AB416-SSA1, s. 37 4Section 37. 619.14 (5) (a) of the statutes is amended to read:
AB416-SSA1,16,255 619.14 (5) (a) The plan shall offer a deductible in combination with appropriate
6premiums determined under this subchapter for major medical expense coverage
7required under this section. For coverage offered to those persons eligible for
8medicare, the plan shall offer a deductible equal to the deductible charged by part
9A of title XVIII of the federal social security act, as amended. The deductible
10amounts for all other eligible persons shall be dependent upon household income as
11determined under s. 619.165. For eligible persons under s. 619.165 (1) (b) 1., the
12deductible shall be $500. For eligible persons under s. 619.165 (1) (b) 2., the
13deductible shall be $600. For eligible persons under s. 619.165 (1) (b) 3., the
14deductible shall be $700. For eligible persons under s. 619.165 (1) (b) 4., the
15deductible shall be $800. For all other eligible persons who are not eligible for
16medicare, the deductible shall be $1,000. With respect to all eligible persons,
17expenses used to satisfy the deductible during the last 90 days of a calendar year
18shall also be applied to satisfy the deductible for the following calendar year. The
19schedule of premiums shall be promulgated by rule by the commissioner , subject to
20s. 619.15 (3) (f)
. The commissioner shall set rates at 60% of the operating and
21administrative costs of the plan
premiums for eligible persons who have a household
22income, as defined in s. 71.52 (5) and as determined under s. 619.165 (1) (d), at or
23above the threshold amount established under s. 619.15 (3) (g) at a higher rate than
24premiums for eligible persons who have a household income below the threshold
25amount
.
AB416-SSA1, s. 38
1Section 38. 619.14 (5) (d) of the statutes is amended to read:
AB416-SSA1,17,82 619.14 (5) (d) Notwithstanding pars. (a) to (c), the board may establish
3different deductible amounts, a different coinsurance percentage and different
4covered costs and deductible aggregate amounts from those specified in pars. (a) to
5(c) in accordance with cost containment provisions established by the commissioner
6under s. 619.17 (4) (a) and for individuals who enroll in an alternative plan under s.
7619.145 or who are unable to enroll in an alternative plan because of the
8unavailability of such a plan in the individual's geographic area
.
AB416-SSA1, s. 39 9Section 39. 619.145 (1) of the statutes is amended to read:
AB416-SSA1,17,1610 619.145 (1) The Except as provided in sub. (1m), the board may offer to persons
11eligible for coverage under s. 619.12 the opportunity to enroll, on a voluntary basis,
12in an alternative plan that uses managed care and that the commissioner determines
13provides benefits that are substantially equivalent to or greater than the benefits
14provided under the plan. A person who voluntarily enrolls in an alternative plan
15under this section is ineligible for coverage under the plan for 12 months after
16enrolling in the alternative plan.
AB416-SSA1, s. 40 17Section 40. 619.145 (1m) of the statutes is created to read:
AB416-SSA1,17,2218 619.145 (1m) (a) The board shall promulgate rules that implement the use of
19alternative plans that use managed care and capitation or other risk-sharing
20mechanisms and that the commissioner determines provide benefits for persons who
21use the services of providers designated by the alternative plan that are
22substantially equivalent to or greater than the benefits provided under the plan.
AB416-SSA1,17,2523 (b) Beginning on July 1, 1997, the board shall offer to persons eligible for
24coverage under s. 619.12 the opportunity to enroll, and may require such persons to
25enroll, in an alternative plan.
AB416-SSA1,18,7
1(c) Notwithstanding s. 619.14 (5) (a), the board may by rule establish premiums
2for persons who enroll in an alternative plan that are different from premiums for
3persons who do not enroll in an alternative plan to reflect the differences in the cost
4of covered services and articles. A person who is unable to enroll in an alternative
5plan because of the unavailability of such a plan in the person's geographic area,
6however, shall be allowed to pay the same premium rate as persons who do enroll in
7an alternative plan.
AB416-SSA1, s. 41 8Section 41. 619.145 (3) (e) of the statutes is repealed.
AB416-SSA1, s. 42 9Section 42. 619.145 (3) (e) of the statutes is created to read:
AB416-SSA1,18,1310 619.145 (3) (e) Subject to sub. (4), a reduction in the alternative plan's
11assessment under s. 619.13 for operating and administrative, but not subsidy,
12expenses of the plan. This paragraph does not apply after 2 years after the effective
13date of this paragraph .... [revisor inserts date].
