SB218: Bill Text

SB218,40,5 1. What diagnostic conditions constitute high risk medical conditions for purposes of the definition of a high-risk individual.

SB218,40,7 2. How to determine an insurer's highest premium rate level for purposes of the definition of a high-risk individual.

SB218,40,9 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, s. 46 Section 46. 635.08 of the statutes is created to read:

SB218,40,13 635.08 Coverage requirements for individual health benefit plans. (1) (a) In this section, "qualifying coverage" means benefits or coverage provided under any of the following:

SB218,40,16 1. A group health benefit plan, group health plan or self-insured health plan that provides benefits similar to or exceeding benefits provided under the health benefit plan for which the individual is applying.

SB218,40,20 2. An individual health benefit plan that provides benefits similar to or exceeding benefits provided under the health benefit plan for which the individual is applying, if the individual health benefit plan has been in effect for at least one year.

SB218,41,2 (b) Notwithstanding par. (a), "qualifying coverage" does not include a high cost-share health plan, as defined in s. 632.898 (1) (c), that is linked to a medical savings account, as described in s. 632.898, if the employer that provides the individual's new coverage offers its eligible employes a choice of health benefit plan options that includes a high cost-share health plan, as defined in s. 632.898 (1) (c), and the individual's new coverage is not a high cost-share health plan.

SB218,41,5 (2) (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.

SB218,41,7 (b) An individual health benefit plan may not define a preexisting condition more restrictively than any of the following:

SB218,41,11 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.

SB218,41,14 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.

SB218,41,17 (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.

SB218,41,20 (3) (a) Except as provided in pars. (b) and (g), an insurer shall provide coverage under an individual health benefit plan to an individual who is a resident of this state, regardless of health condition or claims experience, if all of the following apply:

SB218,41,21 1. The insurer has in force an individual health benefit plan.

SB218,41,23 2. The individual agrees to pay the premium required for coverage under the individual health benefit plan.

SB218,42,3 3. The individual agrees to comply with all other provisions of the individual health benefit plan that apply generally to a policyholder or an insured without regard to health condition or claims experience.

SB218,42,5 4. The individual was covered under qualifying coverage that terminated not more than 31 days before the individual applied for the new coverage.

SB218,42,11 5. If the individual's qualifying coverage under subd. 4. was coverage under sub. (1) (a) 1., the individual had been covered under continuation coverage, as defined in s. 252.16 (1) (a), for the maximum allowable period; the individual is not now eligible for coverage under any group health benefit plan, group health plan or self-insured health plan; and the individual was an eligible employe for at least 6 months immediately before applying for the new coverage.

SB218,42,14 (b) 1. Paragraph (a) 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.

SB218,42,18 2. Paragraph (a) does not require an insurer that provides coverage to an individual under an individual health benefit plan to issue a different individual health benefit plan to the individual before the expiration of the agreed term of the individual health benefit plan under which the individual has coverage.

SB218,42,22 3. An insurer that offers health care coverage exclusively to a single category or limited categories of individuals may, with prior approval of the commissioner, limit its compliance with par. (a) to the single category or those limited categories of individuals.

SB218,43,2 4. The commissioner may exempt an insurer from the requirement under par. (a) if the commissioner determines that it is in the public interest to exempt the insurer from the requirement under par. (a) because the insurer is in financially hazardous condition.

SB218,43,6 (c) An insurer that issues an individual health benefit plan to an individual described in par. (a) shall provide coverage under the individual health benefit plan for any dependents of the individual who had coverage under the individual's qualifying coverage under par. (a) 4.

SB218,43,10 (d) An individual health benefit plan that is issued to an individual described in par. (a) may not restrict or modify coverage with respect to the individual except to the extent that the individual's qualifying coverage under par. (a) 4. was restricted or modified.

SB218,43,13 (e) The maximum lifetime benefits available under an individual health benefit plan that is issued to an individual described in par. (a) may be reduced by the total benefits paid under the individual's qualifying coverage under par. (a) 4.

SB218,43,18 (f) An individual health benefit plan that is issued to an individual described in par. (a) 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 such services under the individual's qualifying coverage under par. (a) 4.

SB218,43,21 (g) An insurer that is otherwise required to provide coverage under par. (a) shall be exempt from the requirement under par. (a) for the remainder of a calendar year after all of the following occur:

SB218,44,2 1. The total number of individuals described under par. (a) and their dependents who are covered by the insurer equals at least 1% of the total number of individuals and their dependents covered under all individual health benefit plans issued by the insurer that were in effect on December 31 of the preceding year and that were qualifying coverage under sub. (1) (a) 2.

