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1 1 Section 1. NEW SECTION. 513C.1 SHORT TITLE.
1 2 This chapter shall be known and may be cited as the
1 3 "Individual Health Insurance Market Reform Act".
1 4 Sec. 2. NEW SECTION. 513C.2 PURPOSE.
1 5 The purpose and intent of this chapter is to promote the
1 6 availability of health insurance coverage to individuals
1 7 regardless of their health status or claims experience, to
1 8 prevent abusive rating practices, to require disclosure of
1 9 rating practices to purchasers, to establish rules regarding
1 10 the renewal of coverage, to establish limitations on the use
1 11 of preexisting condition exclusions, to assure fair access to
1 12 health plans, and to improve the overall fairness and
1 13 efficiency of the individual health insurance market.
1 14 Sec. 3. NEW SECTION. 513C.3 DEFINITIONS.
1 15 As used in this chapter, unless the context otherwise
1 16 requires:
1 17 1. "Actuarial certification" means a written statement by
1 18 a member of the American academy of actuaries or other
1 19 individual acceptable to the commissioner that an individual
1 20 carrier is in compliance with the provisions of section 513C.5
1 21 which is based upon the actuary's or individual's examination,
1 22 including a review of the appropriate records and the
1 23 actuarial assumptions and methods used by the carrier in
1 24 establishing premium rates for applicable individual health
1 25 benefit plans.
1 26 2. "Affiliate" or "affiliated" means any entity or person
1 27 who directly or indirectly through one or more intermediaries,
1 28 controls or is controlled by, or is under common control with,
1 29 a specified entity or person.
1 30 3. "Basic or standard health benefit plan" means the core
1 31 group of health benefits developed pursuant to section 513C.8.
1 32 4. "Block of business" means all the individuals insured
1 33 under the same individual health benefit plan.
1 34 5. "Carrier" means any entity that provides individual
1 35 health benefit plans in this state. For purposes of this
2 1 chapter, carrier includes an insurance company, a group
2 2 hospital or medical service corporation, a fraternal benefit
2 3 society, a health maintenance organization, and any other
2 4 entity providing an individual plan of health insurance or
2 5 health benefits subject to state insurance regulation.
2 6 6. "Commissioner" means the commissioner of insurance.
2 7 7. "Director" means the director of public health.
2 8 8. "Eligible individual" means an individual who is a
2 9 resident of this state and who either has qualifying existing
2 10 coverage or has had qualifying existing coverage within the
2 11 immediately preceding thirty days, or an individual who has
2 12 had a qualifying event occur within the immediately preceding
2 13 thirty days.
2 14 9. "Established service area" means a geographic area, as
2 15 approved by the commissioner and based upon the carrier's
2 16 certificate of authority to transact business in this state,
2 17 within which the carrier is authorized to provide coverage, or
2 18 a geographic area, as approved by the director and based upon
2 19 the organized delivery system's license to transact business
2 20 in this state, within which the organized delivery system is
2 21 authorized to provide coverage.
2 22 10. "Filed rate" means, for a rating period related to
2 23 each block of business, the rate charged to all individuals
2 24 with similar rating characteristics for individual health
2 25 benefit plans.
2 26 11. "Health choices" means those behaviors or activities
2 27 that are actually a matter of choice, can be actuarially
2 28 determined to affect the cost of insurance, and are
2 29 objectively determined.
2 30 12. "Individual health benefit plan" means any hospital or
2 31 medical expense incurred policy or certificate, hospital or
2 32 medical service plan, or health maintenance organization
2 33 subscriber contract sold to an individual, or any
2 34 discretionary group trust or association policy, whether
2 35 issued within or outside of the state, providing hospital or
3 1 medical expense incurred coverage to individuals residing
3 2 within the state. Individual health benefit plan does not
3 3 include a self-insured group health plan, a self-insured
3 4 multiple employer group health plan, a group conversion plan,
3 5 an insured group health plan, accident-only, specified
3 6 disease, short-term hospital or medical, hospital confinement
3 7 indemnity, credit, dental, vision, medicare supplement, long-
3 8 term care, or disability income insurance coverage, coverage
3 9 issued as a supplement to liability insurance, workers'
3 10 compensation or similar insurance, or automobile medical
3 11 payment insurance.
3 12 13. "Organized delivery system" means an organized
3 13 delivery system licensed by the director.
