|SB 0820||Makes several changes to individual and small employer health insurance laws|
|LR Number:||3379S.03I||Fiscal Note:||3379-03|
|Committee:||Insurance and Housing|
|Last Action:||02/29/00 - Hearing Conducted S Insurance & Housing Committee-||Journal page:|
SB 820 - This act establishes an advisory committee on health insurance mandates; expands eligibility into the Missouri Health Insurance Pool for high-risk enrollees; modifies the small employer health insurance provisions; establishes rating restrictions on individual health insurance policies; and establishes an individual health benefit reinsurance association.
ADVISORY COMMISSION ON HEALTH INSURANCE MANDATES - Establishes the Advisory Commission on Health Insurance Mandates. The commission is charged with studying the costs and benefits of each health insurance benefit or offer mandated by Missouri law. The commission must report by January 1, 2001, the results of its study to the Governor, the Speaker of the House of Representatives, and the President Pro Tem of the Senate.
MISSOURI HEALTH INSURANCE POOL - Allows individuals to be eligible for coverage through the Missouri Health Insurance Pool (also referred to as the "high risk pool") if they have been refused coverage, offered coverage at a rate exceeding 135% of the standard rate, or their period of creditable coverage is not less than 12 months. The rate for coverage under the pool is 135% of the standard rate for individuals who had continuous coverage through a date not less than 63 days prior to the effective date of pool coverage or who enroll during the open enrollment period. The rate for other eligible individuals is 200% of the standard rate.
The act also changes the makeup of the board of directors which governs the health insurance pool.
SMALL EMPLOYER HEALTH INSURANCE - Modifies the Small Employer Health Insurance Availability Act so that it complies with the federal Health Insurance Portability and Accountability Act of 1996. Under this act, a small employer employs 2 to 50 employees. Current law defines a small employer as any association which employs 3 to 25 employees. This act also removes language that requires a husband and wife working for the same small employer to be considered one eligible employee.
A small employer health benefit plan is renewable except when: 1) the plan sponsor fails to pay a premium or contribution in accordance with the terms of the plan; 2) the plan sponsor commits an act of fraud; 3) the small employer carrier decides to discontinue offering a particular type of group health benefit plan in the small employer market; or 4) when the small employer's membership in a professional association, in which the employer obtains the insurance, ends. A small employer carrier offering coverage through a network plan is not required to offer coverage to persons or small employers who no longer reside or work in the service area for which the carrier is authorized to do business.
Small employer plans are allowed to apply preexisting condition exclusions during the first 12 months of coverage but are required to waive the exclusions for the period of time that an individual had creditable coverage continuous to a date not less than 63 days prior to obtaining the new coverage. The exclusion must also be waived if the individual's prior coverage is for a period of 12 of the most recent 18 months. Insurers may discontinue offering a plan under certain conditions. No preexisting condition exclusions are allowed relating to pregnancy or a condition for which medical advice was received during a period when the person had qualifying coverage.
LIFE INSURANCE AND HEALTH INSURANCE - This act prohibits insurance companies from requiring the purchase of life insurance policies or annuities as a condition of purchasing health insurance.
INDIVIDUAL HEALTH INSURANCE POLICIES - This act establishes rating restrictions for individual health insurance policies. An insurer may refuse to issue an individual policy of accident and health insurance based upon the insurer's underwriting standards. An insurer, however, shall not refuse to issue the individual policy if the applicant had prior creditable coverage which was terminated within 63 days prior to the application, the period of creditable coverage is not less than 12 months, and the individual has exhausted any COBRA coverage. An insurer is not required to issue individual health benefit coverage without medical underwriting when such plans constitute 2% or more of that insurer's earned premium on an annual basis from individual health plans.
An individual policy of accident and sickness insurance shall be renewable except for the following reasons: 1) nonpayment of premiums; 2) fraud or misrepresentation; 3) attainment of eligibility for Medicare due to age; 4) the insurer decides not to renew all policies within the state; and 5) the director of insurance finds that continuance of the policy would not be in the best interests of other enrollees or would impair the carrier's ability to meet its contractual obligations.
The act also includes several rating restrictions for individual health insurance premiums. An insurance carrier shall base its rates on "allowed rating characteristics" which are family composition, geographic area, age and use of tobacco. After establishing a premium rate based on the allowed rating characteristics and benefits for a block of business, the premium rate for one block of business of individual policies may not exceed certain percentages for another block of business.
This act allows insurance companies issuing individual health insurance policies to apply preexisting condition exclusions during the first 12 months of coverage but are required to waive the exclusions for the period of time that an individual has coverage continuous to a date not less than 63 days prior to obtaining new coverage. Genetic information cannot be treated as a condition for which a preexisting exclusion may be imposed in the absence of a diagnosis of the condition related to the information.
HEALTH INSURANCE PURCHASING COOPERATIVE - This act requires the Department of Insurance to administer a grant program to assist in the establishment of health insurance purchasing cooperatives. Each individual grant is limited to $25,000. Funds for the grants must be appropriated from general revenue and the total amount of grants may not exceed $400,000. This act also establishes the Advisory Joint Committee on Health Insurance Purchasing Cooperatives.
MISSOURI INDIVIDUAL HEALTH BENEFIT REINSURANCE ASSOCIATION - This act establishes an individual health benefit reinsurance association and requires all entities providing health insurance or health benefits subject to state insurance regulation to be members of the association. Those entities that provide plans only for Medicaid recipients are exempted from membership in the association. The association's board is responsible for developing a plan to provide for the sharing of losses between the members of the association related to insuring individuals enrolled in health plans without the use of medical underwriting. Board members are immune from civil liability for performing duties.
CLOSING A BLOCK OF BUSINESS - This act requires health insurers to follow certain procedures if they close a block of insurance business pertaining to individual health insurance policies. The insurer cannot close a block of business unless the insurer allows the existing contract holders to purchase a policy from a similar block of business which provides similar benefits and the insurer pools the experience of the closed block of business with other similar blocks of business to determine the new premium rate. If the insurer cannot offer a comparable block of insurance business, then the insurer must provide notice to the director of revenue that it is deciding to close a block of business.
This is act is similar to HS/HCS/HB 718,225, 876 & 838 (1999)and HB 1362 (2000).
This act has an effective date for certain sections. STEPHEN J. WITTE