Mail: PO Box 7873, Madison, WI 53707-7873
Analysis Prepared by the Office of the Commissioner of Insurance (OCI)
Statutes interpreted
Statutory authority
Explanation of agency authority
2009 Wisconsin Act 28 created chapter 648, Wis. Stat., establishing the regulation of care management organizations. The statute specifically authorizes the commissioner to promulgate rules that are necessary to carry out the intent of the statute with consultation with the department. These proposed rules are the result of numerous discussions with the department and incorporate effective regulatory tools modified appropriately for care management organizations.
Related statutes or rules
The proposed rule is consistent with and related to existing financial regulations including, chs.
Ins 9,
40 and
50, Wis. Adm. Code.
Plain language analysis and summary of the proposed rule
Ch.
648, Wis. Stats., was created to establishes financial regulation of care management organizations that provide and coordinate services for the Family Care program. Family Care is a Wisconsin Medicaid program that was designed to provide cost-effective, comprehensive and flexible long-term care that fosters consumers' independence and quality of life, while recognizing the need for interdependence and support. Family Care improves the cost-effective coordination of long-term care services by creating a single flexible benefit that includes a large number of health and long-term care services that are typically only available separately. Enrollees have access to specific health care services offered by Medicaid as well as long-term care services in the Home and Community-Based Waivers and the state-funded Community Options Program.
Family Care is a public program operated by the Wisconsin Department of Health Services (“Department"), that contracts with both private and public plans to provide consumers an option for coverage of long-term care services beyond fee-for-service and the self-directed supports waiver. The care management organizations receive a fixed capitated amount per enrollee from the Department through the waiver programs. However, due to the nature of the organizations and the structure of the plan, care management organizations, unlike insurers, may be less able to build and draw upon reserves both during the expansion periods and due to the potential for unforeseen expenditures.
The proposed rule implements ch.
648, Stats., financial regulatory oversight of the care management organizations in coordination with the Department to ensure the organizations use sound financial tools when commencing operations and ongoing oversight of the financial condition of the organizations. Specifically the proposed rule establishes minimum financial standards, financial reporting requirements, regulatory examinations and restricted reserves for care management organizations in the event of an insolvency.
Comparison with federal regulations
There is no existing or proposed federal regulation related to oversight of care management organizations.
Comparison of similar rules in adjacent states
Illinois:
None.
Iowa:
None.
Michigan:
None.
Minnesota:
None.
Summary of factual data and analytical methodologies
The Office engaged along with the Department of Health Services engaged PricewaterhouseCoopers to analyze the necessary reserves and regulatory structure for the Family Care program. In addition the office reviewed care management organizations' financial information, coordinated the proposed regulatory scheme with current oversight provided by the Department and reviewed accounting principles best suited for care management organizations
Analysis and supporting documentation used to determine effect on small businesses
The Office worked with the Department of Health Services to determine the rule's effect on small businesses that are care management organizations.
Small Business Impact
This rule will have minimal to no effect on small businesses that are care management organizations. This rule may effect small businesses that are care management organizations seeking a permit from the commissioner. The office worked closely with the Department to minimize the impact on the care management organizations and will share information between departments so not to overly burden care management organizations
Small business regulatory coordinator
The OCI small business coordinator is Eileen Mallow and may be reached at phone number (608) 266-7843 or at email address
eileen.mallow@wisconsin.gov
Fiscal Estimate
Private sector fiscal impact
This rule change will have no significant effect on the private sector regulated by OCI.
State or local government fiscal impact
There will be no state or local government fiscal effect.
Long-range fiscal implications
None.
Notice of Hearing
Insurance
NOTICE IS HEREBY GIVEN that pursuant to the authority granted under s.
601.41 (3), Stats., and the procedures set forth under s.
227.18, Stats., subject to the Commissioner's approval of the Statement of Scope, the Office of the Commissioner of Insurance (OCI) will hold a public hearing to consider emergency rules and adoption of proposed permanent rules creating section
Ins 3.34, Wis. Adm. Code, relating to coverage of dependents to age 27 and affecting small business.
Hearing Information
Date: December 9, 2009
Time: 1:00 p.m., or as soon thereafter as the
matter may be reached
Place: OCI, Room 227
125 South Webster Street, 2nd Floor
Madison, WI
Submission of Written Comments
Written comments can be mailed to:
Julie E. Walsh
Legal Unit - OCI Rule Comment for Rule Ins 334
Office of the Commissioner of Insurance
PO Box 7873
Madison WI 53707-7873
Written comments can be hand delivered to:
Julie E. Walsh
Legal Unit - OCI Rule Comment for Rule Ins 334
Office of the Commissioner of Insurance
125 South Webster St – 2nd Floor
Madison WI 53703-3474
Comments can be emailed to:
Julie E. Walsh
The deadline for submitting comments is 4:00 p.m. on the 14th day after the date for the hearing stated in this Notice of Hearing.
Copy of Proposed Rule and Contact Person
A copy of the full text of the proposed rule changes, analysis and fiscal estimate may be obtained from the OCI internet Web site at
http://oci.wi.gov/ocirules.htm or by contacting Inger Williams, OCI Services Section, at:
Phone: (608) 264-8110
Address: 125 South Webster St – 2nd Floor,
Madison WI 53703-3474
Mail: PO Box 7873, Madison, WI 53707-7873
Analysis Prepared by the Office of the Commissioner of Insurance (OCI)
Statutes interpreted
Statutory authority
Explanation of agency authority
The commissioner is authorized by s.
601.41, Stats., to propose rules in accordance with s.
227.11 (2), Stats., in order for the commissioner to administer and enforce the insurance statutes. Since passage of
2009 Wis. Act 28, the commissioner has been made aware of dramatic differences in interpretation and approaches to implementation that necessitate rule making.
Related statutes or rules
None.
Plain language analysis and summary of the proposed rule
The proposed rule interprets and implements the requirements of s.
632.885, Stats., by clarifying and defining eligibility criteria and providing guidance as to how insurers and self-insured health plans are to determine an adult child's eligibility for coverage. The proposed rule clarifies that the mandate applies to individual and group health insurance, limited-scope health insurance including vision and dental plans as well as self-insured health plans. The rule also clarifies that this mandate does not apply to certain insurance products including long-term care and Medigap policies. Further, as described in the applicability provisions of
2009 Wis. Act 28, the rule states when the mandate first applies, including the initial applicability for collectively bargained health plans.
The proposed rule provides clarity through definitions of “premium contribution" and “premium amount." The commissioner received the greatest volume of inquiries seeking guidance on how the premium comparison was to be conducted. The proposed rule simplifies and guides insurers and self-insured plans on exactly what is to be compared for this element of eligibility determination.
Guidance is provided regarding to whom an offer of coverage for an eligible adult child is to be given and reinforces the statutory provision that it is only the applicant or the insured who determines whether or not an eligible dependent is added to his or her health plan. The rule further informs insurers and self-insured plans on prohibited practices that would unduly restrict an otherwise eligible dependent from coverage contrary to the intent of the statute.
Specifically the rule provides specific guidance to insurers offering individual health insurance products as compared to insurers or self-insured health plans offering group health insurance coverage. Insurers offering individual health insurance may rate, may utilize pre-existing condition waiting periods and may apply elimination riders to an eligible adult child but may not impose such limitations as coverage would be rendered illusory. Insurers offering group health insurance or limited-scope insurance and self-insured health plans must comply with s.
632.746, Stat., with regards to pre-existing condition waiting periods and application of creditable coverage. The rule also requires insurers and self-insured health plans to treat an eligible adult child as a new entrant and provide annually at least a 30-day enrollment period.
Finally, the rule clarifies s.
632.885 (2) (a) 3. and
(b) 3., Stats. An adult child is an eligible adult child when the child is between the ages of 17 and 27, is not married and who is not eligible for his or her employer sponsored coverage or whose employer does not offer health insurance to its employees. An adult child who has been called to federal active duty is an eligible adult child when a full-time student, less than 27 years of age when called to active duty. The rule clarifies that the adult child will have up to 12 months after completing active duty to apply for full-time student status at an institution of higher education, and that if the adult child is called more than once in four years of the first call to active duty, insurers and self-insured health plans may only use the adult child's age at the time of the first call to active duty when determining eligibility.
Comparison with federal regulations
