. A condition that would have caused an ordinarily prudent person to seek
18medical advice, diagnosis, care or treatment during the 18 months immediately
19preceding the effective date of coverage and for which the individual did not seek
20medical advice, diagnosis, care or treatment.
AB416-SSA1,43,2321 2. A condition for which medical advice, diagnosis, care or treatment was
22recommended or received during the 18 months immediately preceding the effective
23date of coverage.
AB416-SSA1,43,2424 3. A pregnancy existing on the effective date of coverage.
AB416-SSA1,44,4
1(3) Limited guaranteed issue, portability and other coverage requirements.
2(a) Except as provided in pars. (b) and (g), an insurer shall provide coverage under
3an individual health benefit plan to an individual who is a resident of this state,
4regardless of health condition or claims experience, if all of the following apply:
AB416-SSA1,44,55 1. The insurer has in force an individual health benefit plan.
AB416-SSA1,44,76 2. The individual agrees to pay the premium required for coverage under the
7individual health benefit plan.
AB416-SSA1,44,108 3. The individual agrees to comply with all other provisions of the individual
9health benefit plan that apply generally to a policyholder or an insured without
10regard to health condition or claims experience.
AB416-SSA1,44,1211 4. The individual was covered under qualifying coverage that terminated not
12more than 31 days before the individual applied for the new coverage.
AB416-SSA1,44,1913 5. If the individual's qualifying coverage under subd. 4. was coverage under
14sub. (1) (d) 1. a., the individual had been covered under continuation coverage, as
15defined in s. 252.16 (1) (a), for the maximum allowable period; the individual is not
16now eligible for coverage under any group health benefit plan or employer-based
17health benefit arrangement; and the individual was an eligible employe, as defined
18in s. 635.03 (1) (a), for at least 6 months immediately before applying for the new
19coverage.
AB416-SSA1,44,2220 (b) 1. Paragraph (a) does not require an insurer to issue coverage that the
21insurer is not authorized to issue under its bylaws, charter or certificate of
22incorporation or authority.
AB416-SSA1,45,223 2. Paragraph (a) does not require an insurer that provides coverage to an
24individual under an individual health benefit plan to issue a different individual

1health benefit plan to the individual before the expiration of the agreed term of the
2individual health benefit plan under which the individual has coverage.
AB416-SSA1,45,63 3. An insurer that offers health care coverage exclusively to a single category
4or limited categories of individuals may, with prior approval of the commissioner,
5limit its compliance with par. (a) to the single category or those limited categories of
6individuals.
AB416-SSA1,45,107 4. The commissioner may exempt an insurer from the requirement under par.
8(a) if the commissioner determines that it is in the public interest to exempt the
9insurer from the requirement under par. (a) because the insurer is in financially
10hazardous condition.
AB416-SSA1,45,1411 (c) An insurer that issues an individual health benefit plan to an individual
12described in par. (a) shall provide coverage under the individual health benefit plan
13for any dependents of the individual who had coverage under the individual's
14qualifying coverage under par. (a) 4.
AB416-SSA1,45,1815 (d) An individual health benefit plan that is issued to an individual described
16in par. (a) may not restrict or modify coverage with respect to the individual except
17to the extent that the individual's qualifying coverage under par. (a) 4. was restricted
18or modified.
AB416-SSA1,45,2119 (e) The maximum lifetime benefits available under an individual health benefit
20plan that is issued to an individual described in par. (a) may be reduced by the total
21benefits paid under the individual's qualifying coverage under par. (a) 4.
AB416-SSA1,46,222 (f) An individual health benefit plan that is issued to an individual described
23in par. (a) shall waive any period applicable to a preexisting condition exclusion or
24limitation period with respect to particular services for the period that the individual

1was covered with respect to such services under the individual's qualifying coverage
2under par. (a) 4.
AB416-SSA1,46,53 (g) An insurer that is otherwise required to provide coverage under par. (a)
4shall be exempt from the requirement under par. (a) for the remainder of a calendar
5year after all of the following occur:
AB416-SSA1,46,106 1. The total number of individuals described under par. (a) and their
7dependents who are covered by the insurer equals at least 1% of the total number of
8individuals and their dependents covered under all individual health benefit plans
9issued by the insurer that were in effect on December 31 of the preceding year and
10that were qualifying coverage under sub. (1) (d) 1. b.