3 14 14. "Premium" means all moneys paid by an individual and
3 15 eligible dependents as a condition of receiving coverage from
3 16 a carrier or organized delivery system, including any fees or
3 17 other contributions associated with an individual health
3 18 benefit plan.
3 19 15. "Qualifying event" means any of the following:
3 20 a. Loss of eligibility for medical assistance provided
3 21 pursuant to chapter 249A or medicare coverage provided
3 22 pursuant to Title XVIII of the federal Social Security Act.
3 23 b. Loss or change of dependent status under qualifying
3 24 previous coverage.
3 25 c. The attainment by an individual of the age of majority.
3 26 16. "Qualifying existing coverage" or "qualifying previous
3 27 coverage" means benefits or coverage provided under any of the
3 28 following:
3 29 a. Any group health insurance that provides benefits
3 30 similar to or exceeding benefits provided under the standard
3 31 health benefit plan, provided that such policy has been in
3 32 effect for a period of at least one year.
3 33 b. An individual health insurance benefit plan, including
3 34 coverage provided under a health maintenance organization
3 35 contract, a hospital or medical service plan contract, or a
4 1 fraternal benefit society contract, that provides benefits
4 2 similar to or exceeding the benefits provided under the
4 3 standard health benefit plan, provided that such policy has
4 4 been in effect for a period of at least one year.
4 5 c. An organized delivery system that provides benefits
4 6 similar to or exceeding the benefits provided under the
4 7 standard health benefits plan, provided that the benefits
4 8 provided by the organized delivery system have been in effect
4 9 for a period of at least one year.
4 10 17. "Rating characteristics" means demographic
4 11 characteristics of individuals which are considered by the
4 12 carrier or organized delivery system in the determination of
4 13 premium rates.
4 14 18. "Rating period" means the period for which premium
4 15 rates established by a carrier are in effect.
4 16 19. "Restricted network provision" means a provision of an
4 17 individual health benefit plan that conditions the payment of
4 18 benefits, in whole or in part, on the use of health care
4 19 providers that have entered into a contractual arrangement
4 20 with the carrier to provide health care services to covered
4 21 individuals.
4 22 Sec. 4. NEW SECTION. 513C.4 APPLICABILITY AND SCOPE.
4 23 1. Except as provided in subsection 2, for purposes of
4 24 this chapter, carriers that are affiliated companies or that
4 25 are eligible to file a consolidated tax return shall be
4 26 treated as one carrier and any restrictions or limitations
4 27 imposed by this chapter shall apply as if all individual
4 28 health benefit plans delivered or issued for delivery to
4 29 residents of this state by such affiliated carriers were
4 30 issued by one carrier.
4 31 2. An affiliated carrier that is a health maintenance
4 32 organization having a certificate of authority under section
4 33 513C.5 shall be considered to be a separate carrier for the
4 34 purposes of this chapter.
4 35 Sec. 5. NEW SECTION. 513C.5 RESTRICTIONS RELATING TO
5 1 PREMIUM RATES.
5 2 1. Premium rates for any block of individual health
5 3 benefit plan business issued on or after January 1, 1996, or
5 4 the date rules are adopted by the commissioner and the
5 5 director and become effective, whichever date is later, by a
5 6 carrier subject to this chapter shall be limited to the
5 7 composite effect of allocating costs among the following:
5 8 a. After making actuarial adjustments based upon benefit
5 9 design and rating characteristics, the filed rate for any
5 10 block of business shall not exceed the filed rate for any
5 11 other block of business by more than twenty percent.
5 12 b. The filed rate for any block of business shall not
5 13 exceed the filed rate for any other block of business by more
5 14 than thirty percent due to factors relating to rating
5 15 characteristics.
5 16 c. The filed rate for any block of business shall not
5 17 exceed the filed rate for any other block of business by more
5 18 than thirty percent due to factors relating to health choices.
5 19 d. Premium rates for individual health benefit plans shall
5 20 comply with the requirements of this section notwithstanding
5 21 any assessments paid or payable by the carrier pursuant to any
5 22 reinsurance program or risk adjustment mechanism.
5 23 e. An adjustment applied to a single block of business
5 24 shall not exceed the adjustment applied to all blocks of
5 25 business by more than fifteen percent due to the claim
5 26 experience or health status of that block of business.
