2006 Legislation
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HOUSE BILL NO. 655 – Insurnce/employer carrier/discon’t

HOUSE BILL NO. 655

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Bill Status



H0655aaS........................................................by BUSINESS
INSURANCE - Amends existing law relating to insurance to provide that large
employer carriers, small employer carriers and individual carriers may
discontinue offering particular health benefit plans at the time of
coverage renewal under certain conditions.
                                                                        
02/10    House intro - 1st rdg - to printing
02/13    Rpt prt - to Bus
03/02    Rpt out - rec d/p - to 2nd rdg
03/03    2nd rdg - to 3rd rdg
03/06    3rd rdg - PASSED - 62-1-7
      AYES -- Anderson, Andrus, Barraclough, Barrett, Bastian, Bayer,
      Bedke, Bell, Bilbao, Black, Block, Bolz, Bradford, Cannon,
      Chadderdon, Clark, Collins, Crow, Deal, Denney, Edmunson, Ellsworth,
      Eskridge, Field(18), Field(23), Garrett, Hart, Harwood, Henbest,
      Henderson, Jaquet, Kemp, Lake, Loertscher, Martinez, Mathews,
      McGeachin, McKague, Miller, Mitchell, Moyle, Nielsen, Nonini,
      Pasley-Stuart, Pence, Raybould, Ringo, Roberts, Rusche, Rydalch,
      Sali, Schaefer, Shepherd(2), Shepherd(8), Shirley, Skippen,
      Smith(30), Smith(24), Smylie, Snodgrass, Wood, Mr. Speaker
      NAYS -- LeFavour
      Absent and excused -- Boe, Brackett, Ring, Sayler, Stevenson, Trail,
      Wills
    Floor Sponsors - Deal & Black
    Title apvd - to Senate
03/07    Senate intro - 1st rdg - to Com/HuRes
03/24    Rpt out - to 14th Ord
03/28    Rpt out amen - to 1st rdg as amen
03/29    1st rdg - to 2nd rdg as amen
03/30    2nd rdg - to 3rd rdg as amen
    Rls susp - PASSED - 34-0-1
      AYES -- Andreason, Brandt, Broadsword, Bunderson, Burkett,
      Burtenshaw, Cameron, Coiner, Compton, Corder, Darrington, Davis,
      Fulcher, Gannon, Geddes, Goedde, Hill, Jorgenson, Kelly, Keough,
      Langhorst, Little, Lodge, Malepeai, Marley, McGee, McKenzie, Pearce,
      Richardson, Schroeder, Stegner, Stennett, Werk, Williams
      NAYS -- None
      Absent and excused -- Sweet
    Floor Sponsor - Goedde
    Title apvd - to House
04/03    House concurred in Senate amens - to engros
04/04    Rpt engros - 1st rdg - to 2nd rdg as amen
    Rls susp - PASSED - 66-0-4
      AYES -- Anderson, Andrus, Barraclough, Barrett, Bastian, Bayer,
      Bilbao, Black, Block, Boe, Bolz, Brackett, Bradford, Cannon,
      Chadderdon, Clark, Collins, Deal, Denney, Edmunson, Ellsworth,
      Eskridge, Field(18), Field(23), Garrett, Hart, Harwood, Henbest,
      Henderson, Jaquet, 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(8), Shirley, Skippen,
      Smith(30), Smith(24), Smylie, Snodgrass, Stevenson, Trail, Wills,
      Wood, Mr. Speaker
      NAYS -- None
      Absent and excused -- Bedke, Bell, Crow, Shepherd(2)
    Floor Sponsor - Deal
    Title apvd - To enrol - Rpt enrol - Sp signed
04/05    Pres signed - To Governor
04/07    Governor signed
         Session Law Chapter 353
         Effective: 07/01/06

Bill Text


                                                                        
                                                                        
  ]]]]              LEGISLATURE OF THE STATE OF IDAHO             ]]]]
 Fifty-eighth Legislature                   Second Regular Session - 2006
                                                                        
