HB 818 Establishes the Missouri Health Insurance Portability and Accountability Act and changes the laws regarding the Missouri Health Insurance Pool and small employer insurance availability
Sponsor: Loudon
LR Number: 1261S.22T Fiscal Note: 1261-13
Committee: Health and Mental Health
Last Action: 6/1/2007 - Signed by Governor Journal Page:
Title: SS#2 SCS HCS HB 818 Calendar Position:
Effective Date: Varies
House Handler: Ervin

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Current Bill Summary


SS#2/SCS/HCS/HB 818 - This act establishes the Missouri Health Insurance Portability and Accountability Act and changes the laws regarding the Missouri Health Insurance Pool and small employer insurance availability.

HEALTH CARE SHARING MINISTRY TAX DEDUCTION - This act allows taxpayers to subtract from their Missouri adjusted gross income the amount they have paid as a member of a health care sharing ministry. The deduction is only allowed to the extent that the amount is not deducted on the taxpayer’s federal income tax return (Section 143.118). The act provides a definition for the term health care sharing ministry. It further provides that the insurance laws of Missouri do not apply to such organizations (Section 376.1750).

HEALTH INSURANCE PREMIUM DEDUCTION - This act authorizes 100% of the amount paid for nonreimbursed qualified health insurance premiums to be deducted from a taxpayer's Missouri taxable income to the extent the amount is not already included in the taxpayer's itemized deductions (Section 143.121). This provision is contained in HCS/HB 364 (2007).

HEALTH INSURANCE TAX CREDIT - This act allows a self-employed taxpayer, who is otherwise ineligible for the federal income health insurance tax deduction under federal law, to receive a tax credit (Section 143.119).

DOWN SYNDROME PRENATAL INFORMATION - This act requires a health care provider to provide certain information to a patient who receives a positive test result from a prenatal test for Down syndrome or other condition, including current information about the conditions tested for, the accuracy of such tests, and resources for obtaining support services for such conditions and referrals to supportive service providers, including the Missouri Alternatives to Abortion Services Program (Section 191.912).

ACCESS TO TAX REFUNDS FOR DELINQUENT MEDICAL BILLS - This act establishes a process for hospitals and other health care providers to levy a person's tax refund or lottery winnings. Under current law, Sections 143.782 to 143.788, allow state agencies to submit an agency debt that a person owes to it to the department of revenue in order to set off the debt by the person's tax refund. Under Section 143.790, a hospital or other healthcare provider may submit a claim to the Department of Health and Senior Services for any debt over 90 days old that is owed to it by a person who was not covered by health insurance or public aid at the time the health care services were administered. If the Department of Health determines that the claim is valid, the claim will become a "debt: of the agency for purposes of the act, and the Department of Health can submit the debt to the Department of Revenue to set off the person's tax refund. The act utilizes the current law with respect to providing notice to the debtor and the opportunity to contest the claim. After receiving the funds from the Department of Revenue, the Department of Health will settle with the hospital or provider. The hospital or provider will be charged an administrative fee not to exceed 20% of the collected amount. The act also provides that lottery prize payouts are subject to the same procedure (Sections 143.782, 143.790, and 313.321).

HMO DEPENDENT COVERAGE FOR DEPENDENTS WITH MENTAL OR PHYSICAL HANDICAPS - Under this act, if a HMO plan provides that dependent child coverage terminates at a certain age, the coverage shall continue while the child is incapable of self-sustaining employment because of a mental or physical handicap and is chiefly dependent upon the enrollee for support. Proof of incapacity and dependency must be provided at least 31 days after the attainment of the limiting age. HMOs may seek subsequent proof of disability and dependency.

DEPENDENT COVERAGE UNTIL AGE 25 - Under this act, if a HMO plan provides coverage for an enrollee's dependent under which coverage of the dependent terminates at a specific age before the dependent's 25th birthday, the HMO plan must nevertheless provide coverage (at the enrollee's option) to the dependent after that specific age until the dependent's 25th birthday. In addition to being no more than 25 years of age, the dependent must be unmarried, a state resident and must not be provided health insurance coverage under a health benefit plan or government program (Section 354.536).

GROUP HEALTH INSURANCE DEPENDENT COVERAGE UP TO AGE 25 - Under this act, if a group health insurance policy provides coverage for an certificate holder's dependent under which coverage of the dependent terminates at a specific age before the dependent’s 25th birthday, the group plan must nevertheless provide coverage (at the certificate holder's option) to the dependent after that specific age up to the age of 25. In addition to being no more than 25 years of age, the dependent must be unmarried, a state resident and must not be provided health insurance coverage under a health benefit plan or government program (Section 376.426).

INDIVIDUAL ACCIDENT AND SICKNESS INSURANCE DEPENDENT COVERAGE -

Under this act, if a policy of accident or sickness insurance provides coverage for a policyholder's dependent under which coverage of the dependent terminates at a specific age before the dependent's 25th birthday, the individual plan must nevertheless provide coverage (at the policyholder’s option) to the dependent after that specific age up to the age of 25. In addition to being no more than 25 years of age, the dependent must be unmarried, a state resident and must not be provided health insurance coverage under a health benefit plan or government program (Section 376.776).

HIGH RISK POOL TO OFFER HIGH DEDUCTIBLE POLICIES COUPLE WITH HSAs - This act requires the state high risk pool to offer all eligible persons for pool coverage the option of receiving health insurance coverage through a high deductible plan coupled with a health savings account (Section 376.987).

DISCOUNT MEDICAL PLAN ORGANIZATIONS - This act establishes regulations for discount medical plan organizations that issue health discount medical plans. The provisions are contained in SCS/SB 381 (2007)(Section376.1500 to 376.1532).

SMALL EMPLOYER HEALTH INSURANCE ACT - This act modifies Section 379.936 by allowing the premium rate for small employer health insurance to vary from the index rate by 35% rather than 25%.

MISSOURI HEALTH INSURANCE PORTABILITY AND ACCOUNTABILITY ACT - This act amends several provisions of law relating to group health insurance (large and small group market) and individual health insurance. The act (Sections 376.450 to 376.454) attempts to make Missouri "HIPAA compliant" for purposes of federal law. HIPAA is the Health Insurance Portability Accountability Act which, amongst other things, relates to the crediting of prior health coverage for purposes of reducing preexisting condition exclusion periods and determining eligibility.

The new provisions define such terms as "excepted benefits", "pre-existing condition exclusion", "waiting period", and other terms for purposes of the Missouri health insurance portability and accountability act (Section 376.450).

Under the provisions of the act, an insurer may only exclude or limit coverage on persons if the insurer complies with Sections 376.450 to 376.454. Under the act, a health insurance issuer offering group coverage may impose a preexisting condition exclusion only if:

(1) The exclusion relates to a condition for which medical advice, diagnosis, or treatment was recommended or received within the 6 month period ending on the enrollment date;

(2) The exclusion extends for a period no more than 12 months, or 18 months in the case of a late enrollee; and

(3) The period of exclusion is reduced by the aggregate period of creditable coverage.

The act sets forth rules on how to apply creditable coverage. For instance, a period of creditable coverage shall not be counted if, after such period and before the enrollment date, there was a 63-day period in which the individual was not covered by insurance. The act also sets forth rules on how to apply preexisting condition exclusions with respect to adopted children and pregnancies.

The act requires group health insurance issuers to provide certifications of creditable coverage as required by federal law.

The act sets forth rules regarding special enrollment periods in which an employee or a dependent may enroll for coverage under certain conditions. For instance, an employee may enroll for coverage if he or she was covered under another group plan when the coverage was originally offered (Section 376.450.7).

The act allows health management organizations to provide an affiliation period for coverage if no pre-existing condition exclusions are imposed, the period is applied uniformly and does not exceed two months or the period starts on the enrollment date and runs concurrently with waiting periods.

This act requires group health insurance issuers to follow standards prohibiting discrimination of eligible individuals based on physical or mental health, claims experience, medical history, genetic information, insurability, or disability and premiums based on health status.

