SB218: Bill Text

SB218,16,7 CHAPTER 635

SB218,16,9 SMALL EMPLOYER regulation of HEALTH INSURANCE

SB218, s. 40 Section 40. Subchapter I (title) of chapter 635 [precedes 635.01] of the statutes is repealed.

SB218, s. 41 Section 41. 635.01 of the statutes is repealed.

SB218, s. 42 Section 42. 635.02 of the statutes, as affected by 1995 Wisconsin Act 289, is repealed and recreated to read:

SB218,16,15 635.02 Definitions. In this chapter, unless otherwise specified:

SB218,16,18 (1) "Affiliation period" means the period which, under the terms of health insurance coverage offered by a health maintenance organization, must expire before the health insurance coverage becomes effective.

SB218,16,21 (2) "Base premium rate" means the lowest premium rate chargeable under a rating system to employers or individuals with similar case characteristics and the same or similar benefit design characteristics.

SB218,16,23 (3) "Beneficiary" has the meaning given in section 3 (8) of the federal Employee Retirement Income Security Act of 1974.

SB218,17,3 (4) "Benefit design characteristics" means covered services, cost sharing, utilization management, managed care networks and other features that differentiate plan or coverage designs.

SB218,17,5 (5) "Bona fide association" means an association that satisfies all of the following:

SB218,17,6 (a) The association has been actively in existence for at least 5 years.

SB218,17,8 (b) The association has been formed and maintained in good faith for purposes other than obtaining insurance.

SB218,17,11 (c) The association does not condition membership in the association on any health status-related factor of an individual, including an employe of an employer or a dependent of an employe.

SB218,17,14 (d) The association makes health insurance coverage offered through the association available to all members, regardless of any health status-related factor of those members or individuals eligible for coverage through a member.

SB218,17,16 (e) The association does not make health insurance coverage offered through the association available other than in connection with a member of the association.

SB218,17,19 (f) The association meets any additional requirements that are imposed by a rule of the commissioner designed to prevent the use of an association for risk segmentation.

SB218,17,21 (6) "Case characteristics" means the age, gender, geographic location and tobacco use of the individuals covered under a health benefit plan.

SB218,17,23 (7) (a) Except as provided in par. (b), "creditable coverage" means coverage under any of the following:

SB218,17,24 1. A group health plan.

SB218,17,25 2. Health insurance.

SB218,18,1 3. Part A or part B of title XVIII of the federal Social Security Act.

SB218,18,3 4. Title XIX of the federal Social Security Act, except for coverage consisting solely of benefits under section 1928 of that act.

SB218,18,4 5. Chapter 55 of title 10 of the United States Code.

SB218,18,6 6. A medical care program of the federal Indian health service or of an American Indian tribal organization.

SB218,18,7 7. A state health benefits risk pool.

SB218,18,8 8. A health plan offered under chapter 89 of title 5 of the United States Code.

SB218,18,10 9. A public health plan, as defined in regulations issued by the federal department of health and human services.

SB218,18,12 10. A health coverage plan under section 5 (e) of the federal Peace Corps Act, 22 USC 2504 (e).

SB218,18,14 (b) "Creditable coverage" does not include coverage consisting solely of coverage of excepted benefits, as defined in section 2791 (c) of P.L. 104-191.

SB218,18,21 (8) (a) Except as provided in par. (b), "eligible employe" means an employe who works on a permanent basis and has a normal work week of 30 or more hours. The term includes a sole proprietor, a business owner, including the owner of a farm business, a partner of a partnership and a member of a limited liability company if the sole proprietor, business owner, partner or member is included as an employe under a health benefit plan of an employer, but the term does not include an employe who works on a temporary or substitute basis.

SB218,18,24 (b) For purposes of a group health benefit plan, or a self-insured health plan, that is offered by the state under s. 40.51 (6) or by the group insurance board under s. 40.51 (7), "eligible employe" has the meaning given in s. 40.02 (25).

SB218,18,25 (9) (a) "Employer" means any of the following:

SB218,19,3 1. An individual, firm, corporation, partnership, limited liability company or association that is actively engaged in a business enterprise in this state, including a farm business.

