Amendment SSA1-SB218

SB218-SSA1,13,15 (3) An insurer that provides coverage under sub. (2) may impose payment security provisions that are reasonably related to the risk covered.

SB218-SSA1,13,19 (4) (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.

SB218-SSA1,13,22 (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.

SB218-SSA1,14,2 (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.

SB218-SSA1,14,6 (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.

SB218-SSA1,14,10 (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.

SB218-SSA1,14,15 (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 beginning on the day on which the employer lost coverage.

SB218-SSA1,14,21 (g) An insurer that previously issued group health benefit plans but, prior to the effective date of this paragraph .... [revisor inserts date], discontinued offering such plans to small employers shall within 60 days after the effective date of this paragraph .... [revisor inserts date], again offer group health benefit plans to small employers or be subject to the requirements under s. 632.749 as if the insurer had elected to discontinue offering a group health benefit plan.

SB218-SSA1,14,24 (5) (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.

SB218-SSA1,15,3 (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:

SB218-SSA1,15,5 1. The number of high-risk individuals covered by the insurer at least equals the threshold level determined under par. (e) 3.

SB218-SSA1,15,12 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.

SB218-SSA1,15,16 (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 offering group health benefit plans to employers in this state and to all insurance agents listed under s. 628.11 by those insurers.

SB218-SSA1,15,19 (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).

SB218-SSA1,15,22 (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:

SB218-SSA1,15,24 1. What diagnostic conditions constitute high-risk medical conditions for purposes of the definition of a high-risk individual.

SB218-SSA1,16,2 2. How to determine an insurer's highest premium rate level for purposes of the definition of a high-risk individual.

SB218-SSA1,16,4 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.

SB218-SSA1, s. 36 Section 36. 632.747 (title) of the statutes is amended to read:

SB218-SSA1,16,7 632.747 (title) Guaranteed acceptance under group health benefit plans.

SB218-SSA1, s. 37 Section 37. 632.748 (title) of the statutes, as created by 1997 Wisconsin Act 27, is amended to read:

SB218-SSA1,16,10 632.748 Prohibiting discrimination under group health benefit plans.

SB218-SSA1, s. 38 Section 38. 632.748 (4) (c) of the statutes, as created by 1997 Wisconsin Act 27, is amended to read:

SB218-SSA1,16,14 632.748 (4) (c) Provide an exception from, or limit, the rate regulation under s. 635.05 632.7497.

SB218-SSA1, s. 39 Section 39. 632.749 (title) of the statutes, as affected by 1997 Wisconsin Act 27, is amended to read:

SB218-SSA1,16,18 632.749 (title) Contract termination and renewability for group health benefit plans.

SB218-SSA1, s. 40 Section 40. 632.749 (2) (e) of the statutes, as affected by 1997 Wisconsin Act 27, is amended to read:

SB218-SSA1,16,25 632.749 (2) (e) In the case of a group health benefit plan that the insurer offers through a network plan, there is no longer an enrollee under the plan who resides, lives or works in the service area of the insurer or in an area in which the insurer is authorized to do business and, in the case of the small group market, the insurer would deny enrollment under the plan under s. 635.19 (2) (a) 1.

SB218-SSA1, s. 41 Section 41. 632.7491 of the statutes is created to read:

SB218-SSA1,17,4 632.7491 Disclosure of rating factors and renewability provisions for group health benefit plans. (1) Before the sale of a group health benefit plan, an insurer shall disclose to an employer all of the following:

SB218-SSA1,17,6 (a) The insurer's right to increase premium rates and any factors limiting the amount of increase.

SB218-SSA1,17,8 (b) The extent to which benefit design characteristics and case characteristics affect premium rates.

SB218-SSA1,17,10 (c) The extent to which rating factors and changes in benefit design benefit design characteristics and case characteristics affect changes in premium rates.

SB218-SSA1,17,11 (d) The employer's renewability rights.

SB218-SSA1,17,13 (e) As part of the insurer's solicitation and sales materials, the availability of the information under par. (f).

SB218-SSA1,17,14 (f) Upon the request of the employer, the following information:

SB218-SSA1,17,16 1. The provisions, if any, of the plan or policy relating to preexisting condition exclusions.

SB218-SSA1,17,18 2. The benefits and premiums available under all health insurance coverage offered by the insurer for which the employer is qualified.

SB218-SSA1,17,22 (2) Information required to be disclosed under this section shall be provided in a manner that is understandable to an employer and shall be sufficient to reasonably inform an employer of the employer's rights and obligations under the health insurance coverage.

SB218-SSA1,17,24 (3) An insurer is not required under this section to disclose information that is proprietary or trade secret information under applicable law.

SB218-SSA1, s. 42 Section 42. 632.7492 of the statutes is created to read:

SB218-SSA1,18,7 632.7492 Annual certification of compliance for group health benefit plans. (1) Records. An insurer that issues group health benefit plans to employers, as defined in s. 632.7497 (1), 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 upon request.

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: