AB394: Bill Text

AB394,23,10 2. It is in the public interest to exempt the insurer from the requirements under sub. (1) or (2) because the insurer is in financially hazardous condition.

AB394,23,12 (g) An insurer may limit its issuance of health benefit plans under subs. (1) and (2) to any of the following:

AB394,23,14 1. Group health benefit plans, and related individual conversion policies, to small employer groups.

AB394,23,16 2. Group health benefit plans, and related individual conversion policies, to employer groups that are not small employer groups.

AB394,23,17 3. Individual health benefit plans.

AB394,23,20 (4) Risk adjustment; rules. (a) The commissioner shall promulgate rules establishing a risk adjustment mechanism for insurers issuing health benefit plans under this section.

AB394,23,21 (b) The rules promulgated under par. (a) shall do all of the following:

AB394,23,23 1. Define "high-risk medical conditions", using diagnostic criteria and other criteria.

AB394,23,25 2. Place a dollar value on each high-risk medical condition based on the severity of the condition.

AB394,24,2 3. Determine the percentage of individuals with high-risk medical conditions covered by health benefit plans.

AB394,24,7 4. Provide for an annual assessment against each insurer insuring a lower percentage of individuals with high-risk medical conditions than the percentage established under subd. 3. Any moneys received from assessments imposed under the rules promulgated under this subdivision shall be credited to the appropriation under s. 20.145 (1) (h).

AB394,24,10 5. Provide for an annual reimbursement for each insurer insuring a higher percentage of individuals with high-risk medical conditions than the percentage established under subd. 3.

AB394,24,16 (5) Advisory committee. (a) The commissioner shall establish and appoint the members of an advisory committee to advise the commissioner on the contents of the rules to be promulgated under sub. (4) including definitions, assessments and reimbursements. The committee shall also review the rules developed under sub. (4) and submitted to the legislature under s. 227.19 (2) and make recommendations to the legislature on the rules.

AB394,24,18 (b) The advisory committee established by the commissioner under par. (a) shall consist of the commissioner or his or her designee and all of the following:

AB394,24,19 1. A representative of an insurer that issues individual health benefit plans.

AB394,24,20 2. A representative of an insurer that issues group health benefit plans.

AB394,24,21 3. A representative of a health maintenance organization.

AB394,24,22 4. Two actuaries who are fellows of the American Academy of Actuaries.

AB394,24,24 5. An underwriter employed by an insurer that issues individual health benefit plans.

AB394,25,2 6. An underwriter employed by an insurer that issues group health benefit plans.

AB394,25,3 7. A medical director.

AB394, s. 27 Section 27. 632.748 of the statutes is created to read:

AB394,25,10 632.748 Contract termination and renewability. (1) 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:

AB394,25,11 (a) Failure to pay a premium when due.

AB394,25,13 (b) Fraud or misrepresentation by the policyholder or, with respect to coverage for an insured individual, fraud or misrepresentation by that insured individual.

AB394,25,14 (c) Substantial breaches of contractual duties, conditions or warranties.

AB394,25,16 (d) The number of individuals covered under the health benefit plan is less than the number required by the health benefit plan.

AB394,25,18 (e) If the health benefit plan covers an employer group, the employer is no longer actively engaged in a business enterprise.

AB394,25,20 (2) Nonrenewal. Notwithstanding sub. (1), an insurer may elect not to renew a health benefit plan if the insurer complies with all of the following:

AB394,25,22 (a) The insurer ceases to renew all other health benefit plans issued by the insurer.

AB394,25,25 (b) The insurer provides notice to all affected policyholders and to the commissioner in each state in which an affected insured individual resides not later than one year before termination of coverage.

AB394,26,2 (c) The insurer does not issue a health benefit plan earlier than 5 years after the nonrenewal of the health benefit plans.

AB394,26,6 (d) 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.

AB394,26,8 (3) Insurer in liquidation. This section does not apply to a health benefit plan if the insurer that issued the health benefit plan is in liquidation.

AB394, s. 28 Section 28. 632.749 of the statutes is created to read:

AB394,26,12 632.749 Fair marketing standards. (1) Active marketing. Every insurer shall actively market health benefit plan coverage to employers and individuals in this state.

AB394,26,15 (2) Prohibitions related to case characteristics. (a) 1. Except as provided in subd. 2., an insurer or an intermediary may not directly or indirectly do any of the following:

AB394,26,19 a. 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.

