AB394,21,98 2. The employer group meets the insurer's minimum participation
9requirements.
AB394,21,1110 3. The employer agrees to pay the premium required for coverage under the
11group health benefit plan.
AB394,21,1412 4. The employer agrees to comply with all other provisions of the group health
13benefit plan that apply generally to a policyholder or an insured without regard to
14health condition or claims experience.
AB394,21,1915 (b) An insurer shall provide coverage under a group health benefit plan to an
16eligible employe, or to any other employe for whom the employer desires to provide
17coverage, who becomes eligible for coverage according to the employer's
18requirements after the commencement of the employer's coverage, and to the eligible
19or other employe's dependents, regardless of health condition or claims experience.
AB394,21,24 20(2) Individual health benefit plans. Except as provided in sub. (3) and
21notwithstanding s. 632.897 (4) (d), an insurer shall provide coverage under an
22individual health benefit plan to an individual who is a resident and to the
23individual's dependents, regardless of health condition or claims experience, if all of
24the following apply:
AB394,21,2525 (a) The insurer has in force a health benefit plan.
AB394,22,2
1(b) The individual agrees to pay the premium required for coverage under the
2individual health benefit plan.
AB394,22,53 (c) The individual agrees to comply with all other provisions of the individual
4health benefit plan that apply generally to a policyholder or an insured without
5regard to health condition or claims experience.
AB394,22,10 6(3) Exceptions to guaranteed issue. (a) An insurer that is otherwise required
7to provide coverage under sub. (1) may refuse to issue a group health benefit plan to
8an employer if all of the individuals in the employer group that are to be covered
9under the group health benefit plan may be covered under an individual health
10benefit plan providing single or family coverage.
AB394,22,1411 (b) An insurer that is otherwise required to provide coverage under sub. (2) may
12refuse to provide coverage to an individual if the individual was excluded from
13coverage under an employer's health benefit plan or self-funded health care plan for
14reasons related to the individual's health condition.
AB394,22,1815 (c) An insurer that is otherwise required to provide coverage under sub. (2) may
16refuse to provide coverage to an individual if the individual waived coverage under
17an employer's health benefit plan or self-funded health care plan for reasons related
18to the individual's health condition.
AB394,22,2019 (d) 1. In this paragraph, "municipal" means county, city, village, town or school
20district.
AB394,22,2521 2. Subsections (1) and (2) do not require an insurer to issue coverage that the
22insurer is not authorized to issue under its bylaws, charter or certificate of
23incorporation or authority if the insurer is authorized under its bylaws, charter or
24certificate of incorporation or authority to issue coverage only to state or municipal
25employes and former employes and their dependents.
AB394,23,4
1(e) An insurer that offers health care coverage exclusively to a single category
2or limited categories of employers may, with prior approval of the commissioner, limit
3its compliance with subs. (1) and (2) to that single category or those limited categories
4of employers.
AB394,23,65 (f) The commissioner may exempt an insurer from the requirements of sub. (1)
6or (2) if the commissioner determines that any of the following applies:
AB394,23,87 1. It is inequitable to apply sub. (1) or (2) to the insurer due to its
8disproportionate share of groups or individuals with high claims experience.
AB394,23,109 2. It is in the public interest to exempt the insurer from the requirements under
10sub. (1) or (2) because the insurer is in financially hazardous condition.
AB394,23,1211 (g) An insurer may limit its issuance of health benefit plans under subs. (1) and
12(2) to any of the following:
AB394,23,1413 1. Group health benefit plans, and related individual conversion policies, to
14small employer groups.
AB394,23,1615 2. Group health benefit plans, and related individual conversion policies, to
16employer groups that are not small employer groups.
AB394,23,1717 3. Individual health benefit plans.
AB394,23,20 18(4) Risk adjustment; rules. (a) The commissioner shall promulgate rules
19establishing a risk adjustment mechanism for insurers issuing health benefit plans
20under this section.
AB394,23,2121 (b) The rules promulgated under par. (a) shall do all of the following:
AB394,23,2322 1. Define "high-risk medical conditions", using diagnostic criteria and other
23criteria.
AB394,23,2524 2. Place a dollar value on each high-risk medical condition based on the
25severity of the condition.
