Amendment SSA1-SB218

SB218-SSA1,18,12 (2) Certification. An insurer that issues group health benefit plans to employers, as defined in s. 632.7497 (1), 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:

SB218-SSA1,18,13 (a) That the insurer is in compliance with the rate provisions of s. 632.7497.

SB218-SSA1,18,15 (b) That the insurer's rating methods are based on generally accepted and sound actuarial principles, policies and procedures.

SB218-SSA1,18,18 (c) That the opinion is based on the actuary's examination of the insurer's records and a review of the insurer's actuarial assumptions and statistical methods used in setting rates and procedures used in implementing rating plans.

SB218-SSA1, s. 43 Section 43. 632.7494 of the statutes is created to read:

SB218-SSA1,18,23 632.7494 Preexisting conditions and portability for individual health benefit plans. (1) (a) An individual health benefit plan may not impose a preexisting condition exclusion with respect to a covered individual for losses incurred more than 12 months after the individual's enrollment date under the plan.

SB218-SSA1,18,25 (b) An individual health benefit plan may not define a preexisting condition more restrictively than any of the following:

SB218-SSA1,19,4 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 individual's enrollment date under the plan and for which the individual did not seek medical advice, diagnosis, care or treatment.

SB218-SSA1,19,7 2. A condition for which medical advice, diagnosis, care or treatment was recommended or received during the 18 months immediately preceding the individual's enrollment date under the plan.

SB218-SSA1,19,10 (c) Notwithstanding pars. (a) and (b), an individual health benefit plan may not impose a preexisting condition exclusion relating to pregnancy as a preexisting condition.

SB218-SSA1,19,15 (2) An individual health benefit plan shall waive any period applicable to a preexisting condition exclusion period with respect to particular services for the period that the individual was covered with respect to those services under creditable coverage, if the creditable coverage terminated not more than 31 days before the individual applied for coverage under the individual health benefit plan.

SB218-SSA1, s. 44 Section 44. 632.7497 of the statutes is created to read:

SB218-SSA1,19,24 632.7497 Rate regulation for individual and group health benefit plans. (1) In this section, "employer" means, with respect to a calendar year and a plan year, an employer that employed an average of at least 2 but not more than 100 employes on business days during the preceding calendar year, or that is reasonably expected to employ an average of at least 2 but not more than 100 employes on business days during the current calendar year if the employer was not in existence during the preceding calendar year, and that employs at least 2 employes on the first day of the plan year.

SB218-SSA1,20,2 (2) Notwithstanding ch. 625, the commissioner shall promulgate rules that do all of the following:

SB218-SSA1,20,7 (a) 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.

SB218-SSA1,20,12 (b) 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.

SB218-SSA1,20,14 (c) Establish restrictions on increases in premium rates that an insurer may charge an employer for coverage under a group health benefit plan such that:

SB218-SSA1,20,16 1. The percentage increase in the premium rate for a new rating period does not exceed the sum of the following:

SB218-SSA1,20,18 a. 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.

SB218-SSA1,20,23 b. An adjustment, not to exceed 15% per year for small employers or 25% per year for large employers, 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.

SB218-SSA1,21,3 c. 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.

SB218-SSA1,21,7 2. 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 subdivision .... [revisor inserts date], does not exceed the sum of subd. 1. a. and c., unless premium rates are in compliance with the rules promulgated under par. (a).

SB218-SSA1,21,11 (d) Require the premium rate of a health benefit plan issued before the effective date of this paragraph .... [revisor inserts date], to comply with the rules promulgated under par. (a) or (b) no later than 2 years after the effective date of this paragraph .... [revisor inserts date].

SB218-SSA1,21,12 (e) Define the terms necessary for compliance with this section.

SB218-SSA1,21,13 (f) Ensure that employers are classified using objective criteria.

SB218-SSA1,21,15 (g) Ensure that rating factors are applied objectively and consistently to small employers.

SB218-SSA1, s. 45 Section 45. 632.7498 of the statutes is created to read:

SB218-SSA1,21,19 632.7498 Temporary suspension of rate regulation for individual and group health benefit plans. (1) In this section, "employer" has the meaning given in s. 632.7497 (1).