SB218,44,4 2. The insurer applies for exemption from the requirement under par. (a) by submitting to the commissioner certification that includes all of the following:

SB218,44,7 a. The total number of individuals and their dependents covered under all individual health benefit plans issued by the insurer that were in effect on December 31 of the preceding year and that were qualifying coverage under sub. (1) (a) 2.

SB218,44,10 b. The total number of individuals described under par. (a) and their dependents who have been accepted by the insurer for coverage under par. (a) during the current year.

SB218,44,14 (h) Whenever an insurer becomes exempt from the requirement under par. (a) by satisfying the criteria under par. (g), the commissioner shall provide notice of that exemption to all insurers offering individual health benefit plans to individuals in this state and to all insurance agents listed under s. 628.11 by those insurers.

SB218, s. 47 Section 47. 635.08 (1) (b) of the statutes, as created by 1997 Wisconsin Act .... (this act), is repealed.

SB218, s. 48 Section 48. 635.09 of the statutes is repealed and recreated to read:

SB218,44,20 635.09 Rate regulation for individual and group health benefit plans. Notwithstanding ch. 625, the commissioner shall promulgate rules that do all of the following:

SB218,44,25 (1) 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.

SB218,45,5 (2) 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.

SB218,45,7 (3) Establish restrictions on increases in premium rates that an insurer may charge an employer for coverage under a group health benefit plan such that:

SB218,45,9 (a) The percentage increase in the premium rate for a new rating period does not exceed the sum of the following:

SB218,45,11 1. 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.

SB218,45,16 2. 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.

SB218,45,19 3. 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.

SB218,45,23 (b) 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 paragraph .... [revisor inserts date], does not exceed the sum of par. (a) 1. and 3., unless premium rates are in compliance with the rules promulgated under sub. (1).

SB218,46,2 (4) Require the premium rate of a health benefit plan issued before the effective date of this subsection .... [revisor inserts date], to comply with the rules promulgated under sub. (1) or (2) no later than 2 years after the effective date of this subsection .... [revisor inserts date].

SB218,46,3 (5) Define the terms necessary for compliance with this section.

SB218,46,4 (6) Ensure that employers are classified using objective criteria.

SB218,46,6 (7) Ensure that rating factors are applied objectively and consistently to small employers.

SB218, s. 49 Section 49. 635.11 (title) of the statutes is amended to read:

SB218,46,9 635.11 (title) Disclosure of rating factors and renewability provisions for group health benefit plans.

SB218, s. 50 Section 50. 635.11 of the statutes is renumbered 635.11 (1m), and 635.11 (1m) (intro.), (a) and (d), as renumbered, are amended to read:

SB218,46,14 635.11 (1m) (intro.) Before the sale of a group health benefit plan or policy subject to this subchapter, a small employer, an insurer shall disclose to a small an employer all of the following:

SB218,46,16 (a) The small employer insurer's right to increase premium rates and the factors limiting the amount of increase.

SB218,46,17 (d) The small employer's renewability rights.

SB218, s. 51 Section 51. 635.11 (1m) (e) of the statutes is created to read:

SB218,46,20 635.11 (1m) (e) As part of the insurer's solicitation and sales materials, the availability of the information under par. (f).

SB218, s. 52 Section 52. 635.11 (1m) (f) of the statutes is created to read:

SB218,46,22 635.11 (1m) (f) Upon the request of the employer, the following information:

SB218,46,24 1. The provisions, if any, of the plan or policy relating to preexisting condition exclusions.

SB218,47,2 2. The benefits and premiums available under all health insurance coverage offered by the insurer for which the employer is qualified.

SB218, s. 53 Section 53. 635.11 (2m) of the statutes is created to read:

SB218,47,7 635.11 (2m) 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, s. 54 Section 54. 635.11 (3m) of the statutes is created to read:

SB218,47,10 635.11 (3m) An insurer is not required under this section to disclose information that is proprietary or trade secret information under applicable law.

SB218, s. 55 Section 55. 635.13 (title) of the statutes is amended to read:

SB218,47,13 635.13 (title) Annual certification of compliance for group health benefit plans.