AB394,24,2
13. Determine the percentage of individuals with high-risk medical conditions
2covered by health benefit plans.
AB394,24,73 4. Provide for an annual assessment against each insurer insuring a lower
4percentage of individuals with high-risk medical conditions than the percentage
5established under subd. 3. Any moneys received from assessments imposed under
6the rules promulgated under this subdivision shall be credited to the appropriation
7under s. 20.145 (1) (h).
AB394,24,108 5. Provide for an annual reimbursement for each insurer insuring a higher
9percentage of individuals with high-risk medical conditions than the percentage
10established under subd. 3.
AB394,24,16 11(5) Advisory committee. (a) The commissioner shall establish and appoint the
12members of an advisory committee to advise the commissioner on the contents of the
13rules to be promulgated under sub. (4) including definitions, assessments and
14reimbursements. The committee shall also review the rules developed under sub.
15(4) and submitted to the legislature under s. 227.19 (2) and make recommendations
16to the legislature on the rules.
AB394,24,1817 (b) The advisory committee established by the commissioner under par. (a)
18shall consist of the commissioner or his or her designee and all of the following:
AB394,24,1919 1. A representative of an insurer that issues individual health benefit plans.
AB394,24,2020 2. A representative of an insurer that issues group health benefit plans.
AB394,24,2121 3. A representative of a health maintenance organization.
AB394,24,2222 4. Two actuaries who are fellows of the American Academy of Actuaries.
AB394,24,2423 5. An underwriter employed by an insurer that issues individual health benefit
24plans.
AB394,25,2
16. An underwriter employed by an insurer that issues group health benefit
2plans.
AB394,25,33 7. A medical director.
AB394, s. 27 4Section 27. 632.748 of the statutes is created to read:
AB394,25,10 5632.748 Contract termination and renewability. (1) Midterm
6cancellation.
Notwithstanding s. 631.36 (2) to (4m), a health benefit plan may not
7be canceled by an insurer before the expiration of the agreed term, and shall be
8renewable to the policyholder and all insureds and dependents eligible under the
9terms of the health benefit plan at the expiration of the agreed term at the option of
10the policyholder, except for any of the following reasons:
AB394,25,1111 (a) Failure to pay a premium when due.
AB394,25,1312 (b) Fraud or misrepresentation by the policyholder or, with respect to coverage
13for an insured individual, fraud or misrepresentation by that insured individual.
AB394,25,1414 (c) Substantial breaches of contractual duties, conditions or warranties.
AB394,25,1615 (d) The number of individuals covered under the health benefit plan is less than
16the number required by the health benefit plan.
AB394,25,1817 (e) If the health benefit plan covers an employer group, the employer is no
18longer actively engaged in a business enterprise.
AB394,25,20 19(2) Nonrenewal. Notwithstanding sub. (1), an insurer may elect not to renew
20a health benefit plan if the insurer complies with all of the following:
AB394,25,2221 (a) The insurer ceases to renew all other health benefit plans issued by the
22insurer.
AB394,25,2523 (b) The insurer provides notice to all affected policyholders and to the
24commissioner in each state in which an affected insured individual resides not later
25than one year before termination of coverage.
AB394,26,2
1(c) The insurer does not issue a health benefit plan earlier than 5 years after
2the nonrenewal of the health benefit plans.
AB394,26,63 (d) The insurer does not transfer or otherwise provide coverage to a
4policyholder from the nonrenewed business unless the insurer offers to transfer or
5provide coverage to all affected policyholders from the nonrenewed business without
6regard to claims experience, health condition or duration of coverage.
AB394,26,8 7(3) Insurer in liquidation. This section does not apply to a health benefit plan
8if the insurer that issued the health benefit plan is in liquidation.
AB394, s. 28 9Section 28. 632.749 of the statutes is created to read:
AB394,26,12 10632.749 Fair marketing standards. (1) Active marketing. Every insurer
11shall actively market health benefit plan coverage to employers and individuals in
12this state.
AB394,26,15 13(2) Prohibitions related to case characteristics. (a) 1. Except as provided
14in subd. 2., an insurer or an intermediary may not directly or indirectly do any of the
15following:
AB394,26,1916 a. Discourage an employer or an individual from applying, or direct an
17employer or an individual not to apply, for coverage with the insurer because of the
18health condition, claims experience, industry, occupation or geographic area of the
19employer or individual.
