AB312: Bill Text

Under current law, an insurer is required to provide consumers policies that are coherent, written in commonly understood language, legible, appropriately divided and captioned, and presented in a meaningful sequence. The commissioner of insurance must make rules establishing standards for the understandability of policies and may exempt types of policies from the specific understandability requirements if the commissioner determines that the type of policy is generally understood by those receiving it or those individuals are adequately protected. This bill additionally requires that, no later than March 23, 2012, each health insurer, health plan, and self-insured governmental health plan comply with the standards that the secretary of the federal DHHS will create regarding compiling and providing a summary of benefits and coverage explanation that accurately describes the benefits and coverage under the plan.

This bill requires that no later than March 23, 2012, every health care plan, except for a grandfathered health care plan, and self-insured governmental health plan must comply with the standards developed by the secretary of the federal DHHS regarding reporting for reimbursement structures to improve health outcomes and other quality measures.

This bill prohibits an insurer or self-insured governmental health plan from imposing a lifetime limit on the dollar value of benefits under the group or individual health care plan or self-insured plan. Before January 1, 2014, an insurer under a group or an individual health care plan, except for a grandfathered health plan providing individual coverage, or a self-insured governmental health plan may impose only a certain annual limit on the dollar value of benefits as defined by the secretary of the federal DHHS. Starting on January 1, 2014, an insurer under a group or individual health care plan, except for a grandfathered health plan providing individual coverage, and a self-insured governmental health plan may not impose an annual limit on the dollar value of benefits.

Under current law, if an insurer provides coverage under a group health benefit plan, the insurer must provide coverage to any eligible employee who becomes an eligible employee after the group coverage commences, and his or her dependents, regardless of health condition or claims experience, with certain exceptions. A self-insured governmental health plan must similarly provide coverage to an eligible employee who waived coverage during an enrollment period, regardless of health condition or claims experience, with certain exceptions. With certain exceptions, under current law, an insurer offering a group health benefit plan must renew coverage at the option of the employer. Current law also requires an insurer that provides an individual health benefit plan to renew the coverage for the insured at the option of the insured, with certain exceptions, but modifications to the individual health benefit plan that comply with the law are allowed. This bill requires any insurer that offers an individual health benefit plan, except for a grandfathered health plan, to offer coverage to any individual, and his or her dependents, that apply for coverage.

Under current law, insurers offering individual or group health insurance policies or plans are not limited in what factors they use to set rates, or premiums, except that they may not discriminate on the basis of race, color, creed, or national origin and they may not under a group health insurance policy or plan charge a higher rate based on a health status-related factor. Rates, under current law, may be modified for individual risks. As of January 1, 2014, health care plans, except for grandfathered health plans, and self-insured governmental health plans, when setting premium rates, may only consider whether the plan covers an individual or a family and the age, tobacco use, and geographic location of any individual covered under the plan. Rates based on age or tobacco use may only vary a certain amount under the bill.

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:

AB312, s. 1 Section 1 . 40.51 (8) of the statutes is amended to read:

AB312,6,6 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), 632.723, 632.7252, 632.7254, 632.746 (1) to (8) and (10), 632.747, 632.748, 632.753, 632.798, 632.83, 632.835, 632.85, 632.853, 632.855, 632.865, 632.87 (3) to (6), 632.883, 632.885, 632.89, 632.895 (5m) and (8) to (17), and 632.896.

AB312, s. 2 Section 2 . 40.51 (8) of the statutes, as affected by 2011 Wisconsin Act .... (this act), is amended to read:

AB312,6,13 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), 632.723, 632.7252, 632.7254, 632.728, 632.746 (1) (1m) to (8) and (10), 632.747, 632.748, 632.753, 632.798, 632.83, 632.835, 632.85, 632.853, 632.855, 632.865, 632.87 (3) to (6), 632.883, 632.885, 632.89, 632.895 (5m) and (8) to (17), and 632.896.

