Types of small businesses that will be affected by the rules
The proposed rules require the registration of individuals and entities that act as building contractors or subcontractors who are involved in the construction or modification of public buildings, places of employment and one- and 2- family dwellings and who are not already credentialed by the department. The department currently credentials several contracting trades, including dwelling contractors, HVAC contractors, electrical contractors and elevator contractors. The rules would apply to those persons and entities engaged in the business of commercial general construction, drywall, plastering, electrical wiring, finish carpentry, flooring, framing carpentry, glass and glazing, insulation, masonry and stone work, plumbing, concrete work, roofing, siding, building site preparation and/or stabilization, structural steel, tile and terrazzo, wall coverings, and other building or equipment specialties.
Reporting, bookkeeping and other procedures required for compliance with the rules
No additional reporting, bookkeeping or other procedures are required above the registration of the building construction business.
Types of professional skills necessary for compliance with the rules
There are no new types of professional skills necessary for compliance with the rules.
Rules have a significant economic impact on small businesses
No.
Fiscal Estimate
Assumptions used in arriving at fiscal estimate
The rules require a registration credential for various building contactors who are involved in the construction or modification of public buildings and places of employment and one- and 2-family dwellings, unless the contractor already holds another type of contractor credential issued by the department. The type of contracting businesses required to be registered under the rules include commercial general construction, drywall, plastering, electrical wiring, finish carpentry, flooring, framing carpentry, glass and glazing, insulation, masonry and stone work, plumbing, concrete work, roofing, siding, building site preparation and/or stabilization, structural steel, tile and terrazzo, wall coverings, and other building or equipment specialties.
The department estimates that there would be 30,000 contracting businesses that would be required to obtain registrations. The department proposes to charge $100 for a 4-year, building contractor registration. There is also a $15 initial application fee that would be waived if the applicant applies and pays for the registration via the internet. The department estimates that it would realize approximately $806,250 in revenue annually.
The department anticipates that the workload associated with this registration can be managed with information technology usage and within current staff levels associated with the administration of the commercial building code program and the one- and 2- family dwelling code program.
State fiscal effect
Increase existing revenues.
Increase costs — costs may be possible to absorb within agency's budget.
Local government fiscal effect
No local government costs.
Fund sources affected
PRO
Long-range fiscal implications
None are anticipated.
Environmental Analysis
The Department has considered the environmental impact of the proposed rules. In accordance with chapter Comm 1, the proposed rules are a Type III action. A Type III action normally does not have the potential to cause significant environmental effects and normally does not involve unresolved conflicts in the use of available resources. The Department has reviewed these rules and finds no reason to believe that any unusual conditions exist. At this time, the Department has issued this notice to serve as a finding of no significant impact.
Contact Information
The small business regulatory coordinator for the Department of Commerce is Carol Dunn, who may be contacted at telephone (608) 267-0297, or Email at
carol.dunn@wisconsin.gov.
Notice of Hearing
Insurance
NOTICE IS HEREBY GIVEN that pursuant to the authority granted under s.
601.41 (3), Stats., and the procedures set forth in under s.
227.18, Stats., the Office of the Commissioner of Insurance will hold a public hearing to consider the adoption of the proposed rulemaking order affecting section
Ins 3.39, Wis. Adm. Code, relating to Medicare supplement insurance.
Hearing Information
Date: January 27, 2009
Time: 1:00 p.m., or as soon thereafter as the matter may
be reached
Place: OCI, Room 227, 2nd Floor
125 South Webster Street
Madison, WI
Submission of Written Comments
Written comments can be mailed to:
Julie E. Walsh
Legal Unit — OCI Rule Comment for Rule Ins 339
Office of the Commissioner of Insurance
PO Box 7873
Madison WI 53707-7873
Written comments can be hand delivered to:
Julie E. Walsh
Legal Unit - OCI Rule Comment for Rule Ins 339
Office of the Commissioner of Insurance
125 South Webster St – 2nd Floor
Madison WI 53703-3474
Comments can be emailed to:
Julie E. Walsh
The deadline for submitting comments is 4:00 p.m. on the 14th day after the date for the hearing stated in this Notice of Hearing.