AB394,26,22 b. 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.

AB394,26,25 2. Subdivision 1. 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.

AB394,27,6 (b) 1. Except as provided in subd. 2., 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 an employer, any of the employer's covered employes, an insured individual or any dependents.

AB394,27,10 2. Payment of compensation on the basis of percentage of premium is not a violation of subd. 1. if the percentage does not vary based on the health condition, claims experience, industry, occupation or geographic area of an employer, any of the employer's covered employes, an insured individual or any dependents.

AB394,27,15 (c) 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, industry, occupation or geographic area of the employers, covered employes, insured individuals or dependents placed by the intermediary with the insurer.

AB394,27,19 (3) Prohibition related to excluding employe. 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.

AB394,27,22 (4) Written denial required. Denial by an insurer of an application for coverage from an employer shall be in writing and shall state the reason or reasons for the denial.

AB394,28,2 (5) Third-party administrators. 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 as if it were an insurer.

AB394,28,6 (6) Insurer ceasing to issue. (a) An insurer that has in force one or more health benefit plans that are included in a category under s. 632.747 (3) (g) 1. to 3. shall actively market and issue health benefit plans in that category, as provided in s. 632.747, unless the insurer complies with all of the following:

AB394,28,8 1. Files notice with the commissioner that the insurer is ceasing to issue health benefit plans in that category.

AB394,28,9 2. Ceases to issue health benefit plans in that category for not less than 5 years.

AB394,28,12 3. Does not commence marketing or issuing health benefit plans in that category until the insurer files notice with the commissioner that the insurer intends to market and issue such health benefit plans.

AB394,28,15 (b) An insurer may not cease to actively market or issue health benefit plans in all categories under s. 632.747 (3) (g) 1. to 3. unless the insurer complies with s. 632.748 (2).

AB394,28,18 (7) Additional standards by rule. 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.

AB394, s. 29 Section 29. 632.76 (2) (a) of the statutes is amended to read:

AB394,28,25 632.76 (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 health benefit plan, as defined in s. 632.745 (1) (d), which is subject to s. 632.745.

AB394, s. 30 Section 30. 632.83 of the statutes is created to read:

AB394,29,6 632.83 Regulation of certain related policies. The commissioner may by rule prescribe standards for specified disease policies, hospital indemnity policies, as defined in s. 632.895 (1) (c), or limited benefit health policies, including prohibiting certain specified types of products, prescribing minimum coverage and establishing marketing or suitability standards.

AB394, s. 31 Section 31. 632.896 (4) of the statutes is amended to read:

AB394,29,13 632.896 (4) Preexisting conditions. Notwithstanding s. ss. 632.745 (2) 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).

AB394, s. 32 Section 32. 632.897 (2) (d) of the statutes is amended to read:

AB394,30,6 632.897 (2) (d) If the employer is notified to terminate the coverage for any of the reasons provided under par. (b), the employer shall provide the terminated insured written notification of the right to continue group coverage or convert to individual coverage and the payment amounts required for either continued or converted coverage including the manner, place and time in which the payments shall be made. This notice shall be given not more than 5 days after the employer receives notice to terminate coverage. The payment amount for continued group coverage may not exceed the group rate in effect for a group member, including an employer's contribution, if any, for a group policy as defined in sub. (1) (c) 1. or 1m. or the equivalent value of the monthly contribution of a group member to a group policy as defined in sub. (1) (c) 2. or the equivalent value of the monthly premium for franchise insurance as defined in sub. (1) (c) 3. The premium for converted coverage shall be determined in accordance with the insurer's table of premium rates applicable to the age and class of risks of each person to be covered under that policy and to the type and amount of coverage provided, subject to s. 632.746 and any rules promulgated under s. 632.7465. The notice may be sent to the terminated insured's home address as shown on the records of the employer.

