Text: HSB00234 Text: HSB00236 Text: HSB00200 - HSB00299 Text: HSB Index Bills and Amendments: General Index Bill History: General Index
PAG LIN 1 1 Section 1. Section 509.3, Code 1997, is amended by adding 1 2 the following new unnumbered paragraph: 1 3 NEW UNNUMBERED PARAGRAPH. In addition to the provisions 1 4 required in subsections 1 through 8, the commissioner shall 1 5 require provisions through the adoption of rules implementing 1 6 the federal Health Insurance Portability and Accountability 1 7 Act, Pub. L. No. 104-191. 1 8 Sec. 2. Section 513B.2, subsection 4, Code 1997, is 1 9 amended by striking the subsection and inserting in lieu 1 10 thereof the following: 1 11 4. "Carrier" means an entity subject to the insurance laws 1 12 and regulations of this state, or subject to the jurisdiction 1 13 of the commissioner, that contracts or offers to contract to 1 14 provide, deliver, arrange for, pay for, or reimburse any of 1 15 the costs of health care services, including an insurance 1 16 company offering sickness and accident plans, a health 1 17 maintenance organization, a nonprofit health service 1 18 corporation, or any other entity providing a plan of health 1 19 insurance, health benefits, or health services. 1 20 Sec. 3. Section 513B.2, subsection 9, Code 1997, is 1 21 amended to read as follows: 1 22 9. "Eligible employee" means an employee who workson a1 23full-time basis and has a normal work week of thirty or more1 24hoursfor a small employer. The term includes a sole 1 25 proprietor, a partner of a partnership, and an independent 1 26 contractor, if the sole proprietor, partner, or independent 1 27 contractor is included as an employee under a health benefit 1 28 plan of a small employer, but does not include an employee who1 29works on a part-time, temporary, or substitute basis. 1 30 Sec. 4. Section 513B.2, subsection 10, Code 1997, is 1 31 amended by striking the subsection and inserting in lieu 1 32 thereof the following: 1 33 10. a. "Health insurance coverage" means benefits 1 34 consisting of health care provided directly, through insurance 1 35 or reimbursement, or otherwise and including items and 2 1 services paid for as health care under a hospital or health 2 2 service policy or certificate, hospital or health service plan 2 3 contract, or health maintenance organization contract offered 2 4 by a carrier. 2 5 b. "Health insurance coverage" does not include any of the 2 6 following: 2 7 (1) Coverage for accident-only, or disability income 2 8 insurance. 2 9 (2) Coverage issued as a supplement to liability 2 10 insurance. 2 11 (3) Liability insurance, including general liability 2 12 insurance and automobile liability insurance. 2 13 (4) Workers' compensation or similar insurance. 2 14 (5) Automobile medical-payment insurance. 2 15 (6) Credit-only insurance. 2 16 (7) Coverage for on-site medical clinic care. 2 17 (8) Other similar insurance coverage, specified in federal 2 18 regulations, under which benefits for medical care are 2 19 secondary or incidental to other insurance coverage or 2 20 benefits. 2 21 c. "Health insurance coverage" does not include benefits 2 22 provided under a separate policy as follows: 2 23 (1) Limited scope dental or vision benefits. 2 24 (2) Benefits for long-term care, nursing home care, home 2 25 health care, or community-based care. 2 26 (3) Any other similar limited benefits as provided by rule 2 27 of the commissioner. 2 28 d. "Health insurance coverage" does not include benefits 2 29 offered as independent noncoordinated benefits as follows: 2 30 (1) Coverage only for a specified disease or illness. 2 31 (2) A hospital indemnity or other fixed indemnity 2 32 insurance. 2 33 e. "Health insurance coverage" does not include Medicare 2 34 supplemental health insurance as defined under } 1882(g)(1) of 2 35 the federal Social Security Act, coverage supplemental to the 3 1 coverage provided under 10 U.S.C. ch. 55, and similar 3 2 supplemental coverage provided to coverage under group health 3 3 insurance coverage. 3 4 f. "Group health insurance coverage" means health 3 5 insurance coverage offered in connection with a group health 3 6 plan. 3 7 Sec. 5. Section 513B.2, subsection 12, paragraph a, Code 3 8 1997, is amended to read as follows: 3 9 a. The individual meets all of the following: 3 10 (1) The individual was covered underqualifying previous3 11 creditable coverage at the time of the initial enrollment. 3 12 (2) The individual lost creditable coverageunder3 13qualifying previous coverageas a result of termination of the 3 14 individual's employment or eligibility, the involuntary 3 15 termination of thequalifying previouscreditable coverage, 3 16 death of the individual's spouse, or the individual's divorce. 3 17 (3) The individual requests enrollment within thirty days 3 18 after termination of thequalifying previouscreditable 3 19 coverage. 3 20 Sec. 6. Section 513B.2, subsection 12, Code 1997, is 3 21 amended by adding the following new paragraphs: 3 22 NEW PARAGRAPH. d. The individual changes status and 3 23 becomes an eligible employee and requests enrollment within 3 24 sixty-three days after the date of the change in status. 3 25 NEW PARAGRAPH. e. The individual was covered under a 3 26 mandated continuation of group health plan or group health 3 27 insurance coverage plan until the coverage under that plan was 3 28 exhausted. 3 29 Sec. 7. Section 513B.2, Code 1997, is amended by adding 3 30 the following new subsections: 3 31 NEW SUBSECTION. 7A. "Creditable coverage" means health 3 32 benefits or coverage provided to an individual under any of 3 33 the following: 3 34 a. A group health plan. 3 35 b. Health insurance coverage. 4 1 c. Part A or Part B Medicare pursuant to Title XVIII of 4 2 the federal Social Security Act. 4 3 d. Medicaid pursuant to Title XIX of the federal Social 4 4 Security Act, other than coverage consisting solely of 4 5 benefits under section 1928 of that Act. 4 6 e. 10 U.S.C. ch. 55. 4 7 f. A health or medical care program provided through the 4 8 Indian health service or a tribal organization. 4 9 g. A state health benefits risk pool. 4 10 h. A health plan offered under 5 U.S.C. ch. 89. 4 11 i. A public health plan as defined under federal 4 12 regulations. 4 13 j. A health benefit plan under section 5(e) of the federal 4 14 Peace Corps Act, 22 U.S.C. } 2504(e). 4 15 k. An organized delivery system licensed by the director 4 16 of public health. 4 17 NEW SUBSECTION. 9A. a. "Group health plan" means an 4 18 employee welfare benefit plan as defined in section 3(1) of 4 19 the federal Employee Retirement Income Security Act of 1974, 4 20 to the extent that the plan provides medical care including 4 21 items and services paid for as medical care to employees or 4 22 their dependents as defined under the terms of the plan 4 23 directly or through insurance, reimbursement, or otherwise. 4 24 b. For purposes of this subsection, "medical care" means 4 25 amounts paid for any of the following: 4 26 (1) The diagnosis, cure, mitigation, treatment, or 4 27 prevention of disease, or amounts paid for the purpose of 4 28 affecting a structure or function of the body. 4 29 (2) Transportation primarily for and essential to medical 4 30 care referred to in subparagraph (1). 4 31 (3) Insurance covering medical care referred to in 4 32 subparagraph (1) or (2). 4 33 NEW SUBSECTION. 13A. "Preexisting conditions exclusion" 4 34 means, with respect to health insurance coverage, a limitation 4 35 or exclusion of benefits relating to a condition based on the 5 1 fact that the condition was present before the date of 5 2 enrollment for such coverage, whether or not any medical 5 3 advice, diagnosis, care, or treatment was recommended or 5 4 received before such date. 5 5 Sec. 8. Section 513B.2, subsection 14, Code 1997, is 5 6 amended by striking the subsection. 5 7 Sec. 9. Section 513B.5, Code 1997, is amended by striking 5 8 the section and inserting in lieu thereof the following: 5 9 513B.5 PROVISIONS ON RENEWABILITY OF COVERAGE. 5 10 1. Health insurance coverage subject to this chapter is 5 11 renewable with respect to all eligible employees or their 5 12 dependents, at the option of the small employer, except for 5 13 one or more of the following reasons: 5 14 a. The health insurance coverage sponsor fails to pay, or 5 15 to make timely payment of, premiums or contributions pursuant 5 16 to the terms of the health insurance coverage. 5 17 b. The health insurance coverage sponsor performs an act 5 18 or practice constituting fraud or makes an intentional 5 19 misrepresentation of a material fact under the terms of the 5 20 coverage. 5 21 c. Noncompliance with the carrier's or organized delivery 5 22 system's minimum participation requirements. 5 23 d. Noncompliance with the carrier's or organized delivery 5 24 system's employer contribution requirements. 5 25 e. A decision by the carrier or organized delivery system 5 26 to discontinue offering a particular type of health insurance 5 27 coverage in the state's small employer market. Health 5 28 insurance coverage may be discontinued by the carrier or 5 29 organized delivery system in that market only if the carrier 5 30 or organized delivery system does all of the following: 5 31 (1) Provides advance notice of its decision to discontinue 5 32 such plan to the commissioner or director of public health. 5 33 Notice to the commissioner or director, at a minimum, shall be 5 34 no less than three days prior to the notice provided for in 5 35 subparagraph (2) to affected small employers, participants, 6 1 and beneficiaries. 6 2 (2) Provides notice of its decision not to renew such plan 6 3 to all affected small employers, participants, and 6 4 beneficiaries no less than ninety days prior to the nonrenewal 6 5 of the plan. 6 6 (3) Offers to each plan sponsor of the discontinued 6 7 coverage, the option to purchase any other coverage currently 6 8 offered by the carrier or organized delivery system to other 6 9 employers in this state. 6 10 (4) Acts uniformly, in opting to discontinue the coverage 6 11 and in offering the option under subparagraph (3), without 6 12 regard to the claims experience of the sponsors under the 6 13 discontinued coverage or to a health status-related factor 6 14 relating to any participants or beneficiaries covered or new 6 15 participants or beneficiaries who may become eligible for the 6 16 coverage. 6 17 f. A decision by the carrier or organized delivery system 6 18 to discontinue offering and to cease to renew all of its 6 19 health insurance coverage delivered or issued for delivery to 6 20 small employers in this state. A carrier or organized 6 21 delivery system making such decision shall do all of the 6 22 following: 6 23 (1) Provide advance notice of its decision to discontinue 6 24 such coverage to the commissioner or director of public 6 25 health. Notice to the commissioner or director, at a minimum, 6 26 shall be no less than three days prior to the notice provided 6 27 for in subparagraph (2) to affected small employers, 6 28 participants, and beneficiaries. 6 29 (2) Provide notice of its decision not to renew such 6 30 coverage to all affected small employers, participants, and 6 31 beneficiaries no less than one hundred eighty days prior to 6 32 the nonrenewal of the coverage. 6 33 (3) Discontinue all health insurance coverage issued or 6 34 delivered for issuance to small employers in this state and 6 35 cease renewal of such coverage. 7 1 g. The membership of an employer in an association, which 7 2 is the basis for the coverage which is provided through such 7 3 association, ceases, but only if the termination of coverage 7 4 under this paragraph occurs uniformly without regard to any 7 5 health status-related factor relating to any covered 7 6 individual. 7 7 h. The commissioner or director of public health finds 7 8 that the continuation of the coverage is not in the best 7 9 interests of the policyholders or certificate holders, or 7 10 would impair the carrier's or organized delivery system's 7 11 ability to meet its contractual obligations. 7 12 i. At the time of coverage renewal, a carrier or organized 7 13 delivery system may modify the health insurance coverage for a 7 14 product offered under group health insurance coverage in the 7 15 small group market, for coverage that is available in such 7 16 market other than only through one or more bona fide 7 17 associations, if such modification is consistent with the laws 7 18 of this state, and is effective on a uniform basis among group 7 19 health insurance coverage with that product. 7 20 2. A carrier or organized delivery system that elects not 7 21 to renew health insurance coverage under subsection 1, 7 22 paragraph "f", shall not write any new business in the small 7 23 employer market in this state for a period of five years after 7 24 the date of notice to the commissioner or director of public 7 25 health. 7 26 3. This section, with respect to a carrier or organized 7 27 delivery system doing business in one established geographic 7 28 service area of the state, applies only to such carrier's or 7 29 organized delivery system's operations in that service area. 7 30 Sec. 10. NEW SECTION. 513B.9A ELIGIBILITY TO ENROLL. 7 31 1. A group health plan or a carrier offering group health 7 32 insurance coverage in connection with a group health plan 7 33 shall not establish rules for eligibility, including continued 7 34 eligibility, of an individual to enroll under the terms of the 7 35 plan based on any of the following health status-related 8 1 factors in relation to the individual or a dependent of the 8 2 individual: 8 3 a. Health status. 8 4 b. Medical condition, including both physical and mental 8 5 conditions. 8 6 c. Claims experience. 8 7 d. Receipt of health care. 8 8 e. Medical history. 8 9 f. Genetic information. 8 10 g. Evidence of insurability, including conditions arising 8 11 out of acts of domestic violence. 8 12 h. Disability. 8 13 2. Subsection 1 does not require a group health plan or 8 14 group health insurance coverage to provide particular benefits 8 15 other than those provided under the terms of the plan or 8 16 coverage, and does not prevent a plan or coverage from 8 17 establishing limitations or restrictions on the amount, level, 8 18 extent, or nature of the benefits or coverage for similarly 8 19 situated individuals enrolled in the plan or coverage. 8 20 3. Rules for eligibility to enroll under a group health 8 21 plan or group health insurance coverage include rules defining 8 22 any applicable waiting periods for such enrollment. 8 23 4. a. A group health plan or carrier offering health 8 24 insurance coverage in connection with a group health plan 8 25 shall not require an individual, as a condition of enrollment 8 26 or continued enrollment under the plan, to pay a premium or 8 27 contribution which is greater than a premium or contribution 8 28 for a similarly situated individual enrolled in the plan on 8 29 the basis of a health status-related factor in relation to the 8 30 individual or to a dependent of an individual enrolled under 8 31 the plan. 8 32 b. Paragraph "a" shall not be construed to do either of 8 33 the following: 8 34 (1) Restrict the amount that an employer may be charged 8 35 for coverage under a group health plan. 9 1 (2) Prevent a carrier or organized delivery system 9 2 offering group health insurance coverage from establishing 9 3 premium discounts or rebates or modifying otherwise applicable 9 4 copayments or deductibles in return for adherence to programs 9 5 of health promotion and disease prevention. 9 6 Sec. 11. Section 513B.10, Code 1997, is amended by 9 7 striking the section and inserting in lieu thereof the 9 8 following: 9 9 513B.10 AVAILABILITY OF COVERAGE. 9 10 1. a. A carrier or an organized delivery system that 9 11 offers health insurance coverage in the small group market 9 12 shall accept every small employer that applies for health 9 13 insurance coverage and shall accept for enrollment under such 9 14 coverage every eligible individual who applies for enrollment 9 15 during the period in which the individual first becomes 9 16 eligible to enroll under the terms of the group health plan 9 17 and shall not place any restriction which is inconsistent with 9 18 eligibility rules established under this chapter. A carrier 9 19 or organized delivery system shall offer health insurance 9 20 coverage which constitutes a basic health benefit plan and 9 21 which constitutes a standard health benefit plan. 9 22 b. A carrier or organized delivery system that offers 9 23 health insurance coverage in the small group market through a 9 24 network plan may do either of the following: 9 25 (1) Limit employers that may apply for such coverage to 9 26 those with eligible individuals who live, work, or reside in 9 27 the service area for such network plan. 9 28 (2) Deny such coverage to such employers within the 9 29 service area of such plan if the carrier or organized delivery 9 30 system has demonstrated, if required, to the applicable state 9 31 authority, both of the following: 9 32 (a) The carrier or organized delivery system will not have 9 33 the capacity to deliver services adequately to enrollees of 9 34 any additional groups because of its obligations to existing 9 35 group contract holders and enrollees. 10 1 (b) The carrier or organized delivery system is applying 10 2 this subparagraph uniformly to all employers without regard to 10 3 the claims experience of those employers and their employees 10 4 and their dependents, or any health status-related factor 10 5 relating to such employees or dependents. 10 6 c. A carrier or organized delivery system, upon denying 10 7 health insurance coverage in any service area pursuant to 10 8 paragraph "b", subparagraph (2), shall not offer coverage in 10 9 the small group market within such service area for a period 10 10 of one hundred eighty days after the date such coverage is 10 11 denied. 10 12 d. A carrier or organized delivery system may deny health 10 13 insurance coverage in the small group market if the issuer has 10 14 demonstrated, if required, to the commissioner or director of 10 15 public health both of the following: 10 16 (1) The carrier or organized delivery system does not have 10 17 the financial reserves necessary to underwrite additional 10 18 coverage. 10 19 (2) The carrier or organized delivery system is applying 10 20 the provisions of this subparagraph uniformly to all employers 10 21 in the small group market in this state consistent with state 10 22 law and without regard to the claims experience of those 10 23 employers and the employees and dependents of such employers, 10 24 or any health status-related factor relating to such employees 10 25 and their dependents. 10 26 e. A carrier or organized delivery system, upon denying 10 27 health insurance coverage in connection with group health 10 28 plans pursuant to paragraph "d", shall not offer coverage in 10 29 connection with group health plans in the small group market 10 30 in this state for a period of one hundred eighty days after 10 31 the date such coverage is denied or until the carrier or 10 32 organized delivery system has demonstrated to the commissioner 10 33 or director of public health that the carrier or organized 10 34 delivery system has sufficient financial reserves to 10 35 underwrite additional coverage, whichever is later. The 11 1 commissioner or director may provide for the application of 11 2 this paragraph on a service area-specific basis. 11 3 f. Paragraph "a" shall not be construed to preclude a 11 4 carrier or organized delivery system from establishing 11 5 employer contribution rules or group participation rules for 11 6 the offering of health insurance coverage in connection with a 11 7 group health plan in the small group market. 11 8 2. A carrier or organized delivery system, subject to 11 9 subsection 1, shall issue health insurance coverage to an 11 10 eligible small employer that applies for the coverage and 11 11 agrees to make the required premium payments and satisfy the 11 12 other reasonable provisions of the health insurance coverage 11 13 not inconsistent with this chapter. A carrier or organized 11 14 delivery system is not required to issue health insurance 11 15 coverage to a self-employed individual who is covered by, or 11 16 is eligible for coverage under, health insurance coverage 11 17 offered by an employer. 