AB210: Bill Text

Analysis by the Legislative Reference Bureau

This bill incorporates the health insurance coverage requirements of the federal Patient Protection and Affordable Care Act (PPACA) into the Wisconsin statutes. The bill requires insurers to comply with PPACA provisions that went into effect for plan years beginning on or after March 23, 2010, relating to all of the following: 1) standards relating to benefits for mothers and newborns; 2) required coverage for reconstructive surgery following a mastectomy; and 3) coverage of a dependent student on a medically necessary leave of absence. The bill requires insurers to comply with PPACA provisions that went into effect for plan years beginning on or after September 23, 2010, relating to all of the following: 1) prohibiting annual or lifetime limits; 2) prohibiting coverage rescissions; 3) prohibiting preexisting condition exclusions for individuals under age 19; 4) coverage of certain preventive health services without cost-sharing; 5) extension of coverage to dependents up to age 26; 6) the provision of additional information; 7) giving plan enrollees choice as to a primary care provider; and 8) coverage of emergency services without prior authorization. In addition, the bill requires insurers to comply with PPACA provisions for plan years beginning on or after March 23, 2012, relating to all of the following: 1) the development and use of uniform explanation of coverage documents and standardized definitions; and 2) requirements for ensuring the quality of care. The bill also requires insurers to comply with the PPACA requirement to file a report for each plan year concerning the ratio of incurred loss, plus loss adjustment expense, to earned premiums and to provide a rebate to enrollees under certain circumstances. Under PPACA, the provisions apply to insurers offering medical care benefits under any hospital or medical service policy or plan contract.

A health care policy or plan that was in effect when PPACA was enacted is called a grandfathered health plan. The bill specifically requires a grandfathered health plan to comply, when the grandfathered health plan is renewed, with the following PPACA provisions: 1) coverage of a dependent student on a medically necessary leave of absence; 2) coverage of certain preventive health services without cost-sharing; 3) coverage of emergency services without prior authorization; and 4) at renewal on or after March 23, 2012, requirements for ensuring the quality of care. The bill provides that the additional requirements under the bill with which insurers must comply apply to grandfathered health plans only with respect to those requirements that apply to grandfathered health plans under PPACA.

Current law requires health insurers to cover emergency services without prior authorization, breast reconstruction after a mastectomy, dependent coverage of a student while on a medically necessary leave of absence, and colorectal screening. These coverage provisions are consistent with, and therefore duplicative of, the relevant PPACA requirements and are not repealed in the bill. Current law also requires health insurers to provide coverage of a dependent up to age 27, or up to any age if the dependent is a student and had to leave school previously because he or she was called to active duty in the armed forces. PPACA requires coverage of a dependent up to age 26 and has no additional requirement related to a student previously called to active duty. Because of this inconsistency, the current law dependent coverage provision is repealed in the bill. The bill specifies that, if PPACA is found by a final decision of a federal court of competent jurisdiction to be unconstitutional in its entirety and unenforceable in this state, after all appeals have been exhausted or the time for appeal has expired insurers are exempt from the PPACA coverage requirements incorporated into the bill, with the exception of the provision related to dependent coverage. Thus, if PPACA were found unconstitutional, in addition to the dependent coverage requirement, insurers would be subject to the coverage requirements in current law that are consistent with PPACA and that have not been repealed in the bill.

Under current law, a health insurer must have an internal grievance procedure and an independent review procedure whereby an insured person may appeal certain types of coverage denials to an independent review organization. The statutes set out criteria for both procedures and provide for certification of independent review organizations by the commissioner of insurance (commissioner). The bill repeals these provisions and requires the commissioner to establish standards by rule for both internal and external appeals that are consistent with requirements under PPACA. The requirements for internal appeals apply to all group and individual health insurance policies, grandfathered health plans, policies providing limited-scope dental or vision benefits, and hospital or fixed indemnity policies. The requirements for external appeals apply to all group and individual health insurance policies, grandfathered health plans, hospital or fixed indemnity policies, and Medicare supplement or replacement polices, excluding Medicare advantage plans. An independent review organization performing external appeals must be certified by the commissioner, who may revoke, suspend, or limit the certification or refuse to recertify under specified conditions. An independent review organization must have a quality assurance mechanism to ensure timely and independent reviews and may charge reasonable fees, which must be approved by the commissioner. The commissioner has authority to examine and audit an independent review organization's books and records. A decision of an independent review organization is binding on the insured and the insurer. An independent review organization is immune from any liability that may result from an independent review determination, and an insurer is not liable for any damages attributable to actions taken in compliance with an independent review organization determination.

Under current law, rates for insurance must be filed with the commissioner within 30 days after they become effective, and the commissioner may disapprove a rate after it has been filed. Certain types of insurance, including group and blanket accident and sickness insurance, are exempt from the rating requirement provisions, including the requirement to file rates. The bill provides that, beginning on September 1, 2011, group health insurance offered to employers with not more than 50 employees (small employer health insurance) and group and blanket accident and sickness insurance offered in the individual market are not exempt from the rating requirement provisions. In addition, the bill requires that rates for individual health insurance, small employer health insurance, and group and blanket accident and sickness insurance offered in the individual market be filed with the commissioner before, rather than after, they become effective.

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:

AB210, s. 1 Section 1 . 40.51 (8) of the statutes is amended to read:

AB210,4,6 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), 631.95, 632.72 (2), 632.746 (1) to (8) and (10), 632.747, 632.748, 632.798, 632.83, 632.835, 632.85, 632.853, 632.855, 632.87 (3) to (6), 632.885, 632.89, 632.895 (5m) and (8) to (17), and 632.896 and, so far as applicable, ch. 636.

AB210, s. 2 Section 2 . 40.51 (8) of the statutes, as affected by 2011 Wisconsin Act .... (this act), is amended to read:

AB210,4,13 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), 631.95, 632.72 (2), 632.746 (1) to (8) and (10), 632.747, 632.748, 632.798, 632.85, 632.853, 632.855, 632.87 (3) to (6), 632.885, 632.89, 632.895 (5m) and (8) to (17), and 632.896 and, so far as applicable, ch. 636.

AB210, s. 3 Section 3 . 40.51 (8m) of the statutes is amended to read:

AB210,4,18 40.51 (8m) Every health care coverage plan offered by the group insurance board under sub. (7) shall comply with ss. 631.95, 632.746 (1) to (8) and (10), 632.747, 632.748, 632.798, 632.83, 632.835, 632.85, 632.853, 632.855, 632.885, 632.89, and 632.895 (11) to (17) and, so far as applicable, ch. 636.

AB210, s. 4 Section 4 . 40.51 (8m) of the statutes, as affected by 2011 Wisconsin Act .... (this act), is amended to read:

AB210,5,4 40.51 (8m) Every health care coverage plan offered by the group insurance board under sub. (7) shall comply with ss. 631.95, 632.746 (1) to (8) and (10), 632.747, 632.748, 632.798, 632.85, 632.853, 632.855, 632.885, 632.89, and 632.895 (11) to (17) and, so far as applicable, ch. 636.

AB210, s. 5 Section 5. 49.67 (3) (am) 2. b. of the statutes, as affected by 2011 Wisconsin Act 32, is amended to read:

AB210,5,11 49.67 (3) (am) 2. b. If the applicant is under 26 years of age, notice that he or she may be eligible for coverage as a dependent under his or her parent's health care plan in accordance with s. 632.885 636.25 (1) (h) or (3) (b), and that his or her parent's plan must include coverage for services that are not covered under the plan under this section.

AB210, s. 6 Section 6 . 66.0137 (4) of the statutes is amended to read:

AB210,5,19 66.0137 (4) 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 employees on a self-insured basis, the self-insured plan shall comply with ss. 49.493 (3) (d), 631.89, 631.90, 631.93 (2), 632.746 (10) (a) 2. and (b) 2., 632.747 (3), 632.798, 632.85, 632.853, 632.855, 632.87 (4), (5), and (6), 632.885, 632.89, 632.895 (9) to (17), 632.896, and 767.513 (4) and, so far as applicable, ch. 636.

AB210, s. 7 Section 7 . 66.0137 (4) of the statutes, as affected by 2011 Wisconsin Act .... (this act), is amended to read:

AB210,6,3 66.0137 (4) 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 employees on a self-insured basis, the self-insured plan shall comply with ss. 49.493 (3) (d), 631.89, 631.90, 631.93 (2), 632.746 (10) (a) 2. and (b) 2., 632.747 (3), 632.798, 632.85, 632.853, 632.855, 632.87 (4), (5), and (6), 632.885, 632.89, 632.895 (9) to (17), 632.896, and 767.513 (4) and, so far as applicable, ch. 636.