Analysis Prepared by the Office of the Commissioner of Insurance (OCI)
Statutes interpreted
Sections
185.983 (1m),
600.03,
601.01 (2),
609.01 (1g) (b),
625.16,
628.34 (12),
628.38,
631.20 (2),
632.73 (2m),
632.76 (2) (b) and
632.81,
632.895 (6) and
(9), Wis. Stats.
Statutory authority
Explanation of agency authority
The statutes all relate to the commissioner's authority to promulgate rules regulating the business of insurance as it relates to Medicare supplement and Medicare replacement insurance products. Specifically, ss.
601.41,
625.16,
628.38,
632.73,
632.76, and
632.81, Wis. Stats., permit the commissioner to promulgate rules regulating various aspects of Medicare supplement and Medicare replacement products while ss.
628.34, and
628.38, Wis. Stats., authorize the commissioner to promulgate rules governing disclosure requirements and unfair marketing practices for disability policies, which includes Medicare supplement and Medicare replacement products.
Related statutes or rules
The Centers for Medicare & Medicaid Services (CMS) required the National Association of Insurance Commissioners, (NAIC) to make conforming changes to the Medigap model regulation by incorporating changes necessary to implement requirements of the Genetic Information Nondiscrimination Act of 2008 (GINA Public Law 110-223) and delegated the function of implementing the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA, Public Law 110-175). The GINA law requires states to adopt necessary changes by September 24, 2009 and to have regulations in place for MIPPA by June 1, 2010. States are required to adopt the NAIC model revision in order to continue to regulate the Medigap marketplace.
CMS delegates enforcement of MIPPA and GINA and the underlying Medicare supplement and Medicare replacement insurance products to the states that have incorporated into the states insurance regulations, the NAIC Model Act. To date Wisconsin has passed several of Model Acts through statute and most frequently administrative rule governing the Medicare supplement and Medicare replacement products. In Wisconsin Medicare supplement and Medicare replacement products are currently regulated through s.
Ins 3.39, Wis. Adm. Code, inclusive of the appendices. The proposed rule modifies s.
Ins 3.39, Wis. Adm. Code, and several appendices in order to comply with the MIPPA and the NAIC requirements, to the extent necessary, and updates the appendices to reflect current requirements.
Plain language analysis and summary of the proposed rule
The proposed rule implements modifications delineated by the NAIC Medicare Supplement Insurance Minimum Standards Model Act that includes modifications to comply with both GINA and MIPPA. Medigap policies are policies purchased by Medicare beneficiaries to cover Medicare deductibles, co-insurance and selected services that Medicare does not cover. Medicare establishes eligibility rules, benefits and coverage limits. The proposed rule incorporates the NAIC Model Act into Wisconsin's current Medicare supplement and Medicare replacement rules.
The proposed rule contains a new paragraph that specifically implements the GINA requirements as they relate to Medicare supplement or replacement plans. The proposed rule updates requirements relating to the submission of form filings and advertisements to the office including the repeal of Appendices currently numbered 2 and 3 and modification of s.
Ins 3.39 (15).
The proposed rule implements the changes to the Medicare supplement benefits that are to be effective by June 1, 2010 in accordance with MIPPA. Specifically, although Wisconsin is a waived state, the office is proposing to incorporate the benefits contained within the federal newly created standardized plans labeled “M" and “N", into two new rider options. These riders will create a Medicare Part A 50% deductible with that has no out-of-pocket maximum limitation and will create a Medicare Part B 100% deductible with co-payment requirements for office and emergency room visits.
While the federal standardized plans eliminate the preventative health care coverage, the proposed rule retains those benefits. Also, although the standardized plans are first incorporating a hospice care benefit while the office has had such benefit for over 3 years and will retain the benefit into the June 1, 2010 benefits. The proposed rule includes a newly created paragraph to address insurers' use of new or innovative benefits as contained in the NAIC Model Act.
For clarity, the proposed rule renumbers existing appendices to include newly created appendices 2 through 6 for the Medicare supplement plans that are effective on or after June 1, 2010. The new appendices follow product lines with one appendix dedicated to premium information and various disclosures. Parallel cites are proposed to ease use of the new regulations by creating ss.
Ins 3.39 (4s),
(5m) and
(30m).
The proposed rule preserves the regulatory oversight of products primarily sold to Wisconsin seniors and maintains rigorous standards for disclosures benefits, consumer rights and marketing practices. In furthering this oversight, the proposed rule includes specific reference to MIPPA that requires insurers that are marketing and selling insurance products to Wisconsin seniors enrolled in Medicare Advantage to fill in “gaps" that those products comply with the Medicare supplement regulations.
Comparison with federal regulations
The NAIC Model Act implements MIPPA, GINA and previous federal Medicare supplement and Medicare replacement regulations. CMS permitted NAIC a narrow period to time to amend its model act and permitted states to implement the updated NAIC Model Act to retain the regulatory oversight of Medicare supplement and replacement insurance for the modified products that are to be effective on or after June 1, 2010. The department of labor and CMS require implementation of the requirements contained in GINA by July 1, 2009.
Comparison of rules in adjacent states
Iowa:
Iowa makes available to its Medicare beneficiaries Medigap policies A through J as required by the Medicare reform provisions under OBRA 1990 and the prior NAIC Model Regulation. Iowa will have to amend its regulations to create new Medigap plans M and N, and to incorporate the hospice care benefit as well as the new and innovative benefit requirements as required by MIPPA. Iowa will also have to comply by implementing the GINA requirements.
Illinois:
Illinois makes available to its Medicare beneficiaries Medigap policies A through J as required by the Medicare reform provisions under OBRA 1990 and the prior NAIC Model Regulation. Illinois will have to amend its regulations to create new Medigap plans M and N, and to incorporate the hospice care benefit as well as the new and innovative benefit requirements as required by MIPPA. Illinois will also have to comply by implementing the GINA requirements.
Minnesota:
Minnesota, like Wisconsin, received a waiver from the federal standardization regulations. Minnesota makes available to its Medicare beneficiaries two standardized policies (basic and extended basic). Minnesota will have to amend its Medicare supplement regulations to create two cost-sharing plans. It also will have to amend its regulations to include the prohibitions and other changes under GINA.
Michigan:
Michigan makes available to its Medicare beneficiaries Medigap policies A through J as required by the Medicare reform provisions under OBRA 1990 and the prior NAIC Model Regulation. Michigan will have to amend its regulations to create new Medigap plans M and N, and to incorporate the hospice care benefit as well as the new and innovative benefit requirements as required by MIPPA. Michigan will also have to comply by implementing the GINA requirements.
Summary of factual data and analytical methodologies
OCI review of complaints, NAIC models, insurer's financial information CMS data indicates that Medicare currently covers 40 million Americans, 814,183 of whom are Wisconsin residents as of 2004. An estimated 27 percent of Medicare beneficiaries are covered by Medigap policies.
Information collected by the OCI indicates that 75 insurance companies offer Medicare supplement, Medicare cost and Medicare select (Medigap) policies to Wisconsin consumers eligible for Medicare due to age or disability. In addition, there are 25 insurance companies that have Medigap policyholders although the companies no longer market Medigap coverage in Wisconsin. At year end 2007, there were 247,142 Wisconsin Medicare beneficiaries with Medigap policies. The majority of these Wisconsin Medicare beneficiaries have Medigap policies that will be affected by the Medigap reforms under the MIPPA and GINA.
A 2000 report by CMS, Office of Research, Development, and Information, based on 2007 Medicare data indicates that Medicare paid 54-56% of the health care expenses of persons 65 or over, and private health insurance, including Medicare supplement policies paid 16% of these health care expenses. The report indicated that overall annual medical expenses in 2005 per Medicare beneficiaries equaled $6,697.
Analysis and supporting documentation used to determine effect on small businesses
OCI reviewed financial statements and other reports filed by life, accident and health insurers and determined that none qualifies as a small business. Wisconsin currently has 75 insurance companies offering Medicare supplement, Medicare cost and Medicare select insurance plans. None of these insurers meet the definition of a small business under s.
227.114, Wis. Stats.
Small Business Impact
This rule does not have a significant impact on regulated small businesses as defined in s.
227.114 (1), Wis. Stat. OCI maintains a database of all licensed insurers in Wisconsin. The database includes information submitted by the companies related to premium revenue and employment. In an examination of this database, OCI identified that 75 insurance companies offer Medicare supplement, Medicare cost and Medicare select (Medigap) policies to Wisconsin consumers eligible for Medicare due to age or disability and none of those companies qualify by definition as a small business. In addition, 25 insurance companies have Medigap policyholders although the companies no longer market Medigap coverage in Wisconsin. Again, none of these 25 companies qualifies by definition as a small business.