SB218-SSA1,21,25 (2) The commissioner may suspend the operation of all or any part of s. 632.7497 with respect to one or more employers or one or more individuals for one or more rating periods upon the written request of an insurer and a finding by the commissioner that the suspension is necessary in light of the financial condition of the insurer or that the suspension would enhance the efficiency and fairness of the health insurance market.

SB218-SSA1, s. 46 Section 46. 632.7499 of the statutes is created to read:

SB218-SSA1,22,6 632.7499 Fair marketing standards for group and individual health benefit plans. (1) Every insurer that provides coverage under a health benefit plan shall actively market such health benefit plan coverage. In addition to other marketing limitations that the commissioner may authorize by rule, an insurer may limit its marketing under this subsection to any of the following:

SB218-SSA1,22,7 (a) Health benefit plans for employer groups of all sizes.

SB218-SSA1,22,8 (b) Health benefit plans for individuals.

SB218-SSA1,22,10 (2) (a) Except as provided in par. (b), an insurer or an intermediary may not, directly or indirectly, do any of the following:

SB218-SSA1,22,14 1. Discourage an employer or an individual from applying, or direct an employer or an individual not to apply, for coverage with the insurer because of the health condition, claims experience, industry, occupation or geographic area of the employer or individual.

SB218-SSA1,22,17 2. Encourage or direct an employer or an individual to seek coverage from another insurer because of the health condition, claims experience, industry, occupation or geographic area of the employer or individual.

SB218-SSA1,22,20 (b) Paragraph (a) does not prohibit an insurer or an intermediary from providing an employer or an individual with information about an established geographic service area or a restricted network provision of the insurer.

SB218-SSA1,23,2 (3) (a) Except as provided in par. (b), an insurer may not, directly or indirectly, enter into any contract, agreement or arrangement with an intermediary that provides for or results in compensation to the intermediary for the sale of a health benefit plan that varies according to the health condition, claims experience, industry, occupation or geographic area of the employer, eligible employes, insured individual or dependents.

SB218-SSA1,23,6 (b) Payment of compensation on the basis of percentage of premium is not a violation of par. (a) if the percentage does not vary based on the health condition, claims experience, industry, occupation or geographic area of the employer, eligible employes, insured individual or dependents.

SB218-SSA1,23,11 (4) An insurer may not terminate, fail to renew or limit its contract or agreement of representation with an intermediary for any reason related to the health condition, claims experience, occupation or geographic area of the employers, eligible employes, insured individuals or dependents placed by the intermediary with the insurer.

SB218-SSA1,23,14 (5) An insurer or an intermediary may not induce or otherwise encourage an employer to separate or otherwise exclude an employe from health coverage or benefits provided in connection with the employe's employment.

SB218-SSA1,23,16 (6) Denial by an insurer of an application for coverage under a health benefit plan shall be in writing and shall state the reason or reasons for the denial.

SB218-SSA1,23,20 (7) A 3rd-party administrator that enters into a contract, agreement or other arrangement with an insurer to provide administrative, marketing or other services related to the offering of health benefit plans to employers or individuals in this state is subject to this section and ss. 632.745 to 632.7498 as if it were an insurer.

SB218-SSA1,23,23 (8) The commissioner may by rule establish additional standards to provide for the fair marketing and broad availability of health benefit plans to employers and individuals in this state.

SB218-SSA1, s. 47 Section 47. 632.76 (2) (a) of the statutes, as affected by 1997 Wisconsin Act 27, is amended to read:

SB218-SSA1,24,6 632.76 (2) (a) No claim for loss incurred or disability commencing after 2 years from the date of issue of the policy may be reduced or denied on the ground that a disease or physical condition existed prior to the effective date of coverage, unless the condition was excluded from coverage by name or specific description by a provision effective on the date of loss. This paragraph does not apply to a group health benefit plan, as defined in s. 632.745 (9) (11), which is subject to s. 632.746 or 632.7494.

SB218-SSA1, s. 48 Section 48. 632.896 (4) of the statutes, as affected by 1997 Wisconsin Act 27, is amended to read:

SB218-SSA1,24,14 632.896 (4) Preexisting conditions. Notwithstanding ss. 632.746, 632.7494 and 632.76 (2) (a), a disability insurance policy that is subject to sub. (2) and that is in effect when a court makes a final order granting adoption or when the child is placed for adoption may not exclude or limit coverage of a disease or physical condition of the child on the ground that the disease or physical condition existed before coverage is required to begin under sub. (3).

SB218-SSA1, s. 49 Section 49. Chapter 635 of the statutes, as affected by 1997 Wisconsin Act 27, is repealed.

SB218-SSA1, s. 50 Section 50 . Nonstatutory provisions.

SB218-SSA1,24,23 (1) Risk adjustment committee. The commissioner of insurance shall appoint a committee on risk adjustment under section 15.04 (1) (c) of the statutes, consisting of 5 to 8 members, to advise the commissioner on, and to assist the commissioner in developing rules for, the group risk adjustment mechanism under section 633.7465 (4) of the statutes, as created by this act. The commissioner shall appoint at least 5 representatives of insurers to be members of the committee.

SB218-SSA1,25,6 (2) Risk adjustment mechanism emergency rule-making authority. Using the procedure under section 227.24 of the statutes, the commissioner of insurance may promulgate rules under section 632.7465 (5) (e) of the statutes, as created by this act, for the period before the effective date of the permanent rules promulgated under section 632.7465 (5) (e) of the statutes, as created by this act, but not to exceed the period authorized under section 227.24 (1) (c) and (2) of the statutes. Notwithstanding section 227.24 (1) and (3) of the statutes, the commissioner is not required to make a finding of emergency.

SB218-SSA1,25,7 (3) Evaluation of market reforms.

SB218-SSA1,25,12 (a) The commissioner of insurance shall evaluate the effectiveness of the health insurance market reforms under sections 632.745 to 632.7499 of the statutes, as affected by this act, and under the federal Health Insurance Portability and Accountability Act of 1996, P.L. 104-191, including the effectiveness of the reforms with respect to all of the following:

SB218-SSA1,25,14 1. Accessibility of health insurance coverage, including such accessibility for persons who reside in rural areas of the state.

SB218-SSA1,25,15 2. Availability of health insurance coverage for uninsured persons.

SB218-SSA1,25,16 3. Affordability of health insurance coverage.

SB218-SSA1,25,20 (b) The commissioner shall submit a report of the results of the evaluation and any recommendations to the legislature in the manner provided under section 13.172 (2) of the statutes no later than the first day of the 24th month beginning after publication.

SB218-SSA1, s. 51 Section 51 . Initial applicability.

SB218-SSA1,25,22 (1) Unless otherwise specified, this act first applies to all of the following:

SB218-SSA1,25,25 (a) Except as provided in paragraphs (b) and (c ), health benefit plans that are issued or renewed, and self-insured health plans that are established, extended, modified or renewed, on the effective date of this paragraph.

SB218-SSA1,26,3 (b) Health benefit plans covering employes who are affected by a collective bargaining agreement containing provisions inconsistent with this act that are issued or renewed on the earlier of the following:

SB218-SSA1,26,4 1. The day on which the collective bargaining agreement expires.

SB218-SSA1,26,6 2. The day on which the collective bargaining agreement is extended, modified or renewed.

SB218-SSA1,26,9 (c) Self-insured health plans covering employes who are affected by a collective bargaining agreement containing provisions inconsistent with this act that are established, extended, modified or renewed on the earlier of the following:

SB218-SSA1,26,10 1. The day on which the collective bargaining agreement expires.

SB218-SSA1,26,12 2. The day on which the collective bargaining agreement is extended, modified or renewed.

SB218-SSA1, s. 52 Section 52. Effective dates. This act takes effect on the first day of the 7th month beginning after publication, except as follows:

SB218-SSA1,26,15 (1) Section 50 (1 ) and (2) of this act takes effect on the day after publication.

SB218-SSA1,26,16 (End)