AB210, s. 8 Section 8. 111.91 (2) (n) of the statutes is amended to read:

AB210,6,7 111.91 (2) (n) The provision to employees of the health insurance coverage required under s. 632.895 (11) to (14), (16), and (16m), and (17) and, so far as applicable, s. 636.25.

AB210, s. 9 Section 9. 111.91 (2) (nm) of the statutes is amended to read:

AB210,6,11 111.91 (2) (nm) The requirements related to providing coverage for a dependent under s. 632.885 and to continuing coverage for a dependent student on a medical leave of absence under s. 632.895 (15).

AB210, s. 10 Section 10. 111.91 (2) (s) of the statutes is amended to read:

AB210,6,15 111.91 (2) (s) The requirements related to internal grievance procedures under s. 632.83 and independent review and external appeals of certain health benefit plan determinations established under s. 632.835 636.12.

AB210, s. 11 Section 11. 111.998 (2) (n) of the statutes is amended to read:

AB210,6,18 111.998 (2) (n) The provision to employees of the health insurance coverage required under s. 632.895 (11) to (14) and, so far as applicable, s. 636.25.

AB210, s. 12 Section 12. 111.998 (2) (s) of the statutes is amended to read:

AB210,6,22 111.998 (2) (s) The requirements related to internal grievance procedures under s. 632.83 and independent review and external appeals of certain health benefit plan determinations established under s. 632.835 636.12.

AB210, s. 13 Section 13 . 120.13 (2) (g) of the statutes is amended to read:

AB210,7,2 120.13 (2) (g) Every self-insured plan under par. (b) shall comply with ss. 49.493 (3) (d), 631.89, 631.90, 631.93 (2), 632.746 (10) (a) 2. and (b) 2., 632.747 (3), 632.798, 632.85, 632.853, 632.855, 632.87 (4), (5), and (6), 632.885, 632.89, 632.895 (9) to (17), 632.896, and 767.513 (4) and, so far as applicable, ch. 636.

AB210, s. 14 Section 14 . 120.13 (2) (g) of the statutes, as affected by 2011 Wisconsin Act .... (this act), is amended to read:

AB210,7,8 120.13 (2) (g) Every self-insured plan under par. (b) shall comply with ss. 49.493 (3) (d), 631.89, 631.90, 631.93 (2), 632.746 (10) (a) 2. and (b) 2., 632.747 (3), 632.798, 632.85, 632.853, 632.855, 632.87 (4), (5), and (6), 632.885, 632.89, 632.895 (9) to (17), 632.896, and 767.513 (4) and, so far as applicable, ch. 636.

AB210, s. 15 Section 15 . 185.983 (1) (intro.) of the statutes is amended to read:

AB210,7,17 185.983 (1) (intro.) Every voluntary nonprofit health care plan operated by a cooperative association organized under s. 185.981 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, 611.26, 611.67, 619.04, 623.11, 623.12, 628.34 (10), 631.17, 631.89, 631.93, 631.95, 632.72 (2), 632.745 to 632.749, 632.775, 632.79, 632.795, 632.798, 632.85, 632.853, 632.855, 632.87 (2), (2m), (3), (4), (5), and (6), 632.885, 632.89, 632.895 (5) and (8) to (17), 632.896, and 632.897 (10) and chs. 609, 620, 625, 630, 635, 636, 645, and 646, but the sponsoring association shall:

AB210, s. 16 Section 16 . 185.983 (1) (intro.) of the statutes, as affected by 2011 Wisconsin Act .... (this act), is amended to read:

AB210,8,2 185.983 (1) (intro.) Every voluntary nonprofit health care plan operated by a cooperative association organized under s. 185.981 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, 611.26, 611.67, 619.04, 623.11, 623.12, 628.34 (10), 631.17, 631.89, 631.93, 631.95, 632.72 (2), 632.745 to 632.749, 632.775, 632.79, 632.795, 632.798, 632.85, 632.853, 632.855, 632.87 (2), (2m), (3), (4), (5), and (6), 632.885, 632.89, 632.895 (5) and (8) to (17), 632.896, and 632.897 (10) and chs. 609, 620, 625, 630, 635, 636, 645, and 646, but the sponsoring association shall:

AB210, s. 17 Section 17. 600.01 (2) (b) of the statutes is amended to read:

AB210,8,5 600.01 (2) (b) Group or blanket insurance described in sub. (1) (b) 3. and 4. is not exempt from ss. 632.745 to 632.749, 632.83 or 632.835 or 636.12 or ch. 633 or 635.