5 27 f. For purposes of this subsection, an individual health
5 28 benefit plan that contains a restricted network provision
5 29 shall not be considered similar coverage to an individual
5 30 health benefit plan that does not contain such a provision,
5 31 provided that the differential in payments made to network
5 32 providers results in substantial differences in claim costs.
5 33 2. Notwithstanding subsection 1, the commissioner, with
5 34 the concurrence of the board of the Iowa individual health
5 35 benefit reinsurance association established in section
6 1 513C.10, may by order reduce or eliminate the allowed rating
6 2 bands provided under subsection 1, paragraphs "a", "b", "c",
6 3 and "e", or otherwise limit or eliminate the use of experience
6 4 rating.
6 5 3. A carrier shall not transfer an individual
6 6 involuntarily into or out of a block of business.
6 7 4. The commissioner may suspend for a specified period the
6 8 application of subsection 1, paragraph "a", as to the premium
6 9 rates applicable to one or more blocks of business of a
6 10 carrier for one or more rating periods upon a filing by the
6 11 carrier requesting the suspension and a finding by the
6 12 commissioner that the suspension is reasonable in light of the
6 13 financial condition of the carrier.
6 14 5. A carrier shall make a reasonable disclosure at the
6 15 time of the offering for sale of any individual health benefit
6 16 plan of all of the following:
6 17 a. The extent to which premium rates for a specified
6 18 individual are established or adjusted based upon rating
6 19 characteristics.
6 20 b. The carrier's right to change premium rates, and the
6 21 factors, other than claim experience, that affect changes in
6 22 premium rates.
6 23 c. The provisions relating to the renewal of policies and
6 24 contracts.
6 25 d. Any provisions relating to any preexisting condition.
6 26 e. All plans offered by the carrier, the prices of such
6 27 plans, and the availability of such plans to the individual.
6 28 6. A carrier shall maintain at its principal place of
6 29 business a complete and detailed description of its rating
6 30 practices, including information and documentation that
6 31 demonstrate that its rating methods and practices are based
6 32 upon commonly accepted actuarial assumptions and are in
6 33 accordance with sound actuarial principles.
6 34 7. A carrier shall file with the commissioner annually on
6 35 or before March 15, an actuarial certification certifying that
7 1 the carrier is in compliance with this chapter and that the
7 2 rating methods of the carrier are actuarially sound. The
7 3 certification shall be in a form and manner and shall contain
7 4 information as specified by the commissioner. A copy of the
7 5 certification shall be retained by the carrier at its
7 6 principal place of business. Rate adjustments made in order
7 7 to comply with this section are exempt from loss ratio
7 8 requirements.
7 9 8. A carrier shall make the information and documentation
7 10 maintained pursuant to subsection 5 available to the
7 11 commissioner upon request. The information and documentation
7 12 shall be considered proprietary and trade secret information
7 13 and shall not be subject to disclosure by the commissioner to
7 14 persons outside of the division except as agreed to by the
7 15 carrier or as ordered by a court of competent jurisdiction.
7 16 Sec. 6. NEW SECTION. 513C.6 RENEWAL OF COVERAGE.
7 17 1. An individual health benefit plan is renewable at the
7 18 option of the individual, except in any of the following
7 19 cases:
7 20 a. Nonpayment of the required premiums.
7 21 b. Fraud or misrepresentation.
7 22 c. The insured individual becomes eligible for medicare
7 23 coverage under Title XVIII of the federal Social Security Act.
7 24 d. The carrier elects not to renew all of its individual
7 25 health benefit plans in the state. In such case, the carrier
7 26 shall provide notice of the decision not to renew coverage to
7 27 all affected individuals and to the commissioner in each state
7 28 in which an affected insured individual is known to reside at
7 29 least ninety days prior to the nonrenewal of the health
7 30 benefit plan by the carrier. Notice to the commissioner under
7 31 this paragraph shall be provided at least three working days
7 32 prior to the notice to the affected individuals.
7 33 e. The commissioner finds that the continuation of the
7 34 coverage would not be in the best interests of the
7 35 policyholders or certificate holders, or would impair the
8 1 carrier's ability to meet its contractual obligations.
8 2 2. A carrier that elects not to renew all of its
8 3 individual health benefit plans in this state shall be
8 4 prohibited from writing new individual health benefit plans in
8 5 this state for a period of five years from the date of the
8 6 notice to the commissioner.
8 7 3. With respect to a carrier doing business in an
8 8 established geographic service area of the state, this section
8 9 applies only to the carrier's operations in the service area.
8 10 Sec. 7. NEW SECTION. 513C.7 AVAILABILITY OF COVERAGE.
8 11 1. A carrier or an organized delivery system, as a
8 12 condition of issuing individual health benefit plans in this
8 13 state, shall make available a basic or standard health benefit
8 14 plan to an eligible individual who applies for a plan and
8 15 agrees to make the required premium payments and to satisfy
8 16 other reasonable provisions of the basic or standard health
8 17 benefit plan. A carrier or an organized delivery system is
8 18 not required to issue a basic or standard health benefit plan
8 19 to an individual who meets any of the following criteria:
8 20 a. The individual is covered or is eligible for coverage
8 21 under a health benefit plan provided by the individual's
8 22 employer.
8 23 b. An eligible individual who does not apply for a basic
8 24 or standard health benefit plan within thirty days of a
8 25 qualifying event or within thirty days upon becoming
8 26 ineligible for qualifying existing coverage.
8 27 c. The individual is covered or is eligible for any
8 28 continued group coverage under section 4980b of the Internal
8 29 Revenue Code, sections 601 through 608 of the federal Employee
8 30 Retirement Income Security Act of 1974, sections 2201 through
8 31 2208 of the federal Public Health Service Act, or any state-
8 32 required continued group coverage. For purposes of this
8 33 subsection, an individual who would have been eligible for
8 34 such continuation of coverage, but is not eligible solely
8 35 because the individual or other responsible party failed to
9 1 make the required coverage election during the applicable time
9 2 period, is deemed to be eligible for such group coverage until
9 3 the date on which the individual's continuing group coverage
9 4 would have expired had an election been made.
9 5 2. A carrier or an organized delivery system shall issue
9 6 the basic or standard health benefit plan to an individual
9 7 currently covered by an underwritten benefit plan issued by
9 8 that carrier at the option of the individual. This option
9 9 must be exercised within thirty days of notification of a
9 10 premium rate increase applicable to the underwritten benefit
9 11 plan.
9 12 3. a. A carrier shall file with the commissioner, in a
9 13 form and manner prescribed by the commissioner, the basic or
9 14 standard health benefit plan. A basic or standard health
9 15 benefit plan filed pursuant to this paragraph may be used by a
9 16 carrier beginning thirty days after it is filed unless the
9 17 commissioner disapproves of its use.
9 18 The commissioner may at any time, after providing notice
9 19 and an opportunity for a hearing to the carrier, disapprove
9 20 the continued use by the carrier of a basic or standard health
9 21 benefit plan on the grounds that the plan does not meet the
9 22 requirements of this chapter.
9 23 b. An organized delivery system shall file with the
9 24 director, in a form and manner prescribed by the director, the
9 25 basic or standard health benefit plan to be used by the
9 26 organized delivery system. A basic or standard health benefit
9 27 plan filed pursuant to this paragraph may be used by an
9 28 organized delivery system beginning thirty days after it is
9 29 filed unless the director disapproves of its use.
9 30 The director may at any time, after providing notice and an
9 31 opportunity for a hearing to the organized delivery system,
9 32 disapprove the continued use by the organized delivery system
9 33 of a basic or standard health benefit plan on the grounds that
9 34 the plan does not meet the requirements of this chapter.
9 35 4. a. The individual basic or standard health benefit
10 1 plan shall not deny, exclude, or limit benefits for a covered
10 2 individual for losses incurred more than twelve months
10 3 following the effective date of the individual's coverage due
10 4 to a preexisting condition. A preexisting condition shall not
10 5 be defined more restrictively than any of the following:
10 6 (1) A condition that would cause an ordinarily prudent
10 7 person to seek medical advice, diagnosis, care, or treatment
10 8 during the twelve months immediately preceding the effective
10 9 date of coverage.
10 10 (2) A condition for which medical advice, diagnosis, care,
10 11 or treatment was recommended or received during the twelve
10 12 months immediately preceding the effective date of coverage.
10 13 (3) A pregnancy existing on the effective date of
10 14 coverage.
10 15 b. A carrier or an organized delivery system shall waive
10 16 any time period applicable to a preexisting condition
10 17 exclusion or limitation period with respect to particular
10 18 services in an individual health benefit plan for the period
10 19 of time an individual was previously covered by qualifying
10 20 previous coverage that provided benefits with respect to such
10 21 services, provided that the qualifying previous coverage was
10 22 continuous to a date not more than thirty days prior to the
10 23 effective date of the new coverage.
10 24 5. A carrier or an organized delivery system is not
10 25 required to offer coverage or accept applications pursuant to
10 26 subsection 1 from any individual not residing in the carrier's
10 27 or organized delivery system's established geographic access
10 28 area.
10 29 6. A carrier or an organized delivery system shall not
10 30 modify a basic or standard health benefit plan with respect to
10 31 an individual or dependent through riders, endorsements, or
10 32 other means to restrict or exclude coverage for certain
10 33 diseases or medical conditions otherwise covered by the health
10 34 benefit plan.
10 35 Sec. 8. NEW SECTION. 513C.8 HEALTH BENEFIT PLAN
11 1 STANDARDS.
11 2 The commissioner shall adopt by rule the form and level of
11 3 coverage of the basic health benefit plan and the standard
11 4 health benefit plan for the individual market which shall
11 5 provide benefit substantially similar to those as provided for
11 6 under chapter 513B with respect to small group coverage, but
11 7 which shall be appropriately adjusted to reflect the
11 8 individual market.
11 9 Sec. 9. NEW SECTION. 513C.9 STANDARDS TO ASSURE FAIR
11 10 MARKETING.
11 11 1. A carrier or an organized delivery system issuing
11 12 individual health benefit plans in this state shall make
11 13 available the basic or standard health benefit plan to
11 14 residents of this state. If a carrier or an organized
11 15 delivery system denies other individual health benefit plan
11 16 coverage to an eligible individual on the basis of the health
11 17 status or claims experience of the eligible individual, or the
11 18 individual's dependents, the carrier or organized delivery
11 19 system shall offer the individual the opportunity to purchase
11 20 a basic or standard health benefit plan.
11 21 2. A carrier, an organized delivery system, or an agent
11 22 shall not do either of the following:
11 23 a. Encourage or direct individuals to refrain from filing
11 24 an application for coverage with the carrier or organized
11 25 delivery system because of the health status, claims
11 26 experience, industry, occupation, or geographic location of
11 27 the individuals.
11 28 b. Encourage or direct individuals to seek coverage from
11 29 another carrier or organized delivery system because of the
11 30 health status, claims experience, industry, occupation, or
11 31 geographic location of the individuals.
11 32 3. Subsection 2, paragraph "a", shall not apply with
11 33 respect to information provided by a carrier, organized
11 34 delivery system, or an agent to an individual regarding the
11 35 established geographic service area of the carrier or
12 1 organized delivery system or the restricted network provision
12 2 of the carrier.
12 3 4. A carrier or an organized delivery system shall not,
12 4 directly or indirectly, enter into any contract, agreement, or
12 5 arrangement with an agent that provides for, or results in,
12 6 the compensation paid to an agent for a sale of a basic or
12 7 standard health benefit plan to vary because of the health
12 8 status or permitted rating characteristics of the individual
12 9 or the individual's dependents.
12 10 5. Subsection 4 does not apply with respect to the
12 11 compensation paid to an agent on the basis of percentage of
12 12 premium, provided that the percentage shall not vary because
12 13 of the health status or other permitted rating characteristics
12 14 of the individual or the individual's dependents.
12 15 6. Denial by a carrier or an organized delivery system of
12 16 an application for coverage from an individual shall be in
12 17 writing and shall state the reason or reasons for the denial.
12 18 7. A violation of this section by a carrier, organized
12 19 delivery system, or an agent is an unfair trade practice under
12 20 chapter 507B.
12 21 8. If a carrier or an organized delivery system enters
12 22 into a contract, agreement, or other arrangement with a third-
12 23 party administrator to provide administrative, marketing, or
12 24 other services related to the offering of individual health
12 25 benefit plans in this state, the third-party administrator is
12 26 subject to this section as if it were a carrier or an
12 27 organized delivery system.
12 28 Sec. 10. NEW SECTION. 513C.10 IOWA INDIVIDUAL HEALTH
12 29 BENEFIT REINSURANCE ASSOCIATION.
12 30 1. A nonprofit corporation is established to be known as
12 31 the Iowa individual health benefit reinsurance association.
12 32 All persons that provide health benefit plans in this state
12 33 including insurers providing accident and sickness insurance
12 34 under chapter 509, 514, or 514A; fraternal benefit societies
12 35 providing hospital, medical, or nursing benefits under chapter
13 1 512B; health maintenance organizations, organized delivery
13 2 system, and all other entities providing health insurance or
13 3 health benefits subject to state insurance regulation shall be
13 4 members of this association. The association shall be
13 5 incorporated under chapter 504A, shall operate under a plan of
13 6 operation established and approved pursuant to chapter 504A,
13 7 and shall exercise its powers through a board of directors
13 8 established under this section.
13 9 2. The initial board of directors of the association shall
13 10 consist of seven members appointed by the commissioner as
13 11 follows:
13 12 a. Four members shall be representatives of the four
13 13 largest domestic carriers of individual health insurance in
13 14 the state as of the calendar year ending December 31, 1994.
13 15 b. Three members shall be representatives of the three
13 16 largest carriers of health insurance in the state, excluding
13 17 medicare supplement coverage premiums, which are not otherwise
13 18 represented. In the event a carrier to be represented
13 19 pursuant to this paragraph does not appoint a representative,
13 20 the board member shall be a representative of the next largest
13 21 carrier which satisfies the criteria.
13 22 After an initial term, board members shall be nominated and
13 23 elected by the members of the association.
13 24 Members of the board may be reimbursed from the funds of
13 25 the association for expenses incurred by them as members, but
13 26 shall not otherwise be compensated by the association for
13 27 their services.
13 28 3. The association shall submit to the commissioner a plan
13 29 of operation for the association and any amendments to the
13 30 association's articles of incorporation necessary and
13 31 appropriate to assure the fair, reasonable, and equitable
13 32 administration of the association. The plan shall provide for
13 33 the sharing of losses related to basic and standard plans, if
13 34 any, on an equitable and proportional basis among the members
13 35 of the association. If the association fails to submit a
14 1 suitable plan of operation within one hundred eighty days
14 2 after the appointment of the board of directors, the
14 3 commissioner shall adopt rules necessary to implement this
14 4 section. The rules shall continue in force until modified by
14 5 the commissioner or superseded by a plan submitted by the
14 6 association and approved by the commissioner. In addition to
14 7 other requirements, the plan of operation shall provide for
14 8 all of the following:
14 9 a. The handling and accounting of assets and funds of the
14 10 association.
14 11 b. The amount of and method for reimbursing the expenses
14 12 of board members.
14 13 c. Regular times and places for meetings of the board of
14 14 directors.
14 15 d. Records to be kept relating to all financial
14 16 transactions, and annual fiscal reporting to the commissioner.
14 17 e. Procedures for selecting the board of directors.
14 18 f. Additional provisions necessary or proper for the
14 19 execution of the powers and duties of the association.
14 20 4. The plan of operation may provide that the powers and
14 21 duties of the association may be delegated to a person who
14 22 will perform functions similar to those of the association. A
14 23 delegation under this section takes effect only upon the
14 24 approval of the board of directors.
14 25 5. The association has the general powers and authority
14 26 enumerated by this section and executed in accordance with the
14 27 plan of operation approved by the commissioner under
14 28 subsection 3. In addition, the association may do any of the
14 29 following:
14 30 a. Enter into contracts as necessary or proper to
14 31 administer this chapter.
14 32 b. Sue or be sued, including taking any legal action
14 33 necessary or proper for recovery of any assessments for, on
14 34 behalf of, or against members of the association or other
14 35 participating persons.
15 1 c. Appoint from among members appropriate legal,
15 2 actuarial, and other committees as necessary to provide
15 3 technical assistance in the operation of the association,
15 4 including the hiring of independent consultants as necessary.
15 5 d. Perform any other functions within the authority of the
15 6 association.
15 7 6. Rates for basic and standard coverages as provided in
15 8 this chapter shall be determined by each carrier or organized
15 9 delivery system as the average of the lowest rate available
15 10 for issuance by that carrier or organized delivery system
15 11 adjusted for rating characteristics and benefits and the
15 12 maximum rate allowable by law after adjustments for rate
15 13 characteristics and benefits.
15 14 7. Following the close of each calendar year, the
15 15 association, in conjunction with the commissioner, shall
15 16 require each carrier or organized delivery system to report
15 17 the amount of earned premiums and the associated paid losses
15 18 for all basic and standard plans issued by the carrier or
15 19 organized delivery system. The reporting of these amounts
15 20 must be certified by an officer of the carrier or organized
15 21 delivery system.
