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House File 701

Partial Bill History

Bill Text

PAG LIN
  1  1                                           HOUSE FILE 701
  1  2 
  1  3                             AN ACT
  1  4 RELATING TO THE REQUIREMENTS FOR PORTABILITY AND
  1  5    CONTINUITY OF HEALTH CARE COVERAGE FOR INDIVIDUALS
  1  6    AMONG CERTAIN TYPES OF HEALTH CARE COVERAGE, AND
  1  7    RELATED MATTERS.
  1  8 
  1  9 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
  1 10 
  1 11    Section 1.  Section 509.3, Code 1997, is amended by adding
  1 12 the following new unnumbered paragraph:
  1 13    NEW UNNUMBERED PARAGRAPH.  In addition to the provisions
  1 14 required in subsections 1 through 8, the commissioner shall
  1 15 require provisions through the adoption of rules implementing
  1 16 the federal Health Insurance Portability and Accountability
  1 17 Act, Pub. L. No. 104-191.
  1 18    Sec. 2.  Section 513B.2, subsection 1, Code 1997, is
  1 19 amended to read as follows:
  1 20    1.  "Actuarial certification" means a written statement by
  1 21 a member of the American academy of actuaries or other
  1 22 individual acceptable to the commissioner that a small
  1 23 employer carrier is in compliance with the provisions of
  1 24 section 513B.4, based upon the person's examination, including
  1 25 a review of the appropriate records and of the actuarial
  1 26 assumptions and methods utilized by the small employer carrier
  1 27 in establishing premium rates for applicable health benefit
  1 28 plans insurance coverages.
  1 29    Sec. 3.  Section 513B.2, subsection 4, Code 1997, is
  1 30 amended by striking the subsection and inserting in lieu
  1 31 thereof the following:
  1 32    4.  "Carrier" means an entity subject to the insurance laws
  1 33 and regulations of this state, or subject to the jurisdiction
  1 34 of the commissioner, that contracts or offers to contract to
  1 35 provide, deliver, arrange for, pay for, or reimburse any of
  2  1 the costs of health care services, including an insurance
  2  2 company offering sickness and accident plans, a health
  2  3 maintenance organization, a nonprofit health service
  2  4 corporation, or any other entity providing a plan of health
  2  5 insurance, health benefits, or health services.
  2  6    Sec. 4.  Section 513B.2, subsection 6, paragraph a, Code
  2  7 1997, is amended to read as follows:
  2  8    a.  A distinct grouping may only be established by the
  2  9 small employer carrier on the basis that the applicable health
  2 10 benefit plans insurance coverages meet one or more of the
  2 11 following requirements:
  2 12    (1)  The plans coverages are marketed and sold through
  2 13 individuals and organizations which are not participating in
  2 14 the marketing or sales of other distinct groupings of small
  2 15 employers for the small employer carrier.
  2 16    (2)  The plans coverages have been acquired from another
  2 17 small employer carrier as a distinct grouping of plans.
  2 18    (3)  The plans coverages are provided through an
  2 19 association with membership of not less than fifty small
  2 20 employers which has been formed for purposes other than
  2 21 obtaining insurance.
  2 22    Sec. 5.  Section 513B.2, subsection 9, Code 1997, is
  2 23 amended to read as follows:
  2 24    9.  "Eligible employee" means an employee who works on a
  2 25 full-time basis and has a normal work week of thirty or more
  2 26 hours.  The term includes a sole proprietor, a partner of a
  2 27 partnership, and an independent contractor, if the sole
  2 28 proprietor, partner, or independent contractor is included as
  2 29 an employee under a health benefit plan health insurance
  2 30 coverage of a small employer, but does not include an employee
  2 31 who works on a part-time, temporary, or substitute basis.
  2 32    Sec. 6.  Section 513B.2, subsection 10, Code 1997, is
  2 33 amended by striking the subsection and inserting in lieu
  2 34 thereof the following:
  2 35    10.  a.  "Health insurance coverage" means benefits
  3  1 consisting of health care provided directly, through insurance
  3  2 or reimbursement, or otherwise and including items and
  3  3 services paid for as health care under a hospital or health
  3  4 service policy or certificate, hospital or health service plan
  3  5 contract, or health maintenance organization contract offered
  3  6 by a carrier.
  3  7    b.  "Health insurance coverage" does not include any of the
  3  8 following:
  3  9    (1)  Coverage for accident-only, or disability income
  3 10 insurance.
  3 11    (2)  Coverage issued as a supplement to liability
  3 12 insurance.
  3 13    (3)  Liability insurance, including general liability
  3 14 insurance and automobile liability insurance.
  3 15    (4)  Workers' compensation or similar insurance.
  3 16    (5)  Automobile medical-payment insurance.
  3 17    (6)  Credit-only insurance.
  3 18    (7)  Coverage for on-site medical clinic care.
  3 19    (8)  Other similar insurance coverage, specified in federal
  3 20 regulations, under which benefits for medical care are
  3 21 secondary or incidental to other insurance coverage or
  3 22 benefits.
  3 23    c.  "Health insurance coverage" does not include benefits
  3 24 provided under a separate policy as follows:
  3 25    (1)  Limited scope dental or vision benefits.
  3 26    (2)  Benefits for long-term care, nursing home care, home
  3 27 health care, or community-based care.
  3 28    (3)  Any other similar limited benefits as provided by rule
  3 29 of the commissioner.
  3 30    d.  "Health insurance coverage" does not include benefits
  3 31 offered as independent noncoordinated benefits as follows:
  3 32    (1)  Coverage only for a specified disease or illness.
  3 33    (2)  A hospital indemnity or other fixed indemnity
  3 34 insurance.
  3 35    e.  "Health insurance coverage" does not include Medicare
  4  1 supplemental health insurance as defined under } 1882(g)(1) of
  4  2 the federal Social Security Act, coverage supplemental to the
  4  3 coverage provided under 10 U.S.C. ch. 55, and similar
  4  4 supplemental coverage provided to coverage under group health
  4  5 insurance coverage.
  4  6    f.  "Group health insurance coverage" means health
  4  7 insurance coverage offered in connection with a group health
  4  8 plan.
  4  9    Sec. 7.  Section 513B.2, subsection 12, paragraphs a, b,
  4 10 and c, Code 1997, are amended to read as follows:
  4 11    a.  The individual meets all of the following:
  4 12    (1)  The individual was covered under qualifying previous
  4 13 creditable coverage at the time of the initial enrollment.
  4 14    (2)  The individual lost creditable coverage under
  4 15 qualifying previous coverage as a result of termination of the
  4 16 individual's employment or eligibility, the involuntary
  4 17 termination of the qualifying previous creditable coverage,
  4 18 death of the individual's spouse, or the individual's divorce.
  4 19    (3)  The individual requests enrollment within thirty days
  4 20 after termination of the qualifying previous creditable
  4 21 coverage.
  4 22    b.  The individual is employed by an employer that offers
  4 23 multiple health benefit plans insurance coverages and the
  4 24 individual elects a different plan coverage during an open
  4 25 enrollment period.
  4 26    c.  A court has ordered that coverage be provided for a
  4 27 spouse or minor or dependent child under a covered employee's
  4 28 health benefit plan insurance coverage and the request for
  4 29 enrollment is made within thirty days after issuance of the
  4 30 court order.
  4 31    Sec. 8.  Section 513B.2, subsection 12, Code 1997, is
  4 32 amended by adding the following new paragraphs:
  4 33    NEW PARAGRAPH.  d.  The individual changes status and
  4 34 becomes an eligible employee and requests enrollment within
  4 35 sixty-three days after the date of the change in status.
  5  1    NEW PARAGRAPH.  e.  The individual was covered under a
  5  2 mandated continuation of group health plan or group health
  5  3 insurance coverage plan until the coverage under that plan was
  5  4 exhausted.
  5  5    Sec. 9.  Section 513B.2, subsection 13, Code 1997, is
  5  6 amended to read as follows:
  5  7    13.  "New business premium rate" means, for each class of
  5  8 business as to a rating period, the lowest premium rate
  5  9 charged or offered by the small employer carrier to small
  5 10 employers with similar case characteristics for newly issued
  5 11 health benefit plans insurance coverages with the same or
  5 12 similar coverage.
  5 13    Sec. 10.  Section 513B.2, Code 1997, is amended by adding
  5 14 the following new subsections:
  5 15    NEW SUBSECTION.  7A.  "Creditable coverage" means health
  5 16 benefits or coverage provided to an individual under any of
  5 17 the following:
  5 18    a.  A group health plan.
  5 19    b.  Health insurance coverage.
  5 20    c.  Part A or Part B Medicare pursuant to Title XVIII of
  5 21 the federal Social Security Act.
  5 22    d.  Medicaid pursuant to Title XIX of the federal Social
  5 23 Security Act, other than coverage consisting solely of
  5 24 benefits under section 1928 of that Act.
  5 25    e.  10 U.S.C. ch. 55.
  5 26    f.  A health or medical care program provided through the
  5 27 Indian health service or a tribal organization.
  5 28    g.  A state health benefits risk pool.
  5 29    h.  A health plan offered under 5 U.S.C. ch. 89.
  5 30    i.  A public health plan as defined under federal
  5 31 regulations.