AB394,26,2220 b. Encourage or direct an employer or an individual to seek coverage from
21another insurer because of the health condition, claims experience, industry,
22occupation or geographic area of the employer or individual.
AB394,26,2523 2. Subdivision 1. does not prohibit an insurer or an intermediary from
24providing an employer or an individual with information about an established
25geographic service area or a restricted network provision of the insurer.
AB394,27,6
1(b) 1. Except as provided in subd. 2., an insurer may not directly or indirectly
2enter into any contract, agreement or arrangement with an intermediary that
3provides for or results in compensation to the intermediary for the sale of a health
4benefit plan that varies according to the health condition, claims experience,
5industry, occupation or geographic area of an employer, any of the employer's covered
6employes, an insured individual or any dependents.
AB394,27,107 2. Payment of compensation on the basis of percentage of premium is not a
8violation of subd. 1. if the percentage does not vary based on the health condition,
9claims experience, industry, occupation or geographic area of an employer, any of the
10employer's covered employes, an insured individual or any dependents.
AB394,27,1511 (c) An insurer may not terminate, fail to renew or limit its contract or
12agreement of representation with an intermediary for any reason related to the
13health condition, claims experience, industry, occupation or geographic area of the
14employers, covered employes, insured individuals or dependents placed by the
15intermediary with the insurer.
AB394,27,19 16(3) Prohibition related to excluding employe. An insurer or an intermediary
17may not induce or otherwise encourage an employer to separate or otherwise exclude
18an employe from health coverage or benefits provided in connection with the
19employe's employment.
AB394,27,22 20(4) Written denial required. Denial by an insurer of an application for
21coverage from an employer shall be in writing and shall state the reason or reasons
22for the denial.
AB394,28,2 23(5) Third-party administrators. A 3rd-party administrator that enters into
24a contract, agreement or other arrangement with an insurer to provide
25administrative, marketing or other services related to the offering of health benefit

1plans to employers or individuals in this state is subject to this section as if it were
2an insurer.
AB394,28,6 3(6) Insurer ceasing to issue. (a) An insurer that has in force one or more health
4benefit plans that are included in a category under s. 632.747 (3) (g) 1. to 3. shall
5actively market and issue health benefit plans in that category, as provided in s.
6632.747, unless the insurer complies with all of the following:
AB394,28,87 1. Files notice with the commissioner that the insurer is ceasing to issue health
8benefit plans in that category.
AB394,28,99 2. Ceases to issue health benefit plans in that category for not less than 5 years.
AB394,28,1210 3. Does not commence marketing or issuing health benefit plans in that
11category until the insurer files notice with the commissioner that the insurer intends
12to market and issue such health benefit plans.
AB394,28,1513 (b) An insurer may not cease to actively market or issue health benefit plans
14in all categories under s. 632.747 (3) (g) 1. to 3. unless the insurer complies with s.
15632.748 (2).
AB394,28,18 16(7) Additional standards by rule. The commissioner may by rule establish
17additional standards to provide for the fair marketing and broad availability of
18health benefit plans to employers and individuals in this state.
AB394, s. 29 19Section 29. 632.76 (2) (a) of the statutes is amended to read:
AB394,28,2520 632.76 (2) (a) No claim for loss incurred or disability commencing after 2 years
21from the date of issue of the policy may be reduced or denied on the ground that a
22disease or physical condition existed prior to the effective date of coverage, unless the
23condition was excluded from coverage by name or specific description by a provision
24effective on the date of loss. This paragraph does not apply to a health benefit plan,
25as defined in s. 632.745 (1) (d), which is subject to s. 632.745.
AB394, s. 30
1Section 30. 632.83 of the statutes is created to read:
AB394,29,6 2632.83 Regulation of certain related policies. The commissioner may by
3rule prescribe standards for specified disease policies, hospital indemnity policies,
4as defined in s. 632.895 (1) (c), or limited benefit health policies, including prohibiting
5certain specified types of products, prescribing minimum coverage and establishing
6marketing or suitability standards.