SB218,19,4 2. A municipality, as defined in s. 16.70 (8).

SB218,19,5 3. The state.

SB218,19,6 (b) For purposes of this definition, all of the following apply:

SB218,19,8 1. All persons treated as a single employer under subsection (b), (c), (m) or (o) of section 414 of the Internal Revenue Code of 1986 shall be treated as one employer.

SB218,19,9 2. "Employer" includes any predecessor of an employer.

SB218,19,13 (10) "Enrollment date" means, with respect to an individual covered under a group health plan, self-insured health plan or health insurance, the date of enrollment of the individual under the plan or insurance or, if earlier, the first day of the waiting period for such enrollment.

SB218,19,14 (11) "Federal continuation provision" means any of the following:

SB218,19,16 (a) Section 4980B of the Internal Revenue Code of 1986, except for section 4980B (f) (1) of that code insofar as it relates to pediatric vaccines.

SB218,19,18 (b) Part 6 of subtitle B of title I of the federal Employee Retirement Income Security Act of 1974, except for section 609 of that act.

SB218,19,19 (c) Title XXII of P.L. 104-191.

SB218,19,24 (12) "Group health benefit plan" means a health benefit plan that is issued by an insurer to or through an employer on behalf of a group consisting of at least 2 employes or a group including at least 2 eligible employes. The term includes individual health benefit plans covering eligible employes when 3 or more are sold to or through an employer.

SB218,19,25 (13) "Group health plan" means any of the following:

SB218,20,5 (a) An employe welfare plan, as defined in section 3 (1) of the federal Employee Retirement Security Act of 1974, to the extent that the employe welfare plan provides medical care, including items and services paid for as medical care, to employes or to their dependents, as defined under the terms of the employe welfare plan, directly or through insurance, reimbursement or otherwise.

SB218,20,11 (b) Any program that would not otherwise be an employe welfare benefit plan and that is established or maintained by a partnership, to the extent that the program provides medical care, including items and services paid for as medical care, to present or former partners of the partnership or to their dependents, as defined under the terms of the program, directly or through insurance, reimbursement or otherwise.

SB218,20,13 (14) (a) Except as provided in par. (b), "health benefit plan" means any hospital or medical policy or certificate.

SB218,20,14 (b) "Health benefit plan" does not include any of the following:

SB218,20,16 1. Coverage that is only accident or disability income insurance, or any combination of the 2 types.

SB218,20,17 2. Coverage issued as a supplement to liability insurance.

SB218,20,19 3. Liability insurance, including general liability insurance and automobile liability insurance.

SB218,20,20 4. Worker's compensation or similar insurance.

SB218,20,21 5. Automobile medical payment insurance.

SB218,20,22 6. Credit-only insurance.

SB218,20,23 7. Coverage for on-site medical clinics.

SB218,21,3 8. Other similar insurance coverage, as specified in regulations issued by the federal department of health and human services, under which benefits for medical care are secondary or incidental to other insurance benefits.

SB218,21,9 9. If provided under a separate policy, certificate or contract of insurance, or if otherwise not an integral part of the policy, certificate or contract of insurance: limited-scope dental or vision benefits; benefits for long-term care, nursing home care, home health care, community-based care, or any combination of those benefits; and such other similar, limited benefits as are specified in regulations issued by the federal department of health and human services under section 2791 of P.L. 104-191.

SB218,21,11 10. Hospital indemnity or other fixed indemnity insurance or coverage only for a specified disease or illness, if all of the following apply:

SB218,21,13 a. The benefits are provided under a separate policy, certificate or contract of insurance.

SB218,21,16 b. There is no coordination between the provision of such benefits and any exclusion of benefits under any group health plan maintained by the same plan sponsor.

SB218,21,19 c. Such benefits are paid with respect to an event without regard to whether benefits are provided with respect to such an event under any group health plan maintained by the same plan sponsor.

SB218,21,25 11. Benefits that are provided under a separate policy, certificate or contract of insurance and that are medicare supplemental health insurance, as defined in section 1882 (g) (1) of the federal Social Security Act, coverage supplemental to the coverage provided under chapter 55 of title 10 of the United States Code or similar supplemental coverage provided as supplemental to coverage under a group health plan.

SB218,22,1 12. Short-term insurance.

SB218,22,2 13. Student-only medical plans.

SB218,22,3 14. Other insurance exempted by rule of the commissioner.

SB218,22,5 (15) "Health insurance" includes health benefit plans but does not include group health plans.

SB218,22,6 (16) "Health maintenance organization" has the meaning given in s. 609.01 (2).

SB218,22,8 (17) "Health status-related factor" means any of the factors listed in s. 635.05 (1) (a).

SB218,22,15 (18) "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 health benefit plans covering individuals in this state or eligible employes of one or more employers in this state. The term includes a health maintenance organization, 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).

SB218,22,21 (19) "Large employer" means, with respect to a calendar year and a plan year, an employer that employed an average of at least 51 employes on business days during the preceding calendar year, or that is reasonably expected to employ an average of at least 51 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.

SB218,22,25 (20) "Large group market" means the health insurance market under which individuals obtain health insurance coverage on behalf of themselves and their dependents, directly or through any arrangement, under a group health benefit plan maintained by a large employer.

SB218,23,4 (21) "Late enrollee" means, with respect to coverage under a group health plan, a self-insured health plan or health insurance coverage, a participant, beneficiary or individual who enrolls under the plan or coverage at any time other than during any of the following:

SB218,23,6 (a) The first period in which the individual is eligible to enroll under the plan or coverage.

SB218,23,7 (b) A special enrollment period under s. 635.03 (7).

SB218,23,9 (22) "Midpoint rate" means the arithmetic average of the base premium rate and the corresponding highest premium rate.

SB218,23,13 (23) "Network plan" means health insurance coverage of an insurer under which the financing and delivery of medical care, including items and services paid for as medical care, are provided, in whole or in part, through a defined set of providers under contract with the insurer.

SB218,23,16 (24) "New business premium rate" means the premium rate charged or offered to employers or individuals with similar case characteristics for newly issued health insurance with the same or similar benefit design characteristics.

SB218,23,21 (25) "Participant" has the meaning given in section 3 (7) of the federal Employee Retirement Income Security Act of 1974. "Participant" includes an individual who is, or may become, eligible to receive a benefit, or whose beneficiaries may be eligible to receive any such benefit, in connection with a group health plan or group health benefit plan if the individual is any of the following:

SB218,23,23 (a) A partner in relation to a partnership and the group health plan or group health benefit plan is maintained by the partnership.

SB218,24,3 (b) A self-employed individual with one or more employes who are participants in the group health plan or group health benefit plan and the group health plan or group health benefit plan is maintained by the self-employed individual.

SB218,24,8 (26) "Placed for adoption" or "placement for adoption" means, with respect to the placement for adoption of a child with a person, the assumption and retention by the person of a legal obligation for the total or partial support of the child in anticipation of the adoption of the child. A child's placement for adoption with a person terminates upon the termination of the person's legal obligation for support.

SB218,24,10 (27) "Plan sponsor" has the meaning given in section 3 (16) (B) of the federal Employee Retirement Income Security Act of 1974.

SB218,24,13 (28) "Preexisting condition exclusion" means, with respect to coverage, a limitation or exclusion of benefits relating to a condition of an individual that existed before the individual's date of enrollment for coverage.

SB218,24,15 (29) "Rating period" means the period, determined by an insurer, during which a premium rate established by the insurer remains in effect.

SB218,24,17 (30) "Self-insured health plan" means a self-insured health plan of the state or a county, city, village, town or school district.

SB218,24,21 (31) "Short-term insurance" means a temporary individual major medical or accident insurance policy issued for a term of 6 months or less, except that such a policy may be renewed one time at the expiration of the initial term for a term of 6 months or less.

SB218,25,3 (32) "Small 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 50 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 50 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.