The act establishes standards for group health insurers prohibiting discrimination on premium contributions based on health status. A group health insurer shall not individuals to, as a condition of enrollment, pay a premium that is greater than a premium from a similarly situated individual on the basis of any health status-related factor. This, however, shall not prevent a group health insurer from offering premium discounts or rebates for adherence to health promotion and disease prevention programs (Section 376.451.2).

The act sets forth rules for renewing large group health insurance plans. Under the act, health insurance issuers offering large group market plans shall renew or continue the coverage at the option of the plan sponsor. The health insurance issuer may discontinue coverage for nonpayment of premiums, fraudulent activity by the sponsor (including misrepresentation of material facts relating to coverage), sponsor's failure to comply with minimum participation requirements, sponsor's failure to comply with employer contribution requirements, and other conditions set forth in the act.

A health insurance issuer shall not discontinue offering a particular type of group coverage in the group market unless:

(1) The issuer provides at least 90 days notice of such fact to each plan's sponsor;

(2) The issuer offers each plan sponsor the option to purchase other types of group coverage offered in the large market; and

(3) The issuer acts uniformly without regard to the claims experience of those plan sponsors or health-status factors of any participant or new participant.

A health insurance issuer shall not discontinue offering all group coverage in the large market unless:

(1) The health insurance issuer provides at least 180 days to the director, plan sponsors and beneficiaries prior to the date of discontinuation; and

(2) All health insurance issued in Missouri in the large group market is continued and is not renewed.

Under this act, an employer that provides health insurance coverage shall not provide such coverage unless the employer has established a premium-only cafeteria plan as provided under federal law (26 U.S.C. §125). Employers who are self-insured are not required to offer the section 125 cafeteria plan(Section 376.453).

The act sets forth similar renewal and discontinuance rules for health insurer issuers offering individual policies in the individual market (Section 376.454).

MISSOURI HEALTH INSURANCE POOL (HIGH RISK) - The act modifies the definition section that governs the Missouri high risk pool provisions. The act adds several new definitions to the high risk pool provision to bring the Missouri Health Insurance Pool into compliance with the federal Health Insurance Portability and Accountability Act (HIPPA) (Section 376.960).

The act specifically provides authority for the director of the Department of Insurance to remove pool board members for neglect of duty, misfeasance, malfeasance, or nonfeasance in office (Section 376.961).

The act allows the board to administer separate accounts to separate federally defined eligible individuals and trade act eligible individuals from other pool eligible individuals (Section 376.964).

The act establishes criteria for determining the individuals eligibility for the high-risk pool and for determining when notifications need to be provided to pool members regarding underwriting, eligibility, premiums, and changes in coverage. Under the act, the following individual persons shall be eligible for pool coverage:

(1) An individual person who provides evidence of rejection by 2 or more insurers or refusal by an insurer to issue health insurance except at a rate exceeding the plan rate for substantially similar health insurance;

(2) A federally defined eligible individual who has not experienced a significant break in coverage;

(3) A trade act eligible individual;

(4) Each resident dependent of a person who is eligible for plan coverage;

(5) Any person, regardless of age, that can be claimed as a dependent of a trade act eligible individual on such trade act eligible individual's tax filing;

(6) Any person whose health insurance coverage is involuntarily terminated for any reason other than nonpayment of premium or fraud;

(7) Any person whose premiums for health insurance coverage have increased to 150% or more of rates established by the board as applicable for individual standard risks;

(8) Any person currently insured who would have qualified as a federally defined eligible individual or a trade act eligible individual between the effective date of the federal Health Insurance Portability and Accountability Act of 1996 and the effective date of this act.