15 22 8. The board shall develop procedures and make assessments
15 23 and distributions as required to equalize the individual
15 24 carrier and organized delivery system gains or losses so that
15 25 each carrier or organized delivery system receives the same
15 26 ratio of paid claims to ninety percent of earned premiums as
15 27 the aggregate of all basic and standard plans insured by all
15 28 carriers and organized delivery systems in the state.
15 29 9. If the statewide aggregate ratio of paid claims to
15 30 ninety percent of earned premiums is greater than one, the
15 31 dollar difference between ninety percent of earned premiums
15 32 and the paid claims shall represent an assessable loss.
15 33 10. The assessable loss plus necessary operating expenses
15 34 for the association, plus any additional expenses as provided
15 35 by law, shall be assessed by the association to all members in
16 1 proportion to their respective shares of total health
16 2 insurance premiums or payments for subscriber contracts
16 3 received in Iowa during the second preceding calendar year, or
16 4 with paid losses in the year, coinciding with or ending during
16 5 the calendar year, or on any other equitable basis as provided
16 6 in the plan of operation. In sharing losses, the association
16 7 may abate or defer any part of the assessment of a member, if,
16 8 in the opinion of the board, payment of the assessment would
16 9 endanger the ability of the member to fulfill its contractual
16 10 obligations. The association may also provide for an initial
16 11 or interim assessment against the members of the association
16 12 to meet the operating expenses of the association until the
16 13 next calendar year is completed.
16 14 11. The board shall develop procedures for distributing
16 15 the assessable loss assessments to each carrier and organized
16 16 delivery system in proportion to the carrier's and organized
16 17 delivery system's respective share of premium for basic and
16 18 standard plans to the statewide total premium for all basic
16 19 and standard plans.
16 20 12. The board shall ensure that procedures for collecting
16 21 and distributing assessments are as efficient as possible for
16 22 carriers and organized delivery systems. The board may
16 23 establish procedures which combine, or offset, the assessment
16 24 from, and the distribution due to, a carrier or organized
16 25 delivery system.
16 26 13. A carrier or an organized delivery system may petition
16 27 the association board to seek remedy from writing a
16 28 significantly disproportionate share of basic and standard
16 29 policies in relation to total premiums written in this state
16 30 for health benefit plans. Upon a finding that a carrier or
16 31 organized delivery system has written a disproportionate
16 32 share, the board may agree to compensate the carrier or
16 33 organized delivery system either by paying to the carrier or
16 34 organized delivery system an additional fee not to exceed two
16 35 percent of earned premiums from basic and standard policies
17 1 for that carrier or organized delivery system or by
17 2 petitioning the commissioner or director, as appropriate for
17 3 remedy.
17 4 14. a. The commissioner, upon a finding that the
17 5 acceptance of the offer of basic and standard coverage by
17 6 individuals pursuant to this chapter would place the carrier
17 7 in a financially impaired condition, shall not require the
17 8 carrier to offer coverage or accept applications for any
17 9 period of time the financial impairment is deemed to exist.
17 10 b. The director, upon a finding that the acceptance of the
17 11 offer of basic and standard coverage by individuals pursuant
17 12 to this chapter would place the organized delivery system in a
17 13 financially impaired condition, shall not required the
17 14 organized delivery system to offer coverage or accept
17 15 applications for any period of time the financial impairment
17 16 is deemed to exist.
17 17 Sec. 11. NEW SECTION. 513C.11 SELF-FUNDED EMPLOYER-
17 18 SPONSORED HEALTH BENEFIT PLAN PARTICIPATION IN IOWA INDIVIDUAL
17 19 HEALTH BENEFIT REINSURANCE ASSOCIATION.
17 20 1. A self-funded employer-sponsored health benefit plan
17 21 qualified under the federal Employee Retirement Income
17 22 Security Act of 1974 may voluntarily elect to participate in
17 23 the Iowa individual health benefit reinsurance association
17 24 established in section 513C.10 in accordance with the plan of
17 25 operation and subject to such terms and conditions adopted by
17 26 the board of the association to provide portability and
17 27 continuity to its covered employees and their covered spouses
17 28 and dependents subject to the same terms and conditions as a
17 29 participating insurer.