  5 32    j.  A health benefit plan under section 5(e) of the federal
  5 33 Peace Corps Act, 22 U.S.C. } 2504(e).
  5 34    k.  An organized delivery system licensed by the director
  5 35 of public health.
  6  1    NEW SUBSECTION.  9A.  a.  "Group health plan" means an
  6  2 employee welfare benefit plan as defined in section 3(1) of
  6  3 the federal Employee Retirement Income Security Act of 1974,
  6  4 to the extent that the plan provides medical care including
  6  5 items and services paid for as medical care to employees or
  6  6 their dependents as defined under the terms of the plan
  6  7 directly or through insurance, reimbursement, or otherwise.
  6  8    b.  For purposes of this subsection, "medical care" means
  6  9 amounts paid for any of the following:
  6 10    (1)  The diagnosis, cure, mitigation, treatment, or
  6 11 prevention of disease, or amounts paid for the purpose of
  6 12 affecting a structure or function of the body.
  6 13    (2)  Transportation primarily for and essential to medical
  6 14 care referred to in subparagraph (1).
  6 15    (3)  Insurance covering medical care referred to in
  6 16 subparagraph (1) or (2).
  6 17    c.  For purposes of this subsection, a partnership which
  6 18 establishes and maintains a plan, fund, or program to provide
  6 19 medical care to present or former partners in the partnership
  6 20 or to their dependents directly or through insurance,
  6 21 reimbursement, or other method, which would not be an employee
  6 22 benefit welfare plan but for this paragraph, shall be treated
  6 23 as an employee benefit welfare plan which is a group health
  6 24 plan.
  6 25    (1)  For purposes of a group health plan, an employer
  6 26 includes the partnership in relation to any partner.
  6 27    (2)  For purposes of a group health plan, the term
  6 28 "participant" also includes both of the following:
  6 29    (a)  An individual who is a partner in relation to a
  6 30 partnership which maintains a group health plan.
  6 31    (b)  An individual who is a self-employed individual in
  6 32 connection with a group health plan maintained by the self-
  6 33 employed individual where one or more employees are
  6 34 participants, if the individual is or may become eligible to
  6 35 receive a benefit under the plan or the individual's
  7  1 beneficiaries may be eligible to receive a benefit.
  7  2    NEW SUBSECTION.  13A.  "Preexisting conditions exclusion"
  7  3 means, with respect to health insurance coverage, a limitation
  7  4 or exclusion of benefits relating to a condition based on the
  7  5 fact that the condition was present before the date of
  7  6 enrollment for such coverage, whether or not any medical
  7  7 advice, diagnosis, care, or treatment was recommended or
  7  8 received before such date.
  7  9    Sec. 11.  Section 513B.2, subsection 14, Code 1997, is
  7 10 amended by striking the subsection.
  7 11    Sec. 12.  Section 513B.3, subsection 3, Code 1997, is
  7 12 amended to read as follows:
  7 13    3.  The health benefit plan insurance coverage is treated
  7 14 by the employer or any of the eligible employees or dependents
  7 15 as part of a plan coverage or program for the purposes of
  7 16 section 106, 125, or 162 of the Internal Revenue Code as
  7 17 defined in section 422.3.
  7 18    Sec. 13.  Section 513B.3, subsection 4, paragraphs a and c,
  7 19 Code 1997, are amended to read as follows:
  7 20    a.  Except as provided in paragraph "b", for purposes of
  7 21 this subchapter, carriers that are affiliated companies or
  7 22 that are eligible to file a consolidated tax return shall be
  7 23 treated as one carrier and any restrictions or limitations
  7 24 imposed by this subchapter shall apply as if all health
  7 25 benefit plans insurance coverages delivered or issued for
  7 26 delivery to small employers in this state by such carriers
  7 27 were issued by one carrier.
  7 28    c.  Unless otherwise authorized by the commissioner, a
  7 29 small employer carrier shall not enter into one or more ceding
  7 30 arrangements with respect to health benefit plans insurance
  7 31 coverages delivered or issued for delivery to small employers
  7 32 in this state if the arrangements would result in less than
  7 33 fifty percent of the insurance obligation or risk for such
  7 34 health benefit plans insurance coverages being retained by the
  7 35 ceding carrier.
  8  1    Sec. 14.  Section 513B.4, subsection 1, paragraph c,
  8  2 subparagraph (1), Code 1997, is amended to read as follows:
  8  3    (1)  The percentage change in the new business premium rate
  8  4 measured from the first day of the prior rating period to the
  8  5 first day of the new rating period.  In the case of a class of
  8  6 business for which the small employer carrier is not issuing
  8  7 new policies, the small employer carrier shall use the
  8  8 percentage change in the base premium rate, provided that the
  8  9 change does not exceed, on a percentage basis, the change in
  8 10 the new business premium rate for the most similar health
  8 11 benefit plan insurance coverage into which the small employer
  8 12 carrier is actively enrolling new insureds who are small
  8 13 employers.
  8 14    Sec. 15.  Section 513B.4, subsection 1, paragraph d, Code
  8 15 1997, is amended to read as follows:
  8 16    d.  In the case of health benefit plans insurance coverages
  8 17 issued prior to July 1, 1991, a premium rate for a rating
  8 18 period may exceed the ranges described in subsection 1,
  8 19 paragraph "a" or "b", for a period of three years following
  8 20 July 1, 1992.  In such case, the percentage increase in the
  8 21 premium rate charged to a small employer in such a class of
  8 22 business for a new rating period may not exceed the sum of the
  8 23 following:
  8 24    (1)  The percentage change in the new business premium rate
  8 25 measured from the first day of the prior rating period to the
  8 26 first day of the new rating period.  In the case of a class of
  8 27 business for which the small employer carrier is not issuing
  8 28 new policies, the small employer carrier shall use the
  8 29 percentage change in the base premium rate, provided that the
  8 30 change does not exceed, on a percentage basis, the change in
  8 31 the new business premium rate for the most similar health
  8 32 benefit plan insurance coverage into which the small employer
  8 33 carrier is actively enrolling new insureds who are small
  8 34 employers.
  8 35    (2)  Any adjustment due to change in coverage or change in
  9  1 the case characteristics of the small employer as determined
  9  2 from the small employer carrier's rate manual for the class of
  9  3 business.
  9  4    Sec. 16.  Section 513B.4, subsection 3, unnumbered
  9  5 paragraph 3, Code 1997, is amended to read as follows:
  9  6    Rating factors shall produce premiums for identical groups
  9  7 which differ only by amounts attributable to plan coverage
  9  8 design and do not reflect differences due to the nature of the
  9  9 groups assumed to select particular health benefit plans.  A
  9 10 small employer carrier shall treat all health benefit plans
  9 11 insurance coverages issued or renewed in the same calendar
  9 12 month as having the same rating period.
  9 13    Sec. 17.  Section 513B.4, subsection 4, Code 1997, is
  9 14 amended to read as follows:
  9 15    4.  For purposes of this section, a health benefit plan
  9 16 insurance coverage that contains a restricted network
  9 17 provision shall not be considered similar coverage to a health
  9 18 benefit plan insurance coverage that does not contain such a
  9 19 provision, if the restriction of benefits to network providers
  9 20 results in substantial differences in claims costs.
  9 21    Sec. 18.  Section 513B.4A, Code 1997, is amended to read as
  9 22 follows:
  9 23    513B.4A  EXEMPTION FROM PREMIUM RATE RESTRICTIONS.
  9 24    A Taft-Hartley trust or a carrier with the written
  9 25 authorization of such a trust may make a written request to
  9 26 the commissioner for an exemption from the application of any
  9 27 provisions of section 513B.4 with respect to a health benefit
  9 28 plan health insurance coverage provided to such a trust.  The
  9 29 commissioner may grant an exemption if the commissioner finds
  9 30 that application of section 513B.4 with respect to the trust
  9 31 would have a substantial adverse effect on the participants
  9 32 and beneficiaries of such trust, and would require significant
  9 33 modifications to one or more collective bargaining
  9 34 arrangements under which the trust is established or
  9 35 maintained.  An exemption granted under this section shall not
 10  1 apply to an individual if the individual participates in a
 10  2 trust as an associate member of an employee organization.
 10  3    Sec. 19.  Section 513B.5, Code 1997, is amended by striking
 10  4 the section and inserting in lieu thereof the following:
 10  5    513B.5  PROVISIONS ON RENEWABILITY OF COVERAGE.
 10  6    1.  Health insurance coverage subject to this chapter is
 10  7 renewable with respect to all eligible employees or their
 10  8 dependents, at the option of the small employer, except for
 10  9 one or more of the following reasons:
 10 10    a.  The health insurance coverage sponsor fails to pay, or
 10 11 to make timely payment of, premiums or contributions pursuant
 10 12 to the terms of the health insurance coverage.
 10 13    b.  The health insurance coverage sponsor performs an act
 10 14 or practice constituting fraud or makes an intentional
 10 15 misrepresentation of a material fact under the terms of the
 10 16 coverage.
 10 17    c.  Noncompliance with the carrier's or organized delivery
 10 18 system's minimum participation requirements.
 10 19    d.  Noncompliance with the carrier's or organized delivery
 10 20 system's employer contribution requirements.
 10 21    e.  A decision by the carrier or organized delivery system
 10 22 to discontinue offering a particular type of health insurance
 10 23 coverage in the state's small employer market.  Health
 10 24 insurance coverage may be discontinued by the carrier or
 10 25 organized delivery system in that market only if the carrier
 10 26 or organized delivery system does all of the following:
 10 27    (1)  Provides advance notice of its decision to discontinue
 10 28 such plan to the commissioner or director of public health.
 10 29 Notice to the commissioner or director, at a minimum, shall be
 10 30 no less than three days prior to the notice provided for in
 10 31 subparagraph (2) to affected small employers, participants,
 10 32 and beneficiaries.
 10 33    (2)  Provides notice of its decision not to renew such plan
 10 34 to all affected small employers, participants, and
 10 35 beneficiaries no less than ninety days prior to the nonrenewal
 11  1 of the plan.
 11  2    (3)  Offers to each plan sponsor of the discontinued
 11  3 coverage, the option to purchase any other coverage currently
 11  4 offered by the carrier or organized delivery system to other
 11  5 employers in this state.
 11  6    (4)  Acts uniformly, in opting to discontinue the coverage
 11  7 and in offering the option under subparagraph (3), without
 11  8 regard to the claims experience of the sponsors under the
 11  9 discontinued coverage or to a health status-related factor
 11 10 relating to any participants or beneficiaries covered or new
 11 11 participants or beneficiaries who may become eligible for the
 11 12 coverage.
 11 13    f.  A decision by the carrier or organized delivery system
 11 14 to discontinue offering and to cease to renew all of its
 11 15 health insurance coverage delivered or issued for delivery to
 11 16 small employers in this state.  A carrier or organized
 11 17 delivery system making such decision shall do all of the
 11 18 following:
 11 19    (1)  Provide advance notice of its decision to discontinue
 11 20 such coverage to the commissioner or director of public
 11 21 health.  Notice to the commissioner or director, at a minimum,
 11 22 shall be no less than three days prior to the notice provided
 11 23 for in subparagraph (2) to affected small employers,
 11 24 participants, and beneficiaries.
 11 25    (2)  Provide notice of its decision not to renew such
 11 26 coverage to all affected small employers, participants, and
 11 27 beneficiaries no less than one hundred eighty days prior to
 11 28 the nonrenewal of the coverage.
 11 29    (3)  Discontinue all health insurance coverage issued or
 11 30 delivered for issuance to small employers in this state and
 11 31 cease renewal of such coverage.
 11 32    g.  The membership of an employer in an association, which
 11 33 is the basis for the coverage which is provided through such
 11 34 association, ceases, but only if the termination of coverage
 11 35 under this paragraph occurs uniformly without regard to any
 12  1 health status-related factor relating to any covered
 12  2 individual.
 12  3    h.  The commissioner or director of public health finds
 12  4 that the continuation of the coverage is not in the best
 12  5 interests of the policyholders or certificate holders, or
 12  6 would impair the carrier's or organized delivery system's
 12  7 ability to meet its contractual obligations.
 12  8    i.  At the time of coverage renewal, a carrier or organized
 12  9 delivery system may modify the health insurance coverage for a
 12 10 product offered under group health insurance coverage in the
 12 11 small group market, for coverage that is available in such
 12 12 market other than only through one or more bona fide
 12 13 associations, if such modification is consistent with the laws
 12 14 of this state, and is effective on a uniform basis among group
 12 15 health insurance coverage with that product.
 12 16    2.  A carrier or organized delivery system that elects not
 12 17 to renew health insurance coverage under subsection 1,
 12 18 paragraph "f", shall not write any new business in the small
 12 19 employer market in this state for a period of five years after
 12 20 the date of notice to the commissioner or director of public
 12 21 health.
 12 22    3.  This section, with respect to a carrier or organized
 12 23 delivery system doing business in one established geographic
 12 24 service area of the state, applies only to such carrier's or
 12 25 organized delivery system's operations in that service area.
 12 26    Sec. 20.  Section 513B.6, unnumbered paragraph 1, Code
 12 27 1997, is amended to read as follows:
 12 28    A small employer carrier or organized delivery system shall
 12 29 make reasonable disclosure in solicitation and sales materials
 12 30 provided to small employers of all of the following:
 12 31    Sec. 21.  Section 513B.6, subsection 2, Code 1997, is
 12 32 amended to read as follows:
 12 33    2.  The provisions concerning the small employer carrier's
 12 34 or organized delivery system's right to change premium rates
 12 35 and factors, including case characteristics, which affect
 13  1 changes in premium rates.
 13  2    Sec. 22.  Section 513B.7, Code 1997, is amended to read as
 13  3 follows:
 13  4    513B.7  MAINTENANCE OF RECORDS.
 13  5    1.  A small employer carrier or organized delivery system
 13  6 shall maintain at its principal place of business a complete
 13  7 and detailed description of its rating practices and renewal
 13  8 underwriting practices, including information and
 13  9 documentation which demonstrate that its rating methods and
 13 10 practices are based upon commonly accepted actuarial
 13 11 assumptions and are in accordance with sound actuarial
 13 12 principles.
 13 13    2.  A small employer carrier or organized delivery system
 13 14 shall file each March 1 with the commissioner or director an
 13 15 actuarial certification that the small employer carrier or
 13 16 organized delivery system is in compliance with this section
 13 17 and that the rating methods of the small employer carrier or
 13 18 organized delivery system are actuarially sound.  A copy of
 13 19 the certification shall be retained by the small employer
 13 20 carrier or organized delivery system at its principal place of
 13 21 business.
 13 22    3.  A small employer carrier or organized delivery system
 13 23 shall make the information and documentation described in
 13 24 subsection 1 available to the commissioner or organized
 13 25 delivery system upon request.  The information is not a public
 13 26 record or otherwise subject to disclosure under chapter 22,
 13 27 and is considered proprietary and trade secret information and
 13 28 is not subject to disclosure by the commissioner or director
 13 29 to persons outside of the division or department except as
 13 30 agreed to by the small employer carrier or organized delivery
 13 31 system or as ordered by a court of competent jurisdiction.
 13 32    Sec. 23.  NEW SECTION.  513B.9A  ELIGIBILITY TO ENROLL.
 13 33    A carrier or organized delivery system offering group
 13 34 health insurance coverage shall not establish rules for
 13 35 eligibility, including continued eligibility, of an individual
 14  1 to enroll under the terms of the coverage based on any of the
 14  2 following health status-related factors in relation to the
 14  3 individual or a dependent of the individual:
 14  4    a.  Health status.
 14  5    b.  Medical condition, including both physical and mental
 14  6 conditions.
 14  7    c.  Claims experience.
 14  8    d.  Receipt of health care.
 14  9    e.  Medical history.
 14 10    f.  Genetic information.
 14 11    g.  Evidence of insurability, including conditions arising
 14 12 out of acts of domestic violence.
 14 13    h.  Disability.
 14 14    2.  Subsection 1 does not require group health insurance
 14 15 coverage to provide particular benefits other than those
 14 16 provided under the terms of the coverage, and does not prevent
 14 17 a coverage from establishing limitations or restrictions on
 14 18 the amount, level, extent, or nature of the benefits or
 14 19 coverage for similarly situated individuals enrolled in the
 14 20 coverage.
 14 21    3.  Rules for eligibility to enroll under group health
 14 22 insurance coverage include rules defining any applicable
 14 23 waiting periods for such enrollment.
 14 24    4.  a.  A carrier or organized delivery system offering
 14 25 health insurance coverage shall not require an individual, as
 14 26 a condition of enrollment or continued enrollment under the
 14 27 coverage, to pay a premium or contribution which is greater
 14 28 than a premium or contribution for a similarly situated
 14 29 individual enrolled in the coverage on the basis of a health
 14 30 status-related factor in relation to the individual or to a
 14 31 dependent of an individual enrolled under the coverage.
 14 32    b.  Paragraph "a" shall not be construed to do either of
 14 33 the following:
 14 34    (1)  Restrict the amount that an employer may be charged
 14 35 for health insurance coverage.
 15  1    (2)  Prevent a carrier or organized delivery system
 15  2 offering group health insurance coverage from establishing
 15  3 premium discounts or rebates or modifying otherwise applicable
 15  4 copayments or deductibles in return for adherence to programs
 15  5 of health promotion and disease prevention.
 15  6    Sec. 24.  Section 513B.10, Code 1997, is amended by
 15  7 striking the section and inserting in lieu thereof the
 15  8 following:
 15  9    513B.10  AVAILABILITY OF COVERAGE.
 15 10    1.  a.  A carrier or an organized delivery system that
 15 11 offers health insurance coverage in the small group market
 15 12 shall accept every small employer that applies for health
 15 13 insurance coverage and shall accept for enrollment under such
 15 14 coverage every eligible individual who applies for enrollment
 15 15 during the period in which the individual first becomes
 15 16 eligible to enroll under the terms of the health insurance
 15 17 coverage and shall not place any restriction which is
 15 18 inconsistent with eligibility rules established under this
 15 19 chapter.  A carrier or organized delivery system shall offer
 15 20 health insurance coverage which constitutes a basic health
 15 21 benefit plan and which constitutes a standard health benefit
 15 22 plan.