                                                                        
                              IN THE HOUSE OF REPRESENTATIVES
                                                                        
                                     HOUSE BILL NO. 655
                                                                        
                                   BY BUSINESS COMMITTEE
                                                                        
  1                                        AN ACT
  2    RELATING TO INSURANCE; AMENDING SECTION 41-2223, IDAHO CODE, TO  PROVIDE  THAT
  3        LARGE EMPLOYER CARRIERS MAY DISCONTINUE OFFERING PARTICULAR HEALTH BENEFIT
  4        PLANS  AT  THE TIME OF COVERAGE RENEWAL UNDER CERTAIN CONDITIONS; AMENDING
  5        SECTION 41-4707, IDAHO CODE, TO PROVIDE THAT SMALL EMPLOYER  CARRIERS  MAY
  6        DISCONTINUE OFFERING PARTICULAR HEALTH BENEFIT PLANS AT THE TIME OF COVER-
  7        AGE  RENEWAL UNDER CERTAIN CONDITIONS; AND AMENDING SECTION 41-5207, IDAHO
  8        CODE, TO PROVIDE THAT INDIVIDUAL CARRIERS MAY DISCONTINUE OFFERING PARTIC-
  9        ULAR HEALTH BENEFIT PLANS AT THE TIME OF COVERAGE  RENEWAL  UNDER  CERTAIN
 10        CONDITIONS.
                                                                        
 11    Be It Enacted by the Legislature of the State of Idaho:
                                                                        
 12        SECTION  1.  That  Section 41-2223, Idaho Code, be, and the same is hereby
 13    amended to read as follows:
                                                                        
 14        41-2223.  RENEWABILITY OF COVERAGE. (1) A health benefit plan  subject  to
 15    the provisions of this chapter shall be renewable with respect to all eligible
 16    employees  or  dependents, at the option of the employer, except in any of the
 17    following cases:
 18        (a)  Nonpayment of the required premiums;
 19        (b)  Fraud or  intentional  misrepresentation  of  material  fact  by  the
 20        employer;
 21        (c)  Noncompliance with the carrier's minimum participation requirements;
 22        (d)  Noncompliance with the carrier's employer contribution requirements;
 23        (e)  In  the  case  of health benefit plans that are made available in the
 24        employer market only through one (1) or more associations, as  defined  in
 25        section 41-2202, Idaho Code, the membership of an employer in the associa-
 26        tion,  on  the basis of which the coverage is provided ceases, but only if
 27        the coverage is terminated under this paragraph uniformly  without  regard
 28        to any health status-related factor relating to any covered individual;
 29        (f)  The   employer   no   longer   meets   the  requirements  of  section
 30        41-2221(2)(b), Idaho Code;
 31        (g)  The carrier elects, at the time of coverage renewal,  to  discontinue
 32        offering a particular health benefit plan delivered or issued for delivery
 33        to  large  employers in this state. Unless otherwise authorized in advance
 34        by the department of insurance, a carrier may discontinue a  product  only
 35        after the product has been in use for at least thirty-six (36) consecutive
 36        months,  provided the carrier may not discontinue more than twenty percent
 37        (20%) of its total number of employees and  dependents  in  all  lines  of
 38        business in a twelve (12) month period. The carrier shall:
 39             (i)   Provide  advance  written  or electronic notice of its decision
 40             under this paragraph to the director;
 41             (ii)  Provide notice of the discontinuation to all affected employers
 42             and employees or dependents at least ninety (90) calendar days  prior
 43             to  the  date the particular health benefit plan will be discontinued
                                                                        
                                           2
                                                                        
  1             by the carrier, provided that notice to the director under the provi-
  2             sions of this paragraph shall be provided at least fourteen (14) cal-
  3             endar days prior to the notice to the affected employers;
  4             (iii) Offer to each affected employer, on a guaranteed  issue  basis,
  5             the option to purchase all other health benefit plans currently being
  6             offered by the carrier to large employers in this state; and
  7             (iv)  In exercising the option to discontinue the health benefit plan
  8             and in offering the option to purchase all other health benefit plans
  9             under  the provisions of this paragraph, act uniformly without regard
 10             to:
 11                  1.  The claims experience of an affected employer;
 12                  2.  Any health status-related factor relating  to  any  affected
 13                  employee or dependent; or
 14                  3.  Any   health  status-related  factor  relating  to  any  new
 15                  employee or dependent who may become eligible for the coverage.
 16        (h)  The carrier elects to nonrenew all of its health benefit plans deliv-
 17        ered or issued for delivery to large employers in this state.  In  such  a
 18        case the carrier shall:
 19             (i)   Provide  advance notice of its decision under this paragraph to
 20             the director in each state in which it is licensed; and
 21             (ii)  Provide notice of the decision not to  renew  coverage  to  all
 22             affected  employers  and  to the director at least one hundred eighty
 23             (180) calendar days prior to the nonrenewal  of  any  health  benefit
 24             plans by the carrier.  Notice to the director under the provisions of
 25             this  paragraph  shall  be  provided  at least three (3) working days
 26             prior to the notice to the affected employers; or
 27        (hi)  The director finds that the continuation of the coverage would:
 28             (i)   Not be in the best interests of the policyholders  or  certifi-
 29             cate holders; or
 30             (ii)  Impair  the  carrier's  ability to meet its contractual obliga-
 31             tions.
 32        In such instance the director shall assist affected employers  in  finding
 33        replacement coverage.
 34        (2)  A  carrier  that  elects not to renew a health benefit plan under the
 35    provisions of subsection (1)(gh) of this  section  shall  be  prohibited  from
 36    writing  new  business in the large employer market in this state for a period
 37    of five (5) years from the date of notice to the director.
 38        (3)  In the case of a carrier doing business in one (1)  established  geo-
 39    graphic  service  area  of the state, the provisions set forth in this section
 40    shall apply only to the carrier's operations in that service area.
                                                                        
