Amendment SSA1-AB416

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AB416-SSA1, s. 75 Section 75. 635.05 of the statutes is repealed.

AB416-SSA1, s. 76 Section 76. 635.07 of the statutes is repealed and recreated to read: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

AB416-SSA1,38,3 (b) An insurer that is otherwise required to provide coverage under sub. (2) shall be exempt from the requirement under sub. (2) for the remainder of a calendar year after all of the following occur:

AB416-SSA1,38,5 1. The number of high-risk individuals covered by the insurer at least equals the threshold level determined under par. (e) 3.

AB416-SSA1,38,12 2. The insurer applies for exemption from the requirement under sub. (2) by certifying its qualification under subd. 1. to the commissioner and the commissioner, within 30 days after the insurer submits its certifying information, makes no objection and does not request additional information. If the commissioner does timely object or request additional information, the insurer shall be exempt from the requirements under sub. (2) 30 days after the commissioner objects or the insurer submits the additional information if the commissioner takes no further action.

AB416-SSA1,38,16 (c) Whenever an insurer becomes exempt from the requirement under sub. (2) by satisfying the criteria under par. (b), the commissioner shall provide notice of that exemption to all insurers to which this section applies and to all insurance agents listed under s. 628.11 by the insurers to which this section applies.

AB416-SSA1,38,19 (d) An insurer that satisfies the criterion under par. (b) 1. is not required to apply for exemption from the requirement under sub. (2). An insurer that does not apply for exemption shall remain subject to the requirement under sub. (2).

AB416-SSA1,38,22 (e) In consultation with the committee on risk adjustment, the commissioner shall promulgate rules for the operation of the risk adjustment mechanism under this subsection, including rules that specify at least all of the following:

AB416-SSA1,38,24 1. What diagnostic conditions constitute high risk medical conditions for purposes of the definition of a high-risk individual.

AB416-SSA1,39,2 2. How to determine an insurer's highest premium rate level for purposes of the definition of a high-risk individual.

AB416-SSA1,39,4 3. What percentage of an insurer's total enrollment under group health benefit plans issued by the insurer constitutes the threshold level for purposes of par. (b) 1.

AB416-SSA1, s. 77 Section 77. 635.09 of the statutes is repealed and recreated to read:

AB416-SSA1,39,8 635.09 Rate regulation for individual and certain group health benefit plans. Notwithstanding ch. 625, the commissioner shall promulgate rules that do all of the following:

AB416-SSA1,39,13 (1) Establish restrictions on premium rates that an insurer may charge an employer for coverage under a group health benefit plan such that the premium rates charged to employers with similar case characteristics for the same or similar benefit design characteristics do not vary from the midpoint rate for those employers by more than 30% of that midpoint rate.

AB416-SSA1,39,18 (1m) Establish restrictions on premium rates that an insurer may charge an individual for coverage under an individual health benefit plan such that the premium rates charged to individuals with similar case characteristics for the same or similar benefit design characteristics do not vary from the midpoint rate for those individuals by more than 35% of that midpoint rate.

AB416-SSA1,39,20 (2) Establish restrictions on increases in premium rates that an insurer may charge an employer for coverage under a group health benefit plan such that:

AB416-SSA1,39,22 (a) The percentage increase in the premium rate for a new rating period does not exceed the sum of the following:

AB416-SSA1,39,24 1. The percentage change in the new business premium rate measured from the first day of the prior rating period to the first day of the new rating period.

AB416-SSA1,40,5 2. An adjustment, not to exceed 15% per year for employers with 2 to 50 eligible employes or 25% per year for employers with 51 to 100 eligible employes, adjusted proportionally for rating periods of less than one year, for such rating factors as claims experience, health condition and duration of coverage, determined in accordance with the insurer's rate manual or rating procedures.

AB416-SSA1,40,8 3. An adjustment for a change in case characteristics or in benefit design characteristics, determined in accordance with the insurer's rate manual or rating procedures.

AB416-SSA1,40,12 (b) The percentage increase in the premium rate for a new rating period for a group health benefit plan issued before the effective date of this paragraph .... [revisor inserts date], does not exceed the sum of par. (a) 1. and 3., unless premium rates are in compliance with the rules promulgated under sub. (1).

AB416-SSA1,40,16 (3) Require the premium rate of a health benefit plan issued before the effective date of this subsection .... [revisor inserts date], to comply with the rules promulgated under sub. (1) or (1m) no later than 2 years after the effective date of this subsection .... [revisor inserts date].

AB416-SSA1,40,17 (4) Define the terms necessary for compliance with this section.

AB416-SSA1,40,18 (5) Ensure that employers are classified using objective criteria.

AB416-SSA1,40,20 (6) Ensure that rating factors are applied objectively and consistently to employers with 2 to 50 eligible employes.

AB416-SSA1, s. 78 Section 78. 635.11 (intro.) of the statutes is amended to read:

AB416-SSA1,40,25 635.11 (title) Disclosure of rating factors and renewability provisions for certain group health benefit plans. (intro.) Before the sale of a group health benefit plan or policy subject to this subchapter, a small employer, an insurer shall disclose to a small an employer all of the following:

AB416-SSA1, s. 79 Section 79. 635.11 (1) of the statutes is amended to read:

AB416-SSA1,41,3 635.11 (1) The small employer insurer's right to increase premium rates and the factors limiting the amount of increase.