AB416-SSA1,46,1211 2. The insurer applies for exemption from the requirement under par. (a) by
12submitting to the commissioner certification that includes all of the following:
AB416-SSA1,46,1513 a. The total number of individuals and their dependents covered under all
14individual health benefit plans issued by the insurer that were in effect on December
1531 of the preceding year and that were qualifying coverage under sub. (1) (d) 1. b.
AB416-SSA1,46,1816 b. The total number of individuals described under par. (a) and their
17dependents who have been accepted by the insurer for coverage under par. (a) during
18the current year.
AB416-SSA1,46,2219 (h) Whenever an insurer becomes exempt from the requirement under par. (a)
20by satisfying the criteria under par. (g), the commissioner shall provide notice of that
21exemption to all insurers to which this subsection applies and to all insurance agents
22listed under s. 628.11 by the insurers to which this subsection applies.
AB416-SSA1, s. 84 23Section 84. 635.17 of the statutes is repealed and recreated to read:
AB416-SSA1,46,25 24635.17 Contract termination and renewability for all group and
25individual health benefit plans. (1)
Definitions. In this section and s. 635.18:
AB416-SSA1,47,1
1(a) "Eligible employe" has the meaning given in s. 635.03 (1) (a).
AB416-SSA1,47,22 (b) "Employer" has the meaning given in s. 635.03 (1) (b).
AB416-SSA1,47,43 (c) "Established geographic service area" means a geographic area within
4which an insurer provides coverage and that has been approved by the commissioner.
AB416-SSA1,47,55 (d) "Group health benefit plan" has the meaning given in s. 635.03 (1) (c).
AB416-SSA1,47,136 (e) "Insurer" means an insurer that is authorized to do business in this state,
7in one or more lines of insurance that includes health insurance, and that offers
8group health benefit plans covering eligible employes of one or more employers in
9this state, or that sells individual health benefit plans to individuals who are
10residents of this state. The term includes a health maintenance organization, as
11defined in s. 609.01 (2), a preferred provider plan, as defined in s. 609.01 (4), and an
12insurer operating as a cooperative association organized under ss. 185.981 to
13185.985 and a limited service health organization, as defined in s. 609.01 (3).
AB416-SSA1,47,1714 (f) "Restricted network provision" means a provision of a health benefit plan
15that conditions the payment of benefits, in whole or in part, on obtaining services or
16articles from health care providers that have contracted with the insurer to provide
17health care services or articles to covered individuals.
AB416-SSA1,47,22 18(1m) Midterm cancellation. Notwithstanding s. 631.36 (2) to (4m), a health
19benefit plan may not be canceled by an insurer before the expiration of the agreed
20term, and shall be renewable to the policyholder and all insureds and dependents
21eligible under the terms of the health benefit plan at the expiration of the agreed
22term at the option of the policyholder, except for any of the following reasons:
AB416-SSA1,47,2323 (a) Failure to pay a premium when due.
AB416-SSA1,47,2524 (b) Fraud or misrepresentation by the policyholder, or, with respect to coverage
25for an insured individual, fraud or misrepresentation by that insured individual.
AB416-SSA1,48,1
1(c) Substantial breaches of contractual duties, conditions or warranties.
AB416-SSA1,48,42 (d) If a group health benefit plan, the number of individuals covered under the
3group health benefit plan is less than the number required by the group health
4benefit plan.
AB416-SSA1,48,65 (e) If a group health benefit plan, the employer to which the group health
6benefit plan is issued is no longer actively engaged in a business enterprise.
AB416-SSA1,48,9 7(2) Nonrenewal. (a) Notwithstanding sub. (1m), an insurer that issues group
8health benefit plans may elect not to renew a group health benefit plan if the insurer
9complies with all of the following:
AB416-SSA1,48,1110 1. The insurer ceases to renew all other group health benefit plans issued by
11the insurer.
AB416-SSA1,48,1412 2. The insurer provides notice to all affected policyholders and to the
13commissioner in each state in which an affected insured individual resides at least
14one year before termination of coverage.
AB416-SSA1,48,1615 3. The insurer does not issue a group health benefit plan before 5 years after
16the nonrenewal of the group health benefit plans.
AB416-SSA1,48,2017 4. The insurer does not transfer or otherwise provide coverage to a policyholder
18from the nonrenewed business unless the insurer offers to transfer or provide
19coverage to all affected policyholders from the nonrenewed business without regard
20to claims experience, health condition or duration of coverage.
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