SB218, s. 56 Section 56. 635.13 (1) of the statutes is amended to read:

SB218,47,20 635.13 (1) Records. A small employer An insurer that issues group health benefit plans 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 and the small employer insurance board upon request.

SB218,47,25 (2) Certification. A small employer An insurer that issues group health benefit plans shall file with the commissioner on or before May 1 annually an actuarial opinion by a member of the American academy of actuaries Academy of Actuaries certifying all of the following with respect to those group health benefit plans:

SB218,48,2 (a) That the small employer insurer is in compliance with the rate provisions of s. 635.05 635.09.

SB218,48,4 (b) That the small employer insurer's rating methods are based on generally accepted and sound actuarial principles, policies and procedures.

SB218,48,8 (c) That the opinion is based on the actuary's examination of the small employer insurer's records and a review of the small employer insurer's actuarial assumptions and statistical methods used in setting rates and procedures used in implementing rating plans.

SB218, s. 57 Section 57. 635.15 of the statutes is renumbered 635.10 and amended to read:

SB218,48,17 635.10 (title) Temporary suspension of rate regulation for individual and group health benefit plans. The commissioner may suspend the operation of all or any part of s. 635.05 635.09 with respect to one or more small employers or one or more individuals for one or more rating periods upon the written request of a small employer an insurer and a finding by the commissioner that the suspension is necessary in light of the financial condition of the small employer insurer or that the suspension would enhance the efficiency and fairness of the small employer health insurance market.

SB218, s. 58 Section 58. 635.16 of the statutes is created to read:

SB218,48,23 635.16 Contract termination and renewability for group health benefit plans. (1) (a) Except as provided in subs. (2) to (4) and notwithstanding s. 631.36 (2) to (4m), an insurer that offers a group health benefit plan shall renew such coverage or continue such coverage in force at the option of the employer and, if applicable, plan sponsor.

SB218,48,25 (b) At the time of coverage renewal, the insurer may modify a group health benefit plan issued in the large group market.

SB218,49,2 (2) Notwithstanding s. 631.36 (2) to (4m), an insurer may nonrenew or discontinue a group health benefit plan, but only if any of the following applies:

SB218,49,4 (a) The plan sponsor has failed to pay premiums or contributions in accordance with the terms of the group health benefit plan or in a timely manner.

SB218,49,7 (b) The plan sponsor has performed an act or engaged in a practice that constitutes fraud or made an intentional misrepresentation of material fact under the terms of the coverage.

SB218,49,10 (c) The plan sponsor has failed to comply with a material plan provision that is permitted under law relating to employer contribution or group participation rules.

SB218,49,13 (d) The insurer is ceasing to offer coverage in the market in which the group health benefit plan is included in accordance with sub. (3) and any other applicable state law.

SB218,49,17 (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.

SB218,49,22 (f) In the case of a group health benefit plan that is made available only through one or more bona fide associations, the employer ceases to be a member of the association on which the coverage is based. Coverage may be terminated if this paragraph applies only if the coverage is terminated uniformly without regard to any health status-related factor of any covered individual.

SB218,50,2 (3) (a) Notwithstanding s. 631.36 (2) to (4m), an insurer may discontinue offering in this state a particular type of group health benefit plan offered in either the large group market or the group market other than the large group market, but only if all of the following apply:

SB218,50,6 1. The insurer provides notice of the discontinuance to each employer and, if applicable, plan sponsor for whom the insurer provides coverage of this type in this state, and to the participants and beneficiaries covered under the coverage, at least 90 days before the date on which the coverage will be discontinued.

SB218,50,13 2. The insurer offers to each employer and, if applicable, plan sponsor for whom the insurer provides coverage of this type in this state the option to purchase from among all of the other group health benefit plans that the insurer offers in the market in which is included the type of group health benefit plan that is being discontinued, except that in the case of the large group market, the insurer must offer each employer and, if applicable, plan sponsor the option to purchase one other group health benefit plan that the insurer offers in the large group market.

SB218,50,18 3. In exercising the option to discontinue coverage of this particular type and in offering the option to purchase coverage under subd. 2., the insurer acts uniformly without regard to any health status-related factor of any covered participants or beneficiaries or any participants or beneficiaries who may become eligible for coverage.

SB218,50,22 (b) Notwithstanding s. 631.36 (2) to (4m), an insurer may discontinue offering in this state all group health benefit plans in the large group market or in the group market other than the large group market, or in both such group markets, but only if all of the following apply: