2005 Legislation
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SENATE BILL NO. 1198 – HSA compatible health benefit plan

SENATE BILL NO. 1198

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S1198................................................by JUDICIARY AND RULES
INSURANCE - Amends existing law relating to insurance to define "individual
HSA compatible health benefit plan"; to reference catastrophic A,
catastrophic B and HSA compatible health benefit plans; and to provide that
HSA compatible health benefit plans shall provide a specified lifetime
maximum benefit per carrier with cost-sharing features that meet federal
qualifications.
                                                                        
03/14    Senate intro - 1st rdg - to printing
03/15    Rpt prt - to Com/HuRes
03/18    Rpt out - rec d/p - to 2nd rdg
03/21    2nd rdg - to 3rd rdg
03/22    3rd rdg - PASSED - 34-0-0, 1 vacancy
      AYES -- Andreason, Brandt, Broadsword, Bunderson, Burkett,
      Burtenshaw, Cameron, Coiner, Compton, Corder, Darrington, Davis,
      Gannon, Geddes, Goedde, Hill, Jorgenson, Kelly, Keough, Langhorst,
      Little, Lodge, Malepeai, Marley, McGee, McKenzie, Pearce, Richardson,
      Schroeder, Stegner, Stennett, Sweet, Werk, Williams
      NAYS -- None
      Absent and excused -- (District 21 seat vacant)
    Floor Sponsor - Cameron
    Title apvd - to House
03/23    House intro - 1st rdg - to Bus
03/30    Rpt out - rec d/p - to 2nd rdg
03/31    2nd rdg - to 3rd rdg
    Rls susp - PASSED - 69-0-1
      AYES -- Anderson, Andrus, Barraclough, Barrett, Bastian, Bayer,
      Bedke, Bell, Bilbao(Reynoldson), Black, Block, Boe, Bolz, Bradford,
      Cannon, Chadderdon, Clark, Collins, Crow, Deal, Denney, Edmunson,
      Ellsworth, Eskridge, Field(18), Field(23), Garrett, Hart, Harwood,
      Henbest, Henderson, Jaquet, Jones, Kemp, Lake, LeFavour, Loertscher,
      Martinez, Mathews, McGeachin, McKague, Miller, Mitchell, Moyle,
      Nielsen, Nonini, Pasley-Stuart, Pence, Raybould, Ring, Ringo,
      Roberts, Rusche, Rydalch, Sali, Sayler, Schaefer, Shepherd(2),
      Shepherd(8), Shirley, Smith(30), Smith(24), Smylie, Snodgrass,
      Stevenson, Trail, Wills, Wood, Mr. Speaker
      NAYS -- None
      Absent and excused -- Skippen
    Floor Sponsor - Deal
    Title apvd - to Senate
04/01    To enrol - Rpt enrol - Pres/Sp signed
04/04    To Governor
04/12    Governor signed
         Session Law Chapter 353
         Effective: 07/01/05

Bill Text


                                                                        
                                                                        
  ]]]]              LEGISLATURE OF THE STATE OF IDAHO             ]]]]
 Fifty-eighth Legislature                   First Regular Session - 2005
                                                                        
                                                                        
                                       IN THE SENATE
                                                                        
                                    SENATE BILL NO. 1198
                                                                        
                              BY JUDICIARY AND RULES COMMITTEE
                                                                        
  1                                        AN ACT
  2    RELATING TO  INSURANCE;  AMENDING  SECTION  41-5203,  IDAHO  CODE,  TO  DEFINE
  3        "INDIVIDUAL HSA COMPATIBLE HEALTH BENEFIT PLAN"; AMENDING SECTION 41-5208,
  4        IDAHO CODE, TO REFERENCE CATASTROPHIC A, CATASTROPHIC B AND HSA COMPATIBLE
  5        HEALTH  BENEFIT  PLANS; AMENDING SECTION 41-5212, IDAHO CODE, TO REFERENCE
  6        HSA COMPATIBLE HEALTH BENEFIT PLANS; AMENDING SECTION 41-5501, IDAHO CODE,
  7        TO DEFINE "INDIVIDUAL HSA COMPATIBLE HEALTH BENEFIT  PLAN,"  TO  REFERENCE
  8        HSA  COMPATIBLE  HEALTH  BENEFIT  PLANS AND TO MAKE TECHNICAL CORRECTIONS;
  9        AMENDING SECTIONS 41-5505, 41-5507, 41-5509 AND 41-5510,  IDAHO  CODE,  TO
 10        REFERENCE  HSA  COMPATIBLE HEALTH BENEFIT PLANS; AMENDING SECTION 41-5511,
 11        IDAHO CODE, TO REFERENCE HSA COMPATIBLE BENEFIT PLANS AND TO PROVIDE  THAT
 12        SUCH  PLANS SHALL PROVIDE A SPECIFIED LIFETIME MAXIMUM BENEFIT PER CARRIER
 13        WITH COST-SHARING FEATURES THAT MEET FEDERAL QUALIFICATIONS.
                                                                        
 14    Be It Enacted by the Legislature of the State of Idaho:
                                                                        
 15        SECTION 1.  That Section 41-5203, Idaho Code, be, and the same  is  hereby
 16    amended to read as follows:
                                                                        
 17        41-5203.  DEFINITIONS. As used in this chapter:
 18        (1)  "Actuarial  certification"  means  a written statement by a member of
 19    the American academy of actuaries or other individual acceptable to the direc-
 20    tor that an individual carrier is in compliance with the provisions of section
 21    41-5206, Idaho Code, based upon  the  person's  examination  and  including  a
 22    review  of  the  appropriate records and the actuarial assumptions and methods
 23    used by the individual carrier in establishing premium  rates  for  applicable
 24    health benefit plans.
 25        (2)  "Affiliate"  or  "affiliated" means any entity or person who directly
 26    or indirectly through one (1) or more  intermediaries,  controls  or  is  con-
 27    trolled by, or is under common control with, a specified entity or person.
 28        (3)  "Agent"  means  a  producer  as  defined in section 41-1003(8), Idaho
 29    Code.
 30        (4)  "Base premium rate" means, as to a rating period, the lowest  premium
 31    rate  charged  or  that  could  have been charged under a rating system by the
 32    individual carrier to individuals with similar case characteristics for health
 33    benefit plans with the same or similar coverage.
 34        (5)  "Carrier" means any entity that provides  health  insurance  in  this
 35    state.  For purposes of this chapter, carrier includes an insurance company, a
 36    hospital or professional service corporation, a fraternal benefit  society,  a
 37    health  maintenance organization, any entity providing health insurance cover-
 38    age or benefits to residents of this state  as  certificate  holders  under  a
 39    group  policy  issued or delivered outside of this state, and any other entity
 40    providing a plan of health insurance  or  health  benefits  subject  to  state
 41    insurance regulation.
 42        (6)  "Case  characteristics"  means demographic or other objective charac-
 43    teristics of an individual that are considered by the  individual  carrier  in
                                                                        
                                           2
                                                                        
  1    the  determination  of  premium  rates for the individual, provided that claim
  2    experience, health status and duration of coverage shall not be  case  charac-
  3    teristics for the purposes of this chapter.
  4        (7)  "Control"  shall  be  defined  in  the  same  manner  as  in  section
  5    41-3801(2), Idaho Code.
  6        (8)  "Dependent" means a spouse, an unmarried child under the age of nine-
  7    teen  (19)  years, an unmarried child who is a full-time student under the age
  8    of twenty-three (23) years and who is financially dependent upon  the  parent,
  9    and an  unmarried child of any  age who is medically certified as disabled and
 10    dependent upon the parent.
 11        (9)  "Director"  means  the director of the department of insurance of the
 12    state of Idaho.
 13        (10) "Eligible individual" means an Idaho resident individual or dependent
 14    of an Idaho resident:
 15        (a)  Who is under the age of sixty-five (65) years, is  not  eligible  for
 16        coverage under a group health plan, part A or part B of title XVIII of the
 17        social security act (medicare), or a state plan under title XIX (medicaid)
 18        or  any  successor  program,  and who does not have other health insurance
 19        coverage; or
 20        (b)  Who is a federally eligible individual (one who meets the eligibility
 21        criteria set  forth  in  the  federal  health  insurance  portability  and
 22        accountability act of 1996 Public Law 104-191, Sec. 2741(b)(HIPAA)).
 23    An  "eligible  individual" can be the dependent of an eligible employee, which
 24    eligible employee is receiving health insurance benefits subject to the  regu-
 25    lation of title 41, Idaho Code.
 26        (11) "Established  geographic  service  area"  means a geographic area, as
 27    approved by the director and based on the carrier's certificate  of  authority
 28    to transact insurance in this state, within which the carrier is authorized to
 29    provide coverage.
 30        (12) "Health benefit plan" means any hospital or medical policy or certif-
 31    icate,  any subscriber contract provided by a hospital or professional service
 32    corporation, or health maintenance organization  subscriber  contract.  Health
 33    benefit  plan  does not include policies or certificates of insurance for spe-
 34    cific disease, hospital confinement indemnity, accident-only, credit,  dental,
 35    vision,  medicare  supplement, long-term care, or disability income insurance,
 36    student health benefits only, coverage issued as  a  supplement  to  liability
 37    insurance, worker's compensation or similar insurance, automobile medical pay-
 38    ment  insurance,  or  nonrenewable  short-term coverage issued for a period of
 39    twelve (12) months or less.
 40        (13) "Index rate" means, as to a rating period for individuals with  simi-
 41    lar  case  characteristics, the arithmetic average of the applicable base pre-
 42    mium rate and the corresponding highest premium rate.
 43        (14) "Individual basic health benefit plan" means a lower cost health ben-
 44    efit plan developed pursuant to chapter 55, title 41, Idaho Code.
 45        (15) "Individual catastrophic A health benefit plan" means a higher  limit
 46    health benefit plan developed pursuant to chapter 55, title 41, Idaho Code.
 47        (16) "Individual  catastrophic B health benefit plan" means a health bene-
 48    fit plan with limits higher than an individual catastrophic A  health  benefit
 49    plan developed pursuant to chapter 55, title 41, Idaho Code.
 50        (17) "Individual  HSA  compatible health benefit plan" means a health sav-
 51    ings account compatible health benefit  plan  developed  pursuant  to  section
 52    41-5511, Idaho Code.
 53        (18) "Individual standard health benefit plan" means a health benefit plan
 54    developed pursuant to chapter 55, title 41, Idaho Code.
 55        (189) "New business premium rate" means, as to a rating period, the lowest
                                                                        