AB416-SSA1, s. 43 14Section 43. 619.145 (4) of the statutes is repealed.
AB416-SSA1, s. 44 15Section 44. 619.145 (4) of the statutes is created to read:
AB416-SSA1,18,1916 619.145 (4) A contract under sub. (3) may not provide for a reduction in the
17assessment under s. 619.13 against an alternative plan unless the assessment
18reduction has been adopted by rule under s. 619.15 (4) (e). This subsection does not
19apply after 2 years after the effective date of this subsection .... [revisor inserts date].
AB416-SSA1, s. 45 20Section 45. 619.15 (1) of the statutes is amended to read:
AB416-SSA1,19,821 619.15 (1) The plan shall operate subject to the supervision and approval of a
22board consisting of representatives of 2 participating insurers which are nonprofit
23corporations, 2 other participating insurers
3 insurers and 3 health care providers,
24and 3 public members, appointed by the commissioner for staggered 3-year terms.
25In addition, the commissioner or a designated representative from the office of the

1commissioner shall be a member of the board. The public members shall not be
2professionally affiliated with the practice of medicine, a hospital or an insurer. At
3least 2 of the public members shall be individuals reasonably expected to qualify for
4coverage under the plan or the parent or spouse of such an individual. The
5commissioner or the commissioner's representative shall be the chairperson of the
6board. Board members, except the commissioner or the commissioner's
7representative, shall be compensated at the rate of $50 per diem plus actual and
8necessary expenses.
AB416-SSA1, s. 46 9Section 46. 619.15 (3) (bc) of the statutes is created to read:
AB416-SSA1,19,1310 619.15 (3) (bc) Specify all persons that are required to impose and collect the
11surcharge under s. 619.13 (1) (a). The board shall include every type of provider that
12may provide a covered service or article under s. 619.14 (3). This paragraph does not
13apply after June 30, 2000.
AB416-SSA1, s. 47 14Section 47. 619.15 (3) (bc) of the statutes, as created by 1995 Wisconsin Act
15.... (this act), is repealed.
AB416-SSA1, s. 48 16Section 48. 619.15 (3) (bm) of the statutes is created to read:
AB416-SSA1,19,2317 619.15 (3) (bm) Set the amount of the surcharge under s. 619.13 (1) (a) at a level
18that is sufficient to cover claims paid under the plan, the operating and
19administrative expenses of the plan and the administrative expenses that may be
20retained by health care providers under s. 619.13 (1) (b) at a level sufficient to cover
21a health care provider's administrative expenses. The amount shall be a flat
22encounter fee, and the board may provide for different surcharge amounts for
23different services or articles. This paragraph does not apply after June 30, 2000.
AB416-SSA1, s. 49 24Section 49. 619.15 (3) (bm) of the statutes, as created by 1995 Wisconsin Act
25.... (this act), is repealed.
AB416-SSA1, s. 50
1Section 50. 619.15 (3) (c) of the statutes is amended to read:
AB416-SSA1,20,102 619.15 (3) (c) Collect assessments surcharges from all insurers health care
3providers
to provide for claims paid under the plan and for administrative expenses
4incurred or estimated to be incurred during the period for which the assessment is
5made. The level of payments shall be established by the board. Assessment of the
6insurers shall occur at the end of each calendar year or other fiscal year end
7established by the board. Assessments are due and payable within 30 days of receipt
8by the insurer of the assessment notice
. The board shall ensure that all surcharges
9are deposited in the health insurance risk-sharing plan fund. This paragraph does
10not apply after June 30, 2000
.
AB416-SSA1, s. 51 11Section 51. 619.15 (3) (c) of the statutes, as affected by 1995 Wisconsin Act ....
12(this act), is repealed and recreated to read:
AB416-SSA1,20,2013 619.15 (3) (c) Collect assessments from all insurers to provide for claims paid
14under the plan and for administrative expenses incurred or estimated to be incurred
15during the period for which the assessment is made. The level of payments shall be
16established by the board. Assessment of the insurers shall occur at the end of each
17calendar year or other fiscal year end established by the board. Assessments are due
18and payable within 30 days of receipt by the insurer of the assessment notice. This
19paragraph does not apply after 2 years after the effective date of this paragraph ....
20[revisor inserts date].
AB416-SSA1, s. 52 21Section 52. 619.15 (3) (f) and (g) of the statutes are created to read:
AB416-SSA1,20,2422 619.15 (3) (f) Determine the percentage, but not less than 60%, of the operating
23and administrative costs of the plan at which the commissioner must set premium
24rates under s. 619.14 (5) (a).
AB416-SSA1,21,3
1(g) Establish a threshold amount for the household income, as defined in s.
271.52 (5) and as determined under s. 619.165 (1) (d), of an eligible person for purposes
3of determining premium rates under s. 619.14 (5) (a).
AB416-SSA1, s. 53 4Section 53 . 619.15 (4) (c) of the statutes is repealed and recreated to read:
AB416-SSA1,21,85 619.15 (4) (c) Adjust the surcharge amount under sub. (3) (bm) to ensure
6adequate funding for the payment of claims, the operating and administrative
7expenses of the plan and the administrative expenses retained by health care
8providers. This paragraph does not apply after June 30, 2000.
AB416-SSA1, s. 54 9Section 54 . 619.15 (4) (c) of the statutes, as affected by 1995 Wisconsin Act ....
10(this act), is repealed and recreated to read:
AB416-SSA1,21,1811 619.15 (4) (c) In addition to assessments imposed under sub. (3) (c), levy
12interim assessments to ensure the financial ability of the plan to cover claims
13expense and administrative expenses incurred or estimated to be incurred in the
14operation of the plan prior to the end of the calendar year end or other fiscal year end
15established by the board. Interim assessments shall be due and payable within 30
16days of receipt by an insurer of an interim assessment notice. Interim assessments
17shall be credited against each insurer's annual assessment. This paragraph does not
18apply after 2 years after the effective date of this paragraph .... [revisor inserts date].
AB416-SSA1, s. 55 19Section 55. 619.15 (4) (e) of the statutes is repealed.
AB416-SSA1, s. 56 20Section 56. 619.15 (4) (e) of the statutes is created to read:
AB416-SSA1,21,2421 619.15 (4) (e) By rule provide for a reduction in the assessment under s. 619.13
22against an alternative plan that provides coverage to eligible persons. This
23paragraph does not apply after 2 years after the effective date of this paragraph ....
24[revisor inserts date].
AB416-SSA1, s. 57 25Section 57. 619.165 (1) (a) of the statutes is amended to read:
AB416-SSA1,22,4
1619.165 (1) (a) The board shall reduce the premiums established by the
2commissioner under s. 619.11 in conformity with ss. 619.14 (5), 619.15 (3) (f) and (g)
3and 619.17 or established by the board under s. 619.145 (1m) (c), for the eligible
4persons and in the manner set forth in pars. (b) to (d).
AB416-SSA1, s. 58 5Section 58. 619.165 (1) (d) of the statutes is amended to read:
AB416-SSA1,22,86 619.165 (1) (d) The board shall establish and implement the method for
7determining the household income of an eligible person under par. (b) and under ss.
8619.14 (5) (a) and 619.15 (3) (g)
.
AB416-SSA1, s. 59 9Section 59. 619.165 (2) of the statutes is amended to read:
AB416-SSA1,22,1310 619.165 (2) The board shall direct the administering carrier to collect, under
11s. 619.16 (3) (b), from the eligible persons under sub. (1) the premiums as reduced
12under sub. (1) rather than the premiums established by the commissioner or by the
13board
.
AB416-SSA1, s. 60 14Section 60. 619.17 (1) of the statutes is amended to read:
AB416-SSA1,22,1615 619.17 (1) Subject to s. ss. 619.14 (5) (a) and 619.15 (3) (f) and (g), a rating plan
16calculated in accordance with generally accepted actuarial principles.
AB416-SSA1, s. 61 17Section 61 . 619.175 of the statutes is amended to read:
AB416-SSA1,22,22 18619.175 Waiver or exemption from provisions prohibited. Except as
19provided in s. 619.13 (1) (a), the
The commissioner may not waive, or authorize the
20board to waive, any of the requirements of this subchapter or exempt, or authorize
21the board to exempt, an individual or a class of individuals from any of the
22requirements of this subchapter.
AB416-SSA1, s. 62 23Section 62 . 619.175 of the statutes, as affected by 1995 Wisconsin Act .... (this
24act), section 61, is repealed and recreated to read:
AB416-SSA1,23,5
1619.175 Waiver or exemption from provisions prohibited. Except as
2provided in s. 619.13 (1) (a), the commissioner may not waive, or authorize the board
3to waive, any of the requirements of this subchapter or exempt, or authorize the
4board to exempt, an individual or a class of individuals from any of the requirements
5of this subchapter.