AB312, s. 3 Section 3 . 40.51 (8m) of the statutes is amended to read:

AB312,6,19 40.51 (8m) Every health care coverage plan offered by the group insurance board under sub. (7) shall comply with ss. 631.95, 632.723, 632.7252, 632.7254, 632.746 (1) to (8) and (10), 632.747, 632.748, 632.753, 632.798, 632.83, 632.835, 632.85, 632.853, 632.855, 632.865, 632.87 (5m), 632.883, 632.885, 632.89, and 632.895 (11) to (17).

AB312, s. 4 Section 4 . 40.51 (8m) of the statutes, as affected by 2011 Wisconsin Act .... (this act), is amended to read:

AB312,7,2 40.51 (8m) Every health care coverage plan offered by the group insurance board under sub. (7) shall comply with ss. 631.95, 632.723, 632.7252, 632.7254, 632.728, 632.746 (1) (1m) to (8) and (10), 632.747, 632.753, 632.748, 632.798, 632.83, 632.835, 632.85, 632.853, 632.855, 632.865, 632.87 (5m), 632.883, 632.885, 632.89, and 632.895 (11) to (17).

AB312, s. 5 Section 5 . 66.0137 (4) of the statutes is amended to read:

AB312,7,10 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), 632.723, 632.7252, 632.7254, 632.746 (2) (dm) and (10) (a) 2. and (b) 2., 632.747 (3), 632.753, 632.798, 632.85, 632.853, 632.855, 632.865, 632.87 (4), (5), and to (6), 632.883, 632.885, 632.89, 632.895 (9) to (17), 632.896, and 767.513 (4).

AB312, s. 6 Section 6 . 66.0137 (4) of the statutes, as affected by 2011 Wisconsin Act .... (this act), is amended to read:

AB312,7,19 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), 632.723, 632.7252, 632.7254, 632.728, 632.746 (2) (dm) (1m) and (10) (a) 2. and (b) 2., 632.747 (3), 632.753, 632.798, 632.85, 632.853, 632.855, 632.865, 632.87 (4) to (6), 632.883, 632.885, 632.89, 632.895 (9) to (17), 632.896, and 767.513 (4).

AB312, s. 7 Section 7 . 120.13 (2) (g) of the statutes is amended to read:

AB312,7,25 120.13 (2) (g) Every self-insured plan under par. (b) shall comply with ss. 49.493 (3) (d), 631.89, 631.90, 631.93 (2), 632.723, 632.7252, 632.7254, 632.746 (2) (dm) and (10) (a) 2. and (b) 2., 632.747 (3), 632.753, 632.798, 632.85, 632.853, 632.855, 632.865, 632.87 (4), (5), and to (6), 632.883, 632.885, 632.89, 632.895 (9) to (17), 632.896, and 767.513 (4).

AB312, s. 8 Section 8 . 120.13 (2) (g) of the statutes, as affected by 2011 Wisconsin Act .... (this act), is amended to read:

AB312,8,7 120.13 (2) (g) Every self-insured plan under par. (b) shall comply with ss. 49.493 (3) (d), 631.89, 631.90, 631.93 (2), 632.723, 632.7252, 632.7254, 632.728, 632.746 (2) (dm) (1m) and (10) (a) 2. and (b) 2., 632.747 (3), 632.753, 632.798, 632.85, 632.853, 632.855, 632.865, 632.87 (4) to (6), 632.883, 632.885, 632.89, 632.895 (9) to (17), 632.896, and 767.513 (4).