                                           3
                                                                        
  1    premium rate charged or offered or which could have been charged or offered by
  2    the  individual  carrier  to individuals with similar case characteristics for
  3    newly issued health benefit plans with the same or similar coverage.
  4        (1920) "Premium" means all moneys  paid  by  an  individual  and  eligible
  5    dependents  as a condition of receiving coverage from a carrier, including any
  6    fees or other contributions associated with the health benefit plan.
  7        (201) "Qualifying previous coverage" and  "qualifying  existing  coverage"
  8    mean benefits or coverage provided under:
  9        (a)  Medicare  or  medicaid,  civilian  health  and  medical  program  for
 10        uniformed  services  (CHAMPUS), the Indian health service program, a state
 11        health benefit risk pool, or any other similar publicly sponsored program;
 12        or
 13        (b)  Any group or individual health insurance  policy  or  health  benefit
 14        arrangement  whether or not subject to the state insurance laws, including
 15        coverage provided by a managed care organization, hospital or professional
 16        service corporation, or a fraternal benefit society, that  provides  bene-
 17        fits similar to or exceeding benefits provided under the basic health ben-
 18        efit plan.
 19        (212) "Rating  period"  means  the calendar period for which premium rates
 20    established by a carrier are assumed to be in effect.
 21        (223) "Reinsuring carrier" means a  carrier  participating  in  the  Idaho
 22    individual  high  risk  reinsurance  pool established in chapter 55, title 41,
 23    Idaho Code.
 24        (234) "Restricted network provision" means any provision of a health bene-
 25    fit plan that conditions the payment of benefits, in whole or in part, on  the
 26    use  of health care providers that have entered into a contractual arrangement
 27    with the carrier to provide health care services to covered individuals.
 28        (245) "Risk-assuming  carrier"  means  a  carrier  whose  application   is
 29    approved by the director pursuant to section 41-5210, Idaho Code.
 30        (256) "Individual  carrier"  means  a  carrier  that offers health benefit
 31    plans covering eligible individuals and their dependents.
                                                                        
 32        SECTION 2.  That Section 41-5208, Idaho Code, be, and the same  is  hereby
 33    amended to read as follows:
                                                                        
 34        41-5208.  AVAILABILITY OF COVERAGE --  PREEXISTING CONDITIONS -- PORTABIL-
 35    ITY.
 36        (1)  (a) Every individual carrier shall, as a condition of offering health
 37        benefit  plans in this state to individuals, actively offer health benefit
 38        plans to individuals, including the individual basic health benefit  plan,
 39        the individual standard health benefit plan, the individual catastrophic A
 40        health benefit plan, and the individual catastrophic B health benefit plan
 41        and the individual HSA compatible health benefit plan.
 42        (b)  An individual carrier shall issue an individual basic, standard, cat-
 43        astrophic  A,  or  catastrophic B or HSA compatible health benefit plan to
 44        any eligible individual that applies for such plan and agrees to make  the
 45        required  premium  payments and to satisfy the other reasonable provisions
 46        of the health benefit plan not inconsistent with the  provisions  of  this
 47        chapter.
 48        (2)  (a) An  individual  carrier shall file with the director, in a format
 49        and manner prescribed by the director,  the  basic,  standard,  and  cata-
 50        strophic,  and  HSA compatible health benefit plans to be used by the car-
 51        rier. A health benefit plan filed pursuant to the provisions of this para-
 52        graph may be used by an individual  carrier  beginning  thirty  (30)  days
 53        after it is filed unless the director disapproves its use.
                                                                        