17 30 2. If the federal Employee Retirement Income Security Act
17 31 of 1974 is amended such that the state may require the
17 32 participation of a self-funded employer, the individual
17 33 reinsurance requirements shall apply equally to such
17 34 employers.
17 35 3. When and if the federal government imposes conditions
18 1 of portability and continuity on self-funded employers
18 2 qualified under the federal Employee Retirement Income
18 3 Security Act of 1974 that the commissioner deems are
18 4 substantially similar to those required of Iowa insurers,
18 5 coverage under such qualified plan shall be deemed qualified
18 6 prior coverage for purposes of chapters 513B and 513C.
18 7 Sec. 12. APPLICABILITY. Chapter 513C applies to an
18 8 individual health benefit plan delivered or issued for
18 9 delivery to a resident of this state on or after January 1,
18 10 1996, or the date rules are adopted by the commissioner of
18 11 insurance and the director of public health and become
18 12 effective, whichever date is the later. The commissioner and
18 13 the director shall adopt rules to carry out the provisions of
18 14 chapter 513C as soon as possible following the enactment of
18 15 this Act.
18 16 EXPLANATION
18 17 This bill enacts provisions relating to the cost of health
18 18 care and providing health care coverage to uninsured
18 19 individuals.
18 20 New chapter 513C is created relating to individual health
18 21 coverage. New section 513C.1 provides the title, the
18 22 "Individual Health Insurance Market Reform Act".
18 23 New section 513C.2 states the purpose of the chapter.
18 24 New section 513C.3 establishes the definitions of key terms
18 25 used in the chapter.
18 26 New section 513C.4 provides that carriers that are
18 27 affiliated companies or that are eligible to file a
18 28 consolidated tax return are to be treated as one carrier for
18 29 purposes of chapter 513C.
18 30 New section 513C.5 establishes restrictions relating to
18 31 premium rates for individual health benefit plans. Certain
18 32 other restrictions apply relating to the transfer of an
18 33 individual into and out of a block of business, and required
18 34 disclosures relating to the coverage are enumerated.
18 35 New section 513C.6 relates to the renewal of an individual
19 1 health benefit plan. Such plan is renewable at the option of
19 2 the individual, except under certain enumerated circumstances.
19 3 The section also provides that a carrier that elects not to
19 4 renew all of its individual health benefit plans in this state
19 5 shall be prohibited from writing new individual health benefit
19 6 plans in this state for a period of five years from the date
19 7 of the notice required to be provided to the commissioner of
19 8 such election.
19 9 New section 513C.7 provides that a carrier or an organized
19 10 delivery system issuing individual health benefit plans must
19 11 issue such plan to an individual applying for the plan except
19 12 under certain defined circumstances.
19 13 New section 513C.8 provides that the commissioner is to
19 14 adopt rules relating to the form and level of coverage of the
19 15 basic and standard health benefit plan for the individual
19 16 market.
19 17 New section 513C.9 establishes standards to assure fair
19 18 marketing of individual basic and standard health benefit
19 19 plans. Restrictions are also established relating to a
19 20 carrier, an organized delivery system and an agent concerning
19 21 the marketing of such plans.
19 22 New section 513C.10 is created which establishes the Iowa
19 23 individual health benefit reinsurance association. The
19 24 association is to submit a plan to the insurance commissioner
19 25 to provide for the sharing of losses, if any, among all
19 26 persons providing health benefit plans in this state. The
19 27 sharing of losses is to be on an equitable and proportional
19 28 basis. The association may defer any part of an assessment on
19 29 a member if the governing board of the association determines
19 30 that payment of the assessment would endanger the ability of
19 31 the member to fulfill its contractual obligations.
19 32 New section 513C.11 is created which provides that a self-
19 33 funded employer-sponsored health benefit plan qualified under
19 34 the federal Employee Retirement Income Security Act of 1974
19 35 may voluntarily elect to participate in the individual
20 1 reinsurance pool to provide portability and continuity to the
20 2 employer's covered employees and their spouses and dependents
20 3 subject to the same terms and conditions as a participating
20 4 insurer.
20 5 LSB 1377XL 76
20 6 mj/cf/24.2
Text: HSB00107 Text: HSB00109 Text: HSB00100 - HSB00199 Text: HSB Index Bills and Amendments: General Index Bill History: General Index
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