AB312, s. 9 Section 9 . 185.983 (1) (intro.) of the statutes is amended to read:

AB312,8,17 185.983 (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), 632.723, 632.7252, 632.7254, 632.745 to 632.749, 632.753, 632.775, 632.79, 632.795, 632.798, 632.85, 632.853, 632.855, 632.865, 632.87 (2), (2m), (3), (4), (5), and to (6), 632.883, 632.885, 632.89, 632.895 (5) and (8) to (17), 632.896, and 632.897 (10) and chs. 609, 620, 630, 635, 645, and 646, but the sponsoring association shall:

AB312, s. 10 Section 10 . 185.983 (1) (intro.) of the statutes, as affected by 2011 Wisconsin Act .... (this act), is amended to read:

AB312,9,3 185.983 (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), 632.723, 632.7252, 632.7254, 632.728, 632.745 to 632.749, 632.753, 632.775, 632.79, 632.795, 632.798, 632.85, 632.853, 632.855, 632.865, 632.87 (2) to (6), 632.883, 632.885, 632.89, 632.895 (5) and (8) to (17), 632.896, and 632.897 (10) and chs. 609, 620, 630, 635, 645, and 646, but the sponsoring association shall:

AB312, s. 11 Section 11. 609.22 (3) of the statutes is amended to read:

AB312,9,12 609.22 (3) Primary provider selection. A Except as provided in s. 632.865, a defined network plan that is not a preferred provider plan shall permit each enrollee to select his or her own primary provider from a list of participating primary care physicians and any other participating providers that are authorized by the defined network plan to serve as primary providers. The list shall be updated on an ongoing basis and shall include a sufficient number of primary care physicians and any other participating providers authorized by the plan to serve as primary providers who are accepting new enrollees.

AB312, s. 12 Section 12. 609.845 of the statutes is created to read:

AB312,9,18 609.845 Coverage requirements and limitations; preventive care; maternal and newborn care; quality; standardization. Limited service health organizations, preferred provider plans, and defined network plans are subject to ss. 632.723, 632.7252, 632.7254, 632.746 (2) (dm) or 632.76 (2) (ac) 4., 632.753, 632.865, 632.87 (5m), 632.883, and 632.895 (13m).

AB312, s. 13 Section 13 . 609.845 of the statutes, as created by 2011 Wisconsin Act .... (this act), is amended to read:

AB312,9,25 609.845 Coverage requirements and limitations; preventive care; maternal and newborn care; quality; standardization. Limited service health organizations, preferred provider plans, and defined network plans are subject to ss. 632.723, 632.7252, 632.7254, 632.728, 632.746 (2) (dm) (1m) or 632.76 (2) (ac) 4., 632.7493, 632.753, 632.865, 632.87 (5m), 632.883, and 632.895 (13m).

AB312, s. 14 Section 14. 625.12 (1) (a) and (e) of the statutes are amended to read:

AB312,10,3 625.12 (1) (a) Past and prospective loss and expense experience within and outside of this state, except as provided in s. 632.728.

AB312,10,5 (e) Subject to s. ss. 632.365 and 632.728, all other relevant factors, including the judgment of technical personnel.

AB312, s. 15 Section 15. 625.12 (2) of the statutes is amended to read:

AB312,10,15 625.12 (2) Classification. Risks Except as provided in s. 632.728, 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 632.728, 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).

AB312, s. 16 Section 16. 625.15 (1) of the statutes is amended to read:

AB312,10,24 625.15 (1) Rate making. An Except as provided in s. 632.728, an insurer may itself establish rates and supplementary rate information for one or more market segments based on the factors in s. 625.12 and, if the rates are for motor vehicle liability insurance, subject to s. 632.365, or the insurer may use rates and supplementary rate information prepared by a rate service organization, with average expense factors determined by the rate service organization or with such modification for its own expense and loss experience as the credibility of that experience allows.

AB312, s. 17 Section 17. 628.34 (3) (a) of the statutes is amended to read:

AB312,11,7 628.34 (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, 632.728, 632.746 and 632.748. 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.

AB312, s. 18 Section 18. 631.11 (4) (a) and (b) of the statutes are amended to read:

AB312,11,16 631.11 (4) (a) Knowledge when policy issued. No Except as provided in s. 632.753, no misrepresentation made by or on behalf of a policyholder and no breach of an affirmative warranty or failure of a condition constitutes grounds for rescission of, or affects an insurer's obligations under, an insurance policy if at the time the policy is issued the insurer has either constructive knowledge of the facts under s. 631.09 (1) or actual knowledge. If the application is in the handwriting of the applicant, the insurer does not have constructive knowledge under s. 631.09 (1) merely because of the agent's knowledge.

AB312,11,24 (b) Knowledge acquired after policy issued. If Except as provided in s. 632.753, after issuance of an insurance policy an insurer acquires knowledge of sufficient facts to constitute grounds for rescission of the policy under this section or a general defense to all claims under the policy, the insurer may not rescind the policy and the defense is not available unless the insurer notifies the insured within 60 days after acquiring such knowledge of its intention to either rescind the policy or defend against a claim if one should arise, or within 120 days if the insurer determines that it is necessary to secure additional medical information.

AB312, s. 19 Section 19. 631.22 (2) of the statutes is amended to read:

AB312,12,7 631.22 (2) An Subject to s. 632.7252, an insurer may provide a consumer insurance policy which is delivered to a person obtaining insurance coverage and is not exempt under sub. (5) only if the consumer insurance policy is coherent, written in commonly understood language, legible, appropriately divided and captioned by its various sections and presented in a meaningful sequence. The commissioner shall promulgate rules establishing standards for the determination of compliance with this subsection.

AB312, s. 20 Section 20. 631.22 (5) of the statutes is amended to read:

AB312,12,13 631.22 (5) The Except as provided in s. 632.7252, the commissioner may by rule exempt a type of consumer insurance policy from the application of this section if the commissioner finds that type of consumer insurance policy is generally understood by persons to whom it is delivered or that those persons are otherwise adequately protected.

AB312, s. 21 Section 21. 631.95 (3) (a) of the statutes is repealed.

AB312, s. 22 Section 22. 632.723 of the statutes is created to read:

AB312,12,22 632.723 Transparency in coverage. (1) Required information. Except as provided in sub. (4), in addition to other required disclosures, a group or individual health benefit plan, as defined in s. 632.745 (11), shall provide the following information to the secretary of the federal department of health and human services and to the commissioner; provide the following information to any insurance exchange, if the plan is sold through an insurance exchange; and make the following information available to the public:

AB312,12,23 (a) Claims payment policies and practices.

AB312,12,24 (b) Financial disclosures, periodically.

AB312,12,25 (c) Data on enrollment in the plan.

AB312,13,1 (d) Data on disenrollment in the plan.

AB312,13,2 (e) Data on the number of claims that are denied.

AB312,13,3 (f) Data on rating practices.

AB312,13,5 (g) Cost-sharing data and payments with respect to any out-of-network coverage.

AB312,13,6 (h) Enrollee and participant rights.

AB312,13,8 (i) Other information required by the secretary of the federal department of health and human services.

AB312,13,12 (2) Language of disclosures. (a) In this subsection, "plain language" means language that the intended audience, including individuals with limited English proficiency, can readily understand and use because the language is concise, well-organized, and follows other best practices of plain language writing.

AB312,13,14 (b) A group or individual health benefit plan, as defined in s. 632.745 (11), shall submit the information required under sub. (1) in plain language.

AB312,13,20 (3) Cost-sharing transparency. A health benefit plan, as defined in s. 632.745 (11), shall make available on its Internet Web site and through another means for individuals without access to the Internet in a timely manner upon the individual's request a means to permit individuals to learn the amount of cost sharing under the individual's plan or coverage that the individual would be responsible for paying with respect to a specific item or service furnished by a participating provider.

AB312,13,22 (4) Applicability. This section does not apply to a grandfathered health plan, as defined in s. 632.758 (1).

AB312, s. 23 Section 23. 632.7252 of the statutes is created to read:

AB312,14,6 632.7252 Uniform explanation of coverage. No later than March 23, 2012, every insurer that offers a health care plan, as defined in s. 628.36 (2) (a) 1., and the state, and every county, city, village, town, village, and school district that offers a self-insured health plan shall comply with 42 USC 300gg-15 and with the standards developed by the secretary of the federal department of health and human services under 42 USC 300gg-15 for compiling and providing to applicants, enrollees, and policyholders or certificate holders a summary of benefits and coverage explanation that accurately describes the benefits and coverage under the plan.

AB312, s. 24 Section 24. 632.7254 of the statutes is created to read:

AB312,14,16 632.7254 Quality reporting. No later than March 23, 2012, every insurer that offers a health care plan, as defined in s. 628.36 (2) (a) 1., and the state, and every county, city, village, town, village, and school district that offers a self-insured health plan shall comply with 42 USC 300gg-15a and with the standards developed by the secretary of the federal department of health and human services under 42 USC 300gg-15a to require reporting for reimbursement structures that improve health outcomes, prevent hospital readmissions, improve patient safety and reduce medical errors, and implement wellness and health promotion activities. This section does not apply to a grandfathered health plan, as defined in s. 632.758 (1).

AB312, s. 25 Section 25. 632.728 of the statutes is created to read:

AB312,14,19 632.728 Rates for individual and group health care plans. (1) In this section:

AB312,14,20 (a) "Health care plan" has the meaning given in s. 628.36 (2) (a) 1.

AB312,14,21 (b) "Self-insured health plan" has the meaning given in s. 632.85 (1) (c).

AB312,15,2 (2) Subject to sub. (3) and except as provided in sub. (4), for the purpose of setting premium rates for coverage under a group or individual health care plan or a self-insured health plan, an insurer, the state, a county, a city, a village, a town, or a school district, may only consider whether the plan covers an individual or a family and the age, tobacco use, and geographic location of any individual, including any dependent, who is be covered under the plan.

AB312,15,4 (3) (a) The rate under sub. (2) that is based on age may not vary more than 3 to 1 for adults.

AB312,15,6 (b) The rate under sub. (2) that is based on tobacco use may not vary more than 1.5 to 1.

AB312,15,8 (c) The commissioner shall establish one or more geographical rating areas for the purposes of setting premiums or rates under sub. (2).

AB312,15,10 (4) This section does not apply to a grandfathered health plan, as defined in s. 632.758 (1).

AB312, s. 26 Section 26. 632.746 (1) (a) of the statutes is renumbered 632.746 (1m) and amended to read:

AB312,15,19 632.746 (1m) Subject to subs. (2) and (3), an An insurer that offers a group health benefit plan may, with respect to a participant or beneficiary under the plan, not impose a preexisting condition exclusion only if the exclusion relates to 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 the 6-month period ending on the participant's or beneficiary's enrollment date under the plan on a participant or beneficiary under the plan.

AB312, s. 27 Section 27. 632.746 (1) (b) of the statutes is repealed.

AB312, s. 28 Section 28. 632.746 (2) (a) and (b) of the statutes are repealed.

AB312, s. 29 Section 29. 632.746 (2) (c), (d) and (e) of the statutes are repealed.

AB312, s. 30 Section 30. 632.746 (2) (dm) of the statutes is created to read:

AB312,16,2 632.746 (2) (dm) An insurer offering a group health benefit plan may not impose a preexisting condition exclusion or otherwise discriminate against an individual who is under 19 years of age and who is a participant or beneficiary under the plan.

AB312, s. 31 Section 31. 632.746 (2) (dm) of the statutes, as created by 2011 Wisconsin Act .... (this act), is repealed.

AB312, s. 32 Section 32. 632.746 (3) (a) of the statutes is repealed.

AB312, s. 33 Section 33. 632.746 (3) (d) 1. of the statutes is renumbered 632.746 (3) (d).