SB201: Bill Text

SB201,9,6 601.424 Reports on market reform impact on the health insurance risk-sharing plan. The commissioner shall study the effects of the health insurance market reforms under ch. 635 on enrollment in, and other aspects of, the health insurance risk-sharing plan under subch. II of ch. 619. The commissioner shall annually submit a report on the effects and any recommendations to the legislature under s. 13.172 (2) commencing on October 1, 1999.

SB201, s. 13 Section 13. 625.12 (2) of the statutes is amended to read:

SB201,9,17 625.12 (2) Classification. Risks Subject to s. 635.05 and any rules promulgated under s. 635.06, risks may be classified in any reasonable way for the establishment of rates and minimum premiums, except that no classifications may be based on race, color, creed or national origin, and classifications in automobile insurance may not be based on physical condition or developmental disability as defined in s. 51.01 (5). Subject to s. ss. 632.365 and 635.05 and any rules promulgated under s. 635.06, rates thus produced may be modified for individual risks in accordance with rating plans or schedules that establish reasonable standards for measuring probable variations in hazards, expenses, or both. Rates may also be modified for individual risks under s. 625.13 (2).

SB201, s. 14 Section 14. 628.34 (3) of the statutes is amended to read:

SB201,9,24 628.34 (3) Unfair discrimination. (a) No insurer may unfairly discriminate among policyholders by charging different premiums or by offering different terms of coverage except on the basis of classifications related to the nature and the degree of the risk covered or the expenses involved, subject to s. ss. 632.365 and 635.05 and any rules promulgated under s. 635.06. Rates are not unfairly discriminatory if they are averaged broadly among persons insured under a group, blanket or franchise policy, and terms are not unfairly discriminatory merely because they are more favorable than in a similar individual policy.

SB201,10,9 (b) No insurer may refuse to insure or refuse to continue to insure, or limit the amount, extent or kind of coverage available to an individual, or charge an individual a different rate for the same coverage because of a mental or physical disability except when the refusal, limitation or rate differential is based on either sound actuarial principles supported by reliable data or actual or reasonably anticipated experience, subject to ss. 635.05, 635.07 and 635.15 and any rules promulgated under s. 635.06.

SB201, s. 15 Section 15. 628.36 (2) (b) 5. of the statutes is amended to read:

SB201,10,16 628.36 (2) (b) 5. Except for the small employer health insurance plan under subch. II of ch. 635 to the extent determined by the small employer insurance board under s. 635.23 (1) (b), 1993 stats., or the comprehensive health care board under s. 635.23 (1) (b), all health care plans, including health maintenance organizations, limited service health organizations and preferred provider plans are subject to s. 632.87 (3).

SB201, s. 16 Section 16. 632.70 of the statutes is amended to read:

SB201,10,22 632.70 Exemption for plan under ch. 635. The health insurance mandates, as defined in s. 601.423 (1), that are provided under this subchapter apply to the small employer health insurance plan under subch. II of ch. 635 only to the extent determined by the small employer insurance board under s. 635.23 (1) (b), 1993 stats., or the comprehensive health care board under s. 635.23 (1) (b).

SB201, s. 17 Section 17. 632.727 of the statutes is created to read:

SB201,10,25 632.727 Electronic claims capability. (1) Definition. In this section, "health care provider" has the meaning given in s. 146.81 (1) (a) to (m).

SB201,11,4 (2) Insurers. Beginning on January 1, 1997, every insurer that offers disability insurance must have and use the capability to accept all claims electronically and to allow electronic access to information on eligibility, claim status and remittance advice.

SB201,11,7 (3) Health care providers. (a) Beginning on January 1, 1997, every health care provider that has annual gross revenues of more than $1,000,000 must have and use the capability to electronically transmit disability insurance claims information.

SB201,11,10 (b) Beginning on January 1, 1998, every health care provider not specified in par. (a) must have and use the capability to electronically transmit disability insurance claims information.

SB201, s. 18 Section 18. 632.83 of the statutes is created to read:

SB201,11,16 632.83 Regulation of certain related policies. The commissioner may, by rule, prescribe standards for specified disease policies, hospital indemnity policies, as defined in s. 632.895 (1) (c), or limited benefit health policies, including prohibiting certain specified types of products, prescribing minimum coverage and establishing marketing or suitability standards.