 15 23    b.  A carrier or organized delivery system that offers
 15 24 health insurance coverage in the small group market through a
 15 25 network plan may do either of the following:
 15 26    (1)  Limit employers that may apply for such coverage to
 15 27 those with eligible individuals who live, work, or reside in
 15 28 the service area for such network plan.
 15 29    (2)  Deny such coverage to such employers within the
 15 30 service area of such plan if the carrier or organized delivery
 15 31 system has demonstrated to the applicable state authority,
 15 32 both of the following:
 15 33    (a)  The carrier or organized delivery system will not have
 15 34 the capacity to deliver services adequately to enrollees of
 15 35 any additional groups because of its obligations to existing
 16  1 group contract holders and enrollees.
 16  2    (b)  The carrier or organized delivery system is applying
 16  3 this subparagraph uniformly to all employers without regard to
 16  4 the claims experience of those employers and their employees
 16  5 and their dependents, or any health status-related factor
 16  6 relating to such employees or dependents.
 16  7    c.  A carrier or organized delivery system, upon denying
 16  8 health insurance coverage in any service area pursuant to
 16  9 paragraph "b", subparagraph (2), shall not offer coverage in
 16 10 the small group market within such service area for a period
 16 11 of one hundred eighty days after the date such coverage is
 16 12 denied.
 16 13    d.  A carrier or organized delivery system may deny health
 16 14 insurance coverage in the small group market if the issuer has
 16 15 demonstrated to the commissioner or director of public health
 16 16 both of the following:
 16 17    (1)  The carrier or organized delivery system does not have
 16 18 the financial reserves necessary to underwrite additional
 16 19 coverage.
 16 20    (2)  The carrier or organized delivery system is applying
 16 21 the provisions of this subparagraph uniformly to all employers
 16 22 in the small group market in this state consistent with state
 16 23 law and without regard to the claims experience of those
 16 24 employers and the employees and dependents of such employers,
 16 25 or any health status-related factor relating to such employees
 16 26 and their dependents.
 16 27    e.  A carrier or organized delivery system, upon denying
 16 28 health insurance coverage pursuant to paragraph "d", shall not
 16 29 offer coverage in connection with health insurance coverages
 16 30 in the small group market in this state for a period of one
 16 31 hundred eighty days after the date such coverage is denied or
 16 32 until the carrier or organized delivery system has
 16 33 demonstrated to the commissioner or director of public health
 16 34 that the carrier or organized delivery system has sufficient
 16 35 financial reserves to underwrite additional coverage,
 17  1 whichever is later.  The commissioner or director may provide
 17  2 for the application of this paragraph on a service area-
 17  3 specific basis.
 17  4    f.  Paragraph "a" shall not be construed to preclude a
 17  5 carrier or organized delivery system from establishing
 17  6 employer contribution rules or group participation rules for
 17  7 the offering of health insurance coverage in the small group
 17  8 market.
 17  9    2.  A carrier or organized delivery system, subject to
 17 10 subsection 1, shall issue health insurance coverage to an
 17 11 eligible small employer that applies for the coverage and
 17 12 agrees to make the required premium payments and satisfy the
 17 13 other reasonable provisions of the health insurance coverage
 17 14 not inconsistent with this chapter.  A carrier or organized
 17 15 delivery system is not required to issue health insurance
 17 16 coverage to a self-employed individual who is covered by, or
 17 17 is eligible for coverage under, health insurance coverage
 17 18 offered by an employer.
 17 19    3.  a.  A carrier or organized delivery system shall file
 17 20 with the commissioner or director of public health, in a form
 17 21 and manner prescribed by the commissioner or director, the
 17 22 basic health benefit plans and the standard health benefit
 17 23 plans to be used by the carrier or organized delivery system.
 17 24 Health insurance coverage filed pursuant to this paragraph may
 17 25 be used by a carrier or organized delivery system beginning
 17 26 thirty days after it is filed unless the commissioner or
 17 27 director of public health disapproves its use.
 17 28    b.  The commissioner or director of public health, at any
 17 29 time after providing notice and opportunity for hearing to the
 17 30 carrier or organized delivery system, may disapprove the
 17 31 continued use of a basic or standard health benefit plan by a
 17 32 carrier or organized delivery system on the grounds that the
 17 33 plan does not meet the requirements of this chapter.
 17 34    4.  Health insurance coverage for small employers shall
 17 35 satisfy all of the following:
 18  1    a.  A carrier or organized delivery system offering group
 18  2 health insurance coverage, with respect to a participant or
 18  3 beneficiary, may impose a preexisting condition exclusion only
 18  4 as follows:
 18  5    (1)  The exclusion relates to a condition, whether physical
 18  6 or mental, regardless of the cause of the condition, for which
 18  7 medical advice, diagnosis, care, or treatment was recommended
 18  8 or received within the six-month period ending on the
 18  9 enrollment date.  However, genetic information shall not be
 18 10 treated as a condition under this subparagraph in the absence
 18 11 of a diagnosis of the condition related to such information.
 18 12    (2)  The exclusion extends for a period of not more than
 18 13 twelve months, or eighteen months in the case of a late
 18 14 enrollee, after the enrollment date.
 18 15    (3)  The period of any such preexisting condition exclusion
 18 16 is reduced by the aggregate of the periods of creditable
 18 17 coverage applicable to the participant or beneficiary as of
 18 18 the enrollment date.
 18 19    b.  A carrier or organized delivery system offering group
 18 20 health insurance coverage shall not impose any preexisting
 18 21 condition as follows:
 18 22    (1)  In the case of a child who is adopted or placed for
 18 23 adoption before attaining eighteen years of age and who, as of
 18 24 the last day of the thirty-day period beginning on the date of
 18 25 the adoption or placement for adoption, is covered under
 18 26 creditable coverage.  This subparagraph shall not apply to
 18 27 coverage before the date of such adoption or placement for
 18 28 adoption.
 18 29    (2)  In the case of an individual who, as of the last day
 18 30 of the thirty-day period beginning with the date of birth, is
 18 31 covered under creditable coverage.
 18 32    (3)  Relating to pregnancy as a preexisting condition.
 18 33    c.  A carrier or organized delivery system shall waive any
 18 34 waiting period applicable to a preexisting condition exclusion
 18 35 or limitation period with respect to particular services under
 19  1 health insurance coverage for the period of time an individual
 19  2 was covered by creditable coverage, provided that the
 19  3 creditable coverage was continuous to a date not more than
 19  4 sixty-three days prior to the effective date of the new
 19  5 coverage.  Any period that an individual is in a waiting
 19  6 period for any coverage under group health insurance coverage,
 19  7 or is in an affiliation period, shall not be taken into
 19  8 account in determining the period of continuous coverage.  A
 19  9 health maintenance organization that does not use preexisting
 19 10 condition limitations in any of its health insurance coverage
 19 11 may impose an affiliation period.  For purposes of this
 19 12 section, "affiliation period" means a period of time not to
 19 13 exceed sixty days for new entrants and not to exceed ninety
 19 14 days for late enrollees during which no premium shall be
 19 15 collected and coverage issued is not effective, so long as the
 19 16 affiliation period is applied uniformly, without regard to any
 19 17 health status-related factors.  This paragraph does not
 19 18 preclude application of a waiting period applicable to all new
 19 19 enrollees under the health insurance coverage, provided that
 19 20 any carrier or organized delivery system-imposed waiting
 19 21 period is no longer than sixty days and is used in lieu of a
 19 22 preexisting condition exclusion.
 19 23    d.  Health insurance coverage may exclude coverage for late
 19 24 enrollees for preexisting conditions for a period not to
 19 25 exceed eighteen months.
 19 26    e.  (1)  Requirements used by a carrier or organized
 19 27 delivery system in determining whether to provide coverage to
 19 28 a small employer shall be applied uniformly among all small
 19 29 employers applying for coverage or receiving coverage from the
 19 30 carrier or organized delivery system.
 19 31    (2)  In applying minimum participation requirements with
 19 32 respect to a small employer, a carrier or organized delivery
 19 33 system shall not consider employees or dependents who have
 19 34 other creditable coverage in determining whether the
 19 35 applicable percentage of participation is met.
 20  1    (3)  A carrier or organized delivery system shall not
 20  2 increase any requirement for minimum employee participation or
 20  3 modify any requirement for minimum employer contribution
 20  4 applicable to a small employer at any time after the small
 20  5 employer has been accepted for coverage.
 20  6    f.  (1)  If a carrier or organized delivery system offers
 20  7 coverage to a small employer, the carrier or organized
 20  8 delivery system shall offer coverage to all eligible employees
 20  9 of the small employer and the employees' dependents.  A
 20 10 carrier or organized delivery system shall not offer coverage
 20 11 to only certain individuals or dependents in a small employer
 20 12 group or to only part of the group.
 20 13    (2)  Except as provided under paragraphs "a" and "d", a
 20 14 carrier or organized delivery system shall not modify health
 20 15 insurance coverage with respect to a small employer or any
 20 16 eligible employee or dependent through riders, endorsements,
 20 17 or other means, to restrict or exclude coverage or benefits
 20 18 for certain diseases, medical conditions, or services
 20 19 otherwise covered by the health insurance coverage.
 20 20    g.  A carrier or organized delivery system offering
 20 21 coverage through a network plan shall not be required to offer
 20 22 coverage or accept applications pursuant to subsection 1 with
 20 23 respect to a small employer where any of the following apply:
 20 24    (1)  The small employer does not have eligible individuals
 20 25 who live, work, or reside in the service area for the network
 20 26 plan.
 20 27    (2)  The small employer does have eligible individuals who
 20 28 live, work, or reside in the service area for the network
 20 29 plan, but the carrier or organized delivery system, if
 20 30 required, has demonstrated to the commissioner or the director
 20 31 of public health that it will not have the capacity to deliver
 20 32 services adequately to enrollees of any additional groups
 20 33 because of its obligations to existing group contract holders
 20 34 and enrollees and that it is applying the requirements of this
 20 35 lettered paragraph uniformly to all employers without regard
 21  1 to the claims experience of those employers and their
 21  2 employees and the employees' dependents, or any health status-
 21  3 related factor relating to such employees and dependents.
 21  4    (3)  A carrier or organized delivery system, upon denying
 21  5 health insurance coverage in a service area pursuant to
 21  6 subparagraph (2), shall not offer coverage in the small
 21  7 employer market within such service area for a period of one
 21  8 hundred eighty days after the coverage is denied.
 21  9    5.  A carrier or organized delivery system shall not be
 21 10 required to offer coverage to small employers pursuant to
 21 11 subsection 1 for any period of time where the commissioner or
 21 12 director of public health determines that the acceptance of
 21 13 the offers by small employers in accordance with subsection 1
 21 14 would place the carrier or organized delivery system in a
 21 15 financially impaired condition.
 21 16    6.  A carrier or organized delivery system shall not be
 21 17 required to provide coverage to small employers pursuant to
 21 18 subsection 1 if the carrier or organized delivery system
 21 19 elects not to offer new coverage to small employers in this
 21 20 state.  However, a carrier or organized delivery system that
 21 21 elects not to offer new coverage to small employers under this
 21 22 subsection shall be allowed to maintain its existing policies
 21 23 in the state, subject to the requirements of section 513B.5.
 21 24    7.  A carrier or organized delivery system that elects not
 21 25 to offer new coverage to small employers pursuant to
 21 26 subsection 6 shall provide notice to the commissioner or
 21 27 director of public health and is prohibited from writing new
 21 28 business in the small employer market in this state for a
 21 29 period of five years from the date of notice to the
 21 30 commissioner or director.
 21 31    Sec. 25.  Section 513B.11, subsection 2, Code 1997, is
 21 32 amended to read as follows:
 21 33    2.  A reinsuring carrier that applies and is approved to
 21 34 operate as a risk-assuming carrier shall not be permitted to
 21 35 continue to reinsure any health benefit plan insurance
 22  1 coverage with the program.  The carrier shall pay a prorated
 22  2 assessment based upon business issued as a reinsuring carrier
 22  3 for any portion of the year that the business was reinsured.
 22  4    Sec. 26.  Section 513B.13, subsection 7, unnumbered
 22  5 paragraph 1, Code 1997, is amended to read as follows:
 22  6    The same general powers and authority granted under the
 22  7 laws of this state to insurance companies and health
 22  8 maintenance organizations licensed to transact business in
 22  9 this state may be exercised by the board under the program,
 22 10 except the power to issue health benefit plans insurance
 22 11 coverages directly to either groups or individuals.
 22 12 Additionally, the board is granted the specific authority to
 22 13 do all or any of the following:
 22 14    Sec. 27.  Section 513B.13, subsection 7, paragraph d, Code
 22 15 1997, is amended to read as follows:
 22 16    d.  Define the health benefit plans insurance coverages for
 22 17 which reinsurance will be provided, and issue reinsurance
 22 18 policies, pursuant to this subchapter.
 22 19    Sec. 28.  Section 513B.13, subsection 8, paragraph b, Code
 22 20 1997, is amended to read as follows:
 22 21    b.  A small employer carrier may reinsure an entire
 22 22 employer group within sixty days of the commencement of the
 22 23 group's coverage under a health benefit plan health insurance
 22 24 coverage.
 22 25    Sec. 29.  Section 513B.13, subsection 9, paragraph a, Code
 22 26 1997, is amended to read as follows:
 22 27    a.  The board, as part of the plan of operation, shall
 22 28 establish a methodology for determining premium rates to be
 22 29 charged by the program for reinsuring small employers and
 22 30 individuals pursuant to this section.  The methodology shall
 22 31 include a system for classification of small employers that
 22 32 reflects the types of case characteristics commonly used by
 22 33 small employer carriers in the state.  The methodology shall
 22 34 provide for the development of base reinsurance premium rates,
 22 35 which shall be multiplied by the factors set forth in
 23  1 paragraph "b" to determine the premium rates for the program.
 23  2 The base reinsurance premium rates shall be established by the
 23  3 board, subject to the approval of the commissioner, and shall
 23  4 be set at levels which reasonably approximate gross premiums
 23  5 charged to small employers by small employer carriers for
 23  6 health benefit plans insurance coverages with benefits similar
 23  7 to the standard health benefit plan.
 23  8    Sec. 30.  Section 513B.13, subsection 10, Code 1997, is
 23  9 amended to read as follows:
 23 10    10.  If a health benefit plan health insurance coverage for
 23 11 a small employer is entirely or partially reinsured with the
 23 12 program, the premium charged to the small employer for any
 23 13 rating period for the coverage issued shall meet the
 23 14 requirements relating to premium rates set forth in section
 23 15 513B.4.
 23 16    Sec. 31.  Section 513B.13, subsection 11, paragraph b,
 23 17 subparagraphs (1), (2), and (3), Code 1997, are amended to
 23 18 read as follows:
 23 19    (1)  The board shall establish, as part of the plan of
 23 20 operation, a formula by which to make assessments against
 23 21 reinsuring carriers.  The assessment formula shall be based on
 23 22 both of the following:
 23 23    (a)  Each reinsuring carrier's share of the total premiums
 23 24 earned in the preceding calendar year from health benefit
 23 25 plans insurance coverages delivered or issued for delivery to
 23 26 small employers in this state by reinsuring carriers.
 23 27    (b)  Each reinsuring carrier's share of the premiums earned
 23 28 in the preceding calendar year from newly issued health
 23 29 benefit plans insurance coverages delivered or issued for
 23 30 delivery during such calendar year to small employers in this
 23 31 state by reinsuring carriers.
 23 32    (2)  The formula established pursuant to subparagraph (1)
 23 33 shall not result in any reinsuring carrier having an
 23 34 assessment share that is less than fifty percent nor more than
 23 35 one hundred fifty percent of an amount which is based on the
 24  1 proportion of the reinsuring carrier's total premiums earned
 24  2 in the preceding calendar year from health benefit plans
 24  3 insurance coverages delivered or issued for delivery to small
 24  4 employers in this state by reinsuring carriers to total
 24  5 premiums earned in the preceding calendar year from health
 24  6 benefit plans insurance coverages delivered or issued for
 24  7 delivery to small employers in this state by all reinsuring
 24  8 carriers.
 24  9    (3)  The board, with approval of the commissioner, may
 24 10 change the assessment formula established pursuant to
 24 11 subparagraph (1) from time to time as appropriate.  The board
 24 12 may provide for the shares of the assessment base attributable
 24 13 to premiums from all health benefit plans insurance coverages
 24 14 and to premiums from newly issued health benefit plans
 24 15 insurance coverages to vary during a transition period.
 24 16    Sec. 32.  Section 513B.13, subsection 11, paragraph c,
 24 17 subparagraph (3), Code 1997, is amended to read as follows:
 24 18    (3)  For any calendar year, the amount specified in this
 24 19 subparagraph is five percent of total premiums earned in the
 24 20 previous year from health benefit plans insurance coverages
 24 21 delivered or issued for delivery to small employers in this
 24 22 state by reinsuring carriers.
 24 23    Sec. 33.  Section 513B.15, Code 1997, is amended to read as
 24 24 follows:
 24 25    513B.15  PERIODIC MARKET EVALUATION.
 24 26    The board shall study and report at least every three years
 24 27 to the commissioner on the effectiveness of this subchapter.
 24 28 The report shall analyze the effectiveness of the subchapter
 24 29 in promoting rate stability, product availability, and
 24 30 coverage affordability.  The report may contain
 24 31 recommendations for actions to improve the overall
 24 32 effectiveness, efficiency, and fairness of the small group
 24 33 health insurance marketplace.  The report shall address
 24 34 whether carriers and producers are fairly and actively
 24 35 marketing or issuing health benefit plans insurance coverages
 25  1 to small employers in fulfillment of the purposes of this
 25  2 subchapter.  The report may contain recommendations for market
 25  3 conduct or other regulatory standards or action.
 25  4    Sec. 34.  Section 513B.17, subsection 3, Code 1997, is
 25  5 amended to read as follows:
 25  6    3.  The commissioner may adopt, by rule or order,
 25  7 transition provisions to facilitate the orderly and
 25  8 coordinated implementation of 1992 Iowa Acts, chapter 1167 the
 25  9 implementation and administration of this chapter.
 25 10    Sec. 35.  Section 513B.17A, Code 1997, is amended to read
 25 11 as follows:
 25 12    513B.17A  RESTORATION OF TERMINATED COVERAGE.
 25 13    The commissioner may adopt rules to require small employer
 25 14 carriers, as a condition of transacting business with small
 25 15 employers in this state after July 1, 1993, to reissue a
 25 16 health benefit plan health insurance coverage to any small
 25 17 employer whose health benefit plan insurance coverage is
 25 18 terminated or not renewed by a carrier after January 1, 1993,
 25 19 unless the carrier's termination is pursuant to section
 25 20 513B.5.  The commissioner may prescribe such terms for the
 25 21 reissuance of coverage as the commissioner finds are
 25 22 reasonable and necessary to provide continuity of coverage to
 25 23 such employers.
 25 24    Sec. 36.  Section 513C.6, Code 1997, is amended by striking
 25 25 the section and inserting in lieu thereof the following:
 25 26    513C.6  PROVISIONS ON RENEWABILITY OF COVERAGE.
 25 27    1.  An individual health benefit plan subject to this
 25 28 chapter is renewable with respect to an eligible individual or
 25 29 dependents, at the option of the individual, except for one or
 25 30 more of the following reasons:
 25 31    a.  The individual fails to pay, or to make timely payment
 25 32 of, premiums or contributions pursuant to the terms of the
 25 33 individual health benefit plan.
 25 34    b.  The individual performs an act or practice constituting
 25 35 fraud or makes an intentional misrepresentation of a material
 26  1 fact under the terms of the individual health benefit plan.
 26  2    c.  A decision by the individual carrier or organized
 26  3 delivery system to discontinue offering a particular type of
 26  4 individual health benefit plan in the state's individual
 26  5 insurance market.  An individual health benefit plan may be
 26  6 discontinued by the carrier or organized delivery system in
 26  7 that market with the approval of the commissioner or the
 26  8 director and only if the carrier or organized delivery system
 26  9 does all of the following:
 26 10    (1)  Provides advance notice of its decision to discontinue
 26 11 such plan to the commissioner or director.  Notice to the
 26 12 commissioner or director, at a minimum, shall be no less than
 26 13 three days prior to the notice provided for in subparagraph
 26 14 (2) to affected individuals.
 26 15    (2)  Provides notice of its decision not to renew such plan
 26 16 to all affected individuals no less than ninety days prior to
 26 17 the nonrenewal date of any discontinued individual health
 26 18 benefit plans.
 26 19    (3)  Offers to each individual of the discontinued plan the
 26 20 option to purchase any other health plan currently offered by
 26 21 the carrier or organized delivery system to individuals in
 26 22 this state.
 26 23    (4)  Acts uniformly in opting to discontinue the plan and
 26 24 in offering the option under subparagraph (3), without regard
 26 25 to the claims experience of any affected eligible individual
 26 26 or beneficiary under the discontinued plan or to a health
 26 27 status-related factor relating to any covered individuals or
 26 28 beneficiaries who may become eligible for the coverage.
 26 29    d.  A decision by the carrier or organized delivery system
 26 30 to discontinue offering and to cease to renew all of its
 26 31 individual health benefit plans delivered or issued for
 26 32 delivery to individuals in this state.  A carrier or organized
 26 33 delivery system making such decision shall do all of the
 26 34 following:
 26 35    (1)  Provide advance notice of its decision to discontinue
 27  1 such plan to the commissioner or director.  Notice to the
 27  2 commissioner or director, at a minimum, shall be no less than
 27  3 three days prior to the notice provided for in subparagraph
 27  4 (2) to affected individuals.
 27  5    (2)  Provide notice of its decision not to renew such plan
 27  6 to all individuals and to the commissioner or director in each
 27  7 state in which an individual under the discontinued plan is
 27  8 known to reside no less than one hundred eighty days prior to
 27  9 the nonrenewal of the plan.
 27 10    e.  The commissioner or director finds that the
 27 11 continuation of the coverage is not in the best interests of
 27 12 the individuals, or would impair the carrier's or organized
 27 13 delivery system's ability to meet its contractual obligations.
 27 14    2.  At the time of coverage renewal, a carrier or organized
 27 15 delivery system may modify the health insurance coverage for a
 27 16 policy form offered to individuals in the individual market so
 27 17 long as such modification is consistent with state law and
 27 18 effective on a uniform basis among all individuals with that
 27 19 policy form.
 27 20    3.  An individual carrier or organized delivery system that
 27 21 elects not to renew an individual health benefit plan under
 27 22 subsection 1, paragraph "d", shall not write any new business
 27 23 in the individual market in this state for a period of five
 27 24 years after the date of notice to the commissioner or
 27 25 director.
 27 26    4.  This section, with respect to a carrier or organized
 27 27 delivery system doing business in one established geographic
 27 28 service area of the state, applies only to such carrier's or
 27 29 organized delivery system's operations in that service area.
 27 30    5.  A carrier or organized delivery system offering
 27 31 coverage through a network plan is not required to renew or
 27 32 continue in force coverage or to accept applications from an
 27 33 individual who no longer resides or lives in, or is no longer
 27 34 employed in, the service area of such carrier or organized
 27 35 delivery system, or no longer resides or lives in, or is no
 28  1 longer employed in, a service area for which the carrier is
 28  2 authorized to do business, but only if coverage is not offered
 28  3 or terminated uniformly without regard to health status-
 28  4 related factors of a covered individual.
 28  5    6.  A carrier or organized delivery system offering
 28  6 coverage through a bona fide association is not required to
 28  7 renew a continue in force coverage or to accept applications
 28  8 from an individual through an association if the membership of
 28  9 the individual in the association on which the basis of
 28 10 coverage is provided ceases, but only if the coverage is not
 28 11 offered or terminated under this paragraph uniformly without
 28 12 regard to health status-related factors of a covered
 28 13 individual.
 28 14    Sec. 37.  Section 513C.7, subsection 1, paragraph b, Code
 28 15 1997, is amended to read as follows:
 28 16    b.  An eligible individual who does not apply for a basic
 28 17 or standard health benefit plan within thirty sixty-three days
 28 18 of a qualifying event or within thirty sixty-three days upon
 28 19 becoming ineligible for qualifying existing coverage.
 28 20    Sec. 38.  Section 513C.7, subsection 2, Code 1997, is
 28 21 amended to read as follows:
 28 22    2.  A carrier or an organized delivery system shall issue
 28 23 the basic or standard health benefit plan to an individual
 28 24 currently covered by an underwritten benefit plan issued by
 28 25 that carrier or an organized delivery system at the option of
 28 26 the individual.  This option must be exercised within thirty
 28 27 sixty-three days of notification of a premium rate increase
 28 28 applicable to the underwritten benefit plan.
 28 29    Sec. 39.  Section 513C.7, subsection 4, paragraph b, Code
 28 30 1997, is amended to read as follows:
 28 31    b.  A carrier or an organized delivery system shall waive
 28 32 any time period applicable to a preexisting condition
 28 33 exclusion or limitation period with respect to particular
 28 34 services in an individual health benefit plan for the period
 28 35 of time an individual was previously covered by qualifying
 29  1 previous coverage that provided benefits with respect to such
 29  2 services, provided that the qualifying previous coverage was
 29  3 continuous to a date not more than thirty sixty-three days
 29  4 prior to the effective date of the new coverage.
 29  5    Sec. 40.  Section 513C.9, Code 1997, is amended by adding
 29  6 the following new subsection:
 29  7    NEW SUBSECTION.  4A.  Notwithstanding subsection 4, a
 29  8 commission shall be paid to an agent related to the sale of a
 29  9 basic or standard health benefit plan under this chapter.  A
 29 10 commission paid pursuant to this subsection shall not be
 29 11 considered by the board for purposes of section 513C.10,
 29 12 subsection 9.
 29 13    Sec. 41.  NEW SECTION.  513C.12  COMMISSIONER'S DUTIES.
 29 14    The commissioner shall adopt rules administering this
 29 15 chapter.
 29 16    Sec. 42.  Section 514E.1, Code 1997, is amended by adding
 29 17 the following new subsections:
 29 18    NEW SUBSECTION.  3A.  "Church plan" means the same as
 29 19 defined in the federal Employee Retirement Income Security Act
 29 20 of 1974, 29 U.S.C. } 3(33).
 29 21    NEW SUBSECTION.  4A.  "Creditable coverage" means health
 29 22 benefits or coverage provided to an individual under any of
 29 23 the following:
 29 24    a.  A group health plan.
 29 25    b.  Health insurance coverage.
 29 26    c.  Part A or Part B Medicare pursuant to Title XVIII of
 29 27 the federal Social Security Act.
 29 28    d.  Medicaid pursuant to Title XIX of the federal Social
 29 29 Security Act, other than coverage consisting solely of
 29 30 benefits under section 1928 of that Act.
 29 31    e.  10 U.S.C. ch. 55.
 29 32    f.  A health or medical care program provided through the
 29 33 Indian health service or a tribal organization.
 29 34    g.  A state health benefits risk pool.
 29 35    h.  A health plan offered under 5 U.S.C. ch. 89.
 30  1    i.  A public health plan as defined under federal
 30  2 regulations.
