Amendment SSA1-AB416

AB416-SSA1, s. 70 Section 70. Chapter 635 (title) of the statutes is amended to read:

AB416-SSA1,25,13 CHAPTER 635

AB416-SSA1,25,15 SMALL EMPLOYER regulation of HEALTH INSURANCE

AB416-SSA1, s. 71 Section 71. 635.01 of the statutes is repealed.

AB416-SSA1, s. 72 Section 72. 635.02 of the statutes is repealed and recreated to read:

AB416-SSA1,25,18 635.02 Definitions. In this subchapter:

AB416-SSA1,25,20 (1) "Basic health benefit plan" means a small employer health insurance plan under subch. II.

AB416-SSA1,25,24 (2) "Dependent" means a spouse, an unmarried child under the age of 19 years, an unmarried child who is a full-time student under the age of 21 years and who is financially dependent upon the parent, or an unmarried child of any age who is medically certified as disabled and who is dependent upon the parent.

AB416-SSA1,26,10 (3) "Health benefit plan" means any hospital or medical policy or certificate. "Health benefit plan" does not include accident-only, credit accident or health, dental, vision, medicare supplement, medicare replacement, long-term care, disability income or short-term insurance, coverage issued as a supplement to liability insurance, worker's compensation or similar insurance, automobile medical payment insurance, student-only medical plans, policies issued to medicaid recipients, individual conversion policies, 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.

AB416-SSA1,26,14 (4) "Short-term insurance" means a temporary individual major medical or accident insurance policy issued for a term of 6 months or less, except that such a policy may be renewed one time at the expiration of the initial term for a term of 6 months or less.

AB416-SSA1,26,19 (5) "Student-only medical plan" means a limited nonmedically underwritten individual or group health benefit plan that is guaranteed renewable while the covered person is enrolled as a regular, full-time undergraduate or graduate student at an accredited technical or trade school, college or university and to which any of the following applied at issuance:

AB416-SSA1,26,20 (a) The student was not insured under a health benefit plan.

AB416-SSA1,26,23 (b) The student was eligible for coverage under a health benefit plan of his or her parent, stepparent or guardian but was unable to access the full health benefits of the plan due to limitations in the plan's geographic service area.

AB416-SSA1, s. 73 Section 73. 635.03 of the statutes is created to read:

AB416-SSA1,27,2 635.03 Coverage requirements for all group health benefit plans. (1) Definitions. In this section and s. 635.04:

AB416-SSA1,27,9 (a) 1. Except as provided in subd. 2., "eligible employe" means an employe who works on a permanent basis and has a normal workweek 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 and a member of a limited liability company if the sole proprietor, business owner, partner or member is included as an employe under a health benefit plan of an employer, but the term does not include an employe who works on a temporary or substitute basis.

AB416-SSA1,27,12 2. For purposes of a group health benefit plan, or a self-insured health plan, that is offered by the state under s. 40.51 (6) or by the group insurance board under s. 40.51 (7), "eligible employe" has the meaning given in s. 40.02 (25).

AB416-SSA1,27,13 (b) "Employer" means any of the following:

AB416-SSA1,27,16 1. 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.

AB416-SSA1,27,17 2. A municipality, as defined in s. 16.70 (8).

AB416-SSA1,27,18 3. The state.

AB416-SSA1,27,22 (c) "Group health benefit plan" means a health benefit plan that is issued by an insurer to an employer on behalf of a group consisting of eligible employes of the employer. The term includes individual health benefit plans covering eligible employes when 3 or more are sold to an employer.

AB416-SSA1,28,4 (d) "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. 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), an insurer operating as a cooperative association organized under ss. 185.981 to 185.985 and a limited service health organization, as defined in s. 609.01 (3).

AB416-SSA1,28,6 (e) 1. "Qualifying coverage" means benefits or coverage provided under any of the following:

AB416-SSA1,28,7 a. Medicare or medicaid.

AB416-SSA1,28,10 b. A group health benefit plan or an employer-based health benefit arrangement that provides benefits similar to or exceeding benefits provided under a basic health benefit plan.

AB416-SSA1,28,13 c. An individual health benefit plan that provides benefits similar to or exceeding benefits provided under a basic health benefit plan, if the individual health benefit plan has been in effect for at least one year.

AB416-SSA1,28,16 2. Notwithstanding subd. 1. b. and c., "qualifying coverage" does not include catastrophic coverage that is linked to a tax-preferred savings plan for payment of medical expenses.