11 18 3. a. A carrier or organized delivery system shall file 11 19 with the commissioner or director of public health, in a form 11 20 and manner prescribed by the commissioner or director, the 11 21 basic health benefit plans and the standard health benefit 11 22 plans to be used by the carrier. Health insurance coverage 11 23 filed pursuant to this paragraph may be used by a carrier or 11 24 organized delivery system beginning thirty days after it is 11 25 filed unless the commissioner or director of public health 11 26 disapproves its use. 11 27 b. The commissioner or director of public health, at any 11 28 time after providing notice and opportunity for hearing to the 11 29 carrier or organized delivery system, may disapprove the 11 30 continued use of a basic or standard health benefit plan by a 11 31 carrier or organized delivery system on the grounds that the 11 32 plan does not meet the requirements of this chapter. 11 33 4. Health insurance coverage for small employers shall 11 34 satisfy all of the following: 11 35 a. A carrier or organized delivery system offering group 12 1 health insurance coverage, with respect to a participant or 12 2 beneficiary, may impose a preexisting condition exclusion only 12 3 as follows: 12 4 (1) The exclusion relates to a condition, whether physical 12 5 or mental, regardless of the cause of the condition, for which 12 6 medical advice, diagnosis, care, or treatment was recommended 12 7 or received within the six-month period ending on the 12 8 enrollment date. However, genetic information shall not be 12 9 treated as a condition under this subparagraph in the absence 12 10 of a diagnosis of the condition related to such information. 12 11 (2) The exclusion extends for a period of not more than 12 12 twelve months, or eighteen months in the case of a late 12 13 enrollee, after the enrollment date. 12 14 (3) The period of any such preexisting condition exclusion 12 15 is reduced by the aggregate of the periods of creditable 12 16 coverage applicable to the participant or beneficiary as of 12 17 the enrollment date. 12 18 b. A group health plan and a carrier or organized delivery 12 19 system offering group health insurance coverage shall not 12 20 impose any preexisting condition as follows: 12 21 (1) In the case of a child who is adopted or placed for 12 22 adoption before attaining eighteen years of age and who, as of 12 23 the last day of the thirty-day period beginning on the date of 12 24 the adoption or placement for adoption, is covered under 12 25 creditable coverage. This subparagraph shall not apply to 12 26 coverage before the date of such adoption or placement for 12 27 adoption. 12 28 (2) In the case of an individual who, as of the last day 12 29 of the thirty-day period beginning with the date of birth, is 12 30 covered under creditable coverage. 12 31 (3) Relating to pregnancy as a preexisting condition. 12 32 c. A carrier or organized delivery system shall waive any 12 33 waiting period applicable to a preexisting condition exclusion 12 34 or limitation period with respect to particular services under 12 35 health insurance coverage for the period of time an individual 13 1 was covered by creditable coverage, provided that the 13 2 creditable coverage was continuous to a date not more than 13 3 sixty-three days prior to the effective date of the new 13 4 coverage. Any period that an individual is in a waiting 13 5 period for any coverage under group health insurance coverage, 13 6 or is in an affiliation period, shall not be taken into 13 7 account in determining the period of continuous coverage. A 13 8 health maintenance organization that does not use preexisting 13 9 condition limitations in any of its health insurance coverage 13 10 may impose an affiliation period. For purposes of this 13 11 section, "affiliation period" means a period of time not to 13 12 exceed sixty days for new entrants and not to exceed ninety 13 13 days for late enrollees during which no premium shall be 13 14 collected and coverage issued is not effective, so long as the 13 15 affiliation period is applied uniformly, without regard to any 13 16 health status-related factors. This paragraph does not 13 17 preclude application of a waiting period applicable to all new 13 18 enrollees under the health insurance coverage, provided that 13 19 any carrier or organized delivery system-imposed waiting 13 20 period is no longer than sixty days and is used in lieu of a 13 21 preexisting condition exclusion. 13 22 d. Health insurance coverage may exclude coverage for late 13 23 enrollees for preexisting conditions for a period not to 13 24 exceed eighteen months. 13 25 e. (1) Requirements used by a carrier or organized 13 26 delivery system in determining whether to provide coverage to 13 27 a small employer shall be applied uniformly among all small 13 28 employers applying for coverage or receiving coverage from the 13 29 carrier or organized delivery system. 13 30 (2) In applying minimum participation requirements with 13 31 respect to a small employer, a carrier or organized delivery 13 32 system shall not consider employees or dependents who have 13 33 other creditable coverage in determining whether the 13 34 applicable percentage of participation is met. 13 35 (3) A carrier or organized delivery system shall not 14 1 increase any requirement for minimum employee participation or 14 2 modify any requirement for minimum employer contribution 14 3 applicable to a small employer at any time after the small 14 4 employer has been accepted for coverage. 14 5 f. (1) If a carrier or organized delivery system offers 14 6 coverage to a small employer, the carrier or organized 14 7 delivery system shall offer coverage to all eligible employees 14 8 of the small employer and the employees' dependents. A 14 9 carrier or organized delivery system shall not offer coverage 14 10 to only certain individuals or dependents in a small employer 14 11 group or to only part of the group. 14 12 (2) Except as provided under paragraphs "a" and "d", a 14 13 carrier or organized delivery system shall not modify health 14 14 insurance coverage with respect to a small employer or any 14 15 eligible employee or dependent through riders, endorsements, 14 16 or other means, to restrict or exclude coverage or benefits 14 17 for certain diseases, medical conditions, or services 14 18 otherwise covered by the health insurance coverage. 14 19 g. A carrier or organized delivery system offering 14 20 coverage through a network plan shall not be required to offer 14 21 coverage or accept applications pursuant to subsection 1 with 14 22 respect to a small employer where any of the following apply: 14 23 (1) The small employer does not have eligible individuals 14 24 who live, work, or reside in the service area for the network 14 25 plan. 14 26 (2) The small employer does have eligible individuals who 14 27 live, work, or reside in the service area for the network 14 28 plan, but the carrier or organized delivery system, if 14 29 required, has demonstrated to the commissioner or the director 14 30 of public health that it will not have the capacity to deliver 14 31 services adequately to enrollees of any additional groups 14 32 because of its obligations to existing group contract holders 14 33 and enrollees and that it is applying the requirements of this 14 34 lettered paragraph uniformly to all employers without regard 14 35 to the claims experience of those employers and their 15 1 employees and the employees' dependents, or any health status- 15 2 related factor relating to such employees and dependents. 15 3 (3) A carrier or organized delivery system, upon denying 15 4 health insurance coverage in a service area pursuant to 15 5 subparagraph (2), shall not offer coverage in the small 15 6 employer market within such service area for a period of one 15 7 hundred eighty days after the coverage is denied. 15 8 5. A carrier or organized delivery system shall not be 15 9 required to offer coverage to small employers pursuant to 15 10 subsection 1 for any period of time where the commissioner or 15 11 director of public health determines that the acceptance of 15 12 the offers by small employers in accordance with subsection 1 15 13 would place the carrier or organized delivery system in a 15 14 financially impaired condition. 15 15 6. A carrier or organized delivery system shall not be 15 16 required to provide coverage to small employers pursuant to 15 17 subsection 1 if the carrier or organized delivery system 15 18 elects not to offer new coverage to small employers in this 15 19 state. However, a carrier or organized delivery system that 15 20 elects not to offer new coverage to small employers under this 15 21 subsection shall be allowed to maintain its existing policies 15 22 in the state, subject to the requirements of section 513B.5. 15 23 7. A carrier or organized delivery system that elects not 15 24 to offer new coverage to small employers pursuant to 15 25 subsection 6 shall provide notice to the commissioner or 15 26 director of public health and is prohibited from writing new 15 27 business in the small employer market in this state for a 15 28 period of five years from the date of notice to the 15 29 commissioner or director. 15 30 Sec. 12. Section 513B.17, subsection 3, Code 1997, is 15 31 amended to read as follows: 15 32 3. The commissioner may adopt, by rule or order, 15 33 transition provisions to facilitatethe orderly and15 34coordinated implementation of 1992 Iowa Acts, chapter 1167the 15 35 implementation and administration of this chapter. 16 1 Sec. 13. Section 513C.6, Code 1997, is amended by striking 16 2 the section and inserting in lieu thereof the following: 16 3 513C.6 PROVISIONS ON RENEWABILITY OF COVERAGE. 16 4 1. An individual health benefit plan subject to this 16 5 chapter is renewable with respect to an eligible individual or 16 6 dependents, at the option of the individual, except for one or 16 7 more of the following reasons: 16 8 a. The individual fails to pay, or to make timely payment 16 9 of, premiums or contributions pursuant to the terms of the 16 10 individual health benefit plan. 16 11 b. The individual performs an act or practice constituting 16 12 fraud or makes an intentional misrepresentation of a material 16 13 fact under the terms of the individual health benefit plan. 16 14 c. A decision by the individual carrier or organized 16 15 delivery system to discontinue offering a particular type of 16 16 individual health benefit plan in the state's individual 16 17 insurance market. An individual health benefit plan may be 16 18 discontinued by the carrier or organized delivery system in 16 19 that market with the approval of the commissioner or the 16 20 director and only if the carrier or organized delivery system 16 21 does all of the following: 16 22 (1) Provides advance notice of its decision to discontinue 16 23 such plan to the commissioner or director. Notice to the 16 24 commissioner or director, at a minimum, shall be no less than 16 25 three days prior to the notice provided for in subparagraph 16 26 (2) to affected individuals. 16 27 (2) Provides notice of its decision not to renew such plan 16 28 to all affected individuals no less than ninety days prior to 16 29 the nonrenewal date of any discontinued individual health 16 30 benefit plans. 16 31 (3) Offers to each individual of the discontinued plan the 16 32 option to purchase any other health plan currently offered by 16 33 the carrier or organized delivery system to individuals in 16 34 this state. 16 35 (4) Acts uniformly in opting to discontinue the plan and 17 1 in offering the option under subparagraph (3), without regard 17 2 to the claims experience of any affected eligible individual 17 3 or beneficiary under the discontinued plan or to a health 17 4 status-related factor relating to any covered individuals or 17 5 beneficiaries who may become eligible for the coverage. 17 6 d. A decision by the carrier or organized delivery system 17 7 to discontinue offering and to cease to renew all of its 17 8 individual health benefit plans delivered or issued for 17 9 delivery to individuals in this state. A carrier or organized 17 10 delivery system making such decision shall do all of the 17 11 following: 17 12 (1) Provide advance notice of its decision to discontinue 17 13 such plan to the commissioner or director. Notice to the 17 14 commissioner or director, at a minimum, shall be no less than 17 15 three days prior to the notice provided for in subparagraph 17 16 (2) to affected individuals. 17 17 (2) Provide notice of its decision not to renew such plan 17 18 to all individuals and to the commissioner or director in each 17 19 state in which an individual under the discontinued plan is 17 20 known to reside no less than one hundred eighty days prior to 17 21 the nonrenewal of the plan. 17 22 e. The commissioner or director finds that the 17 23 continuation of the coverage is not in the best interests of 17 24 the individuals, or would impair the carrier's or organized 17 25 delivery system's ability to meet its contractual obligations. 17 26 2. At the time of coverage renewal, a carrier or organized 17 27 delivery system may modify the health insurance coverage for a 17 28 policy form offered to individuals in the individual market so 17 29 long as such modification is consistent with state law and 17 30 effective on a uniform basis among all individuals with that 17 31 policy form. 17 32 3. An individual carrier or organized delivery system that 17 33 elects not to renew an individual health benefit plan under 17 34 subsection 1, paragraph "d", shall not write any new business 17 35 in the individual market in this state for a period of five 18 1 years after the date of notice to the commissioner or 18 2 director. 18 3 4. This section, with respect to a carrier or organized 18 4 delivery system doing business in one established geographic 18 5 service area of the state, applies only to such carrier's or 18 6 organized delivery system's operations in that service area. 18 7 5. A carrier or organized delivery system offering 18 8 coverage through a network plan is not required to renew or 18 9 continue in force coverage or to accept applications from an 18 10 individual who no longer resides or lives in, or is no longer 18 11 employed in, the service area of such carrier or organized 18 12 delivery system, or no longer resides or lives in, or is no 18 13 longer employed in, a service area for which the carrier is 18 14 authorized to do business, but only if coverage is not offered 18 15 or terminated uniformly without regard to health status- 18 16 related factors of a covered individual. 18 17 Sec. 14. Section 513C.7, subsection 1, paragraph b, Code 18 18 1997, is amended to read as follows: 18 19 b. An eligible individual who does not apply for a basic 18 20 or standard health benefit plan withinthirtysixty-three days 18 21 of a qualifying event or withinthirtysixty-three days upon 18 22 becoming ineligible for qualifying existing coverage. 18 23 Sec. 15. Section 513C.7, subsection 2, Code 1997, is 18 24 amended to read as follows: 18 25 2. A carrier or an organized delivery system shall issue 18 26 the basic or standard health benefit plan to an individual 18 27 currently covered by an underwritten benefit plan issued by 18 28 that carrier or an organized delivery system at the option of 18 29 the individual. This option must be exercised withinthirty18 30 sixty-three days of notification of a premium rate increase 18 31 applicable to the underwritten benefit plan. 18 32 Sec. 16. Section 513C.7, subsection 4, paragraph b, Code 18 33 1997, is amended to read as follows: 18 34 b. A carrier or an organized delivery system shall waive 18 35 any time period applicable to a preexisting condition 19 1 exclusion or limitation period with respect to particular 19 2 services in an individual health benefit plan for the period 19 3 of time an individual was previously covered by qualifying 19 4 previous coverage that provided benefits with respect to such 19 5 services, provided that the qualifying previous coverage was 19 6 continuous to a date not more thanthirtysixty-three days 19 7 prior to the effective date of the new coverage. 19 8 Sec. 17. NEW SECTION. 513C.12 COMMISSIONER'S DUTIES. 19 9 The commissioner shall adopt rules administering this 19 10 chapter. 19 11 Sec. 18. Section 514E.1, Code 1997, is amended by adding 19 12 the following new subsections: 19 13 NEW SUBSECTION. 3A. "Church plan" means as the same 19 14 defined in the federal Employee Retirement Income Security Act 19 15 of 1974, 29 U.S.C. } 3(33). 19 16 NEW SUBSECTION. 4A. "Creditable coverage" means health 19 17 benefits or coverage provided to an individual under any of 19 18 the following: 19 19 a. A group health plan. 19 20 b. Health insurance coverage. 19 21 c. Part A or Part B Medicare pursuant to Title XVIII of 19 22 the federal Social Security Act. 19 23 d. Medicaid pursuant to Title XIX of the federal Social 19 24 Security Act, other than coverage consisting solely of 19 25 benefits under section 1928 of that Act. 19 26 e. 10 U.S.C. ch. 55. 19 27 f. A health or medical care program provided through the 19 28 Indian health service or a tribal organization. 19 29 g. A state health benefits risk pool. 19 30 h. A health plan offered under 5 U.S.C. ch. 89. 19 31 i. A public health plan as defined under federal 19 32 regulations. 19 33 j. A health benefit plan under section 5(e) of the federal 19 34 Peace Corps Act, 22 U.S.C. } 2504(e). 19 35 k. An organized delivery system licensed by the director 20 1 of public health. 20 2 NEW SUBSECTION. 4B. "Director" means the director of 20 3 public health. 20 4 NEW SUBSECTION. 5A. "Federally eligible individual" means 20 5 an individual who satisfies any of the following: 20 6 a. For whom, as of the date on which the individual seeks 20 7 coverage under this chapter, the aggregate of the periods of 20 8 creditable coverage is eighteen or more months with no more 20 9 than a sixty-three day lapse of coverage, and whose most 20 10 recent prior creditable coverage was under a group health 20 11 plan, governmental plan, or church plan, or health insurance 20 12 coverage offered in connection with any such plan. 20 13 b. Who is not eligible for coverage under a group health 20 14 plan, Part A or Part B of Title XVIII of the federal Social 20 15 Security Act, or a state plan under Title XIX of that Act, or 20 16 any successor program, and does not have other health 20 17 insurance coverage. 20 18 c. With respect to whom the most recent coverage within 20 19 the coverage period described in paragraph "a" was not 20 20 terminated based on a nonpayment of premiums or fraud. 20 21 d. If the individual had been offered the option of 20 22 continuation coverage under a COBRA continuation provision or 20 23 under a similar state program, and elected such coverage. 20 24 e. Who, if the individual elected continuation coverage as 20 25 provided in paragraph "d", has exhausted the continuation 20 26 coverage under the provision or program. 20 27 NEW SUBSECTION. 5B. "Governmental plan" means as defined 20 28 under section 3(32) of the federal Employee Retirement Income 20 29 Security Act of 1974 and any federal governmental plan. 20 30 NEW SUBSECTION. 5C. a. "Group health plan" means an 20 31 employee welfare benefit plan as defined in section 3(1) of 20 32 the federal Employee Retirement Income Security Act of 1974, 20 33 to the extent that the plan provides medical care including 20 34 items and services paid for as medical care to employees or 20 35 their dependents as defined under the terms of the plan 21 1 directly or through insurance, reimbursement, or otherwise. 21 2 b. For purposes of this subsection, "medical care" means 21 3 amounts paid for any of the following: 21 4 (1) The diagnosis, cure, mitigation, treatment, or 21 5 prevention of disease, or amounts paid for the purpose of 21 6 affecting a structure or function of the body. 21 7 (2) Transportation primarily for and essential to medical 21 8 care referred to in subparagraph (1). 21 9 (3) Insurance covering medical care referred to in 21 10 subparagraph (1) or (2). 21 11 c. For purposes of this chapter, the following apply: 21 12 (1) A plan, fund, or program established or maintained by 21 13 a partnership which, but for this subsection, would not be an 21 14 employee welfare benefit plan, shall be treated as an employee 21 15 welfare benefit plan which is a group health plan to the 21 16 extent that the plan, fund, or program provides medical care, 21 17 including items and services paid for as medical care for 21 18 present or former partners in the partnership or to the 21 19 dependents of such partners, as defined under the terms of the 21 20 plan, fund, or program, either directly or through insurance, 21 21 reimbursement, or otherwise. 21 22 (2) With respect to a group health plan, the term 21 23 "employer" includes a partnership with respect to a partner. 21 24 (3) With respect to a group health plan, the term 21 25 participant includes the following: 21 26 (a) With respect to a group health plan maintained by a 21 27 partnership, an individual who is a partner in the 21 28 partnership. 21 29 (b) With respect to a group health plan maintained by a 21 30 self-employed individual under which one or more of the self- 21 31 employed individual's employees are participants, the self- 21 32 employed individual, if that individual is, or may become, 21 33 eligible to receive benefits under the plan or the 21 34 individual's dependents may be eligible to receive benefits 21 35 under the plan. 22 1 NEW SUBSECTION. 8A. a. "Health insurance coverage" means 22 2 health insurance coverage offered to individuals in the 22 3 individual market, but does not include short-term limited 22 4 duration insurance. 22 5 b. "Individual health insurance coverage" does not include 22 6 any of the following: 22 7 (1) Coverage for accident-only, or disability income 22 8 insurance. 22 9 (2) Coverage issued as a supplement to liability 22 10 insurance. 22 11 (3) Liability insurance, including general liability 22 12 insurance and automobile liability insurance. 22 13 (4) Workers' compensation or similar insurance. 22 14 (5) Automobile medical-payment insurance. 22 15 (6) Credit-only insurance. 22 16 (7) Coverage for on-site medical clinic care. 22 17 (8) Other similar insurance coverage, specified in federal 22 18 regulations, under which benefits for medical care are 22 19 secondary or incidental to other insurance coverage or 22 20 benefits. 22 21 c. "Individual health insurance coverage" does not include 22 22 benefits provided under a separate policy as follows: 22 23 (1) Limited-scope dental or vision benefits. 22 24 (2) Benefits for long-term care, nursing home care, home 22 25 health care, or community-based care. 22 26 (3) Any other similar limited benefits as provided by rule 22 27 of the commissioner. 22 28 d. "Individual health insurance coverage" does not include 22 29 benefits offered as independent noncoordinated benefits as 22 30 follows: 22 31 (1) Coverage only for a specified disease or illness. 22 32 (2) A hospital indemnity or other fixed indemnity 22 33 insurance. 22 34 e. "Individual health insurance coverage" does not include 22 35 Medicare supplemental health insurance as defined under 23 1 section 1882(g)(1) of the federal Social Security Act, 23 2 coverage supplemental to the coverage provided under 10 U.S.C. 23 3 ch. 55 and similar supplemental coverage provided to coverage 23 4 under group health insurance coverage. 23 5 NEW SUBSECTION. 10A. "Involuntary termination" includes, 23 6 but is not limited to, termination of coverage when a 23 7 conversion policy is not available or where benefits under a 23 8 state or federal law providing for continuation of coverage 23 9 upon termination of employment will cease or have ceased. 23 10 NEW SUBSECTION. 12A. "Organized delivery system" means an 23 11 organized delivery system as licensed by the director of the 23 12 department of public health. 23 13 NEW SUBSECTION. 15. "Preexisting condition exclusion", 23 14 with respect to coverage, means a limitation or exclusion of 23 15 benefits relating to a condition based on the fact that the 23 16 condition was present before the date of enrollment for such 23 17 coverage, whether or not any medical advice, diagnosis, care, 23 18 or treatment was recommended or received before such date. 23 19 Sec. 19. Section 514E.1, subsection 9, Code 1997, is 23 20 amended by striking the subsection. 23 21 Sec. 20. Section 514E.2, subsection 1, Code 1997, is 23 22 amended to read as follows: 23 23 1. There is established a nonprofit corporation known as 23 24 the Iowa comprehensive health insurance association which 23 25 shall assure that health insurance, as limited by sections 23 26 514E.4 and 514E.5, is made available to each eligible Iowa 23 27 resident and each federally eligible individual applying to 23 28 the association for coverage. All carriers as defined in 23 29 section 514E.1, subsection 3, and all organized delivery 23 30 systems licensed by the director of public health providing 23 31 health insurance or health care services in Iowa shall be 23 32 members of the association. The association shall operate 23 33 under a plan of operation established and approved under 23 34 subsection 3 and shall exercise its powers through a board of 23 35 directors established under this section. 24 1 Sec. 21. Section 514E.2, subsection 12, Code 1997, is 24 2 amended by striking the subsection. 24 3 Sec. 22. Section 514E.6, subsection 3, paragraph e, Code 24 4 1997, is amended by striking the paragraph and inserting in 24 5 lieu thereof the following: 24 6 e. An amount as determined by the association for any 24 7 other association policy offered. 24 8 Sec. 23. Section 514E.6, subsection 6, Code 1997, is 24 9 amended by striking the subsection and inserting in lieu 24 10 thereof the following: 24 11 6. The association, in addition to other policies, shall 24 12 offer one which is comparable to the standard health benefit 24 13 plan as defined in section 513B.2. 24 14 Sec. 24. Section 514E.7, subsections 1, 2, and 5, Code 24 15 1997, are amended by striking the subsections and inserting in 24 16 lieu thereof the following: 24 17 1. An individual who is and continues to be a resident is 24 18 eligible for plan coverage if evidence is provided of any of 24 19 the following: 24 20 a. A notice of rejection or refusal to issue substantially 24 21 similar insurance for health reasons by one carrier. 24 22 b. A refusal by a carrier to issue insurance except at a 24 23 rate exceeding the plan rate. 24 24 c. That the individual is a federally defined eligible 24 25 individual. 24 26 A rejection or refusal by a carrier offering only stoploss, 24 27 excess of loss, or reinsurance coverage with respect to an 24 28 applicant under paragraphs "a" and "b" is not sufficient 24 29 evidence for purposes of this subsection. 24 30 5. a. A preexisting condition exclusion shall not apply 24 31 to a federally defined eligible individual. 24 32 b. Plan coverage shall not impose any preexisting 24 33 condition as follows: 24 34 (1) In the case of a child who is adopted or placed for 24 35 adoption before attaining eighteen years of age and who, as of 25 1 the last day of the thirty-day period beginning on the date of 25 2 the adoption or placement for adoption, is covered under 25 3 creditable coverage. This subparagraph shall not apply to 25 4 coverage before the date of such adoption or placement for 25 5 adoption. 25 6 (2) In the case of an individual who, as of the last day 25 7 of the thirty-day period beginning with the date of birth, is 25 8 covered under creditable coverage. 25 9 (3) Relating to pregnancy as a preexisting condition. 25 10 c. Plan coverage shall exclude charges or expenses 25 11 incurred during the first six months following the effective 25 12 date of coverage for preexisting conditions. Such preexisting 25 13 condition exclusions shall be waived to the extent that 25 14 similar exclusions, if any, have been satisfied under any 25 15 prior health insurance coverage which was involuntarily 25 16 terminated, provided both of the following apply: 25 17 (1) Application for association coverage is made no later 25 18 than sixty-three days following such involuntary termination 25 19 and, in such case, coverage under the plan is effective from 25 20 the date on which such prior coverage was terminated. 25 21 (2) The applicant is not eligible for continuation or 25 22 conversion rights that would provide coverage substantially 25 23 similar to plan coverage. 25 24 d. This subsection does not prohibit preexisting 25 25 conditions coverage in an association policy that is more 25 26 favorable to the insured than that specified in this 25 27 subsection. 25 28 If the association policy contains a waiting period for 25 29 preexisting conditions, an insured may retain any existing 25 30 coverage the insured has under an insurance plan that has 25 31 coverage equivalent to the association policy for the duration 25 32 of the waiting period only. 25 33 Sec. 25. Section 514E.7, subsection 6, Code 1997, is 25 34 amended to read as follows: 25 35 6. An individual is not eligible for coverage by the 26 1 association if any of the following apply: 26 2 a. The individual is at the time of application eligible 26 3 for health care benefits under chapter 249A. 26 4 b. The individual has terminated coverage by the 26 5 association within the past twelve months, except that this 26 6 paragraph does not apply to an applicant who is a federally 26 7 eligible individual. 26 8 c. The individual is an inmate of a public institutionor26 9is eligible for public programs for which medical care is26 10provided, except that this paragraph does not apply to an 26 11 applicant who is a federally defined eligible individual. 26 12 d. The individual premiums are paid for or reimbursed 26 13 under any government sponsored program or by any government 26 14 agency or health care provider, except as an otherwise 26 15 qualifying full-time employee, or dependent of the employee, 26 16 of a government agency or health care provider. 26 17 e. The individual, on the effective date of the coverage 26 18 applied for, has not been rejected for, already has, or will 26 19 have coverage similar to an association policy as an insured 26 20 or covered dependent. This paragraph does not apply to an 26 21 applicant who is a federally eligible individual. 26 22 Sec. 26. Section 514E.9, Code 1997, is amended to read as 26 23 follows: 26 24 514E.9 RULES. 26 25 Pursuant to chapter 17A, the commissioner and the director 26 26 of public health shall adopt rules to provide for disclosure 26 27 by carriers and organized delivery systems of the availability 26 28 of insurance coverage from the association, and to otherwise 26 29 implement this chapter. 26 30 Sec. 27. Section 514E.11, Code 1997, is amended to read as 26 31 follows: 26 32 514E.11 NOTICE OF ASSOCIATION POLICY. 26 33Commencing July 1, 1986, everyEvery carrier, including a 26 34 health maintenance organization subject to chapter 514B and an 26 35 organized delivery system, authorized to provide health care 27 1 insurance or coverage for health care services in Iowa, shall 27 2 provide a noticeand an application forof the availability of 27 3 coverage by the association to any person who receives a 27 4 rejection of coverage for health insurance or health care 27 5 services, or a notice to any person who is informed that a 27 6 rate for health insurance or coverage for health care services 27 7 will exceed the rate of an association policy,that effective27 8January 1, 1987,that person is eligible to apply for health 27 9 insurance provided by the association. Application for the 27 10 health insurance shall be on forms prescribed by the board and 27 11 made available to the carriers and organized delivery systems. 27 12 Sec. 28. Section 514E.3, Code 1997, is repealed. 27 13 EXPLANATION 27 14 This bill enacts changes required as a result of passage of 27 15 the federal Health Insurance Portability and Accountability 27 16 Act, which was enacted in 1996 and provides for continuity of 27 17 coverage between self-funded plans and insured health care 27 18 plans. Provisions of Code chapters 509, 513B, 513C, and 514E 27 19 are amended. 27 20 The bill amends Code section 509.3 to authorize the 27 21 commissioner to adopt rules to conform the group health 27 22 insurance statute, Code chapter 509, to the health care 27 23 requirements of the federal law. 27 24 The bill creates new definitions in Code chapter 513B, 27 25 small group coverage, for key terms used, including "health 27 26 insurance coverage", "group health insurance coverage", 27 27 "creditable coverage", "group health plan", and "preexisting 27 28 conditions exclusion". The bill amends several definitions, 27 29 including the definitions of "carrier", "eligible employee", 27 30 and "late enrollee". 27 31 The bill extends the time period a person may go without 27 32 coverage and still be eligible upon application for subsequent 27 33 coverage from 30 days to 63 days. 27 34 The bill provides that a small group policy is guaranteed 27 35 renewable with certain exceptions for nonpayment of premium, 28 1 fraud, noncompliance, or discontinuance of the plan or all 28 2 small group plans. The bill provides that all small group 28 3 policies will be guaranteed issue. 28 4 The bill amends provisions of Code chapter 513C, individual 28 5 health insurance market reform. The bill extends the time 28 6 which an eligible individual may go without coverage and still 28 7 be eligible for coverage from 30 days to 63 days. The bill 28 8 provides for the termination of a government health benefit 28 9 plan to be a qualifying event for portability to the 28 10 individual health care market. The bill amends provisions 28 11 relating to the renewability of health care coverage. 28 12 LSB 1335DP 77 28 13 mj/jj/8
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