SB218: Bill Text

Preexisting conditions and portability

Under the bill, an insurer offering a group health benefit plan may impose a preexisting condition limitation or exclusion only if the limitation or exclusion relates to a condition for which the individual received medical advice or treatment within the 6-month period before the individual's enrollment date. The limitation or exclusion may extend no more than 12 months, or 18 months for a late enrollee (an individual who enrolls at a time other than the first period during which the individual is eligible to enroll or a special enrollment period). In addition, the length of time for which an insurer may impose a limitation or exclusion must be reduced by the aggregate of the individual's creditable coverage (defined in the bill to include many types of health care coverage), regardless of the benefits provided under the creditable coverage. A period of creditable coverage after which an individual had no coverage for at least 63 days is not counted toward the aggregate. Generally, beginning on October 1, 1996, an insurer is required to provide an individual with certification of creditable coverage when the individual's coverage under a health care plan provided by the insurer terminates.

An insurer may not treat genetic information as a preexisting condition without a diagnosis of a condition related to the information. An insurer may not impose a preexisting condition limitation or exclusion relating to pregnancy as a preexisting condition. An insurer may not impose any preexisting condition limitation or exclusion with respect to an individual if the individual had creditable coverage on the 30th day after the individual was born or adopted, unless the individual was without any creditable coverage for a period of at least 63 days.

Prohibiting discrimination

The bill prohibits an insurer from establishing rules for eligibility for group health benefit plan coverage on the basis of various specified factors, such as health status, claims experience, genetic information, disability or medical history. An insurer offering a group health benefit plan may not use any of the specified factors as a basis for charging an individual a higher premium than another similarly situated individual.

Contract termination and renewability

As under current law, an insurer that offers a group health benefit plan must renew the plan at the option of the employer unless certain specified events occur, such as the employer fails to pay premiums. The insurer may, however, discontinue offering a particular type of group health benefit plan if the insurer acts uniformly without regard to any health status-related factor of covered individuals and offers each affected employer the option to purchase another type of group health benefit plan that the insurer offers. The insurer may also discontinue offering in this state all group health benefit plans in the large group market (group health benefit plans sold to employers with more than 50 employes), in the market other than the large group market, or in both group markets, if the insurer does not issue any group health benefit plans in the affected market for 5 years.

Rate regulation

Under current law, the commissioner is required to promulgate rules that establish restrictions on premium rates and increases in premium rates that an insurer may charge for coverage provided to a small employer (one that employs not fewer than 2 nor more than 25 eligible employes). The restrictions must require that the rates charged by an insurer to small employers with employes with similar demographic, actuarially based characteristics for the same or similar benefit design characteristics not vary from the midpoint rate for those small employers by more than 35% of that midpoint rate. The bill expands the requirement for restrictions on rates to all group health benefit plans, regardless of the size of the employer group that the plan covers. The restrictions must require that the rates charged by an insurer to employers with employes with similar demographic, actuarially based characteristics for similar benefit design characteristics not vary from the midpoint rate for those employers by more than 30% of that midpoint rate. The restrictions for rate increases must allow for, among other things, an adjustment that does not exceed 15% per year for employers with 2 to 50 eligible employes or 25% per year for employers with more than 50 eligible employes.

Individual health insurance requirements

The health insurance market reform provisions under current law apply only to group health benefit plans. This bill provides for similar health insurance market reform provisions for individual health benefit plans.

Guaranteed issue

With certain specified exceptions, an insurer that has in force an individual health benefit plan must issue an individual health benefit plan to an individual who is a resident of this state, without regard to health condition or claims experience. The individual must agree to pay the premium and comply with all other plan provisions and must have been covered, within 31 days before applying for the new coverage, under other health insurance that provided benefits similar to or exceeding the benefits under the new coverage. An insurer is exempt from the guaranteed issue requirement, for the remainder of a calendar year, if the insurer fulfills certain requirements set out in the bill based on the number of individuals covered by the insurer who fulfill the requirements necessary for guaranteed issue in comparison to the total number of individuals covered by the insurer under all individual health benefit plans.