AB416-SSA1,28,18 (f) "Self-insured health plan" means a self-insured health plan of the state or a county, city, village, town or school district.

AB416-SSA1,28,22 (2) Preexisting conditions. (a) A group health benefit plan, or a self-insured health plan, may not deny, exclude or limit benefits for a covered individual for losses incurred more than 12 months after the effective date of the individual's coverage due to a preexisting condition.

AB416-SSA1,28,25 (b) Except as provided in par. (c), a group health benefit plan, or a self-insured health plan, may not define a preexisting condition more restrictively than any of the following:

AB416-SSA1,29,4 1. A condition that would have caused an ordinarily prudent person to seek medical advice, diagnosis, care or treatment during the 6 months immediately preceding the effective date of coverage and for which the individual did not seek medical advice, diagnosis, care or treatment.

AB416-SSA1,29,7 2. A condition for which medical advice, diagnosis, care or treatment was recommended or received during the 6 months immediately preceding the effective date of coverage.

AB416-SSA1,29,11 (c) Notwithstanding par. (b) 1. and 2., a group health benefit plan, or a self-insured health plan, shall exclude pregnancy from the definition of a preexisting condition for the purpose of coverage of expenses related to prenatal and postnatal care, delivery and any complications of pregnancy.

AB416-SSA1,29,18 (3) Portability. (a) A group health benefit plan, or a self-insured health plan, shall waive any period applicable to a preexisting condition exclusion or limitation period with respect to particular services for the period that an individual was previously covered by qualifying coverage that was not sponsored by the employer sponsoring the group health benefit plan or the self-insured health plan and that provided benefits with respect to such services, if the qualifying coverage terminated not more than 60 days before the effective date of the new coverage.

AB416-SSA1,29,23 (b) Paragraph (a) does not prohibit the application of a waiting period to all new enrollees under a group health benefit plan or a self-insured health plan; however, a waiting period may not be applied when determining whether the qualifying coverage terminated not more than 60 days before the effective date of the new coverage.

AB416-SSA1,30,4 (4) Minimum participation of employes. (a) Except as provided in par. (d), requirements used by an insurer in determining whether to provide coverage under a group health benefit plan to an employer, including requirements for minimum participation of eligible employes and minimum employer contributions, shall be applied uniformly among all employers that apply for or receive coverage from the insurer.

AB416-SSA1,30,7 (b) An insurer may vary its minimum participation requirements and minimum employer contribution requirements only by the size of the employer group based on the number of eligible employes.

AB416-SSA1,30,13 (c) In applying minimum participation requirements with respect to an employer, an insurer may not count eligible employes who have other coverage that is qualifying coverage in determining whether the applicable percentage of participation is met, except that an insurer may count eligible employes who have coverage under another health benefit plan that is sponsored by that employer and that is qualifying coverage.

AB416-SSA1,30,16 (d) An insurer may not increase a requirement for minimum employe participation or a requirement for minimum employer contribution that applies to an employer after the employer has been accepted for coverage.

AB416-SSA1,30,18 (e) This subsection does not apply to a group health benefit plan offered by the state under s. 40.51 (6) or by the group insurance board under s. 40.51 (7).

AB416-SSA1,30,25 (5) Prohibited coverage practices. (a) 1. Except as provided in rules promulgated under subd. 3., if an insurer offers a group health benefit plan to an employer, the insurer shall offer coverage to all of the eligible employes of the employer and their dependents. Except as provided in rules promulgated under subd. 3., an insurer may not offer coverage to only certain individuals in an employer group or to only part of the group, except for an eligible employe who has not yet satisfied an applicable waiting period, if any.

AB416-SSA1,31,7 2. Except as provided in rules promulgated under subd. 3., if the state or a county, city, village, town or school district offers coverage under a self-insured health plan, it shall offer coverage to all of its eligible employes and their dependents. Except as provided in rules promulgated under subd. 3., the state or a county, city, village, town or school district may not offer coverage to only certain individuals in the employer group or to only part of the group, except for an eligible employe who has not yet satisfied an applicable waiting period, if any.

AB416-SSA1,31,14 3. The secretary of employe trust funds, with the approval of the group insurance board, shall promulgate rules related to offering coverage to eligible employes under a group health benefit plan, or a self-insured health plan, offered by the state under s. 40.51 (6) or by the group insurance board under s. 40.51 (7). The rules shall conform to the intent of subds. 1. and 2. and may not allow the state or the group insurance board to refuse to offer coverage to an eligible employe or dependent for reasons related to health condition.

AB416-SSA1,31,18 (b) 1. An insurer may not modify a group health benefit plan with respect to an employer or an eligible employe or dependent, through riders, endorsements or otherwise, to restrict or exclude coverage for certain diseases or medical conditions otherwise covered by the group health benefit plan.

AB416-SSA1,31,22 2. The state or a county, city, village, town or school district may not modify a self-insured health plan with respect to an eligible employe or dependent, through riders, endorsements or otherwise, to restrict or exclude coverage for certain diseases or medical conditions otherwise covered by the self-insured health plan.

AB416-SSA1,32,2 3. Nothing in this paragraph limits the authority of the group insurance board to fulfill its obligations as trustee under s. 40.03 (6) (d) or to design or modify procedures or provisions pertaining to enrollment, premium transmitted or coverage of eligible employes for health care benefits under s. 40.51 (1).

AB416-SSA1, s. 74 Section 74. 635.04 of the statutes is created to read:

AB416-SSA1,32,9 635.04 Guaranteed acceptance. (1) Employe becomes eligible after commencement of coverage. If an insurer provides coverage under a group health benefit plan, the insurer shall provide coverage under the group health benefit plan to an eligible employe who becomes eligible for coverage after the commencement of the employer's coverage, and to the eligible employe's dependents, regardless of health condition or claims experience, if all of the following apply:

AB416-SSA1,32,10 (a) The employe has satisfied any applicable waiting period.

AB416-SSA1,32,12 (b) The employer agrees to pay the premium required for coverage of the employe under the group health benefit plan.

AB416-SSA1,32,18 (2) Employe waived coverage previously. If an insurer provides coverage under a group health benefit plan, the insurer shall provide coverage under the group health benefit plan to an eligible employe who waived coverage during an enrollment period during which the employe was entitled to enroll in the group health benefit plan, regardless of health condition or claims experience, if all of the following apply:

AB416-SSA1,32,20 (a) The eligible employe was covered as a dependent under qualifying coverage when he or she waived coverage under the group health benefit plan.

AB416-SSA1,32,25 (b) The eligible employe's coverage under the qualifying coverage has terminated or will terminate due to a divorce from the insured under the qualifying coverage, the death of the insured under the qualifying coverage, loss of employment by the insured under the qualifying coverage or involuntary loss of coverage under the qualifying coverage by the insured under the qualifying coverage.

AB416-SSA1,33,3 (c) The eligible employe applies for coverage under the group health benefit plan not more than 30 days after termination of his or her coverage under the qualifying coverage.

AB416-SSA1,33,5 (d) The employer agrees to pay the premium required for coverage of the employe under the group health benefit plan.

AB416-SSA1,33,11 (3) State or municipal self-insured plans. If the state or a county, city, village, town or school district provides coverage under a self-insured health plan, it shall provide coverage under the self-insured health plan to an eligible employe who waived coverage during an enrollment period during which the employe was entitled to enroll in the self-insured health plan, regardless of health condition or claims experience, if all of the following apply:

AB416-SSA1,33,13 (a) The eligible employe was covered as a dependent under qualifying coverage when he or she waived coverage under the self-insured health plan.

AB416-SSA1,33,18 (b) The eligible employe's coverage under the qualifying coverage has terminated or will terminate due to a divorce from the insured under the qualifying coverage, the death of the insured under the qualifying coverage, loss of employment by the insured under the qualifying coverage or involuntary loss of coverage under the qualifying coverage by the insured under the qualifying coverage.

AB416-SSA1,33,21 (c) The eligible employe applies for coverage under the self-insured health plan not more than 30 days after termination of his or her coverage under the qualifying coverage.

AB416-SSA1, s. 75 Section 75. 635.05 of the statutes is repealed.

AB416-SSA1, s. 76 Section 76. 635.07 of the statutes is repealed and recreated to read:

AB416-SSA1,33,25 635.07 Guaranteed issue for certain group health benefit plans. (1) Definitions. In this section and ss. 635.09 to 635.15:

AB416-SSA1,34,3 (a) "Base premium rate" means the lowest premium rate chargeable under a rating system to employers or individuals with similar case characteristics and the same or similar benefit design characteristics.

AB416-SSA1,34,6 (b) "Benefit design characteristics" means covered services, cost sharing, utilization management, managed care networks and other features that differentiate plan or coverage designs.

AB416-SSA1,34,8 (c) "Case characteristics" means the age, gender, geographic location and tobacco use of the individuals covered under a health benefit plan.