 30  3    j.  A health benefit plan under section 5(e) of the federal
 30  4 Peace Corps Act, 22 U.S.C. } 2504(e).
 30  5    k.  An organized delivery system licensed by the director
 30  6 of public health.
 30  7    NEW SUBSECTION.  4B.  "Director" means the director of
 30  8 public health.
 30  9    NEW SUBSECTION.  5A.  "Federally eligible individual" means
 30 10 an individual who satisfies the following:
 30 11    a.  For whom, as of the date on which the individual seeks
 30 12 coverage under this chapter, the aggregate of the periods of
 30 13 creditable coverage is eighteen or more months with no more
 30 14 than a sixty-three day lapse of coverage, and whose most
 30 15 recent prior creditable coverage was under a group health
 30 16 plan, governmental plan, or church plan, or health insurance
 30 17 coverage offered in connection with any such plan.
 30 18    b.  Who is not eligible for coverage under a group health
 30 19 plan, Part A or Part B of Title XVIII of the federal Social
 30 20 Security Act, or a state plan under Title XIX of that Act, or
 30 21 any successor program, and does not have other health
 30 22 insurance coverage.
 30 23    c.  With respect to whom the most recent coverage within
 30 24 the coverage period described in paragraph "a" was not
 30 25 terminated based on a nonpayment of premiums or fraud.
 30 26    d.  If the individual had been offered the option of
 30 27 continuation coverage under a COBRA continuation provision or
 30 28 under a similar state program, and elected such coverage.
 30 29    e.  Who, if the individual elected continuation coverage as
 30 30 provided in paragraph "d", has exhausted the continuation
 30 31 coverage under the provision or program.
 30 32    NEW SUBSECTION.  5B.  "Governmental plan" means as defined
 30 33 under section 3(32) of the federal Employee Retirement Income
 30 34 Security Act of 1974 and any federal governmental plan.
 30 35    NEW SUBSECTION.  5C.  a.  "Group health plan" means an
 31  1 employee welfare benefit plan as defined in section 3(1) of
 31  2 the federal Employee Retirement Income Security Act of 1974,
 31  3 to the extent that the plan provides medical care including
 31  4 items and services paid for as medical care to employees or
 31  5 their dependents as defined under the terms of the plan
 31  6 directly or through insurance, reimbursement, or otherwise.
 31  7    b.  For purposes of this subsection, "medical care" means
 31  8 amounts paid for any of the following:
 31  9    (1)  The diagnosis, cure, mitigation, treatment, or
 31 10 prevention of disease, or amounts paid for the purpose of
 31 11 affecting a structure or function of the body.
 31 12    (2)  Transportation primarily for and essential to medical
 31 13 care referred to in subparagraph (1).
 31 14    (3)  Insurance covering medical care referred to in
 31 15 subparagraph (1) or (2).
 31 16    c.  For purposes of this chapter, the following apply:
 31 17    (1)  A plan, fund, or program established or maintained by
 31 18 a partnership which, but for this subsection, would not be an
 31 19 employee welfare benefit plan, shall be treated as an employee
 31 20 welfare benefit plan which is a group health plan to the
 31 21 extent that the plan, fund, or program provides medical care,
 31 22 including items and services paid for as medical care for
 31 23 present or former partners in the partnership or to the
 31 24 dependents of such partners, as defined under the terms of the
 31 25 plan, fund, or program, either directly or through insurance,
 31 26 reimbursement, or otherwise.
 31 27    (2)  With respect to a group health plan, the term
 31 28 "employer" includes a partnership with respect to a partner.
 31 29    (3)  With respect to a group health plan, the term
 31 30 participant includes the following:
 31 31    (a)  With respect to a group health plan maintained by a
 31 32 partnership, an individual who is a partner in the
 31 33 partnership.
 31 34    (b)  With respect to a group health plan maintained by a
 31 35 self-employed individual under which one or more of the self-
 32  1 employed individual's employees are participants, the self-
 32  2 employed individual, if that individual is, or may become,
 32  3 eligible to receive benefits under the plan or the
 32  4 individual's dependents may be eligible to receive benefits
 32  5 under the plan.
 32  6    NEW SUBSECTION.  8A.  a.  "Health insurance coverage" means
 32  7 health insurance coverage offered to individuals, but does not
 32  8 include short-term limited duration insurance.
 32  9    b.  "Health insurance coverage" does not include any of the
 32 10 following:
 32 11    (1)  Coverage for accident-only, or disability income
 32 12 insurance.
 32 13    (2)  Coverage issued as a supplement to liability
 32 14 insurance.
 32 15    (3)  Liability insurance, including general liability
 32 16 insurance and automobile liability insurance.
 32 17    (4)  Workers' compensation or similar insurance.
 32 18    (5)  Automobile medical-payment insurance.
 32 19    (6)  Credit-only insurance.
 32 20    (7)  Coverage for on-site medical clinic care.
 32 21    (8)  Other similar insurance coverage, specified in federal
 32 22 regulations, under which benefits for medical care are
 32 23 secondary or incidental to other insurance coverage or
 32 24 benefits.
 32 25    c.  "Health insurance coverage" does not include benefits
 32 26 provided under a separate policy as follows:
 32 27    (1)  Limited-scope dental or vision benefits.
 32 28    (2)  Benefits for long-term care, nursing home care, home
 32 29 health care, or community-based care.
 32 30    (3)  Any other similar limited benefits as provided by rule
 32 31 of the commissioner.
 32 32    d.  "Health insurance coverage" does not include benefits
 32 33 offered as independent noncoordinated benefits as follows:
 32 34    (1)  Coverage only for a specified disease or illness.
 32 35    (2)  A hospital indemnity or other fixed indemnity
 33  1 insurance.
 33  2    e.  "Health insurance coverage" does not include Medicare
 33  3 supplemental health insurance as defined under section
 33  4 1882(g)(1) of the federal Social Security Act, coverage
 33  5 supplemental to the coverage provided under 10 U.S.C. ch. 55
 33  6 and similar supplemental coverage provided to coverage under
 33  7 group health insurance coverage.
 33  8    NEW SUBSECTION.  10A.  "Involuntary termination" includes,
 33  9 but is not limited to, termination of coverage when a
 33 10 conversion policy is not available or where benefits under a
 33 11 state or federal law providing for continuation of coverage
 33 12 upon termination of employment will cease or have ceased.
 33 13    NEW SUBSECTION.  12A.  "Organized delivery system" means an
 33 14 organized delivery system as licensed by the director of the
 33 15 department of public health.
 33 16    NEW SUBSECTION.  15.  "Preexisting condition exclusion",
 33 17 with respect to coverage, means a limitation or exclusion of
 33 18 benefits relating to a condition based on the fact that the
 33 19 condition was present before the date of enrollment for such
 33 20 coverage, whether or not any medical advice, diagnosis, care,
 33 21 or treatment was recommended or received before such date.
 33 22    Sec. 43.  Section 514E.1, subsection 9, Code 1997, is
 33 23 amended by striking the subsection.
 33 24    Sec. 44.  Section 514E.2, subsection 1, Code 1997, is
 33 25 amended to read as follows:
 33 26    1.  There is established a nonprofit corporation known as
 33 27 the Iowa comprehensive health insurance association which
 33 28 shall assure that health insurance, as limited by sections
 33 29 514E.4 and 514E.5, is made available to each eligible Iowa
 33 30 resident and each federally eligible individual applying to
 33 31 the association for coverage.  All carriers as defined in
 33 32 section 514E.1, subsection 3, and all organized delivery
 33 33 systems licensed by the director of public health providing
 33 34 health insurance or health care services in Iowa shall be
 33 35 members of the association.  The association shall operate
 34  1 under a plan of operation established and approved under
 34  2 subsection 3 and shall exercise its powers through a board of
 34  3 directors established under this section.
 34  4    Sec. 45.  Section 514E.2, subsection 2, unnumbered
 34  5 paragraph 1, Code 1997, is amended to read as follows:
 34  6    The board of directors of the association shall consist of
 34  7 four members selected by the members of the association, two
 34  8 of whom shall be representatives from corporations operating
 34  9 pursuant to chapter 514 on July 1, 1989, or any successors in
 34 10 interest, and two of whom shall be representatives of
 34 11 organized delivery systems or insurers providing coverage
 34 12 pursuant to chapter 509 or 514A; four public members selected
 34 13 by the governor; the commissioner or the commissioner's
 34 14 designee from the division of insurance; and two members of
 34 15 the general assembly, one of whom shall be appointed by the
 34 16 speaker of the house and one of whom shall be appointed by the
 34 17 president of the senate, after consultation with the majority
 34 18 leader and the minority leader of the senate, who shall be ex
 34 19 officio and nonvoting members.  The composition of the board
 34 20 of directors shall be in compliance with sections 69.16 and
 34 21 69.16A.  The governor's appointees shall be chosen from a
 34 22 broad cross-section of the residents of this state.
 34 23    Sec. 46.  Section 514E.2, subsection 3, paragraph f, Code
 34 24 1997, is amended by striking the paragraph.