AB416-SSA1, s. 63 6Section 63 . 619.175 of the statutes, as affected by 1995 Wisconsin Act .... (this
7act), sections 55 and 56, is repealed and recreated to read:
AB416-SSA1,23,11 8619.175 Waiver or exemption from provisions prohibited. The
9commissioner may not waive, or authorize the board to waive, any of the
10requirements of this subchapter or exempt, or authorize the board to exempt, an
11individual or a class of individuals from any of the requirements of this subchapter.
AB416-SSA1, s. 64 12Section 64. 625.12 (2) of the statutes is amended to read:
AB416-SSA1,23,2113 625.12 (2) Classification. Risks Subject to s. 635.09, risks may be classified
14in any reasonable way for the establishment of rates and minimum premiums,
15except that no classifications may be based on race, color, creed or national origin,
16and classifications in automobile insurance may not be based on physical condition
17or developmental disability as defined in s. 51.01 (5). Subject to s. ss. 632.365 and
18635.09
, rates thus produced may be modified for individual risks in accordance with
19rating plans or schedules that establish reasonable standards for measuring
20probable variations in hazards, expenses, or both. Rates may also be modified for
21individual risks under s. 625.13 (2).
AB416-SSA1, s. 65 22Section 65. 628.34 (3) (a) of the statutes is amended to read:
AB416-SSA1,24,423 628.34 (3) (a) No insurer may unfairly discriminate among policyholders by
24charging different premiums or by offering different terms of coverage except on the
25basis of classifications related to the nature and the degree of the risk covered or the

1expenses involved, subject to s. ss. 632.365, 635.03, 635.09 and 635.16. Rates are not
2unfairly discriminatory if they are averaged broadly among persons insured under
3a group, blanket or franchise policy, and terms are not unfairly discriminatory
4merely because they are more favorable than in a similar individual policy.
AB416-SSA1, s. 66 5Section 66. 628.34 (3) (b) of the statutes is amended to read:
AB416-SSA1,24,116 628.34 (3) (b) No insurer may refuse to insure or refuse to continue to insure,
7or limit the amount, extent or kind of coverage available to an individual, or charge
8an individual a different rate for the same coverage because of a mental or physical
9disability except when the refusal, limitation or rate differential is based on either
10sound actuarial principles supported by reliable data or actual or reasonably
11anticipated experience, subject to ss. 635.03 to 635.09, 635.16 and 635.17.
AB416-SSA1, s. 67 12Section 67. 632.727 of the statutes is created to read:
AB416-SSA1,24,14 13632.727 Electronic claims capability. (1) Definition. In this section,
14"health care provider" has the meaning given in s. 146.81 (1) (a) to (m) and (p).
AB416-SSA1,24,16 15(2) Insurers. Beginning on January 1, 1997, every insurer that offers disability
16insurance must have and use the capability to accept all claims electronically.
AB416-SSA1,24,19 17(3) Health care providers. (a) Beginning on January 1, 1997, every health
18care provider that has annual gross revenues of more than $1,000,000 must have and
19use the capability to electronically transmit disability insurance claims information.
AB416-SSA1,24,2220 (b) Beginning on January 1, 1998, every health care provider not specified in
21par. (a) must have and use the capability to electronically transmit disability
22insurance claims information.
AB416-SSA1, s. 68 23Section 68. 632.76 (2) (a) of the statutes is amended to read:
AB416-SSA1,25,424 632.76 (2) (a) No claim for loss incurred or disability commencing after 2 years
25from the date of issue of the policy may be reduced or denied on the ground that a

1disease or physical condition existed prior to the effective date of coverage, unless the
2condition was excluded from coverage by name or specific description by a provision
3effective on the date of loss. This paragraph does not apply to a health benefit plan,
4as defined in s. 635.02 (3), which is subject to s. 635.03 (2) or 635.16 (2).
AB416-SSA1, s. 69 5Section 69. 632.896 (4) of the statutes is amended to read:
AB416-SSA1,25,116 632.896 (4) Preexisting conditions. Notwithstanding s. ss. 632.76 (2) (a),
7635.03 (2) and 635.16 (2)
, a disability insurance policy that is subject to sub. (2) and
8that is in effect when a court makes a final order granting adoption or when the child
9is placed for adoption may not exclude or limit coverage of a disease or physical
10condition of the child on the ground that the disease or physical condition existed
11before coverage is required to begin under sub. (3).
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.
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