 41        SECTION 2.  That Section 41-4707, Idaho Code, be, and the same  is  hereby
 42    amended to read as follows:
                                                                        
 43        41-4707.  RENEWABILITY  OF  COVERAGE. (1) A health benefit plan subject to
 44    the provisions of this chapter shall be renewable with respect to all eligible
 45    employees or dependents, at the option of the small employer, except in any of
 46    the following cases:
 47        (a)  Nonpayment of the required premiums;
 48        (b)  Fraud or intentional misrepresentation of material fact by the  small
 49        employer;
 50        (c)  Noncompliance with the carrier's minimum participation requirements;
 51        (d)  Noncompliance with the carrier's employer contribution requirements;
 52        (e)  In  the  case  of health benefit plans that are made available in the
 53        small employer market only through one (1) or more associations as defined
                                                                        
                                           3
                                                                        
  1        in section 41-2202, Idaho Code, the membership of an employer in the asso-
  2        ciation, on the basis of which the coverage is provided ceases,  but  only
  3        if  the  coverage  is  terminated  under  this paragraph uniformly without
  4        regard to any health status-related factor relating to any  covered  indi-
  5        vidual;
  6        (f)  The  small  employer  no  longer  meets  the  requirements of section
  7        41-4703(28), Idaho Code;
  8        (g)  The small employer carrier elects, at the time of  coverage  renewal,
  9        to  discontinue  offering  a  particular  health benefit plan delivered or
 10        issued for delivery to small employers in  this  state.  Unless  otherwise
 11        authorized  in  advance by the department of insurance, a carrier may dis-
 12        continue a product only after the product has been in  use  for  at  least
 13        thirty-six  (36)  consecutive months, provided the carrier may not discon-
 14        tinue more than twenty percent (20%) of its total number of employees  and
 15        dependents  in  all  lines  of business in a twelve (12) month period. The
 16        carrier shall:
 17             (i)   Provide advance written or electronic notice  of  its  decision
 18             under this paragraph to the director;
 19             (ii)  Provide notice of the discontinuation to all affected employers
 20             and  employees or dependents at least ninety (90) calendar days prior
 21             to the date the particular health benefit plan will  be  discontinued
 22             by the carrier, provided that notice to the director under the provi-
 23             sions of this paragraph shall be provided at least fourteen (14) cal-
 24             endar days prior to the notice to the affected employers;
 25             (iii) Offer  to  each affected employer, on a guaranteed issue basis,
 26             the option to purchase all other health benefit plans currently being
 27             offered by the carrier to small employers in this state; and
 28             (iv)  In exercising the option to discontinue the health benefit plan
 29             and in offering the option to purchase all other health benefit plans
 30             under the provisions of this paragraph, act uniformly without  regard
 31             to:
 32                  1.  The claims experience of an affected employer;
 33                  2.  Any  health  status-related  factor relating to any affected
 34                  employee or dependent; or
 35                  3.  Any  health  status-related  factor  relating  to  any   new
 36                  employee or dependent who may become eligible for the coverage.
 37        (h)  The small employer carrier elects to nonrenew all of its health bene-
 38        fit  plans  delivered  or  issued  for delivery to small employers in this
 39        state. In such a case the carrier shall:
 40             (i)   Provide advance notice of its decision under this paragraph  to
 41             the director in each state in which it is licensed; and
 42             (ii)  Provide  notice  of  the  decision not to renew coverage to all
 43             affected small employers and to the director  at  least  one  hundred
 44             eighty (180) calendar days prior to the nonrenewal of any health ben-
 45             efit  plans  by  the carrier. Notice to the director under the provi-
 46             sions of this paragraph shall be provided at least three (3)  working
 47             days prior to the notice to the affected small employers; or
 48        (hi)  The director finds that the continuation of the coverage would:
 49             (i)   Not  be  in the best interests of the policyholders or certifi-
 50             cate holders; or
 51             (ii)  Impair the carrier's ability to meet  its  contractual  obliga-
 52             tions.
 53        In  such  instance  the  director shall assist affected small employers in
 54        finding replacement coverage.
 55        (2)  A small employer carrier that elects not to renew  a  health  benefit
                                                                        