AB394, s. 31 7Section 31. 632.896 (4) of the statutes is amended to read:
AB394,29,138 632.896 (4) Preexisting conditions. Notwithstanding s. ss. 632.745 (2) and
9632.76 (2) (a), a disability insurance policy that is subject to sub. (2) and that is in
10effect when a court makes a final order granting adoption or when the child is placed
11for adoption may not exclude or limit coverage of a disease or physical condition of
12the child on the ground that the disease or physical condition existed before coverage
13is required to begin under sub. (3).
AB394, s. 32 14Section 32. 632.897 (2) (d) of the statutes is amended to read:
AB394,30,615 632.897 (2) (d) If the employer is notified to terminate the coverage for any of
16the reasons provided under par. (b), the employer shall provide the terminated
17insured written notification of the right to continue group coverage or convert to
18individual coverage and the payment amounts required for either continued or
19converted coverage including the manner, place and time in which the payments
20shall be made. This notice shall be given not more than 5 days after the employer
21receives notice to terminate coverage. The payment amount for continued group
22coverage may not exceed the group rate in effect for a group member, including an
23employer's contribution, if any, for a group policy as defined in sub. (1) (c) 1. or 1m.
24or the equivalent value of the monthly contribution of a group member to a group
25policy as defined in sub. (1) (c) 2. or the equivalent value of the monthly premium for

1franchise insurance as defined in sub. (1) (c) 3. The premium for converted coverage
2shall be determined in accordance with the insurer's table of premium rates
3applicable to the age and class of risks of each person to be covered under that policy
4and to the type and amount of coverage provided, subject to s. 632.746 and any rules
5promulgated under s. 632.7465
. The notice may be sent to the terminated insured's
6home address as shown on the records of the employer.
AB394, s. 33 7Section 33. 632.897 (9) (c) of the statutes is amended to read:
AB394,30,208 632.897 (9) (c) When the insurer is notified that the coverage of a spouse may
9be terminated because of a divorce or annulment, the insurer shall provide the
10former spouse written notification of the right to obtain individual coverage under
11sub. (4), the premium amounts required and the manner, place and time in which
12premiums may be paid. This notice shall be given not less than 30 days before the
13former spouse's coverage would otherwise terminate. The premium shall be
14determined in accordance with the insurer's table of premium rates applicable to the
15age and class of risk of
every person to be covered and to the type and amount of
16coverage provided, subject to s. 632.746 and any rules promulgated under s.
17632.7465
. If the former spouse tenders the first monthly premium to the insurer
18within 30 days after the notice provided by this paragraph, sub. (4) shall apply and
19the former spouse shall receive individual coverage commencing immediately upon
20termination of his or her coverage under the insured's policy.
AB394, s. 34 21Section 34. Chapter 635 (title) of the statutes is amended to read:
AB394,30,2222 CHAPTER 635
AB394,30,2423 SMALL EMPLOYER
24 HEALTH INSURANCE PLAN
AB394, s. 35
1Section 35. Subchapter I of chapter 635 [precedes 635.01.] of the statutes is
2repealed.
AB394, s. 36 3Section 36. 635.20 (intro.) of the statutes is amended to read:
AB394,31,4 4635.20 Definitions. (intro.) In this subchapter chapter:
AB394, s. 37 5Section 37. Subchapter II (title) of chapter 635 [precedes 635.20] of the
6statutes is repealed.
AB394, s. 38 7Section 38. 635.20 (1c) of the statutes is repealed and recreated to read:
AB394,31,118 635.20 (1c) "Dependent" means a spouse, an unmarried child under the age of
919 years, an unmarried child who is a full-time student under the age of 21 years and
10who is financially dependent upon the parent, or an unmarried child of any age who
11is medically certified as disabled and who is dependent upon the parent.
AB394, s. 39 12Section 39. 635.20 (1m) of the statutes is repealed and recreated to read:
AB394,31,2013 635.20 (1m) "Eligible employe" means an employe who works on a full-time
14basis and has a normal work week of 30 or more hours. "Eligible employe" includes
15a sole proprietor, a business owner, including the owner of a farm business, a partner
16of a partnership, a member of a limited liability company and an independent
17contractor if the sole proprietor, business owner, partner, member or independent
18contractor is included as an employe under a health benefit plan of a small employer,
19but "eligible employe" does not include an employe who works on a part-time,
20temporary or substitute basis.
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