The proposed rule implements ch.
648, Stats., financial regulatory oversight of the care management organizations in coordination with the Department to ensure the organizations use sound financial tools when commencing operations and ongoing oversight of the financial condition of the organizations. Specifically the proposed rule establishes minimum financial standards, financial reporting requirements, regulatory examinations and restricted reserves for care management organizations in the event of an insolvency.
Comparison with federal regulations
There is no existing or proposed federal regulation related to oversight of care management organizations.
Comparison of similar rules in adjacent states
Illinois:
None.
Iowa:
None.
Michigan:
None.
Minnesota:
None.
Summary of factual data and analytical methodologies
The Office engaged along with the Department of Health Services engaged PricewaterhouseCoopers to analyze the necessary reserves and regulatory structure for the Family Care program. In addition the office reviewed care management organizations' financial information, coordinated the proposed regulatory scheme with current oversight provided by the Department and reviewed accounting principles best suited for care management organizations
Analysis and supporting documentation used to determine effect on small businesses
The Office worked with the Department of Health Services to determine the rule's effect on small businesses that are care management organizations.
Small Business Impact
This rule will have minimal to no effect on small businesses that are care management organizations. This rule may effect small businesses that are care management organizations seeking a permit from the commissioner. The office worked closely with the Department to minimize the impact on the care management organizations and will share information between departments so not to overly burden care management organizations
Small business regulatory coordinator
The OCI small business coordinator is Eileen Mallow and may be reached at phone number (608) 266-7843 or at email address
eileen.mallow@wisconsin.gov
Fiscal Estimate
Private sector fiscal impact
This rule change will have no significant effect on the private sector regulated by OCI.
State or local government fiscal impact
There will be no state or local government fiscal effect.
Long-range fiscal implications
None.
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 under s.
227.18, Stats., subject to the Commissioner's approval of the Statement of Scope, the Office of the Commissioner of Insurance (OCI) will hold a public hearing to consider emergency rules and adoption of proposed permanent rules creating section
Ins 3.34, Wis. Adm. Code, relating to coverage of dependents to age 27 and affecting small business.
Hearing Information
Date: December 9, 2009
Time: 1:00 p.m., or as soon thereafter as the
matter may be reached
Place: OCI, Room 227
125 South Webster Street, 2nd Floor
Madison, WI
Submission of Written Comments
Written comments can be mailed to:
Julie E. Walsh
Legal Unit - OCI Rule Comment for Rule Ins 334
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 334
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.
Copy of Proposed Rule and Contact Person
A copy of the full text of the proposed rule changes, analysis and fiscal estimate may be obtained from the OCI internet Web site at
http://oci.wi.gov/ocirules.htm or by contacting Inger Williams, OCI Services Section, at:
Phone: (608) 264-8110
Address: 125 South Webster St – 2nd Floor,
Madison WI 53703-3474
Mail: PO Box 7873, Madison, WI 53707-7873
Analysis Prepared by the Office of the Commissioner of Insurance (OCI)
Statutes interpreted
Statutory authority
Explanation of agency authority
The commissioner is authorized by s.
601.41, Stats., to propose rules in accordance with s.
227.11 (2), Stats., in order for the commissioner to administer and enforce the insurance statutes. Since passage of
2009 Wis. Act 28, the commissioner has been made aware of dramatic differences in interpretation and approaches to implementation that necessitate rule making.
Related statutes or rules
None.
Plain language analysis and summary of the proposed rule
The proposed rule interprets and implements the requirements of s.
632.885, Stats., by clarifying and defining eligibility criteria and providing guidance as to how insurers and self-insured health plans are to determine an adult child's eligibility for coverage. The proposed rule clarifies that the mandate applies to individual and group health insurance, limited-scope health insurance including vision and dental plans as well as self-insured health plans. The rule also clarifies that this mandate does not apply to certain insurance products including long-term care and Medigap policies. Further, as described in the applicability provisions of
2009 Wis. Act 28, the rule states when the mandate first applies, including the initial applicability for collectively bargained health plans.
The proposed rule provides clarity through definitions of “premium contribution" and “premium amount." The commissioner received the greatest volume of inquiries seeking guidance on how the premium comparison was to be conducted. The proposed rule simplifies and guides insurers and self-insured plans on exactly what is to be compared for this element of eligibility determination.
Guidance is provided regarding to whom an offer of coverage for an eligible adult child is to be given and reinforces the statutory provision that it is only the applicant or the insured who determines whether or not an eligible dependent is added to his or her health plan. The rule further informs insurers and self-insured plans on prohibited practices that would unduly restrict an otherwise eligible dependent from coverage contrary to the intent of the statute.
Specifically the rule provides specific guidance to insurers offering individual health insurance products as compared to insurers or self-insured health plans offering group health insurance coverage. Insurers offering individual health insurance may rate, may utilize pre-existing condition waiting periods and may apply elimination riders to an eligible adult child but may not impose such limitations as coverage would be rendered illusory. Insurers offering group health insurance or limited-scope insurance and self-insured health plans must comply with s.
632.746, Stat., with regards to pre-existing condition waiting periods and application of creditable coverage. The rule also requires insurers and self-insured health plans to treat an eligible adult child as a new entrant and provide annually at least a 30-day enrollment period.
Finally, the rule clarifies s.
632.885 (2) (a) 3. and
(b) 3., Stats. An adult child is an eligible adult child when the child is between the ages of 17 and 27, is not married and who is not eligible for his or her employer sponsored coverage or whose employer does not offer health insurance to its employees. An adult child who has been called to federal active duty is an eligible adult child when a full-time student, less than 27 years of age when called to active duty. The rule clarifies that the adult child will have up to 12 months after completing active duty to apply for full-time student status at an institution of higher education, and that if the adult child is called more than once in four years of the first call to active duty, insurers and self-insured health plans may only use the adult child's age at the time of the first call to active duty when determining eligibility.
Comparison with federal regulations
There is no existing regulation directly related to this new mandate. The federal government, US House and Senate are currently debating health insurance reform and at this time the office is aware that some of the proposals will be revised to contain similar requirements for extending coverage to adult children, but none have passed as of this date.
Comparison of similar rules in adjacent states
Illinois:
215 ILCS 5/356z.12 provides parents with the option of keeping unmarried dependents on their health care insurance up to age 26. Parents with dependents who are veterans can keep dependents on the plans up to age 30. The veterans must be unmarried, must be Illinois residents, and must have received a discharge other than dishonorable. Veterans do not have to be enrolled as full-time students.
Iowa:
Iowa Code § 509.3 and Iowa Code § 514E.7 requires that health insurance providers continue to cover unmarried children under their parents' coverage provided that the child: 1) is under the age of 25 and a current resident of Iowa, 2) is a full-time student, or 3) has a disability. Iowa Code § 509A.13.B, effective July 1, 2009, allows reenrollment of the same children in previously existing coverage under certain circumstances.
Michigan:
No comparable regulations found. Michigan Code §
500.3406g prohibits the denial of enrollment on certain grounds for plans offering dependent coverage, and §
500.3406h addresses the eligibility of parents for dependent coverage and the health coverage of children through noncustodial parents. §
500.2264 provides exception for the termination of dependent coverage at specified age if a child is incapable of self-support due to mental or physical disability.
Minnesota:
Minnesota Chapter 62E.02 Defines “dependent" as a spouse or unmarried child under age 25, or a dependent child of any age who is disabled.
Ohio:
(information only) Ohio Rev. Code § 1751.14, as amended by 2009 OH H 1 allows an unmarried, dependent child who is an Ohio resident or a full-time student to remain on parent's insurance up to age 28, or without regard to age if they are incapable of self-sustaining employment due to disability.
Summary of factual data and analytical methodologies