                                           4
                                                                        
  1    plan under the provisions of subsection (1)(gh) of this section shall  be pro-
  2    hibited  from  writing new business in the small employer market in this state
  3    for a period of five (5) years from the date of notice to the director.
  4        (3)  In the case of a small employer carrier doing  business  in  one  (1)
  5    established  geographic service area of the state, the rules set forth in this
  6    subsection shall apply only to the carrier's operations in that service area.
                                                                        
  7        SECTION 3.  That Section 41-5207, Idaho Code, be, and the same  is  hereby
  8    amended to read as follows:
                                                                        
  9        41-5207.  RENEWABILITY  OF  COVERAGE. (1) A health benefit plan subject to
 10    the provisions of this chapter shall be renewable with respect to the individ-
 11    ual or dependents, at the option of the individual, except in any of the  fol-
 12    lowing cases:
 13        (a)  Nonpayment of the required premiums;
 14        (b)  Fraud  or intentional misrepresentation of material fact by the indi-
 15        vidual insured or his representatives. An  individual  whose  coverage  is
 16        terminated  for  fraud  or  misrepresentation shall not be deemed to be an
 17        "eligible individual" for a period of twelve (12) months from  the  effec-
 18        tive date of the termination of the individual's coverage and shall not be
 19        deemed  to have "qualifying previous coverage" under chapter 22, 47 or 52,
 20        title 41, Idaho Code;
 21        (c)  The individual ceases to be an eligible individual as defined in sec-
 22        tion 41-5203(10), Idaho Code;
 23        (d)  In the case of health benefit plans that are made  available  in  the
 24        individual market only through one (1) or more associations, as defined in
 25        section  41-2202, Idaho Code, the membership of an individual in the asso-
 26        ciation, on the basis of which the coverage is provided ceases,  but  only
 27        if  the  coverage  is  terminated  under  this paragraph uniformly without
 28        regard to any health status-related factor relating to any  covered  indi-
 29        vidual;
 30        (e)  The  individual  carrier  elects, at the time of coverage renewal, to
 31        discontinue offering a particular health benefit plan delivered or  issued
 32        for  delivery to individuals in this state. Unless otherwise authorized in
 33        advance by the department of insurance, a carrier may discontinue a  prod-
 34        uct  only  after  the product has been in use for at least thirty-six (36)
 35        consecutive months, provided the carrier may  not  discontinue  more  than
 36        twenty  percent (20%) of its total number of individuals and dependents in
 37        all lines of business in a twelve (12) month period. The carrier shall:
 38             (i)   Provide advance written or electronic notice  of  its  decision
 39             under this paragraph to the director;
 40             (ii)  Provide notice of the discontinuation to all affected individu-
 41             als at least ninety (90) calendar days prior to the date the particu-
 42             lar health benefit plan will be discontinued by the carrier, provided
 43             that  notice  to  the director under the provisions of this paragraph
 44             shall be provided at least fourteen (14) calendar days prior  to  the
 45             notice to the affected individuals;
 46             (iii) Offer to each affected individual, on a guaranteed issue basis,
 47             the option to purchase all other health benefit plans currently being
 48             offered by the carrier to individuals in this state; and
 49             (iv)  Act  uniformly without regard to any health status-related fac-
 50             tor of an affected individual or dependent of an affected  individual
 51             who may become eligible for the coverage.
 52        (f)  The  individual  carrier elects to nonrenew all of its health benefit
 53        plans delivered or issued for delivery to individuals in  this  state.  In
                                                                        
                                           5
                                                                        
  1        such a case the carrier shall:
  2             (i)   Provide  advance notice of its decision under this paragraph to
  3             the director; and
  4             (ii)  Provide notice of the decision not to  renew  coverage  to  all
  5             affected  individuals and to the director at least one hundred eighty
  6             (180) calendar days prior to the nonrenewal  of  any  health  benefit
  7             plans  by the carrier. Notice to the director under the provisions of
  8             this paragraph shall be provided at  least  three  (3)  working  days
  9             prior to the notice to the affected individuals; or
 10        (fg)  The director finds that the continuation of the coverage would:
 11             (i)   Not  be  in the best interests of the policyholders or certifi-
 12             cate holders; or
 13             (ii)  Impair the carrier's ability to meet  its  contractual  obliga-
 14             tions.
 15        In  such instance, the director shall assist affected individuals in find-
 16        ing replacement coverage.
 17        (2)  An individual carrier that elects not to renew a health benefit  plan
 18    under the provisions of subsection (1)(ef) of this section shall be prohibited
 19    from  writing new business in the individual market in this state for a period
 20    of five (5) years from the date of notice to the director.
 21        (3)  In the case of an individual carrier doing business in one (1) estab-
 22    lished geographic service area of the state, the rules set forth in this  sub-
 23    section shall apply only to the carrier's operations in that service area.

Amendment


                                                                        
                                                                        
  ]]]]              LEGISLATURE OF THE STATE OF IDAHO             ]]]]
 Fifty-eighth Legislature                   Second Regular Session - 2006
                                                                        
                                                                        
                                                     Moved by    Goedde              
                                                                        
                                                     Seconded by Broadsword          
                                                                        
                                                                        
                                       IN THE SENATE
                             SENATE AMENDMENTS TO H.B. NO. 655
                                                                        
  1                               AMENDMENTS TO SECTION 2
  2        On page 3 of the printed bill, in line 14, delete "twenty  percent  (20%)"
  3    and  insert: "fifteen percent (15%)"; in line 15, following "business" insert:
  4    "regulated by this chapter"; in line 27, delete "and"; and in line 36,  delete
  5    "coverage." and insert: "coverage; and
  6             (v)  Offer  the  new  products  at  rates  that  comply  with section
  7             41-4706(1)(c), Idaho Code.".
                                                                        
  8                               AMENDMENTS TO SECTION 3
  9        On page 4, in line 36, delete "twenty percent (20%)" and insert:  "fifteen
 10    percent  (15%)";  in  line 37, following "business" insert: "regulated by this
 11    chapter"; in line 48, delete "and"; and in line  51,  delete  "coverage."  and
 12    insert: "coverage; and
 13             (v)  Offer  the  new  products  at  rates  that  comply  with section
 14             41-5206(1)(b), Idaho Code.".

Engrossed Bill (Original Bill with Amendment(s) Incorporated)


                                                                        
                                                                        
  ]]]]              LEGISLATURE OF THE STATE OF IDAHO             ]]]]
 Fifty-eighth Legislature                   Second Regular Session - 2006
                                                                        
                                                                        
                              IN THE HOUSE OF REPRESENTATIVES
                                                                        
                        HOUSE BILL NO. 655, As Amended in the Senate
                                                                        
                                   BY BUSINESS COMMITTEE
                                                                        
  1                                        AN ACT
  2    RELATING TO INSURANCE; AMENDING SECTION 41-2223, IDAHO CODE, TO  PROVIDE  THAT
  3        LARGE EMPLOYER CARRIERS MAY DISCONTINUE OFFERING PARTICULAR HEALTH BENEFIT
  4        PLANS  AT  THE TIME OF COVERAGE RENEWAL UNDER CERTAIN CONDITIONS; AMENDING
  5        SECTION 41-4707, IDAHO CODE, TO PROVIDE THAT SMALL EMPLOYER  CARRIERS  MAY
  6        DISCONTINUE OFFERING PARTICULAR HEALTH BENEFIT PLANS AT THE TIME OF COVER-
  7        AGE  RENEWAL UNDER CERTAIN CONDITIONS; AND AMENDING SECTION 41-5207, IDAHO
  8        CODE, TO PROVIDE THAT INDIVIDUAL CARRIERS MAY DISCONTINUE OFFERING PARTIC-
  9        ULAR HEALTH BENEFIT PLANS AT THE TIME OF COVERAGE  RENEWAL  UNDER  CERTAIN
 10        CONDITIONS.
                                                                        