Preexisting conditions, portability and other restrictions

Under the bill, an individual health benefit plan may not exclude or limit benefits on account of a preexisting condition for more than 12 months after the commencement of an individual's coverage and may not define a preexisting condition more restrictively than a condition for which the individual sought or should have sought medical care during the 18 months immediately preceding the effective date of coverage. An individual health benefit plan may not impose a preexisting condition limitation or exclusion relating to pregnancy as a preexisting condition. If the individual fulfills the requirements necessary for guaranteed issue of an individual health benefit plan, the plan must waive any period applicable to a preexisting condition exclusion or limitation for particular services for the period that the individual was covered for those services under his or her previous health insurance coverage. In addition, the plan may not restrict the individual's coverage except to the extent that the individual's coverage was restricted under the previous health insurance coverage. The maximum lifetime benefits under the plan, however, may be reduced by the total benefits paid under the previous health insurance coverage.

Contract termination and renewability

Similar to the requirement for group health benefit plans, the bill requires an insurer to renew individual health benefit plan coverage at the option of the insured individual unless certain specified events occur, such as the individual fails to pay premiums. The insurer may, however, discontinue offering in this state a particular type of individual health benefit plan coverage if the insurer acts uniformly without regard to any health status-related factor of covered individuals and offers to each individual who has that type of coverage the option to purchase any other type of individual health benefit plan coverage that the insurer offers. The insurer may also discontinue offering in this state all individual health benefit plan coverage if the insurer does not issue in this state any individual health benefit plan coverage for 5 years.

Rate regulation

Similar to the requirement for group health benefit plans, the bill requires the commissioner to promulgate rules that establish restrictions on premium rates that an insurer may charge for coverage under an individual health benefit plan. The restrictions must require that the rates charged by an insurer to individuals with similar demographic, actuarially based characteristics for the same or similar benefit design characteristics not vary from the midpoint rate for those individuals by more than 35% of that midpoint rate. Unlike the requirement for group health benefit plans, the bill does not require the commissioner to establish restrictions on increases in premium rates for individual health benefit plans.

Repeal of basic benefits plan

Under current law, a small employer may purchase a group health insurance policy providing basic benefits for the health insurance coverage of its employes. The small employer insurance board determines by rule most aspects of the basic benefits policies that insurers may offer to small employers, including the basic benefits that the policies must contain and the deductible, copayment and maximum benefit requirements for the policies. The bill eliminates the provisions related to the basic benefits policies, as well as the small employer insurance board.

For further information see the state and local fiscal estimate, which will be printed as an appendix to this bill.

The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:

SB218, s. 1 Section 1. 15.735 (1) of the statutes is repealed.

SB218, s. 2 Section 2. 40.51 (8) of the statutes, as affected by 1995 Wisconsin Act 289, is amended to read:

SB218,7,6 40.51 (8) Every health care coverage plan offered by the state under sub. (6) shall comply with ss. 631.89, 631.90, 631.93 (2), 632.72 (2), 632.745 (1) to (3) and (5), 632.747, 632.87 (3) to (5), 632.895 (5m) and (8) to (10) and 632.896 and ch. 635.

SB218, s. 3 Section 3. 40.51 (8m) of the statutes, as created by 1995 Wisconsin Act 289, is amended to read:

SB218,7,11 40.51 (8m) Every health care coverage plan offered by the group insurance board under sub. (7) shall comply with ss. 632.745 (1) to (3) and (5) and 632.747 ch. 635.

SB218, s. 4 Section 4. 60.23 (25) of the statutes, as affected by 1995 Wisconsin Act 289, is amended to read:

SB218,7,17 60.23 (25) Self-insured health plans. Provide health care benefits to its officers and employes on a self-insured basis if the self-insured plan complies with ss. 631.89, 631.90, 631.93 (2), 632.745 (2), (3) and (5) (a) 2. and (b) 2., 632.747 (3), 632.87 (4) and (5), 632.895 (9) and, 632.896, 635.03 and 635.04.

SB218, s. 5 Section 5. 66.184 of the statutes, as affected by 1995 Wisconsin Act 289, is amended to read:

SB218,7,25 66.184 Self-insured health plans. If a city, including a 1st class city, or a village provides health care benefits under its home rule power, or if a town provides health care benefits, to its officers and employes on a self-insured basis, the self-insured plan shall comply with ss. 49.493 (3) (d), 631.89, 631.90, 631.93 (2), 632.745 (2), (3) and (5) (a) 2. and (b) 2., 632.747 (3), 632.87 (4) and (5), 632.895 (9) and (10), 632.896, 635.03, 635.04, 767.25 (4m) (d) and 767.51 (3m) (d).

SB218, s. 6 Section 6. 111.70 (1) (a) of the statutes, as affected by 1995 Wisconsin Act 289, is amended to read:

SB218,8,25 111.70 (1) (a) "Collective bargaining" means the performance of the mutual obligation of a municipal employer, through its officers and agents, and the representative of its municipal employes in a collective bargaining unit, to meet and confer at reasonable times, in good faith, with the intention of reaching an agreement, or to resolve questions arising under such an agreement, with respect to wages, hours and conditions of employment, and with respect to a requirement of the municipal employer for a municipal employe to perform law enforcement and fire fighting services under s. 61.66, except as provided in sub. (4) (m) and (n) and s. 40.81 (3) and except that a municipal employer shall not meet and confer with respect to any proposal to diminish or abridge the rights guaranteed to municipal employes under ch. 164. The duty to bargain, however, does not compel either party to agree to a proposal or require the making of a concession. Collective bargaining includes the reduction of any agreement reached to a written and signed document. The municipal employer shall not be required to bargain on subjects reserved to management and direction of the governmental unit except insofar as the manner of exercise of such functions affects the wages, hours and conditions of employment of the municipal employes in a collective bargaining unit. In creating this subchapter the legislature recognizes that the municipal employer must exercise its powers and responsibilities to act for the government and good order of the jurisdiction which it serves, its commercial benefit and the health, safety and welfare of the public to assure orderly operations and functions within its jurisdiction, subject to those rights secured to municipal employes by the constitutions of this state and of the United States and by this subchapter.

SB218, s. 7 Section 7. 111.70 (4) (n) of the statutes, as created by 1995 Wisconsin Act 289, is repealed.

SB218, s. 8 Section 8. 111.91 (2) (k) of the statutes, as created by 1995 Wisconsin Act 289, is amended to read:

SB218,9,6 111.91 (2) (k) Compliance with the health benefit plan requirements under ss. 32.745 (1) to (3) and (5) and 632.747 ch. 635.

SB218, s. 9 Section 9. 120.13 (2) (g) of the statutes, as affected by 1995 Wisconsin Act 289, is amended to read:

SB218,9,12 120.13 (2) (g) Every self-insured plan under par. (b) shall comply with ss. 49.493 (3) (d), 631.89, 631.90, 631.93 (2), 632.745 (2), (3) and (5) (a) 2. and (b) 2., 632.747 (3), 632.87 (4) and (5), 632.895 (9) and (10), 632.896, 635.03, 635.04, 767.25 (4m) (d) and 767.51 (3m) (d).

SB218, s. 10 Section 10. 185.981 (4t) of the statutes, as affected by 1995 Wisconsin Act 289, is amended to read:

SB218,9,17 185.981 (4t) A sickness care plan operated by a cooperative association is subject to ss. 252.14, 631.89, 632.72 (2), 632.745, 632.747, 632.749, 632.87 (2m), (3), (4) and (5), 632.895 (10) and 632.897 (10) and ch. chs. 155 and 635.

SB218, s. 11 Section 11. 185.983 (1) (intro.) of the statutes, as affected by 1995 Wisconsin Act 289, is amended to read:

SB218,9,25 185.983 (1) (intro.) Every such voluntary nonprofit sickness care plan shall be exempt from chs. 600 to 646, with the exception of ss. 601.04, 601.13, 601.31, 601.41, 601.42, 601.43, 601.44, 601.45, 611.67, 619.04, 628.34 (10), 631.89, 631.93, 632.72 (2), 632.745, 632.747, 632.749, 632.775, 632.79, 632.795, 632.87 (2m), (3), (4) and (5), 632.895 (5), (9) and (10), 632.896 and 632.897 (10), subch. II of ch. 619 and chs. 609, 630, 635, 645 and 646, but the sponsoring association shall:

SB218, s. 12 Section 12. 185.983 (1g) of the statutes is repealed.

SB218, s. 13 Section 13. 600.01 (2) (b) of the statutes, as affected by 1995 Wisconsin Act 289, is amended to read:

SB218,10,5 600.01 (2) (b) Group or blanket insurance described in sub. (1) (b) 3. and 4. is not exempt from s. 632.745, 632.747 or 632.749 or ch. 633 or 635.

SB218, s. 14 Section 14. 619.12 (2) (e) 1. of the statutes is renumbered 619.12 (2) (e) and amended to read:

SB218,10,11 619.12 (2) (e) Except as provided in subd. 2., no No person who is eligible for health care benefits, other than those benefits specified in s. 635.02 (14) (b) 1. to 14., that are provided by an employer on a self-insured basis or through health insurance is eligible for coverage under the plan.