 34 25    Sec. 47.  Section 514E.2, subsection 7, Code 1997, is
 34 26 amended to read as follows:
 34 27    7.  Following the close of each calendar year, the
 34 28 association shall determine the net premiums and payments, the
 34 29 expenses of administration, and the incurred losses of the
 34 30 association for the year.  The association shall certify the
 34 31 amount of any net loss for the preceding calendar year to the
 34 32 commissioner of insurance and director of revenue and finance
 34 33 who shall make payment to the association according to
 34 34 procedures established under subsection 3, paragraph "f".  Any
 34 35 remaining loss, after payment to the association from the
 35  1 health insurance trust fund, shall be assessed by the
 35  2 association to all members in proportion to their respective
 35  3 shares of total health insurance premiums or payments for
 35  4 subscriber contracts received in Iowa during the second
 35  5 preceding calendar year, or with paid losses in the year,
 35  6 coinciding with or ending during the calendar year or on any
 35  7 other equitable basis as provided in the plan of operation.
 35  8 In sharing losses, the association may abate or defer in any
 35  9 part the assessment of a member, if, in the opinion of the
 35 10 board, payment of the assessment would endanger the ability of
 35 11 the member to fulfill its contractual obligations.  The
 35 12 association may also provide for an initial or interim
 35 13 assessment against members of the association if necessary to
 35 14 assure the financial capability of the association to meet the
 35 15 incurred or estimated claims expenses or operating expenses of
 35 16 the association until the next calendar year is completed.
 35 17 Net gains, if any, must be held at interest to offset future
 35 18 losses or allocated to reduce future premiums.
 35 19    Sec. 48.  Section 514E.2, subsection 12, Code 1997, is
 35 20 amended by striking the subsection.
 35 21    Sec. 49.  Section 514E.5, subsection 2, Code 1997, is
 35 22 amended to read as follows:
 35 23    2.  Services and charges made for benefits provided under
 35 24 the laws of the United States, including excluding Medicare
 35 25 and Medicaid, military service-connected disabilities, but
 35 26 including medical services provided for members of the armed
 35 27 forces and their dependents or for employees of the armed
 35 28 forces of the United States, and medical services financed on
 35 29 behalf of all citizens by the United States.
 35 30    However, the association policy shall pay benefits as a
 35 31 primary payer in any case where benefit coverage provided
 35 32 under the laws of the United States, including Medicare and
 35 33 Medicaid, or under the laws of this state is, by rule or
 35 34 statute, secondary to all other coverages.
 35 35    Sec. 50.  Section 514E.6, subsection 3, paragraph e, Code
 36  1 1997, is amended by striking the paragraph and inserting in
 36  2 lieu thereof the following:
 36  3    e.  An amount as determined by the association for any
 36  4 other association policy offered.
 36  5    Sec. 51.  Section 514E.6, subsection 6, Code 1997, is
 36  6 amended by striking the subsection and inserting in lieu
 36  7 thereof the following:
 36  8    6.  The association, in addition to other policies, shall
 36  9 offer one which is comparable to the standard health benefit
 36 10 plan as defined in section 513B.2.
 36 11    Sec. 52.  Section 514E.7, subsections 1, 2, and 5, Code
 36 12 1997, are amended by striking the subsections and inserting in
 36 13 lieu thereof the following:
 36 14    1.  An individual who is and continues to be a resident is
 36 15 eligible for plan coverage if evidence is provided of any of
 36 16 the following:
 36 17    a.  A notice of rejection or refusal to issue substantially
 36 18 similar insurance for health reasons by one carrier or
 36 19 organized delivery system.
 36 20    b.  A refusal by a carrier or organized delivery system to
 36 21 issue insurance except at a rate exceeding the plan rate.
 36 22    c.  That the individual is a federally defined eligible
 36 23 individual.
 36 24    A rejection or refusal by a carrier or organized delivery
 36 25 system offering only stoploss, excess of loss, or reinsurance
 36 26 coverage with respect to an applicant under paragraphs "a" and
 36 27 "b" is not sufficient evidence for purposes of this
 36 28 subsection.
 36 29    5.  a.  A preexisting condition exclusion shall not apply
 36 30 to a federally defined eligible individual.
 36 31    b.  Plan coverage shall not impose any preexisting
 36 32 condition as follows:
 36 33    (1)  In the case of a child who is adopted or placed for
 36 34 adoption before attaining eighteen years of age and who, as of
 36 35 the last day of the thirty-day period beginning on the date of
 37  1 the adoption or placement for adoption, is covered under
 37  2 creditable coverage.  This subparagraph shall not apply to
 37  3 coverage before the date of such adoption or placement for
 37  4 adoption.
 37  5    (2)  In the case of an individual who, as of the last day
 37  6 of the thirty-day period beginning with the date of birth, is
 37  7 covered under creditable coverage.
 37  8    (3)  Relating to pregnancy as a preexisting condition.
 37  9    c.  Plan coverage shall exclude charges or expenses
 37 10 incurred during the first six months following the effective
 37 11 date of coverage for preexisting conditions.  Such preexisting
 37 12 condition exclusions shall be waived to the extent that
 37 13 similar exclusions, if any, have been satisfied under any
 37 14 prior health insurance coverage which was involuntarily
 37 15 terminated, provided both of the following apply:
 37 16    (1)  Application for association coverage is made no later
 37 17 than sixty-three days following such involuntary termination
 37 18 and, in such case, coverage under the plan is effective from
 37 19 the date on which such prior coverage was terminated.
 37 20    (2)  The applicant is not eligible for continuation or
 37 21 conversion rights that would provide coverage substantially
 37 22 similar to plan coverage.
 37 23    d.  This subsection does not prohibit preexisting
 37 24 conditions coverage in an association policy that is more
 37 25 favorable to the insured than that specified in this
 37 26 subsection.
 37 27    If the association policy contains a waiting period for
 37 28 preexisting conditions, an insured may retain any existing
 37 29 coverage the insured has under an insurance plan that has
 37 30 coverage equivalent to the association policy for the duration
 37 31 of the waiting period only.
 37 32    Sec. 53.  Section 514E.7, subsection 6, Code 1997, is
 37 33 amended to read as follows:
 37 34    6.  An individual is not eligible for coverage by the
 37 35 association if any of the following apply:
 38  1    a.  The individual is at the time of application eligible
 38  2 for health care benefits under chapter 249A.
 38  3    b.  The individual has terminated coverage by the
 38  4 association within the past twelve months, except that this
 38  5 paragraph does not apply to an applicant who is a federally
 38  6 eligible individual.
 38  7    c.  The individual is an inmate of a public institution or
 38  8 is eligible for public programs for which medical care is
 38  9 provided, except that this paragraph does not apply to an
 38 10 applicant who is a federally defined eligible individual.
 38 11    d.  The individual premiums are paid for or reimbursed
 38 12 under any government sponsored program or by any government
 38 13 agency or health care provider, except as an otherwise
 38 14 qualifying full-time employee, or dependent of the employee,
 38 15 of a government agency or health care provider.
 38 16    e.  The individual, on the effective date of the coverage
 38 17 applied for, has not been rejected for, already has, or will
 38 18 have coverage similar to an association policy as an insured
 38 19 or covered dependent.  This paragraph does not apply to an
 38 20 applicant who is a federally eligible individual.
 38 21    Sec. 54.  Section 514E.9, Code 1997, is amended to read as
 38 22 follows:
 38 23    514E.9  RULES.
 38 24    Pursuant to chapter 17A, the commissioner and the director
 38 25 of public health shall adopt rules to provide for disclosure
 38 26 by carriers and organized delivery systems of the availability
 38 27 of insurance coverage from the association, and to otherwise
 38 28 implement this chapter.
 38 29    Sec. 55.  Section 514E.11, Code 1997, is amended to read as
 38 30 follows:
 38 31    514E.11  NOTICE OF ASSOCIATION POLICY.
 38 32    Commencing July 1, 1986, every Every carrier, including a
 38 33 health maintenance organization subject to chapter 514B and an
 38 34 organized delivery system, authorized to provide health care
 38 35 insurance or coverage for health care services in Iowa, shall
 39  1 provide a notice and an application for of the availability of
 39  2 coverage by the association to any person who receives a
 39  3 rejection of coverage for health insurance or health care
 39  4 services, or a notice to any person who is informed that a
 39  5 rate for health insurance or coverage for health care services
 39  6 will exceed the rate of an association policy, that effective
 39  7 January 1, 1987, that person is eligible to apply for health
 39  8 insurance provided by the association.  Application for the
 39  9 health insurance shall be on forms prescribed by the board and
 39 10 made available to the carriers and organized delivery systems.
 39 11    Sec. 56.  Section 514E.3, Code 1997, is repealed.  
 39 12 
 39 13 
 39 14                                                             
 39 15                               RON J. CORBETT
 39 16                               Speaker of the House
 39 17 
 39 18 
 39 19                                                             
 39 20                               MARY E. KRAMER
 39 21                               President of the Senate
 39 22 
 39 23    I hereby certify that this bill originated in the House and
 39 24 is known as House File 701, Seventy-seventh General Assembly.
 39 25 
 39 26 
 39 27                                                             
 39 28                               ELIZABETH ISAACSON
 39 29                               Chief Clerk of the House
 39 30 Approved                , 1997
 39 31 
 39 32 
 39 33                         
 39 34 TERRY E. BRANSTAD
 39 35 Governor
     
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