AB416-SSA1, s. 80 Section 80. 635.11 (4) of the statutes is amended to read:

AB416-SSA1,41,5 635.11 (4) The small employer's renewability rights.

AB416-SSA1, s. 81 Section 81. 635.13 of the statutes is amended to read:

AB416-SSA1,41,13 635.13 (title) Annual certification of  compliance for certain group health benefit plans. (1) Records. A small employer An insurer that issues group health benefit plans shall maintain at its principal place of business complete and detailed records with respect to those group health benefit plans relating to its rating methods and practices and its renewal underwriting methods and practices, and shall make the records available to the commissioner and the small employer insurance board upon request.

AB416-SSA1,41,17 (2) Certification. A small employer An insurer that issues group health benefit plans shall file with the commissioner on or before May 1 annually an actuarial opinion by a member of the American academy of actuaries certifying all of the following with respect to those group health benefit plans:

AB416-SSA1,41,19 (a) That the small employer insurer is in compliance with the rate provisions of s. 635.05 635.09.

AB416-SSA1,41,21 (b) That the small employer insurer's rating methods are based on generally accepted and sound actuarial principles, policies and procedures.

AB416-SSA1,41,25 (c) That the opinion is based on the actuary's examination of the small employer insurer's records and a review of the small employer insurer's actuarial assumptions and statistical methods used in setting rates and procedures used in implementing rating plans.

AB416-SSA1, s. 82 Section 82. 635.15 of the statutes is amended to read:

AB416-SSA1,42,9 635.15 (title) Temporary suspension of rate regulation for individual and certain group health benefit plans. The commissioner may suspend the operation of all or any part of s. 635.05 635.09 with respect to one or more small employers or one or more individuals for one or more rating periods upon the written request of a small employer an insurer and a finding by the commissioner that the suspension is necessary in light of the financial condition of the small employer insurer or that the suspension would enhance the efficiency and fairness of the small employer health insurance market.

AB416-SSA1, s. 83 Section 83. 635.16 of the statutes is created to read:

AB416-SSA1,42,12 635.16 Coverage requirements for individual health benefit plans. (1) Definitions. In this section:

AB416-SSA1,42,13 (a) "Employer" has the meaning given in s. 635.03 (1) (b).

AB416-SSA1,42,14 (b) "Group health benefit plan" has the meaning given in s. 635.03 (1) (c).

AB416-SSA1,42,21 (c) "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 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-SSA1,42,23 (d) 1. "Qualifying coverage" means benefits or coverage provided under any of the following:

AB416-SSA1,43,3 a. A group health benefit plan or an employer-based health benefit arrangement that provides benefits similar to or exceeding benefits provided under the health benefit plan for which the individual is applying.

AB416-SSA1,43,7 b. An individual health benefit plan that provides benefits similar to or exceeding benefits provided under the health benefit plan for which the individual is applying, if the individual health benefit plan has been in effect for at least one year.

AB416-SSA1,43,10 2. Notwithstanding subd. 1. a. and b., "qualifying coverage" does not include catastrophic coverage that is linked to a tax-preferred savings plan for payment of medical expenses.

AB416-SSA1,43,14 (2) Preexisting conditions. (a) An individual health benefit 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-SSA1,43,16 (b) An individual health benefit plan may not define a preexisting condition more restrictively than any of the following:

AB416-SSA1,43,20 1. A condition that would have caused an ordinarily prudent person to seek medical advice, diagnosis, care or treatment during the 18 months immediately preceding the effective date of coverage and for which the individual did not seek medical advice, diagnosis, care or treatment.

AB416-SSA1,43,23 2. A condition for which medical advice, diagnosis, care or treatment was recommended or received during the 18 months immediately preceding the effective date of coverage.

AB416-SSA1,43,24 3. A pregnancy existing on the effective date of coverage.

AB416-SSA1,44,4 (3) Limited guaranteed issue, portability and other coverage requirements. (a) Except as provided in pars. (b) and (g), an insurer shall provide coverage under an individual health benefit plan to an individual who is a resident of this state, regardless of health condition or claims experience, if all of the following apply:

AB416-SSA1,44,5 1. The insurer has in force an individual health benefit plan.

AB416-SSA1,44,7 2. The individual agrees to pay the premium required for coverage under the individual health benefit plan.

AB416-SSA1,44,10 3. The individual agrees to comply with all other provisions of the individual health benefit plan that apply generally to a policyholder or an insured without regard to health condition or claims experience.

AB416-SSA1,44,12 4. The individual was covered under qualifying coverage that terminated not more than 31 days before the individual applied for the new coverage.

AB416-SSA1,44,19 5. If the individual's qualifying coverage under subd. 4. was coverage under sub. (1) (d) 1. a., the individual had been covered under continuation coverage, as defined in s. 252.16 (1) (a), for the maximum allowable period; the individual is not now eligible for coverage under any group health benefit plan or employer-based health benefit arrangement; and the individual was an eligible employe, as defined in s. 635.03 (1) (a), for at least 6 months immediately before applying for the new coverage.

AB416-SSA1,44,22 (b) 1. Paragraph (a) 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-SSA1,45,2 2. Paragraph (a) does not require an insurer that provides coverage to an individual under an individual health benefit plan to issue a different individual health benefit plan to the individual before the expiration of the agreed term of the individual health benefit plan under which the individual has coverage.