SB218, s. 15 Section 15. 619.12 (2) (e) 2. of the statutes is repealed.

SB218, s. 16 Section 16. 619.12 (2) (e) 3. of the statutes is repealed.

SB218, s. 17 Section 17. 619.123 of the statutes is repealed.

SB218, s. 18 Section 18. 625.12 (2) of the statutes is amended to read:

SB218,10,24 625.12 (2) Classification. Risks Subject to s. 635.09, risks may be classified in any reasonable way for the establishment of rates and minimum premiums, except that no classifications may be based on race, color, creed or national origin, and classifications in automobile insurance may not be based on physical condition or developmental disability as defined in s. 51.01 (5). Subject to s. ss. 632.365 and 635.09, rates thus produced may be modified for individual risks in accordance with rating plans or schedules that establish reasonable standards for measuring probable variations in hazards, expenses, or both. Rates may also be modified for individual risks under s. 625.13 (2).

SB218, s. 19 Section 19. 628.34 (3) (a) of the statutes, as affected by 1995 Wisconsin Act 289, is amended to read:

SB218,11,10 628.34 (3) (a) No insurer may unfairly discriminate among policyholders by charging different premiums or by offering different terms of coverage except on the basis of classifications related to the nature and the degree of the risk covered or the expenses involved, subject to ss. 632.365 and 632.745 , 635.03, 635.05, 635.08 and 635.09. Rates are not unfairly discriminatory if they are averaged broadly among persons insured under a group, blanket or franchise policy, and terms are not unfairly discriminatory merely because they are more favorable than in a similar individual policy.

SB218, s. 20 Section 20. 628.34 (3) (b) of the statutes, as affected by 1995 Wisconsin Act 289, is amended to read:

SB218,11,19 628.34 (3) (b) No insurer may refuse to insure or refuse to continue to insure, or limit the amount, extent or kind of coverage available to an individual, or charge an individual a different rate for the same coverage because of a mental or physical disability except when the refusal, limitation or rate differential is based on either sound actuarial principles supported by reliable data or actual or reasonably anticipated experience, subject to ss. 632.745, 632.747, 632.749, 635.09 and 635.26 635.03 to 635.09, 635.16 and 635.165.

SB218, s. 21 Section 21. 628.36 (2) (b) 1. of the statutes is amended to read:

SB218,12,2 628.36 (2) (b) 1. Except for health maintenance organizations, preferred provider plans, and limited service health organizations and the small employer health insurance plan under subch. II of ch. 635, no health care plan may prevent any person covered under the plan from choosing freely among providers who have agreed to participate in the plan and abide by its terms, except by requiring the person covered to select primary providers to be used when reasonably possible.

SB218, s. 22 Section 22. 628.36 (2) (b) 3. of the statutes is amended to read:

SB218,12,8 628.36 (2) (b) 3. Except as provided in subd. 4., no provider may be denied the opportunity to participate in a health care plan, other than a health maintenance organization, a limited service health organization, or a preferred provider plan or the small employer health insurance plan under subch. II of ch. 635, under the terms of the plan.

SB218, s. 23 Section 23. 628.36 (2) (b) 5. of the statutes is amended to read:

SB218,12,14 628.36 (2) (b) 5. Except for the small employer health insurance plan under subch. II of ch. 635 to the extent determined by the small employer insurance board under s. 635.23 (1) (b), all All health care plans, including health maintenance organizations, limited service health organizations and preferred provider plans are subject to s. 632.87 (3).

SB218, s. 24 Section 24. 631.01 (4) of the statutes is amended to read:

SB218,13,2 631.01 (4) Annuities and group policies for eleemosynary institutions. This chapter, and ch. 632 and the health insurance mandates under ch. 632 that apply to the plan under subch. II of ch. 635 do not apply to annuities or group policies that are provided on a basis as uniform nationally as state statutes permit to educational, scientific research, religious or charitable institutions organized without profit to any person, for the benefit of employes of such institutions. The commissioner may by order subject such contracts issued by a particular insurer to this chapter, or ch. 632 or the health insurance mandates under ch. 632 that apply to the plan under subch. II of ch. 635 or any portion of those provisions upon a finding, after a hearing, that the interests of Wisconsin insureds or creditors or the public of this state so require.

SB218, s. 25 Section 25. 632.70 of the statutes is repealed.

SB218, s. 26 Section 26. 632.745 of the statutes, as affected by 1995 Wisconsin Acts 289 and 453, is repealed.

SB218, s. 27 Section 27. 632.747 (title) of the statutes, as created by 1995 Wisconsin Act 289, is renumbered 635.04 (title) and amended to read:

SB218,13,8 635.04 (title) Guaranteed acceptance under group plans.

SB218, s. 28 Section 28. 632.747 (1) of the statutes, as created by 1995 Wisconsin Act 289, is renumbered 635.04 (1), and 635.04 (1) (intro.), as renumbered, is amended to read:

SB218,13,17 635.04 (1) Employe becomes eligible after commencement of coverage. (intro.) If Unless otherwise permitted by rule of the commissioner, if an insurer provides coverage under a group health benefit plan, the insurer shall provide coverage under the group health benefit plan to an eligible employe who becomes eligible for coverage after the commencement of the employer's coverage, and to the eligible employe's dependents, regardless of health condition or claims experience, if all of the following apply:

SB218, s. 29 Section 29. 632.747 (2) of the statutes, as created by 1995 Wisconsin Act 289, is repealed.

SB218, s. 30 Section 30. 632.747 (3) (intro.) of the statutes, as created by 1995 Wisconsin Act 289, is renumbered 635.04 (2) (intro.).

SB218, s. 31 Section 31. 632.747 (3) (a) of the statutes, as created by 1995 Wisconsin Act 289, is renumbered 635.04 (2) (a) and amended to read:

SB218,14,3 635.04 (2) (a) The eligible employe was covered as a dependent under qualifying creditable coverage when he or she waived coverage under the self-insured health plan.

SB218, s. 32 Section 32. 632.747 (3) (b) of the statutes, as created by 1995 Wisconsin Act 289, is renumbered 635.04 (2) (b) and amended to read:

SB218,14,11 635.04 (2) (b) The eligible employe's coverage under the qualifying creditable coverage has terminated or will terminate due to a divorce from the insured under the qualifying creditable coverage, the death of the insured under the qualifying creditable coverage, loss of employment by the insured under the qualifying creditable coverage or involuntary loss of coverage under the qualifying creditable coverage by the insured under the qualifying creditable coverage.

SB218, s. 33 Section 33. 632.747 (3) (c) of the statutes, as created by 1995 Wisconsin Act 289, is renumbered 635.04 (2) (c) and amended to read:

SB218,14,16 635.04 (2) (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 creditable coverage.

SB218, s. 34 Section 34. 632.749 of the statutes, as created by 1997 Wisconsin Act 289, is repealed.

SB218, s. 35 Section 35. 632.76 (2) (a) of the statutes, as affected by 1995 Wisconsin Act 289, is amended to read:

SB218,15,2 632.76 (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 (1) (c) 635.02 (14), which is subject to s. 632.745 (2) 635.03 or 635.08 (2).

SB218, s. 36 Section 36. 632.896 (4) of the statutes, as affected by 1995 Wisconsin Act 289, is amended to read:

SB218,15,10 632.896 (4) Preexisting conditions. Notwithstanding ss. 632.745 (2) and 632.76 (2) (a), 635.03 and 635.08 (2), 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, s. 37 Section 37. 632.898 (1) (b) of the statutes is repealed and recreated to read:

SB218,15,15 632.898 (1) (b) "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.

SB218, s. 38 Section 38. 632.898 (7) of the statutes is amended to read:

SB218,16,5 632.898 (7) If the federal government enacts legislation providing for a federal income tax exemption for amounts deposited in an account established under this section and for any interest, dividends or other gain that accrues in the account if redeposited in the account, the commissioner shall conduct a study, to be completed within 4 years after the enactment of the federal legislation, of individuals and groups that had coverage under a high cost-share health plan and that terminated that coverage in order to enroll in a health benefit plan that was not a high cost-share health plan. If as a result of the study the commissioner determines that s. 632.745 (1) (f) 2. 635.08 (1) (b) is not necessary for the purpose for which it was intended, the commissioner shall certify that determination to the revisor of statutes. Upon the certification, the revisor of statutes shall publish notice in the Wisconsin administrative register of the determination, the date of the certification and that after 30 days after the date of the certification s. 632.745 (1) (f) 2. 635.08 (1) (b) is not effective.