                                           4
                                                                        
  1        (b)  The  director at any time may, after providing notice and an opportu-
  2        nity for a hearing to the individual carrier, disapprove the continued use
  3        by an individual carrier of a basic, standard,  or  catastrophic,  or  HSA
  4        compatible health benefit plan  on the grounds that the plan does not meet
  5        the requirements of this chapter.
  6        (3)  Health  benefit plans covering eligible individuals shall comply with
  7    the following provisions:
  8        (a)  A health benefit plan shall not deny, exclude or limit benefits for a
  9        covered individual for covered expenses incurred  more  than  twelve  (12)
 10        months  following the effective date of the individual's coverage due to a
 11        preexisting condition. A health benefit plan shall not define a  preexist-
 12        ing condition more restrictively than:
 13             (i)   A condition that would have caused an ordinarily prudent person
 14             to  seek  medical advice, diagnosis, care or treatment during the six
 15             (6) months immediately preceding the effective date of coverage;
 16             (ii)  A condition for which medical advice, diagnosis, care or treat-
 17             ment was recommended or received during the six  (6)  months  immedi-
 18             ately preceding the effective date of coverage; or
 19             (iii) A pregnancy existing on the effective date of coverage.
 20        (b)  A  health  benefit  plan  shall waive any time period applicable to a
 21        preexisting condition exclusion or limitation period  for  the  period  of
 22        time an individual was previously covered by qualifying previous coverage,
 23        provided  that  the  qualifying previous coverage was continuous to a date
 24        not more than sixty-three (63) days prior to the effective date of the new
 25        coverage. As provided in section 2741(b) of the federal  health  insurance
 26        portability  and  accountability act of 1996 (42 U.S.C. 300gg-41(b)), with
 27        regard to federally eligible individuals under HIPAA,  any  limitation  or
 28        exclusion  of  benefits relating to a condition based on the fact that the
 29        condition was present before the first day of coverage  shall  not  apply,
 30        whether or not any medical advice, diagnosis, care or treatment was recom-
 31        mended or received before that day, and whether or not the condition would
 32        have  caused  an ordinarily prudent person to seek medical advice, diagno-
 33        sis, care or treatment before that day.
 34        (c)  An individual carrier shall not modify a basic,  standard,  or  cata-
 35        strophic  A,  catastrophic  B  or  HSA compatible health benefit plan with
 36        respect to an individual or any dependent through riders, endorsements, or
 37        otherwise, to restrict or exclude coverage for certain diseases or medical
 38        conditions otherwise covered by the health benefit plan.
 39        (d)  In the case of an individual who  is  eligible  for  the  credit  for
 40        health  insurance  costs  under section 35 of the Internal Revenue Code of
 41        1986, the preexisting condition limitation shall not  apply  only  if  the
 42        individual  maintained  creditable health insurance coverage for an aggre-
 43        gate period of three (3) months as of the date  on  which  the  individual
 44        seeks  to  enroll  in  pool  coverage,  not counting any period prior to a
 45        sixty-three (63) day break in coverage.
 46        (4)  (a) An individual carrier shall not be required to offer coverage  or
 47        accept  applications  pursuant to the provisions of subsection (1) of this
 48        section in the case of the following:
 49             (i)   To an individual, where the individual is not residing  in  the
 50             carrier's established geographic service area;
 51             (ii)  Within  an area where the individual carrier reasonably antici-
 52             pates, and demonstrates to the satisfaction of the director, that  it
 53             will  not have the capacity within its established geographic service
 54             area to deliver service adequately  to  individuals  because  of  its
 55             obligations to existing groups or individuals.
                                                                        
                                           5
                                                                        
  1        (b)  An individual carrier that cannot offer coverage pursuant to the pro-
  2        visions    of subsection (4)(a)(ii) of this section may not offer coverage
  3        in the applicable area to new employer groups with more  than  fifty  (50)
  4        eligible  employees  or to any small employer groups or to any individuals
  5        until the later of one hundred  eighty  (180)  days  following  each  such
  6        refusal or the date on which the carrier notifies the director that it has
  7        regained capacity to deliver services to individuals and groups.
  8        (5)  An  individual  carrier  shall not be required to provide coverage to
  9    individuals pursuant to the provisions of subsection (1) of this  section  for
 10    any period of time for which the director determines that requiring the accep-
 11    tance  of  individuals  in accordance with the provisions of subsection (1) of
 12    this section would place the individual carrier in a financially impaired con-
 13    dition.
                                                                        
 14        SECTION 3.  That Section 41-5212, Idaho Code, be, and the same  is  hereby
 15    amended to read as follows:
                                                                        
 16        41-5212.  STANDARDS  TO ASSURE FAIR MARKETING. (1) Each individual carrier
 17    shall actively market health benefit plan coverage, including  the  individual
 18    basic, standard, catastrophic A, and catastrophic B, and HSA compatible health
 19    benefit  plans, to eligible individuals in the state. If an individual carrier
 20    denies coverage to an individual on the basis of the health status  or  claims
 21    experience of the individual or dependents, the individual carrier shall offer
 22    the  individual  the  opportunity   to purchase an individual basic, standard,
 23    catastrophic A, or catastrophic B, or HSA compatible health benefit plan.
 24        (2)  (a)  Except as provided in subsection  (2)(b)  of  this  section,  no
 25        individual  carrier  or agent shall, directly or indirectly, engage in the
 26        following activities:
 27             (i)   Encouraging or directing individuals to refrain from filing  an
 28             application  for  coverage with the individual carrier because of the
 29             health status, claims experience, industry, occupation or  geographic
 30             location of the individual or dependents.
 31             (ii)  Encouraging  or  directing  individuals  to  seek coverage from
 32             another carrier because of  the  health  status,  claims  experience,
 33             industry, occupation or geographic location of the individual.
 34        (b)  The  provisions  of subsection (2)(a) of this section shall not apply
 35        with respect to information provided by an individual carrier or agent  to
 36        an  individual  regarding  the  established  geographic  service area or a
 37        restricted network provision of an individual carrier.
 38        (3)  (a)  Except as provided in subsection  (2)(b)  of  this  section,  no
 39        individual carrier shall, directly or indirectly, enter into any contract,
 40        agreement or arrangement with an agent that provides for or results in the
 41        compensation  paid to an agent for the sale of a health benefit plan to be
 42        carried because of the health status, claims experience, industry, occupa-
 43        tion or geographic location of the individual.
 44        (b)  The provisions of paragraph (a) of this subsection  shall  not  apply
 45        with  respect  to a compensation arrangement that provides compensation to
 46        an agent on the basis of percentage of premium, provided that the percent-
 47        age shall not vary because of the health status, claims experience, indus-
 48        try, occupation or geographic  area of the individual.
 49        (4)  An individual carrier shall provide reasonable compensation, as  pro-
 50    vided  under  the  plan  of  operation of the individual high risk reinsurance
 51    pool, to an agent, if any, for the sale of an individual basic, standard, cat-
 52    astrophic A, or catastrophic  B, or HSA compatible health benefit plan.
 53        (5)  No individual carrier may terminate, fail to renew or limit its  con-
                                                                        