AB394, s. 33 Section 33. 632.897 (9) (c) of the statutes is amended to read:

AB394,30,20 632.897 (9) (c) When the insurer is notified that the coverage of a spouse may be terminated because of a divorce or annulment, the insurer shall provide the former spouse written notification of the right to obtain individual coverage under sub. (4), the premium amounts required and the manner, place and time in which premiums may be paid. This notice shall be given not less than 30 days before the former spouse's coverage would otherwise terminate. The premium shall be determined in accordance with the insurer's table of premium rates applicable to the age and class of risk of every person to be covered and to the type and amount of coverage provided, subject to s. 632.746 and any rules promulgated under s. 632.7465. If the former spouse tenders the first monthly premium to the insurer within 30 days after the notice provided by this paragraph, sub. (4) shall apply and the former spouse shall receive individual coverage commencing immediately upon termination of his or her coverage under the insured's policy.

AB394, s. 34 Section 34. Chapter 635 (title) of the statutes is amended to read:

AB394,30,22 CHAPTER 635

AB394,30,24 SMALL EMPLOYER HEALTH INSURANCE PLAN

AB394, s. 35 Section 35. Subchapter I of chapter 635 [precedes 635.01.] of the statutes is repealed.

AB394, s. 36 Section 36. 635.20 (intro.) of the statutes is amended to read:

AB394,31,4 635.20 Definitions. (intro.) In this subchapter chapter:

AB394, s. 37 Section 37. Subchapter II (title) of chapter 635 [precedes 635.20] of the statutes is repealed.

AB394, s. 38 Section 38. 635.20 (1c) of the statutes is repealed and recreated to read:

AB394,31,11 635.20 (1c) "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.

AB394, s. 39 Section 39. 635.20 (1m) of the statutes is repealed and recreated to read:

AB394,31,20 635.20 (1m) "Eligible employe" means an employe who works on a full-time basis and has a normal work week of 30 or more hours. "Eligible employe" includes a sole proprietor, a business owner, including the owner of a farm business, a partner of a partnership, a member of a limited liability company and an independent contractor if the sole proprietor, business owner, partner, member or independent contractor is included as an employe under a health benefit plan of a small employer, but "eligible employe" does not include an employe who works on a part-time, temporary or substitute basis.

AB394, s. 40 Section 40. 635.20 (10) of the statutes is amended to read:

AB394,31,24 635.20 (10) "Plan" means the health insurance plan for individuals employed by small employers that is created under s. 635.21 and that consists of a policy under this subchapter chapter containing the basic benefits.

AB394, s. 41 Section 41. 635.20 (13) of the statutes is repealed and recreated to read:

AB394,32,9 635.20 (13) "Small employer 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 small employers in this state, or that sells 3 or more individual health benefit plans to a small employer, covering eligible employes of the small employer. "Small employer insurer" 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, but does not include a limited service health organization, as defined in s. 609.01 (3).

AB394, s. 42 Section 42. 635.25 (1) (a) (intro.) of the statutes is amended to read:

AB394,32,12 635.25 (1) (a) (intro.) To be eligible to participate in the plan by purchasing a policy under this subchapter chapter containing the basic benefits, an employer:

AB394, s. 43 Section 43. 635.25 (1) (b) of the statutes is amended to read:

AB394,32,17 635.25 (1) (b) Except as provided in ss. 645.43 and 646.35, an employer that purchases a policy under this subchapter chapter containing the basic benefits and that ceases to be eligible to participate in the plan during a policy period shall retain coverage under the plan to the end of the policy period.

AB394, s. 44 Section 44. 635.25 (1m) of the statutes is amended to read:

AB394,32,21 635.25 (1m) Notwithstanding sub. (1), an employer is not eligible to participate in the plan if all of the individuals to be covered under the plan may be covered by a single one policy providing individual single or family coverage.

AB394, s. 45 Section 45. 635.254 (1) of the statutes is amended to read:

AB394,33,2 635.254 (1) An employer that participates in the plan shall pay a premium contribution of not less than 50% of the premium rate on behalf of an eligible employe with individual single coverage and not less than 40% of the premium rate on behalf of an eligible employe with family coverage.

AB394, s. 46 Section 46. 635.254 (3) of the statutes is amended to read:

AB394,33,8 635.254 (3) For an eligible employe who obtains coverage under the health insurance risk-sharing plan under s. 619.12 (2) (e) 2., an employer under sub. (1) shall pay a premium contribution to the health insurance risk-sharing plan that is equal to the amount that the employer would pay on behalf of the employe for coverage under the plan under this subchapter chapter.

AB394, s. 47 Section 47. 635.26 (1s) of the statutes is repealed.

AB394, s. 48 Section 48. 635.28 of the statutes is amended to read: