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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
]]]] 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
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
S 1198