SB201, s. 19 Section 19. 632.897 (2) (d) of the statutes is amended to read:

SB201,12,9 632.897 (2) (d) If the employer is notified to terminate the coverage for any of the reasons provided under par. (b), the employer shall provide the terminated insured written notification of the right to continue group coverage or convert to individual coverage and the payment amounts required for either continued or converted coverage including the manner, place and time in which the payments shall be made. This notice shall be given not more than 5 days after the employer receives notice to terminate coverage. The payment amount for continued group coverage may not exceed the group rate in effect for a group member, including an employer's contribution, if any, for a group policy as defined in sub. (1) (c) 1. or 1m. or the equivalent value of the monthly contribution of a group member to a group policy as defined in sub. (1) (c) 2. or the equivalent value of the monthly premium for franchise insurance as defined in sub. (1) (c) 3. The premium for converted coverage shall be determined in accordance with the insurer's table of premium rates applicable to the age and class of risks of each person to be covered under that policy and to the type and amount of coverage provided, subject to s. 635.05 and any rules promulgated under s. 635.06. The notice may be sent to the terminated insured's home address as shown on the records of the employer.

SB201, s. 20 Section 20. 632.897 (9) (c) of the statutes is amended to read:

SB201,12,23 632.897 (9) (c) When the insurer is notified that the coverage of a spouse may be terminated because of a divorce or annulment, the insurer shall provide the former spouse written notification of the right to obtain individual coverage under sub. (4), the premium amounts required and the manner, place and time in which premiums may be paid. This notice shall be given not less than 30 days before the former spouse's coverage would otherwise terminate. The premium shall be determined in accordance with the insurer's table of premium rates applicable to the age and class of risk of every person to be covered and to the type and amount of coverage provided, subject to s. 635.05 and any rules promulgated under s. 635.06. If the former spouse tenders the first monthly premium to the insurer within 30 days after the notice provided by this paragraph, sub. (4) shall apply and the former spouse shall receive individual coverage commencing immediately upon termination of his or her coverage under the insured's policy.

SB201, s. 21 Section 21. Chapter 635 (title) of the statutes is amended to read:

SB201,13,3 Chapter 635 SMALL EMPLOYER REGULATION OF HEALTH INSURANCE

SB201, s. 22 Section 22. 635.01 of the statutes is repealed and recreated to read:

SB201,13,5 635.01 Scope. (1) This subchapter applies to all of the following:

SB201,13,8 (a) Group health benefit plans, and insurers with respect to group health benefit plans, that are written on risks or operations in this state and that provide coverage for eligible employes of an employer.

SB201,13,11 (b) Individual health benefit plans, and insurers with respect to individual health benefit plans, that are issued or renewed to a policyholder who is a resident of this state and who was a resident of this state when the policy was first issued.

SB201,13,15 (2) The provisions of this subchapter that apply to individual health benefit plans apply to certificates issued under a group health benefit plan as if the certificates were individual health benefit plans if the group health benefit plan certificates are marketed to individuals.

SB201, s. 23 Section 23. 635.02 (1) of the statutes is repealed.

SB201, s. 24 Section 24. 635.02 (1c) of the statutes is amended to read:

SB201,13,19 635.02 (1c) "Basic health benefit plan" means the a small employer health insurance plan under subch. II.

SB201, s. 25 Section 25. 635.02 (1r) of the statutes is created to read:

SB201,13,21 635.02 (1r) "Board" means the comprehensive health care board.

SB201, s. 26 Section 26. 635.02 (2) of the statutes is amended to read:

SB201,14,4 635.02 (2) "Case characteristics" means the demographic, actuarially based characteristics of the employes of a small employer, and the employer, if covered members of a group or of an individual, such as age, sex gender, geographic location area and occupation, used by a small employer an insurer to determine premium rates for a small employer health benefit plan. "Case characteristics" does not include loss or claim history, health status condition, duration of coverage or other factors related to claim claims experience.

