Amendment SSA1-AB416

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AB416-SSA1, s. 77 Section 77. 635.09 of the statutes is repealed and recreated to read: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

AB416-SSA1,45,6 3. An insurer that offers health care coverage exclusively to a single category or limited categories of individuals may, with prior approval of the commissioner, limit its compliance with par. (a) to the single category or those limited categories of individuals.

AB416-SSA1,45,10 4. The commissioner may exempt an insurer from the requirement under par. (a) if the commissioner determines that it is in the public interest to exempt the insurer from the requirement under par. (a) because the insurer is in financially hazardous condition.

AB416-SSA1,45,14 (c) An insurer that issues an individual health benefit plan to an individual described in par. (a) shall provide coverage under the individual health benefit plan for any dependents of the individual who had coverage under the individual's qualifying coverage under par. (a) 4.

AB416-SSA1,45,18 (d) An individual health benefit plan that is issued to an individual described in par. (a) may not restrict or modify coverage with respect to the individual except to the extent that the individual's qualifying coverage under par. (a) 4. was restricted or modified.

AB416-SSA1,45,21 (e) The maximum lifetime benefits available under an individual health benefit plan that is issued to an individual described in par. (a) may be reduced by the total benefits paid under the individual's qualifying coverage under par. (a) 4.

AB416-SSA1,46,2 (f) An individual health benefit plan that is issued to an individual described in par. (a) shall waive any period applicable to a preexisting condition exclusion or limitation period with respect to particular services for the period that the individual was covered with respect to such services under the individual's qualifying coverage under par. (a) 4.

AB416-SSA1,46,5 (g) An insurer that is otherwise required to provide coverage under par. (a) shall be exempt from the requirement under par. (a) for the remainder of a calendar year after all of the following occur:

AB416-SSA1,46,10 1. The total number of individuals described under par. (a) and their dependents who are covered by the insurer equals at least 1% of the total number of individuals and their dependents covered under all individual health benefit plans issued by the insurer that were in effect on December 31 of the preceding year and that were qualifying coverage under sub. (1) (d) 1. b.

AB416-SSA1,46,12 2. The insurer applies for exemption from the requirement under par. (a) by submitting to the commissioner certification that includes all of the following:

AB416-SSA1,46,15 a. The total number of individuals and their dependents covered under all individual health benefit plans issued by the insurer that were in effect on December 31 of the preceding year and that were qualifying coverage under sub. (1) (d) 1. b.

AB416-SSA1,46,18 b. The total number of individuals described under par. (a) and their dependents who have been accepted by the insurer for coverage under par. (a) during the current year.

AB416-SSA1,46,22 (h) Whenever an insurer becomes exempt from the requirement under par. (a) by satisfying the criteria under par. (g), the commissioner shall provide notice of that exemption to all insurers to which this subsection applies and to all insurance agents listed under s. 628.11 by the insurers to which this subsection applies.

AB416-SSA1, s. 84 Section 84. 635.17 of the statutes is repealed and recreated to read:

AB416-SSA1,46,25 635.17 Contract termination and renewability for all group and individual health benefit plans. (1) Definitions. In this section and s. 635.18:

AB416-SSA1,47,1 (a) "Eligible employe" has the meaning given in s. 635.03 (1) (a).

AB416-SSA1,47,2 (b) "Employer" has the meaning given in s. 635.03 (1) (b).

AB416-SSA1,47,4 (c) "Established geographic service area" means a geographic area within which an insurer provides coverage and that has been approved by the commissioner.

AB416-SSA1,47,5 (d) "Group health benefit plan" has the meaning given in s. 635.03 (1) (c).

AB416-SSA1,47,13 (e) "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 and a limited service health organization, as defined in s. 609.01 (3).

AB416-SSA1,47,17 (f) "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 insurer to provide health care services or articles to covered individuals.

AB416-SSA1,47,22 (1m) Midterm cancellation. Notwithstanding s. 631.36 (2) to (4m), a health benefit plan may not be canceled by an insurer before the expiration of the agreed term, and shall be renewable to the policyholder and all insureds and dependents eligible under the terms of the health benefit plan at the expiration of the agreed term at the option of the policyholder, except for any of the following reasons:

AB416-SSA1,47,23 (a) Failure to pay a premium when due.

AB416-SSA1,47,25 (b) Fraud or misrepresentation by the policyholder, or, with respect to coverage for an insured individual, fraud or misrepresentation by that insured individual.

AB416-SSA1,48,1 (c) Substantial breaches of contractual duties, conditions or warranties.

AB416-SSA1,48,4 (d) If a group health benefit plan, the number of individuals covered under the group health benefit plan is less than the number required by the group health benefit plan.

AB416-SSA1,48,6 (e) If a group health benefit plan, the employer to which the group health benefit plan is issued is no longer actively engaged in a business enterprise.

AB416-SSA1,48,9 (2) Nonrenewal. (a) Notwithstanding sub. (1m), an insurer that issues group health benefit plans may elect not to renew a group health benefit plan if the insurer complies with all of the following:

AB416-SSA1,48,11 1. The insurer ceases to renew all other group health benefit plans issued by the insurer.

AB416-SSA1,48,14 2. The insurer provides notice to all affected policyholders and to the commissioner in each state in which an affected insured individual resides at least one year before termination of coverage.

AB416-SSA1,48,16 3. The insurer does not issue a group health benefit plan before 5 years after the nonrenewal of the group health benefit plans.

AB416-SSA1,48,20 4. The insurer does not transfer or otherwise provide coverage to a policyholder from the nonrenewed business unless the insurer offers to transfer or provide coverage to all affected policyholders from the nonrenewed business without regard to claims experience, health condition or duration of coverage.