AB416-SSA1,34,15 (d) "Eligible employe" means an employe who works on a permanent basis and has a normal workweek 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 and a member of a limited liability company if the sole proprietor, business owner, partner or member is included as an employe under a health benefit plan of an employer, but the term does not include an employe who works on a temporary or substitute basis.

AB416-SSA1,34,16 (e) "Employer" means any of the following:

AB416-SSA1,34,22 1. 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.

AB416-SSA1,34,24 2. A municipality, as defined in s. 16.70 (8), that employs not fewer than 2 nor more than 100 eligible employes.

AB416-SSA1,35,4 (f) "Group health benefit plan" means a health benefit plan that is issued by an insurer to an employer on behalf of a group consisting of eligible employes of the employer. The term includes individual health benefit plans covering eligible employes when 3 or more are sold to an employer.

AB416-SSA1,35,12 (g) "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), an insurer operating as a cooperative association organized under ss. 185.981 to 185.985 and a limited service health organization, as defined in s. 609.01 (3).

AB416-SSA1,35,14 (h) "Midpoint rate" means the arithmetic average of the base premium rate and the corresponding highest premium rate.

AB416-SSA1,35,17 (i) "New business premium rate" means the premium rate charged or offered to employers or individuals with similar case characteristics for newly issued health insurance with the same or similar benefit design characteristics.

AB416-SSA1,35,19 (j) "Rating period" means the period, determined by an insurer, during which a premium rate established by the insurer remains in effect.

AB416-SSA1,35,23 (2) Requirement. Except as provided in subs. (3) and (4), an insurer shall provide coverage under a group health benefit plan to an employer and to all of the employer's eligible employes and their dependents, regardless of health condition or claims experience, if all of the following apply:

AB416-SSA1,35,24 (a) The insurer has in force a group health benefit plan.

AB416-SSA1,36,2 (b) The employer agrees to pay the premium required for coverage under the group health benefit plan.

AB416-SSA1,36,5 (c) The employer agrees to comply with all other provisions of the group health benefit plan that apply generally to a policyholder or an insured without regard to health condition or claims experience.

AB416-SSA1,36,8 (2m) Payment security provisions allowed. An insurer that provides coverage under sub. (2) may impose payment security provisions that are reasonably related to the risk covered.

AB416-SSA1,36,13 (3) Exceptions to guaranteed issue. (a) An insurer that is otherwise required to provide coverage under sub. (2) may refuse to issue a group health benefit plan to an employer if all of the individuals in the employer group that are to be covered under the group health benefit plan may be covered under one individual health benefit plan providing family coverage.

AB416-SSA1,36,16 (b) Subsection (2) does not require an insurer to issue coverage that the insurer is not authorized to issue under its bylaws, charter or certificate of incorporation or authority.

AB416-SSA1,36,20 (c) Subsection (2) does not require an insurer that provides coverage to an employer under a group health benefit plan to issue a different group health benefit plan to the employer before the expiration of the agreed term of the group health benefit plan under which the employer has coverage.

AB416-SSA1,36,24 (d) An insurer that offers health care coverage exclusively to a single category or limited categories of employers may, with prior approval of the commissioner, limit its compliance with sub. (2) to that single category or those limited categories of employers.

AB416-SSA1,37,4 (e) The commissioner may exempt an insurer from the requirements of sub. (2) if the commissioner determines that it is in the public interest to exempt the insurer from the requirements under sub. (2) because the insurer is in financially hazardous condition.

AB416-SSA1,37,9 (f) If an employer loses coverage under a group health benefit plan for failure to pay a premium when due, an insurer that is otherwise required to provide coverage under sub. (2) may refuse to issue a group health benefit plan to that employer during the 12-month period after the date on which the employer lost coverage.

AB416-SSA1,37,14 (g) 1. In this paragraph, "small employer" means 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.

AB416-SSA1,37,20 2. An insurer that previously issued group health benefit plans but, prior to the effective date of this subdivision .... [revisor inserts date], discontinued offering such plans to small employers, shall within 60 days after the effective date of this subdivision .... [revisor inserts date], again offer group health benefit plans to small employers or be subject to the requirements under s. 635.17 (2) (a) as if the insurer had elected to not renew a group health benefit plan.

AB416-SSA1,37,24 (4) Group risk adjustment mechanism. (a) In this subsection, "high-risk individual" means an individual with a high-risk medical condition who has coverage under a group health benefit plan with a premium rate at the insurer's highest premium rate level.