SB201, s. 27 Section 27. 635.02 (3) of the statutes is repealed and recreated to read:

SB201,14,10 635.02 (3) "Community rate" means a uniform rate determined in such a manner that all insured individuals with the same level of coverage and plan design pay the same rate for that coverage, without regard to case characteristics or to loss or claim history, health condition, duration of coverage or other factors related to claims experience.

SB201, s. 28 Section 28. 635.02 (3f) of the statutes is amended to read:

SB201,14,19 635.02 (3f) "Eligible employe" means an employe who works on a full-time basis and has a normal work week of 30 or more hours. The term includes a sole proprietor, a business owner, including the owner of a farm business, a partner of a partnership, a member of a limited liability company and an independent contractor if the sole proprietor, business owner, partner, member or independent contractor is included as an employe under a health benefit plan of a small an employer, but the term does not include an employe who works on a part-time, temporary or substitute basis.

SB201, s. 29 Section 29. 635.02 (3h) of the statutes is created to read:

SB201,14,21 635.02 (3h) "Employer" means any of the following:

SB201,15,2 (a) An individual, firm, corporation, partnership, limited liability company or association that is actively engaged in a business enterprise in this state, including a farm business, and that employs in this state not fewer than 2 nor more than 100 eligible employes. In determining the number of eligible employes, employers that are affiliated, or that are eligible to file a combined tax return for purposes of state taxation, shall be considered one employer.

SB201,15,4 (b) A municipality, as defined in s. 16.70 (8), that employs not fewer than 2 nor more than 100 eligible employes.

SB201, s. 30 Section 30. 635.02 (3j) of the statutes is amended to read:

SB201,15,8 635.02 (3j) "Established geographic service area" means a geographic area within which a small employer an insurer provides coverage and that has been approved by the commissioner.

SB201, s. 31 Section 31. 635.02 (3m) of the statutes is amended to read:

SB201,15,18 635.02 (3m) "Health benefit plan" means any hospital or medical policy or certificate, and includes a conversion health insurance policy. "Health benefit plan" does not include accident-only, credit, dental, vision, medicare supplement, medicare replacement, long-term care, or disability income insurance, coverage issued as a supplement to liability insurance, worker's compensation or similar insurance, automobile medical payment insurance, specified disease policies, hospital indemnity policies, as defined in s. 632.895 (1) (c), policies or certificates issued under the health insurance risk-sharing plan or an alternative plan under subch. II of ch. 619 or other insurance exempted by rule of the commissioner.

SB201, s. 32 Section 32. 635.02 (4g) of the statutes is created to read:

SB201,16,3 635.02 (4g) "Insurer" means an insurer that is authorized to do business in this state, in one or more lines of insurance that includes health insurance, and that offers group health benefit plans covering eligible employes of one or more employers in this state, or that sells individual health benefit plans to individuals who are residents of this state. The term includes a health maintenance organization, as defined in s. 609.01 (2), a preferred provider plan, as defined in s. 609.01 (4), and an insurer operating as a cooperative association organized under ss. 185.981 to 185.985, but does not include a limited service health organization, as defined in s. 609.01 (3).

SB201, s. 33 Section 33. 635.02 (4m) of the statutes is repealed.

SB201, s. 34 Section 34. 635.02 (5) of the statutes is repealed.

SB201, s. 35 Section 35. 635.02 (5m) (d) of the statutes is created to read:

SB201,16,8 635.02 (5m) (d) The health insurance risk-sharing plan or an alternative plan under subch. II of ch. 619.

SB201, s. 36 Section 36. 635.02 (6) of the statutes is repealed.

SB201, s. 37 Section 37. 635.02 (6m) of the statutes is amended to read:

SB201,16,14 635.02 (6m) "Restricted network provision" means a provision of a health benefit plan that conditions the payment of benefits, in whole or in part, on obtaining services or articles from health care providers that have contracted with the small employer insurer to provide health care services or articles to covered individuals.

SB201, s. 38 Section 38. 635.02 (7) (intro.) and (a) of the statutes are consolidated, renumbered 635.02 (7) and amended to read:

SB201,16,23 635.02 (7) "Small employer" means any of the following: (a) An individual, firm, corporation, partnership, limited liability company or association that is actively engaged in a business enterprise in this state, including a farm business, and an employer that employs in this state not fewer than 2 nor more than 25 eligible employes. In determining the number of eligible employes, employers that are affiliated, or that are eligible to file a combined tax return for purposes of state taxation, shall be considered one employer.

SB201, s. 39 Section 39. 635.02 (7) (b) of the statutes is repealed.

SB201, s. 40 Section 40. 635.02 (8) of the statutes is repealed.

SB201, s. 41 Section 41. 635.03 of the statutes is created to read:

SB201,17,3 635.03 Duties of the board. In addition to any other duties specifically required under this subchapter, the board shall do all of the following:

SB201,17,4 (1) Perform the duties required under subch. II.

SB201,17,5 (2) Provide data or technical assistance to any purchasing coalition.

SB201,17,7 (3) Develop quality outcomes measures, quality and practice pattern standards and health plan performance criteria.

SB201,17,8 (4) Provide information on technology assessment to any purchasing coalition.

SB201,17,10 (5) Recommend cost containment measures and provide assessments of health care needs to any purchasing coalition.

SB201, s. 42 Section 42. 635.05 of the statutes is repealed and recreated to read:

SB201,17,15 635.05 Community rating. (1) Except as provided in subs. (2) and (4), an insurer shall charge a community rate for coverage under a health benefit plan that is subject to this subchapter and that is issued or renewed on or after the effective date of this subsection .... [revisor inserts date].

SB201,17,18 (2) Subject to rate bands prescribed by the commissioner by rule, the community rate under sub. (1) may be modified by taking into account the following factors:

SB201,17,19 (a) The insured's age.

SB201,17,20 (b) The insured's gender.

SB201,17,22 (c) The insured's geographic area, which may not include less than an entire county.

SB201,17,23 (d) The insured's tobacco use.

SB201,17,25 (e) Whether the insured's coverage is single coverage or a type of family coverage.

SB201,18,3 (3) For each of the following factors, the rate bands prescribed by the commissioner by rule may not restrict the ratio of the highest variance to the lowest variance to a ratio that is less than the ratio shown after each factor:

SB201,18,4 (a) For age, a ratio of 2.5.

SB201,18,5 (b) For gender, a ratio of 1.2.

SB201,18,6 (c) For geographic area, a ratio of 1.2.

SB201,18,9 (4) An insurer may provide a rate discount for healthy lifestyle choices on the part of an insured individual that, given the individual's health condition, tend to reduce the risk of loss.

SB201, s. 43 Section 43. 635.06 of the statutes is created to read:

SB201,18,18 635.06 Transition by rule. Notwithstanding s. 635.05 (1) and (2), the commissioner may promulgate rules that permit an insurer to vary from the community rate required under s. 635.05 (1) and modified under s. 635.05 (2) within restrictions provided in the rules. The restrictions provided in the rules shall be reasonably designed to provide for an orderly transition to the community rates required under s. 635.05 (1) and modified under s. 635.05 (2) for all health benefit plans subject to this subchapter by no later than the first day of the 12th month beginning after the effective date of this section .... [revisor inserts date].

SB201, s. 44 Section 44. 635.07 (1) (intro.), (b), (d) and (e) of the statutes are amended to read:

SB201,19,2 635.07 (1) (intro.) Notwithstanding s. 631.36 (2) to (4m), a health benefit plan or policy subject to this subchapter may not be canceled by an insurer before the expiration of the agreed term, and shall be renewable to the employer and all employes policyholder and all insureds and dependents eligible under the terms of the health benefit plan or policy at the expiration of the agreed term at the option of the small employer policyholder, except for any of the following reasons:

SB201,19,5 (b) Fraud or misrepresentation by the small employer policyholder, or, with respect to coverage for an insured individual, fraud or misrepresentation by the that insured individual.

SB201,19,7 (d) The number of individuals covered under the health benefit plan or policy is less than the number required by the health benefit plan or policy.

SB201,19,8 (e) The small employer is no longer actively engaged in a business enterprise.

SB201, s. 45 Section 45. 635.07 (1) (f) of the statutes is created to read:

SB201,19,11 635.07 (1) (f) The health benefit plan is an individual policy and the commissioner permits cancellation or nonrenewal of such a policy by rule.