 11    Be It Enacted by the Legislature of the State of Idaho:
                                                                        
 12        SECTION  1.  That  Section 41-2223, Idaho Code, be, and the same is hereby
 13    amended to read as follows:
                                                                        
 14        41-2223.  RENEWABILITY OF COVERAGE. (1) A health benefit plan  subject  to
 15    the provisions of this chapter shall be renewable with respect to all eligible
 16    employees  or  dependents, at the option of the employer, except in any of the
 17    following cases:
 18        (a)  Nonpayment of the required premiums;
 19        (b)  Fraud or  intentional  misrepresentation  of  material  fact  by  the
 20        employer;
 21        (c)  Noncompliance with the carrier's minimum participation requirements;
 22        (d)  Noncompliance with the carrier's employer contribution requirements;
 23        (e)  In  the  case  of health benefit plans that are made available in the
 24        employer market only through one (1) or more associations, as  defined  in
 25        section 41-2202, Idaho Code, the membership of an employer in the associa-
 26        tion,  on  the basis of which the coverage is provided ceases, but only if
 27        the coverage is terminated under this paragraph uniformly  without  regard
 28        to any health status-related factor relating to any covered individual;
 29        (f)  The   employer   no   longer   meets   the  requirements  of  section
 30        41-2221(2)(b), Idaho Code;
 31        (g)  The carrier elects, at the time of coverage renewal,  to  discontinue
 32        offering a particular health benefit plan delivered or issued for delivery
 33        to  large  employers in this state. Unless otherwise authorized in advance
 34        by the department of insurance, a carrier may discontinue a  product  only
 35        after the product has been in use for at least thirty-six (36) consecutive
 36        months,  provided the carrier may not discontinue more than twenty percent
 37        (20%) of its total number of employees and  dependents  in  all  lines  of
 38        business in a twelve (12) month period. The carrier shall:
 39             (i)   Provide  advance  written  or electronic notice of its decision
 40             under this paragraph to the director;
 41             (ii)  Provide notice of the discontinuation to all affected employers
 42             and employees or dependents at least ninety (90) calendar days  prior
 43             to  the  date the particular health benefit plan will be discontinued
                                                                        
                                           2
                                                                        
  1             by the carrier, provided that notice to the director under the provi-
  2             sions of this paragraph shall be provided at least fourteen (14) cal-
  3             endar days prior to the notice to the affected employers;
  4             (iii) Offer to each affected employer, on a guaranteed  issue  basis,
  5             the option to purchase all other health benefit plans currently being
  6             offered by the carrier to large employers in this state; and
  7             (iv)  In exercising the option to discontinue the health benefit plan
  8             and in offering the option to purchase all other health benefit plans
  9             under  the provisions of this paragraph, act uniformly without regard
 10             to:
 11                  1.  The claims experience of an affected employer;
 12                  2.  Any health status-related factor relating  to  any  affected
 13                  employee or dependent; or
 14                  3.  Any   health  status-related  factor  relating  to  any  new
 15                  employee or dependent who may become eligible for the coverage.
 16        (h)  The carrier elects to nonrenew all of its health benefit plans deliv-
 17        ered or issued for delivery to large employers in this state.  In  such  a
 18        case the carrier shall:
 19             (i)   Provide  advance notice of its decision under this paragraph to
 20             the director in each state in which it is licensed; and
 21             (ii)  Provide notice of the decision not to  renew  coverage  to  all
 22             affected  employers  and  to the director at least one hundred eighty
 23             (180) calendar days prior to the nonrenewal  of  any  health  benefit
 24             plans by the carrier.  Notice to the director under the provisions of
 25             this  paragraph  shall  be  provided  at least three (3) working days
 26             prior to the notice to the affected employers; or
 27        (hi)  The director finds that the continuation of the coverage would:
 28             (i)   Not be in the best interests of the policyholders  or  certifi-
 29             cate holders; or
 30             (ii)  Impair  the  carrier's  ability to meet its contractual obliga-
 31             tions.
 32        In such instance the director shall assist affected employers  in  finding
 33        replacement coverage.
 34        (2)  A  carrier  that  elects not to renew a health benefit plan under the
 35    provisions of subsection (1)(gh) of this  section  shall  be  prohibited  from
 36    writing  new  business in the large employer market in this state for a period
 37    of five (5) years from the date of notice to the director.
 38        (3)  In the case of a carrier doing business in one (1)  established  geo-
 39    graphic  service  area  of the state, the provisions set forth in this section
 40    shall apply only to the carrier's operations in that service area.
                                                                        
 41        SECTION 2.  That Section 41-4707, Idaho Code, be, and the same  is  hereby
 42    amended to read as follows:
                                                                        
 43        41-4707.  RENEWABILITY  OF  COVERAGE. (1) A health benefit plan subject to
 44    the provisions of this chapter shall be renewable with respect to all eligible
 45    employees or dependents, at the option of the small employer, except in any of
 46    the following cases:
 47        (a)  Nonpayment of the required premiums;
 48        (b)  Fraud or intentional misrepresentation of material fact by the  small
 49        employer;
 50        (c)  Noncompliance with the carrier's minimum participation requirements;
 51        (d)  Noncompliance with the carrier's employer contribution requirements;
 52        (e)  In  the  case  of health benefit plans that are made available in the
 53        small employer market only through one (1) or more associations as defined
                                                                        