AB210, s. 18 Section 18. 601.31 (1) (Lp) of the statutes is amended to read:

AB210,8,8 601.31 (1) (Lp) For certifying as an independent review organization under s. 632.835 636.15 (1) (a), $400.

AB210, s. 19 Section 19. 601.31 (1) (Lr) of the statutes is amended to read:

AB210,8,11 601.31 (1) (Lr) For each biennial recertification as an independent review organization under s. 632.835 636.15 (1) (a), $100.

AB210, s. 20 Section 20. 601.42 (4) of the statutes is amended to read:

AB210,8,24 601.42 (4) Replies. Any officer, manager or general agent of any insurer authorized to do or doing an insurance business in this state, any person controlling or having a contract under which the person has a right to control such an insurer, whether exclusively or otherwise, any person with executive authority over or in charge of any segment of such an insurer's affairs, any individual practice association or officer, director or manager of an individual practice association, any insurance agent or other person licensed under chs. 600 to 646, any provider of services under a continuing care contract, as defined in s. 647.01 (2), any independent review organization certified or recertified under s. 632.835 (4) 636.15 (1) (a) or any health care provider, as defined in s. 655.001 (8), shall reply promptly in writing or in other designated form, to any written inquiry from the commissioner requesting a reply.

AB210, s. 21 Section 21. 601.465 (1m) (d) of the statutes is created to read:

AB210,9,3 601.465 (1m) (d) Information contained in individual or small group health insurance rate and supplementary rate information filed under ch. 625 that the office determines is proprietary.

AB210, s. 22 Section 22. 609.655 (4) (b) of the statutes is amended to read:

AB210,9,12 609.655 (4) (b) Upon completion of the review under par. (a), the medical director of the defined network plan shall determine whether the policy or certificate will provide coverage of any further treatment for the dependent student's nervous or mental disorder or alcoholism or other drug abuse problems that is provided by a provider located in reasonably close proximity to the school in which the student is enrolled. If the dependent student disputes the medical director's determination, the dependent student may submit a written grievance under the defined network plan's internal grievance procedure established under s. 632.83 636.12.

AB210, s. 23 Section 23. 609.755 of the statutes is repealed.

AB210, s. 24 Section 24. 625.02 (1) of the statutes is renumbered 625.02 (1m).

AB210, s. 25 Section 25. 625.02 (1h) of the statutes is created to read:

AB210,9,17 625.02 (1h) "Individual health insurance coverage" has the meaning given in s. 636.01 (4).

AB210, s. 26 Section 26. 625.02 (1p) of the statutes is created to read:

AB210,9,19 625.02 (1p) "Public Health Service Act" has the meaning given in s. 636.01 (9).

AB210, s. 27 Section 27. 625.02 (2f) of the statutes is created to read:

AB210,9,22 625.02 (2f) "Secretary" means the secretary of the federal department of health and human services.

AB210, s. 28 Section 28. 625.02 (2s) of the statutes is created to read:

AB210,9,25 625.02 (2s) "Small employer health insurance" means health insurance coverage as defined in s. 636.01 (3) that is offered in the small group market as defined in section 2791 (e) (5) of the Public Health Service Act (42 USC 300gg-91 (e) (5)). For purposes of this subsection, a small employer is an employer that employed an average of at least one but not more than 50 employees on business days during the preceding calendar year and that employs at least one employee on the first day of the plan year.

AB210, s. 29 Section 29. 625.03 (1m) (e) of the statutes is renumbered 625.03 (1m) (e) (intro.) and amended to read:

AB210,10,9 625.03 (1m) (e) (intro.) Group and blanket accident and sickness insurance other than credit, except for the following:

AB210,10,10 1. Credit accident and sickness insurance.