                                           6
                                                                        
  1    tract  or  agreement of representation with an agent for any reason related to
  2    the health status, claims experience, occupation or geographic location of the
  3    individuals placed by the agent with the individual carrier.
  4        (6)  Denial by an individual carrier of an application for  coverage  from
  5    an  individual  shall  be in writing and shall state the reason or reasons for
  6    the denial.
  7        (7)  The director may establish rules setting forth  additional  standards
  8    to  provide  for  the  fair marketing and broad availability of health benefit
  9    plans to individuals in this state.
 10        (8)  (a)  A violation of the provisions of this section by  an  individual
 11        carrier or an agent shall be an unfair trade practice pursuant to the pro-
 12        visions of section 41-1302, Idaho Code.
 13        (b)  If  an  individual carrier enters into a contract, agreement or other
 14        arrangement with a third party administrator  to  provide  administrative,
 15        marketing  or  other  services  related  to the offering of health benefit
 16        plans to individuals in this state, the third party administrator shall be
 17        subject to the provisions of this section as if it were an individual car-
 18        rier.
                                                                        
 19        SECTION 4.  That Section 41-5501, Idaho Code, be, and the same  is  hereby
 20    amended to read as follows:
                                                                        
 21        41-5501.  DEFINITIONS. As used in this chapter:
 22        (1)  "Agent"  means  a  producer  as  defined in section 41-1003(8), Idaho
 23    Code.
 24        (2)  "Board" means the board of directors of the Idaho high risk  individ-
 25    ual  reinsurance pool established in this chapter and the Idaho small employer
 26    reinsurance program established in section 41-4711, Idaho Code.
 27        (3)  "Carrier" means any entity that provides, or is  authorized  to  pro-
 28    vide,  health  insurance  in this state. For purposes of this chapter, carrier
 29    includes an insurance company, any other entity providing reinsurance  includ-
 30    ing  excess or stop loss coverage, a hospital or professional service corpora-
 31    tion, a fraternal benefit society, a managed  care  organization,  any  entity
 32    providing  health insurance coverage or benefits to residents of this state as
 33    certificate holders under a group policy issued or delivered outside  of  this
 34    state,  and  any  other  entity providing a plan of health insurance or health
 35    benefits subject to state insurance regulation.
 36        (4)  "Dependent" means a spouse, an unmarried child under the age of nine-
 37    teen (19) years, an unmarried child who is a full-time student under  the  age
 38    of  twenty-three  (23) years and who is financially dependent upon the parent,
 39    and an unmarried child of any age who is medically certified as  disabled  and
 40    dependent upon the parent.
 41        (5)  "Director"  means  the director of the department of insurance of the
 42    state of Idaho.
 43        (6)  "Eligible individual" means:
 44        (a)  An Idaho resident individual or dependent of an Idaho resident who is
 45        under the age of sixty-five (65) years, is not eligible for coverage under
 46        a group health plan, part A or part B of title XVIII of the  social  secu-
 47        rity  act  (medicare),  or  a state plan under title XIX (medicaid) or any
 48        successor program, and who does not have other health insurance  coverage;
 49        or
 50        (b)  An individual who is legally domiciled in Idaho on the date of appli-
 51        cation  to  the  pool  and is eligible for the credit for health insurance
 52        costs under section 35 of the Internal Revenue Code of 1986; or
 53        (bc)  An Idaho resident individual or a dependent of an Idaho resident who
                                                                        
                                           7
                                                                        
  1        is a federally eligible individual (one who meets the eligibility criteria
  2        set forth in the federal health insurance portability  and  accountability
  3        act of 1996 Public Law 104-191, Sec. 2741(b) (HIPAA)).
  4    Coverage  under  a  basic, standard, catastrophic A, or catastrophic B, or HSA
  5    compatible health benefit plan shall not be available to any individual who is
  6    covered under other health insurance coverage. For purposes of  this  chapter,
  7    to  be  eligible,  an  individual  must  also meet the requirements of section
  8    41-5510, Idaho Code.
  9        (7)  "Health benefit plan" means any hospital or medical policy or certif-
 10    icate, any subscriber contract provided by a hospital or professional  service
 11    corporation,  or  health  maintenance organization subscriber contract. Health
 12    benefit plan does not include policies or certificates of insurance  for  spe-
 13    cific  disease, hospital confinement indemnity, accident-only, credit, dental,
 14    vision, medicare supplement, long-term care, or disability  income  insurance,
 15    student  health  benefits  only,  coverage issued as a supplement to liability
 16    insurance, worker's compensation or similar insurance, automobile medical pay-
 17    ment insurance, or nonrenewable short-term coverage issued  for  a  period  of
 18    twelve (12) months or less.
 19        (8)  "Individual basic health benefit plan" means a lower cost health ben-
 20    efit plan developed pursuant to section 41-5511, Idaho Code.
 21        (9)  "Individual carrier" means a carrier that offers health benefit plans
 22    covering eligible individuals and their dependents.
 23        (10) "Individual  catastrophic A health benefit plan" means a higher limit
 24    health benefit plan developed pursuant to section 41-5511, Idaho Code.
 25        (11) "Individual catastrophic B health benefit plan" means a health  bene-
 26    fit  plan  offering  limits  higher  than a catastrophic A health benefit plan
 27    developed pursuant to section 41-5511, Idaho Code.
 28        (12) "Individual HSA compatible health benefit plan" means a  health  sav-
 29    ings  account  compatible  health  benefit  plan developed pursuant to section
 30    41-5511, Idaho Code.
 31        (13) "Individual standard health benefit plan" means a health benefit plan
 32    developed pursuant to section 41-5511, Idaho Code.
 33        (134) "Plan" or "pool plan" means the individual  basic,  standard,  cata-
 34    strophic  A,  or  catastrophic B, or HSA compatible health benefit plan estab-
 35    lished pursuant to section 41-5511, Idaho Code.
 36        (145) "Plan of operation" means the plan of operation  of  the  individual
 37    high risk reinsurance pool established pursuant to this chapter.
 38        (156) "Pool" means the Idaho high risk reinsurance pool.
 39        (167) "Premium"  means  all  moneys  paid  by  an  individual and eligible
 40    dependents as a condition of receiving coverage from a carrier, including  any
 41    fees or other contributions associated with the health benefit plan.
 42        (178) "Qualifying  previous  coverage"  and "qualifying existing coverage"
 43    mean benefits or coverage provided under:
 44        (a)  Medicare  or  medicaid,  civilian  health  and  medical  program  for
 45        uniformed services (CHAMPUS), the Indian health service program,  a  state
 46        health benefit risk pool, or any other similar publicly sponsored program;
 47        or
 48        (b)  Any  group  or  individual  health insurance policy or health benefit
 49        arrangement whether or not subject to the state insurance laws,  including
 50        coverage  provided  by  a managed care organization or a fraternal benefit
 51        society.
 52        (189) "Reinsurance premium" means the premium set by the board pursuant to
 53    section 41-5506, Idaho Code, to be paid by  a  reinsuring  carrier  for  plans
 54    issued under the pool.
 55        (1920) "Reinsuring  carrier" means a carrier participating in the individ-
                                                                        
                                           8
                                                                        
  1    ual high risk reinsurance pool established by this chapter.
  2        (201) "Restricted network provision" means any provision of a health bene-
  3    fit plan that conditions the payment of benefits, in whole or in part, on  the
  4    use  of health care providers that have entered into a contractual arrangement
  5    with the carrier to provide health care services to covered individuals.
                                                                        
  6        SECTION 5.  That Section 41-5505, Idaho Code, be, and the same  is  hereby
  7    amended to read as follows:
                                                                        
  8        41-5505.  REINSURANCE.  (1)  Any  individual carrier issuing an individual
  9    basic, standard, catastrophic A, or catastrophic B, or HSA  compatible  health
 10    benefit plan as provided in this chapter shall be reinsured by the pool to the
 11    level of coverage provided in the plan and shall be liable to the pool for the
 12    reinsurance premium.
 13        (2)  (a) The pool shall not reimburse a reinsuring carrier with respect to
 14        the  claims  of  a reinsured individual or dependent until the carrier has
 15        incurred an initial level of claims for such individual  or  dependent  of
 16        five  thousand dollars ($5,000) in a calendar year for benefits covered by
 17        the pool. In addition, the reinsuring carrier shall be responsible for ten
 18        percent (10%) of the next twenty-five thousand dollars ($25,000) of  bene-
 19        fit  payments  during  a  calendar  year  and  the pool shall reinsure the
 20        remainder.
 21        (b)  The board annually may adjust the initial level  of  claims  and  the
 22        maximum  limit to be retained by the carrier to reflect increases in costs
 23        and utilization within the standard market for health benefit plans within
 24        the state. The adjustment shall not be less than the annual change in  the
 25        medical component of the "Consumer Price Index for All Urban Consumers" of
 26        the department of labor, bureau of labor statistics, unless the board pro-
 27        poses and the director approves a lower adjustment factor.
 28        (3)  A reinsuring carrier shall apply all managed care and claims handling
 29    techniques,  including  utilization  review,  individual case management, pre-
 30    ferred provider provisions, and other managed care provisions  or  methods  of
 31    operation consistently with respect to reinsured and nonreinsured business.
 32        (4)  Each  carrier  shall  make  a filing with the director containing the
 33    carrier's earned health insurance premium derived from  health  benefit  plans
 34    delivered or issued for delivery in this state in the previous calendar year.
 35        (5)  Each carrier shall file with the director, in a form and manner to be
 36    prescribed  by the director, an annual report. The report shall state the num-
 37    ber of resident persons insured under the carrier's health  benefit  plan,  or
 38    through excess or stop loss coverage.
                                                                        
 39        SECTION  6.  That  Section 41-5507, Idaho Code, be, and the same is hereby
 40    amended to read as follows:
                                                                        
 41        41-5507.  PREMIUM RATES FOR PLAN COVERAGE. (1) The board  shall  establish
 42    premium  rates for coverage under the individual basic, standard, catastrophic
 43    A, and catastrophic B, and HSA compatible health benefit plans.
 44        (2)  Separate schedules of premium rates based on age, individual  tobacco
 45    use,  geography  as  defined  by rule of the director, gender and benefit plan
 46    design shall apply for individual risks.
 47        (3)  The board, with the assistance of the director and in accordance with
 48    appropriate actuarial principles, shall determine  a  standard  risk  rate  by
 49    using  the  average  rates  that  individual  standard risks in this state are
 50    charged by at least five (5) of the largest health insurance carriers  provid-
 51    ing  individual  health  insurance coverage to residents of Idaho that is sub-
                                                                        
                                           9
                                                                        
  1    stantially similar to the coverage offered by each pool plan.  In  determining
  2    the  average  rate  or  charges  of those health insurance carriers, the rates
  3    charged by those carriers shall be actuarially adjusted to determine the  rate
  4    that  would  have  been charged for benefits similar to those provided by each
  5    plan.  The standard risk rates shall be established using reasonable actuarial
  6    techniques and shall reflect  anticipated  claims  experience,  expenses,  and
  7    other appropriate risk factors for such coverage.
  8        (4)  Rates  for  plan  coverage shall not be less than one hundred twenty-
  9    five percent (125%) nor more than one hundred fifty percent  (150%)  of  rates
 10    established as applicable for individual standard risks pursuant to subsection
 11    (3) of this section.
                                                                        
 12        SECTION  7.  That  Section 41-5509, Idaho Code, be, and the same is hereby
 13    amended to read as follows:
                                                                        
 14        41-5509.  STANDARDS FOR AGENTS. The board, as part of the plan  of  opera-
 15    tion, shall develop standards setting forth the manner and levels of compensa-
 16    tion  to  be  paid to agents for the sale of individual basic, standard, cata-
 17    strophic A, and catastrophic B, and HSA compatible health  benefit  plans.  In
 18    establishing  such standards, the board shall take into consideration the need
 19    to assure broad availability of coverages, the objectives  of  the  pool,  the
 20    time  and effort expended in placing the coverage, the need to provide ongoing
 21    service to the individual, the levels of compensation currently  used  in  the
 22    industry  and  the  overall  costs  of coverage to individuals selecting these
 23    plans.
                                                                        
 24        SECTION 8.  That Section 41-5510, Idaho Code, be, and the same  is  hereby
 25    amended to read as follows:
                                                                        
 26        41-5510.  ELIGIBILITY. (1) Any individual eligible person, who is and con-
 27    tinues  to  be  a  resident shall be eligible for coverage under an individual
 28    basic, standard, catastrophic A, or catastrophic B, and HSA compatible  health
 29    benefit plan if evidence is provided that:
 30        (a)  Such  person  has  been rejected by one (1) individual carrier on the
 31        basis of health status or claims experience; or
 32        (b)  An individual carrier refuses to issue a health benefit plan  provid-
 33        ing coverage substantially similar to coverage offered under an equivalent
 34        pool plan except at a rate exceeding the rate for the pool plan; or
 35        (c)  Such  person is legally domiciled in Idaho on the date of application
 36        to the pool and is eligible for the  credit  for  health  insurance  costs
 37        under  section  35  of  the Internal Revenue Code of 1986. In addition, if
 38        such person maintained creditable health insurance  coverage for an aggre-
 39        gate period of three (3) months as of the date  on  which  the  individual
 40        seeks  to  enroll  in  pool  coverage,  not counting any period prior to a
 41        sixty-three (63) day break in coverage:
 42             (i)   The preexisting  condition  limitation  set  forth  in  section
 43             41-5208, Idaho Code, shall not apply; and
 44             (ii)  The  requirement for exhaustion of any available COBRA or state
 45             continuation benefits is waived.
 46        (2)  A rejection or refusal by a carrier offering only stop  loss,  excess
 47    of  loss or reinsurance coverage with respect to an applicant under subsection
 48    (1) of this section shall not constitute sufficient evidence for  purposes  of
 49    subsection (1) of this section.
 50        (3)  Each  resident  dependent  of  a  person who is eligible for coverage
 51    under the pool shall also be eligible for coverage under the pool.
                                                                        
                                           10
                                                                        
  1        (4)  A person shall not be eligible for coverage under a pool plan if:
  2        (a)  The person has or obtains  health  insurance  coverage  substantially
  3        similar to or more comprehensive than a pool plan, or would be eligible to
  4        have coverage if the person elected to obtain it;
  5        (b)  The  person  is  determined  to  be eligible for health care benefits
  6        under medicaid;
  7        (c)  The person has previously terminated pool plan coverage unless twelve
  8        (12) months have lapsed since such  termination;  provided  however,  that
  9        this  provision shall not apply with respect to an applicant who is a fed-
 10        erally eligible individual;
 11        (d)  The person is an inmate or resident of a state or other public insti-
 12        tution, or a state, local or private correctional facility; provided  how-
 13        ever, that this provision shall not apply with respect to an applicant who
 14        is a federally eligible individual.
 15        (5)  Coverage shall cease:
 16        (a)  On  the  first  day  of  the  month following the date a person is no
 17        longer a resident of this state;
 18        (b)  On the first day of the month following the date  a  person  requests
 19        coverage to end;
 20        (c)  Upon the death of the covered person;
 21        (d)  At the option of the board, thirty (30) days after the plan makes any
 22        inquiry concerning the person's eligibility or place of residence to which
 23        the person does not reply.
 24        (6)  A person who ceases to meet the eligibility requirements of this sec-
 25    tion  may  be terminated on the first day of the month following the date when
 26    the individual becomes ineligible.
                                                                        
 27        SECTION 9.  That Section 41-5511, Idaho Code, be, and the same  is  hereby
 28    amended to read as follows:
                                                                        
 29        41-5511.  DESIGN  OF  PRODUCTS.  (1) The board shall design the individual
 30    basic, standard, catastrophic A, and catastrophic B, and HSA compatible health
 31    benefit plans, with an emphasis on making coverage  available  for  preventive
 32    care,  and subject to the deductibles and maximum benefits provided in subsec-
 33    tion (2) of this section.
 34        (2)  (a) The basic health benefit plan shall provide a deductible of  five
 35        hundred  dollars  ($500),  with a lifetime maximum benefit of five hundred
 36        thousand dollars ($500,000) per carrier;
 37        (b)  The standard health benefit plan shall provide a  deductible  of  one
 38        thousand  dollars ($1,000), with a lifetime maximum benefit of one million
 39        dollars ($1,000,000) per carrier;
 40        (c)  The catastrophic A health benefit plan shall offer  a  deductible  of
 41        two  thousand  dollars ($2,000) and a lifetime maximum benefit of one mil-
 42        lion dollars ($1,000,000) per carrier; and
 43        (d)  The catastrophic B health benefit plan shall offer  a  deductible  of
 44        five  thousand dollars ($5,000) and a lifetime maximum benefit of one mil-
 45        lion dollars ($1,000,000) per carrier; and
 46        (e)  The HSA compatible health benefit plan shall provide a lifetime maxi-
 47        mum benefit of one million dollars ($1,000,000) per carrier with a deduct-
 48        ible and other cost-sharing features that  meet  federal  high  deductible
 49        health  plan  qualifications  as defined in public law 108-173, title XII,
 50        section 1201(a), 117 stat. 2469.
 51        (3)  The board shall establish all other benefit levels, as well  as  cost
 52    sharing arrangements, exclusions and limitations for each health benefit plan.
 53    The  plan  designs  for the small employer market shall not necessarily be the
                                                                        
                                           11
                                                                        
  1    same as the plan designs for the individual market.
  2        (4)  The board shall also design  an  individual  basic,  standard,  cata-
  3    strophic  A,  and catastrophic B, and HSA compatible health benefit plan which
  4    each contain benefit and cost-sharing arrangements that  are  consistent  with
  5    the  basic method of operation and the benefit plans of managed care organiza-
  6    tions, including any restrictions imposed by federal law,  which  may  include
  7    cost containment features such as the following:
  8        (a)  Utilization review of health care services, including review of medi-
  9        cal necessity of hospital and physician services;
 10        (b)  Case management;
 11        (c)  Selective  contracting  with  hospitals,  physicians and other health
 12        care providers;
 13        (d)  Reasonable benefit differentials applicable to providers that partic-
 14        ipate or do not participate in arrangements using restricted network  pro-
 15        visions; and
 16        (e)  Other managed care provisions.
 17        (5)  The  board shall submit the health benefit plans or changes described
 18    in this section to the director for approval. The  director  shall  promulgate
 19    the  approved plans in accordance with the provisions of chapter 52, title 67,
 20    Idaho Code.
 21        (6)  The board may appoint an advisory committee to assist it in  develop-
 22    ing the health benefit plans prescribed by this section.

Statement of Purpose / Fiscal Impact



                	STATEMENT OF PURPOSE

	                    RS 15116C1
                                                                                                                                                 
The purpose of this bill is to add a new benefit plan to 
the four existing benefit plans offered through the High Risk 
Pool.  Those plans are referred to as: 1) Basic, 2) Standard, 
3) Catastrophic A, and 4) Catastrophic B.  This bill adds a 
fifth plan as an HSA compatible benefit plan.  HSA’s or Health 
Savings Accounts by federal law require certain benefits for an 
individual to qualify for the tax deductibility.  The High Risk 
Pool Board felt that individuals should not be prohibited from 
participating in an HSA just because they only qualify for High 
Risk Pool products.

                                                                                                                                      
                            FISCAL IMPACT

None to the General Fund or to the High Risk Pool which is 
funded with 25% of all premium taxes over $45 million.



Contact

Name:  Senator Dean Cameron
Phone: 334-4735
Name:  Rep. Bill Deal, 332-1000 
Name:  Hyatt Erstad, Chairman, High Risk Pool, 343-8899
Name:  Bart Harwood, Legal Counsel, High Risk Pool, 395-8500
Name:  Shad Priest, Department of Insurance, 334-4214


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