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H0812......................................................by STATE AFFAIRS
HEALTH INSURANCE - REINSURANCE POOL - Amends existing law relating to
Idaho's reinsurance pool law to provide that health benefit plans covering
eligible individuals shall comply with certain provisions; to revise
language regarding waiving any time period applicable to a preexisting
condition; and to incorporate a portion of the Federal Health Insurance
Portability and Accountability Act of 1996.
03/04 House intro - 1st rdg - to printing
03/05 Rpt prt - to Bus
03/10 Rpt out - rec d/p - to 2nd rdg
03/11 2nd rdg - to 3rd rdg
03/12 3rd rdg - PASSED - 64-0-6
AYES -- Andersen, Barraclough, Barrett, Bauer, Bayer, Bedke, Black,
Block, Boe, Bolz, Campbell, Cannon, Clark, Collins, Crow, Cuddy,
Deal, Denney, Douglas, Eberle, Edmunson, Ellsworth, Eskridge,
Field(18), Field(23), Gagner, Garrett, Harwood, Jaquet, Jones,
Kellogg, Kulczyk, Lake, Langford, Langhorst, Martinez, McKague,
Meyer, Miller, Mitchell, Moyle, Naccarato, Nielsen, Pasley-Stuart,
Raybould, Ridinger, Ring, Ringo, Roberts, Robison, Rydalch, Sali,
Sayler, Schaefer, Shepherd, Skippen, Smith(30), Smith(24), Smylie,
Snodgrass, Trail, Wills, Wood, Mr. Speaker
NAYS -- None
Absent and excused -- Bell, Bradford, Henbest, McGeachin, Shirley,
Stevenson
Floor Sponsor - Deal
Title apvd - to Senate
03/15 Senate intro - 1st rdg - to Com/HuRes
03/17 Rpt out - rec d/p - to 2nd rdg
03/18 2nd rdg - to 3rd rdg
03/19 3rd rdg - PASSED - 35-0-0
AYES -- Andreason, Bailey, Brandt, Bunderson, Burkett(Maxand),
Burtenshaw, Calabretta, Cameron, Compton, Darrington, Davis, Gannon,
Geddes, Goedde, Hill, Ingram, Kennedy, Keough, Little, Lodge,
Malepeai, Marley, McKenzie, McWilliams, Noble, Noh, Pearce,
Richardson, Schroeder, Sorensen, Stegner, Stennett, Sweet, Werk,
Williams
NAYS -- None
Absent and excused -- None
Floor Sponsor - Cameron
Title apvd - to House
03/20 To enrol - Rpt enrol - Sp signed - Pres signed
03/22 To Governor
03/23 Governor signed
Session Law Chapter 285
Effective: 07/01/04
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]]
Fifty-seventh Legislature Second Regular Session - 2004
IN THE HOUSE OF REPRESENTATIVES
HOUSE BILL NO. 812
BY STATE AFFAIRS COMMITTEE
1 AN ACT
2 RELATING TO HEALTH INSURANCE; AMENDING SECTION 41-5203, IDAHO CODE, TO FURTHER
3 DEFINE TERMS AND TO PROVIDE A CORRECT CODE REFERENCE; AMENDING SECTION
4 41-5208, IDAHO CODE, TO PROVIDE THAT HEALTH BENEFIT PLANS COVERING ELIGI-
5 BLE INDIVIDUALS SHALL COMPLY WITH CERTAIN PROVISIONS, TO REVISE LANGUAGE
6 REGARDING WAIVING ANY TIME PERIOD APPLICABLE TO A PREEXISTING CONDITION
7 EXCLUSION OR LIMITATION PERIOD AND TO INCORPORATE A PORTION OF THE FEDERAL
8 HEALTH INSURANCE PORTABILITY AND ACCOUNTABILITY ACT OF 1996; AMENDING SEC-
9 TION 41-5501, IDAHO CODE, TO FURTHER DEFINE TERMS AND TO PROVIDE A CORRECT
10 CODE REFERENCE; AND AMENDING SECTION 41-5510, IDAHO CODE, TO REVISE ELIGI-
11 BILITY CRITERIA FOR COVERAGE UNDER A POOL PLAN.
12 Be It Enacted by the Legislature of the State of Idaho:
13 SECTION 1. That Section 41-5203, Idaho Code, be, and the same is hereby
14 amended to read as follows:
15 41-5203. DEFINITIONS. As used in this chapter:
16 (1) "Actuarial certification" means a written statement by a member of
17 the American academy of actuaries or other individual acceptable to the direc-
18 tor that an individual carrier is in compliance with the provisions of section
19 41-5206, Idaho Code, based upon the person's examination and including a
20 review of the appropriate records and the actuarial assumptions and methods
21 used by the individual carrier in establishing premium rates for applicable
22 health benefit plans.
23 (2) "Affiliate" or "affiliated" means any entity or person who directly
24 or indirectly through one (1) or more intermediaries, controls or is con-
25 trolled by, or is under common control with, a specified entity or person.
26 (3) "Agent" means a producer as defined in section 41-1003(98), Idaho
27 Code.
28 (4) "Base premium rate" means, as to a rating period, the lowest premium
29 rate charged or that could have been charged under a rating system by the
30 individual carrier to individuals with similar case characteristics for health
31 benefit plans with the same or similar coverage.
32 (5) "Carrier" means any entity that provides health insurance in this
33 state. For purposes of this chapter, carrier includes an insurance company, a
34 hospital or professional service corporation, a fraternal benefit society, a
35 health maintenance organization, any entity providing health insurance cover-
36 age or benefits to residents of this state as certificate holders under a
37 group policy issued or delivered outside of this state, and any other entity
38 providing a plan of health insurance or health benefits subject to state
39 insurance regulation.
40 (6) "Case characteristics" means demographic or other objective charac-
41 teristics of an individual that are considered by the individual carrier in
42 the determination of premium rates for the individual, provided that claim
43 experience, health status and duration of coverage shall not be case charac-
2
1 teristics for the purposes of this chapter.
2 (7) "Control" shall be defined in the same manner as in section
3 41-3801(2), Idaho Code.
4 (8) "Dependent" means a spouse, an unmarried child under the age of nine-
5 teen (19) years, an unmarried child who is a full-time student under the age
6 of twenty-three (23) years and who is financially dependent upon the parent,
7 and an unmarried child of any age who is medically certified as disabled and
8 dependent upon the parent.
9 (9) "Director" means the director of the department of insurance of the
10 state of Idaho.
11 (10) "Eligible individual" means an Idaho resident individual or dependent
12 of an Idaho resident:
13 (a) Wwho is under the age of sixty-five (65) years, is not eligible for
14 coverage under a group health plan, part A or part B of title XVIII of the
15 social security act (medicare), or a state plan under title XIX (medicaid)
16 or any successor program, and who does not have other health insurance
17 coverage; or
18 (b) Who is a federally eligible individual (one who meets the eligibility
19 criteria set forth in the federal health insurance portability and
20 accountability act of 1996 Public Law 104-191, Sec. 2741(b)(HIPAA)).
21 An "eligible individual" can be the dependent of an eligible employee, which
22 eligible employee is receiving health insurance benefits subject to the regu-
23 lation of title 41, Idaho Code.
24 (11) "Established geographic service area" means a geographic area, as
25 approved by the director and based on the carrier's certificate of authority
26 to transact insurance in this state, within which the carrier is authorized to
27 provide coverage.
28 (12) "Health benefit plan" means any hospital or medical policy or certif-
29 icate, any subscriber contract provided by a hospital or professional service
30 corporation, or health maintenance organization subscriber contract. Health
31 benefit plan does not include policies or certificates of insurance for spe-
32 cific disease, hospital confinement indemnity, accident-only, credit, dental,
33 vision, medicare supplement, long-term care, or disability income insurance,
34 student health benefits only, coverage issued as a supplement to liability
35 insurance, worker's compensation or similar insurance, automobile medical pay-
36 ment insurance, or nonrenewable short-term coverage issued for a period of
37 twelve (12) months or less.
38 (13) "Index rate" means, as to a rating period for individuals with simi-
39 lar case characteristics, the arithmetic average of the applicable base pre-
40 mium rate and the corresponding highest premium rate.
41 (14) "Individual basic health benefit plan" means a lower cost health ben-
42 efit plan developed pursuant to chapter 55, title 41, Idaho Code.
43 (15) "Individual catastrophic A health benefit plan" means a higher limit
44 health benefit plan developed pursuant to chapter 55, title 41, Idaho Code.
45 (16) "Individual catastrophic B health benefit plan" means a health bene-
46 fit plan with limits higher than an individual catastrophic A health benefit
47 plan developed pursuant to chapter 55, title 41, Idaho Code.
48 (17) "Individual standard health benefit plan" means a health benefit plan
49 developed pursuant to chapter 55, title 41, Idaho Code.
50 (18) "New business premium rate" means, as to a rating period, the lowest
51 premium rate charged or offered or which could have been charged or offered by
52 the individual carrier to individuals with similar case characteristics for
53 newly issued health benefit plans with the same or similar coverage.
54 (19) "Premium" means all moneys paid by an individual and eligible depend-
55 ents as a condition of receiving coverage from a carrier, including any fees
3
1 or other contributions associated with the health benefit plan.
2 (20) "Qualifying previous coverage" and "qualifying existing coverage"
3 mean benefits or coverage provided under:
4 (a) Medicare or medicaid, civilian health and medical program for
5 uniformed services (CHAMPUS), the Indian health service program, a state
6 health benefit risk pool, or any other similar publicly sponsored program;
7 or
8 (b) Any group or individual health insurance policy or health benefit
9 arrangement whether or not subject to the state insurance laws, including
10 coverage provided by a managed care organization, hospital or professional
11 service corporation, or a fraternal benefit society, that provides bene-
12 fits similar to or exceeding benefits provided under the basic health ben-
13 efit plan.
14 (21) "Rating period" means the calendar period for which premium rates
15 established by a carrier are assumed to be in effect.
16 (22) "Reinsuring carrier" means a carrier participating in the Idaho indi-
17 vidual high risk reinsurance pool established in chapter 55, title 41, Idaho
18 Code.
19 (23) "Restricted network provision" means any provision of a health bene-
20 fit plan that conditions the payment of benefits, in whole or in part, on the
21 use of health care providers that have entered into a contractual arrangement
22 with the carrier to provide health care services to covered individuals.
23 (24) "Risk-assuming carrier" means a carrier whose application is approved
24 by the director pursuant to section 41-5210, Idaho Code.
25 (25) "Individual carrier" means a carrier that offers health benefit plans
26 covering eligible individuals and their dependents.
27 SECTION 2. That Section 41-5208, Idaho Code, be, and the same is hereby
28 amended to read as follows:
29 41-5208. AVAILABILITY OF COVERAGE -- PREEXISTING CONDITIONS -- PORTABIL-
30 ITY.
31 (1) (a) Every individual carrier shall, as a condition of offering health
32 benefit plans in this state to individuals, actively offer health benefit
33 plans to individuals, including the individual basic health benefit plan,
34 the individual standard health benefit plan, the individual catastrophic A
35 health benefit plan and the individual catastrophic B health benefit plan.
36 (b) An individual carrier shall issue an individual basic, standard, cat-
37 astrophic A or catastrophic B health benefit plan to any eligible individ-
38 ual that applies for such plan and agrees to make the required premium
39 payments and to satisfy the other reasonable provisions of the health ben-
40 efit plan not inconsistent with the provisions of this chapter.
41 (2) (a) An individual carrier shall file with the director, in a format
42 and manner prescribed by the director, the basic, standard and cata-
43 strophic health benefit plans to be used by the carrier. A health benefit
44 plan filed pursuant to the provisions of this paragraph may be used by an
45 individual carrier beginning thirty (30) days after it is filed unless the
46 director disapproves its use.
47 (b) The director at any time may, after providing notice and an opportu-
48 nity for a hearing to the individual carrier, disapprove the continued use
49 by an individual carrier of a basic, standard, or catastrophic health ben-
50 efit plan on the grounds that the plan does not meet the requirements of
51 this chapter.
52 (3) Health benefit plans covering eligible individuals shall comply with
53 the following provisions:
4
1 (a) A health benefit plan shall not deny, exclude or limit benefits for a
2 covered individual for covered expenses incurred more than twelve (12)
3 months following the effective date of the individual's coverage due to a
4 preexisting condition. A health benefit plan shall not define a preexist-
5 ing condition more restrictively than:
6 (i) A condition that would have caused an ordinarily prudent person
7 to seek medical advice, diagnosis, care or treatment during the six
8 (6) months immediately preceding the effective date of coverage;
9 (ii) A condition for which medical advice, diagnosis, care or treat-
10 ment was recommended or received during the six (6) months immedi-
11 ately preceding the effective date of coverage; or
12 (iii) A pregnancy existing on the effective date of coverage.
13 (b) A health benefit plan shall waive any time period applicable to a
14 preexisting condition exclusion or limitation period with respect to par-
15 ticular services for the period of time an individual was previously cov-
16 ered by qualifying previous coverage, to the extent such previous coverage
17 provided benefits with respect to such services, provided that the quali-
18 fying previous coverage was continuous to a date not more than sixty-three
19 (63) days prior to the effective date of the new coverage. As provided in
20 section 2741(b) of the federal health insurance portability and account-
21 ability act of 1996 (42 U.S.C. 300gg-41(b)), with regard to federally eli-
22 gible individuals under HIPAA, any limitation or exclusion of benefits
23 relating to a condition based on the fact that the condition was present
24 before the first day of coverage shall not apply, whether or not any medi-
25 cal advice, diagnosis, care or treatment was recommended or received
26 before that day, and whether or not the condition would have caused an
27 ordinarily prudent person to seek medical advice, diagnosis, care or
28 treatment before that day.
29 (c) An individual carrier shall not modify a basic, standard, or cata-
30 strophic health benefit plan with respect to an individual or any depend-
31 ent through riders, endorsements, or otherwise, to restrict or exclude
32 coverage for certain diseases or medical conditions otherwise covered by
33 the health benefit plan.
34 (4) (a) An individual carrier shall not be required to offer coverage or
35 accept applications pursuant to the provisions of subsection (1) of this
36 section in the case of the following:
37 (i) To an individual, where the individual is not residing in the
38 carrier's established geographic service area;
39 (ii) Within an area where the individual carrier reasonably antici-
40 pates, and demonstrates to the satisfaction of the director, that it
41 will not have the capacity within its established geographic service
42 area to deliver service adequately to individuals because of its
43 obligations to existing groups or individuals.
44 (b) An individual carrier that cannot offer coverage pursuant to the pro-
45 visions of subsection (4)(a)(ii) of this section may not offer coverage in
46 the applicable area to new employer groups with more than fifty (50) eli-
47 gible employees or to any small employer groups or to any individuals
48 until the later of one hundred eighty (180) days following each such
49 refusal or the date on which the carrier notifies the director that it has
50 regained capacity to deliver services to individuals and groups.
51 (5) An individual carrier shall not be required to provide coverage to
52 individuals pursuant to the provisions of subsection (1) of this section for
53 any period of time for which the director determines that requiring the accep-
54 tance of individuals in accordance with the provisions of subsection (1) of
55 this section would place the individual carrier in a financially impaired con-
5
1 dition.
2 SECTION 3. That Section 41-5501, Idaho Code, be, and the same is hereby
3 amended to read as follows:
4 41-5501. DEFINITIONS. As used in this chapter:
5 (1) "Agent" means a producer as defined in section 41-1003(98), Idaho
6 Code.
7 (2) "Board" means the board of directors of the Idaho high risk individ-
8 ual reinsurance pool established in this chapter and the Idaho small employer
9 reinsurance program established in section 41-4711, Idaho Code.
10 (3) "Carrier" means any entity that provides, or is authorized to pro-
11 vide, health insurance in this state. For purposes of this chapter, carrier
12 includes an insurance company, any other entity providing reinsurance includ-
13 ing excess or stop loss coverage, a hospital or professional service corpora-
14 tion, a fraternal benefit society, a managed care organization, any entity
15 providing health insurance coverage or benefits to residents of this state as
16 certificate holders under a group policy issued or delivered outside of this
17 state, and any other entity providing a plan of health insurance or health
18 benefits subject to state insurance regulation.
19 (4) "Dependent" means a spouse, an unmarried child under the age of nine-
20 teen (19) years, an unmarried child who is a full-time student under the age
21 of twenty-three (23) years and who is financially dependent upon the parent,
22 and an unmarried child of any age who is medically certified as disabled and
23 dependent upon the parent.
24 (5) "Director" means the director of the department of insurance of the
25 state of Idaho.
26 (6) "Eligible individual" means:
27 (a) Aan Idaho resident individual or dependent of an Idaho resident who
28 is under the age of sixty-five (65) years, is not eligible for coverage
29 under a group health plan, part A or part B of title XVIII of the social
30 security act (medicare), or a state plan under title XIX (medicaid) or any
31 successor program, and who does not have other health insurance coverage;
32 or
33 (b) An Idaho resident individual or a dependent of an Idaho resident who
34 is a federally eligible individual (one who meets the eligibility criteria
35 set forth in the federal health insurance portability and accountability
36 act of 1996 Public Law 104-191, Sec. 2741(b) (HIPAA)).
37 Coverage under a basic, standard, catastrophic A or catastrophic B health ben-
38 efit plan shall not be available to any individual who is covered under other
39 health insurance coverage. For purposes of this chapter, to be eligible, an
40 individual must also meet the requirements of section 41-5510, Idaho Code.
41 (7) "Health benefit plan" means any hospital or medical policy or certif-
42 icate, any subscriber contract provided by a hospital or professional service
43 corporation, or health maintenance organization subscriber contract. Health
44 benefit plan does not include policies or certificates of insurance for spe-
45 cific disease, hospital confinement indemnity, accident-only, credit, dental,
46 vision, medicare supplement, long-term care, or disability income insurance,
47 student health benefits only, coverage issued as a supplement to liability
48 insurance, worker's compensation or similar insurance, automobile medical pay-
49 ment insurance, or nonrenewable short-term coverage issued for a period of
50 twelve (12) months or less.
51 (8) "Individual basic health benefit plan" means a lower cost health ben-
52 efit plan developed pursuant to section 41-5511, Idaho Code.
53 (9) "Individual carrier" means a carrier that offers health benefit plans
6
1 covering eligible individuals and their dependents.
2 (10) "Individual catastrophic A health benefit plan" means a higher limit
3 health benefit plan developed pursuant to section 41-5511, Idaho Code.
4 (11) "Individual catastrophic B health benefit plan" means a health bene-
5 fit plan offering limits higher than a catastrophic A health benefit plan
6 developed pursuant to section 41-5511, Idaho Code.
7 (12) "Individual standard health benefit plan" means a health benefit plan
8 developed pursuant to section 41-5511, Idaho Code.
9 (13) "Plan" or "pool plan" means the individual basic, standard, cata-
10 strophic A or catastrophic B plan established pursuant to section 41-5511,
11 Idaho Code.
12 (14) "Plan of operation" means the plan of operation of the individual
13 high risk reinsurance pool established pursuant to this chapter.
14 (15) "Pool" means the Idaho high risk reinsurance pool.
15 (16) "Premium" means all moneys paid by an individual and eligible depend-
16 ents as a condition of receiving coverage from a carrier, including any fees
17 or other contributions associated with the health benefit plan.
18 (17) "Qualifying previous coverage" and "qualifying existing coverage"
19 mean benefits or coverage provided under:
20 (a) Medicare or medicaid, civilian health and medical program for
21 uniformed services (CHAMPUS), the Indian health service program, a state
22 health benefit risk pool, or any other similar publicly sponsored program;
23 or
24 (b) Any group or individual health insurance policy or health benefit
25 arrangement whether or not subject to the state insurance laws, including
26 coverage provided by a managed care organization, hospital or professional
27 service corporation, or a fraternal benefit society, that provides bene-
28 fits similar to or exceeding benefits provided under the basic health ben-
29 efit plan.
30 (18) "Reinsurance premium" means the premium set by the board pursuant to
31 section 41-5506, Idaho Code, to be paid by a reinsuring carrier for plans
32 issued under the pool.
33 (19) "Reinsuring carrier" means a carrier participating in the individual
34 high risk reinsurance pool established by this chapter.
35 (20) "Restricted network provision" means any provision of a health bene-
36 fit plan that conditions the payment of benefits, in whole or in part, on the
37 use of health care providers that have entered into a contractual arrangement
38 with the carrier to provide health care services to covered individuals.
39 SECTION 4. That Section 41-5510, Idaho Code, be, and the same is hereby
40 amended to read as follows:
41 41-5510. ELIGIBILITY. (1) Any individual eligible person, who is and con-
42 tinues to be a resident shall be eligible for coverage under an individual
43 basic, standard, catastrophic A or catastrophic B health benefit plan if evi-
44 dence is provided that:
45 (a) Such person has been rejected by one (1) individual carrier on the
46 basis of health status or claims experience; or
47 (b) An individual carrier refuses to issue a health benefit plan provid-
48 ing coverage substantially similar to coverage offered under an equivalent
49 pool plan except at a rate exceeding the rate for the pool plan.
50 (2) A rejection or refusal by a carrier offering only stop loss, excess
51 of loss or reinsurance coverage with respect to an applicant under subsection
52 (1) of this section shall not constitute sufficient evidence for purposes of
53 subsection (1) of this section.
7
1 (3) Each resident dependent of a person who is eligible for coverage
2 under the pool shall also be eligible for coverage under the pool.
3 (4) A person shall not be eligible for coverage under a pool plan if:
4 (a) The person has or obtains health insurance coverage substantially
5 similar to or more comprehensive than a pool plan, or would be eligible to
6 have coverage if the person elected to obtain it;
7 (b) The person is determined to be eligible for health care benefits
8 under medicaid;
9 (c) The person has previously terminated pool plan coverage unless twelve
10 (12) months have lapsed since such termination; provided however, that
11 this provision shall not apply with respect to an applicant who is a fed-
12 erally defined eligible individual;
13 (d) The person is an inmate or resident of a state or other public insti-
14 tution, or a state, local or private correctional facility; provided how-
15 ever, that this provision shall not apply with respect to an applicant who
16 is a federally defined eligible individual.
17 (5) Coverage shall cease:
18 (a) On the first day of the month following the date a person is no
19 longer a resident of this state;
20 (b) On the first day of the month following the date a person requests
21 coverage to end;
22 (c) Upon the death of the covered person;
23 (d) At the option of the board, thirty (30) days after the plan makes any
24 inquiry concerning the person's eligibility or place of residence to which
25 the person does not reply.
26 (6) A person who ceases to meet the eligibility requirements of this sec-
27 tion may be terminated on the first day of the month following the date when
28 the individual becomes ineligible.
STATEMENT OF PURPOSE
RS 14244
This bill amends provisions of Idaho law relating to individual
health insurance plans to incorporate requirements of the federal
Health Insurance Portability and Accountability Act of 1996
(HIPAA). The changes are required to assure proper identification
and treatment of federally eligible individuals.
FISCAL IMPACT
No fiscal impact
Contact
Name: Mary Hartung, Dept. of Insurance
Phone: 208/334-4250
STATEMENT OF PURPOSE/FISCAL NOTE H 812