                                           3
                                                                        
  1        in section 41-2202, Idaho Code, the membership of an employer in the asso-
  2        ciation, on the basis of which the coverage is provided ceases,  but  only
  3        if  the  coverage  is  terminated  under  this paragraph uniformly without
  4        regard to any health status-related factor relating to any  covered  indi-
  5        vidual;
  6        (f)  The  small  employer  no  longer  meets  the  requirements of section
  7        41-4703(28), Idaho Code;
  8        (g)  The small employer carrier elects, at the time of  coverage  renewal,
  9        to  discontinue  offering  a  particular  health benefit plan delivered or
 10        issued for delivery to small employers in  this  state.  Unless  otherwise
 11        authorized  in  advance by the department of insurance, a carrier may dis-
 12        continue a product only after the product has been in  use  for  at  least
 13        thirty-six  (36)  consecutive months, provided the carrier may not discon-
 14        tinue more than fifteen percent (15%) of its total number of employees and
 15        dependents in all lines of business regulated by this chapter in a  twelve
 16        (12) month period. The carrier shall:
 17             (i)   Provide  advance  written  or electronic notice of its decision
 18             under this paragraph to the director;
 19             (ii)  Provide notice of the discontinuation to all affected employers
 20             and employees or dependents at least ninety (90) calendar days  prior
 21             to  the  date the particular health benefit plan will be discontinued
 22             by the carrier, provided that notice to the director under the provi-
 23             sions of this paragraph shall be provided at least fourteen (14) cal-
 24             endar days prior to the notice to the affected employers;
 25             (iii) Offer to each affected employer, on a guaranteed  issue  basis,
 26             the option to purchase all other health benefit plans currently being
 27             offered by the carrier to small employers in this state;
 28             (iv)  In exercising the option to discontinue the health benefit plan
 29             and in offering the option to purchase all other health benefit plans
 30             under  the provisions of this paragraph, act uniformly without regard
 31             to:
 32                  1.  The claims experience of an affected employer;
 33                  2.  Any health status-related factor relating  to  any  affected
 34                  employee or dependent; or
 35                  3.  Any   health  status-related  factor  relating  to  any  new
 36                  employee or dependent who may become eligible for the  coverage;
 37                  and
 38             (v)  Offer  the  new  products  at  rates  that  comply  with section
 39             41-4706(1)(c), Idaho Code.
 40        (h)  The small employer carrier elects to nonrenew all of its health bene-
 41        fit plans delivered or issued for delivery  to  small  employers  in  this
 42        state. In such a case the carrier shall:
 43             (i)   Provide  advance notice of its decision under this paragraph to
 44             the director in each state in which it is licensed; and
 45             (ii)  Provide notice of the decision not to  renew  coverage  to  all
 46             affected  small  employers  and  to the director at least one hundred
 47             eighty (180) calendar days prior to the nonrenewal of any health ben-
 48             efit plans by the carrier. Notice to the director  under  the  provi-
 49             sions  of this paragraph shall be provided at least three (3) working
 50             days prior to the notice to the affected small employers; or
 51        (hi)  The director finds that the continuation of the coverage would:
 52             (i)   Not be in the best interests of the policyholders  or  certifi-
 53             cate holders; or
 54             (ii)  Impair  the  carrier's  ability to meet its contractual obliga-
 55             tions.
                                                                        
                                           4
                                                                        
  1        In such instance the director shall assist  affected  small  employers  in
  2        finding replacement coverage.
  3        (2)  A  small  employer  carrier that elects not to renew a health benefit
  4    plan under the provisions of subsection (1)(gh) of this section shall  be pro-
  5    hibited from writing new business in the small employer market in  this  state
  6    for a period of five (5) years from the date of notice to the director.
  7        (3)  In  the  case  of  a small employer carrier doing business in one (1)
  8    established geographic service area of the state, the rules set forth in  this
  9    subsection shall apply only to the carrier's operations in that service area.
                                                                        
 10        SECTION  3.  That  Section 41-5207, Idaho Code, be, and the same is hereby
 11    amended to read as follows:
                                                                        
 12        41-5207.  RENEWABILITY OF COVERAGE. (1) A health benefit plan  subject  to
 13    the provisions of this chapter shall be renewable with respect to the individ-
 14    ual  or dependents, at the option of the individual, except in any of the fol-
 15    lowing cases:
 16        (a)  Nonpayment of the required premiums;
 17        (b)  Fraud or intentional misrepresentation of material fact by the  indi-
 18        vidual  insured  or  his  representatives. An individual whose coverage is
 19        terminated for fraud or misrepresentation shall not be  deemed  to  be  an
 20        "eligible  individual"  for a period of twelve (12) months from the effec-
 21        tive date of the termination of the individual's coverage and shall not be
 22        deemed to have "qualifying previous coverage" under chapter 22, 47 or  52,
 23        title 41, Idaho Code;
 24        (c)  The individual ceases to be an eligible individual as defined in sec-
 25        tion 41-5203(10), Idaho Code;
 26        (d)  In  the  case  of health benefit plans that are made available in the
 27        individual market only through one (1) or more associations, as defined in
 28        section 41-2202, Idaho Code, the membership of an individual in the  asso-
 29        ciation,  on  the basis of which the coverage is provided ceases, but only
 30        if the coverage is  terminated  under  this  paragraph  uniformly  without
 31        regard  to  any health status-related factor relating to any covered indi-
 32        vidual;
 33        (e)  The individual carrier elects, at the time of  coverage  renewal,  to
 34        discontinue  offering a particular health benefit plan delivered or issued
 35        for delivery to individuals in this state. Unless otherwise authorized  in
 36        advance  by the department of insurance, a carrier may discontinue a prod-
 37        uct only after the product has been in use for at  least  thirty-six  (36)
 38        consecutive  months,  provided  the  carrier may not discontinue more than
 39        fifteen percent (15%) of its total number of individuals and dependents in
 40        all lines of business regulated by this chapter in  a  twelve  (12)  month
 41        period. The carrier shall:
 42             (i)   Provide  advance  written  or electronic notice of its decision
 43             under this paragraph to the director;
 44             (ii)  Provide notice of the discontinuation to all affected individu-
 45             als at least ninety (90) calendar days prior to the date the particu-
 46             lar health benefit plan will be discontinued by the carrier, provided
 47             that notice to the director under the provisions  of  this  paragraph
 48             shall  be  provided at least fourteen (14) calendar days prior to the
 49             notice to the affected individuals;
 50             (iii) Offer to each affected individual, on a guaranteed issue basis,
 51             the option to purchase all other health benefit plans currently being
 52             offered by the carrier to individuals in this state;
 53             (iv)  Act uniformly without regard to any health status-related  fac-
                                                                        
                                           5
                                                                        
  1             tor  of an affected individual or dependent of an affected individual
  2             who may become eligible for the coverage; and
  3             (v)  Offer the  new  products  at  rates  that  comply  with  section
  4             41-5206(1)(b), Idaho Code.
  5        (f)  The  individual  carrier elects to nonrenew all of its health benefit
  6        plans delivered or issued for delivery to individuals in  this  state.  In
  7        such a case the carrier shall:
  8             (i)   Provide  advance notice of its decision under this paragraph to
  9             the director; and
 10             (ii)  Provide notice of the decision not to  renew  coverage  to  all
 11             affected  individuals and to the director at least one hundred eighty
 12             (180) calendar days prior to the nonrenewal  of  any  health  benefit
 13             plans  by the carrier. Notice to the director under the provisions of
 14             this paragraph shall be provided at  least  three  (3)  working  days
 15             prior to the notice to the affected individuals; or
 16        (fg)  The director finds that the continuation of the coverage would:
 17             (i)   Not  be  in the best interests of the policyholders or certifi-
 18             cate holders; or
 19             (ii)  Impair the carrier's ability to meet  its  contractual  obliga-
 20             tions.
 21        In  such instance, the director shall assist affected individuals in find-
 22        ing replacement coverage.
 23        (2)  An individual carrier that elects not to renew a health benefit  plan
 24    under the provisions of subsection (1)(ef) of this section shall be prohibited
 25    from  writing new business in the individual market in this state for a period
 26    of five (5) years from the date of notice to the director.
 27        (3)  In the case of an individual carrier doing business in one (1) estab-
 28    lished geographic service area of the state, the rules set forth in this  sub-
 29    section shall apply only to the carrier's operations in that service area.

Statement of Purpose / Fiscal Impact



                       STATEMENT OF PURPOSE

                             RS15984 

This proposed HIPAA-compliant legislation will allow carriers to
discontinue obsolete health insurance products while continuing to
guarantee coverage to members through new and existing product
lines, thereby enabling health insurers to better respond to market
needs.  Similar legislation has been enacted in 44 other states.



                           FISCAL NOTE
None.





Contact:  Rep. Max Black, 332-1000
          Rep. Bill Deal, 332-1000

          Regence BlueShield of Idaho 
          Lyn Darrington, 336-1986
          Tim Olson, 333-7838


STATEMENT OF PURPOSE/FISCAL NOTE                         H 655