The act also sets forth which individuals are not eligible for pool coverage. Under the act, persons who have or obtain coverage similar to a pool plan are ineligible for coverage. This exclusion shall not apply to a person who has such coverage if the premiums for such coverage have increased to 150% to 200% of rates established by the board (down from 300%). After December 31, 2009, the exclusion shall not apply to a person who has such coverage if the premiums for such coverage have increased to 300% of the rates established by the board (reverts back to the current 300% standard). A person may maintain eligibility by maintaining other insurance coverage in order to satisfy a preexisting condition waiting period. Similarly, a person may maintain plan coverage to satisfy a preexisting condition waiting period under another health insurance policy intended to replace the pool policy (Section 376.966.3).

Under the act, insurers are required to notify individuals of the existence of the pool and its eligibility requirements if the insurers take certain actions (rejection or cancellation of coverage or limitation of coverage) which are likely to render the individual eligible for pool coverage (Section 376.966.5).

The act requires the pool to establish premium rates for pool coverage. Premium rates and schedules must be submitted to the director for approval prior to use. The standard risk rate shall be determined by considering the premium rates charged by other health insurers offering individual coverage. The initial rates for pool coverage shall not be less than 125% of rates established as applicable for individual standard risks (down from 150%). In no event shall pool rates exceed 150% of the standard rate charge for federally defined eligible individuals and trade act eligible individuals. The same standard applies to other individuals covered under the pool (150%)(down from 200% of standard rate) (Section 376.986.4).

The act requires pool coverage to exclude expenses for 12 months for pre-existing conditions. The act excludes certain individuals (including federally defined eligible individuals and trade act eligible individuals) without significant gaps in coverage (63 days) from pre-existing condition exclusions (Section 376.986.6 and .7).

The act specifically exempts the pool board administrator, board members, and pool employees from legal action pertaining to participation in the required duties of the pool (Section 376.989).

SMALL EMPLOYER HEALTH INSURANCE AVAILABILITY ACT - The act modifies the definition section that governs the Small Employer Health Insurance Availability Act to bring that portion of Missouri law into compliance with the federal Health Insurance Portability and Accountability Act (HIPPA) (Section 376.930). Most notably, the act modifies the definition of "small employer" to mean an employer that employs on average at least two but no more than 50 eligible employees (increased from 25 employees).

The act modifies the provision governing when a small employer may renew a small employer health benefit plan. The act provides that a small employer carrier that elects to discontinue offering a particular plan must provide at least 90 days notice to each plan sponsor and offer each plan sponsor the option to purchase other health benefit plans. A small employer carrier that elects to discontinue offering all health insurance coverage in Missouri must provide at least 180 days notice to the director and each plan sponsor. The act provides that an eligible employee of a small employer may choose to retain their individual health insurance policy at the time of open enrollment so long as the small employer provides a defined contribution through a cafeteria 125 plan.

The act repeals three provisions that related to the establishment and operation of the Missouri Small Employer Health Reinsurance Program and the Health Benefit Plan Committee (which is in essence is defunct as its statutory duty has already been performed)(Sections 379.942, 379.943, and 379.944).

MCHCP AND HIGH DEDUCTIBLE PLANS - This act requires the Missouri Consolidated Health Care Plan to offer all qualifies state employees and retirees the option of receiving health care coverage through a high deductible plan combined with a health savings account beginning with the 2009 open enrollment period (sections 103.080 and 103.085).

HIGH RISK POOL BOARD OF DIRECTORS - This act adds 5 ex officio members to the high risk pool board (2 House members, 2 Senators and 1 representative from a Missouri hospital). Their terms shall expire December 31, 2009 (section 376.961).

HIGH RISK POOL FUNDING STUDY - This act requires the board of the state high risk pool to conduct a study regarding the financing of the pool. The board must submit a report of its findings and recommendations to the General Assembly by January 1, 2008 (section 376.990).

TOCOLOGISTS - This act provides that any person who holds current ministerial or tocological certification by an organization accredited by NOCA may provide certain types of services (section 376.1753).

PRESCRIPTION DRUG COVERAGE CANCELLATION - Under the act, a health carrier is required to provide at least 30 days written or electronic notification prior to deleting any drugs from the carrier's prescription drug formulary (Section 376.392).

The act contains an effective date of January 1, 2008, for a majority of the provisions contained in the act.

STEPHEN WITTE