AB210, s. 30 Section 30. 625.03 (1m) (e) 2. of the statutes is created to read:

AB210,10,14 625.03 (1m) (e) 2. Subject to s. 636.35, on and after September 1, 2011, small employer health insurance, unless the commissioner provides otherwise by rule, including emergency rule as provided in s. 636.10 (2).

AB210, s. 31 Section 31. 625.03 (1m) (e) 3. of the statutes is created to read:

AB210,10,19 625.03 (1m) (e) 3. Subject to s. 636.35, on and after September 1, 2011, group and blanket accident and sickness insurance offered in the individual market, as defined in s. 636.01 (5), unless the commissioner provides otherwise by rule, including emergency rule as provided in s. 636.10 (2).

AB210, s. 32 Section 32. 625.13 (1) of the statutes is amended to read:

AB210,11,2 625.13 (1) Filing procedure. Except as provided in sub. subs. (2) and (3), every authorized insurer and every rate service organization licensed under s. 625.31 which has been designated by any insurer for the filing of rates under s. 625.15 (2) shall file with the commissioner all rates and supplementary rate information and all changes and amendments thereof made by it for use in this state within 30 days after they become effective.

AB210, s. 33 Section 33. 625.13 (3) of the statutes is created to read:

AB210,11,12 625.13 (3) Individual and small employer health insurance. Subject to s. 636.35, on and after September 1, 2011, unless the commissioner provides otherwise by rule, including emergency rule as provided in s. 636.10 (2), for individual health insurance coverage, group and blanket accident and sickness insurance offered in the individual market, or small employer health insurance an insurer, or a rate service organization licensed under s. 625.31 that has been designated by the insurer for the filing of rates under s. 625.15 (2), shall file with the commissioner all rates and supplementary rate information, and all changes and amendments to the information, before they become effective.

AB210, s. 34 Section 34. 625.14 of the statutes is amended to read:

AB210,11,17 625.14 Filings open to inspection. Each Subject to s. 601.465 (1m) (d), each filing and any supporting information filed under this chapter shall, as soon as filed, be open to public inspection at any reasonable time. Copies may be obtained by any person on request and upon payment of a reasonable charge therefor.

AB210, s. 35 Section 35. 632.76 (2) (ac) 1. of the statutes is amended to read:

AB210,11,24 632.76 (2) (ac) 1. Notwithstanding par. (a) and except as provided in subd. 4., no claim or loss incurred or disability commencing after 12 months from the date of issue of an individual disability insurance policy, as defined in s. 632.895 (1) (a), 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 the loss.

AB210, s. 36 Section 36. 632.76 (2) (ac) 2. of the statutes is amended to read:

AB210,12,6 632.76 (2) (ac) 2. Except as provided in subd. subds. 3. and 4., an individual disability insurance policy, as defined in s. 632.895 (1) (a), other than a short-term policy subject to s. 632.7495 (4) and (5), may not define a preexisting condition more restrictively than a condition, whether physical or mental, regardless of the cause of the condition, for which medical advice, diagnosis, care, or treatment was recommended or received within 12 months before the effective date of coverage.

AB210, s. 37 Section 37. 632.76 (2) (ac) 3. (intro.) of the statutes is amended to read:

AB210,12,11 632.76 (2) (ac) 3. (intro.) Except as provided in subd. 4. and except as the commissioner provides by rule under s. 632.7495 (5), all of the following apply to an individual disability insurance policy that is a short-term policy subject to s. 632.7495 (4) and (5):

AB210, s. 38 Section 38. 632.76 (2) (ac) 4. of the statutes is created to read:

AB210,12,17 632.76 (2) (ac) 4. Subdivisions 1., 2., and 3. do not apply to an individual disability insurance policy, as defined in s. 632.895 (1) (a), issued on or after September 23, 2010, and before January 1, 2014, that covers an individual who is under 19 years of age, with respect to coverage of that individual. Section 636.25 (1) (f) applies to such a policy with respect to coverage of that individual.

AB210, s. 39 Section 39. 632.83 of the statutes is repealed.

AB210, s. 40 Section 40. 632.835 of the statutes is repealed.

AB210, s. 41 Section 41. 632.885 of the statutes, as affected by 2011 Wisconsin Act 32, is repealed.

AB210, s. 42 Section 42. 632.895 (15) (c) (intro.) of the statutes is amended to read: