2012 -- H 7892

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LC02083

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STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2012

____________

A N A C T

RELATING TO INSURANCE -- ACCIDENT AND SICKNESS INSURANCE POLICIES

     

     

     Introduced By: Representatives Kennedy, Naughton, Ferri, Tanzi, and O`Grady

     Date Introduced: March 06, 2012

     Referred To: House Corporations

It is enacted by the General Assembly as follows:

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     SECTION 1. Purpose. – It is the purpose of this act to amend Rhode Island general laws

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so as to be consistent with health insurance market reforms enacted in federal law.

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     SECTION 2. Construction. – This act is intended to establish health insurance standards

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in addition to, but not inconsistent with the health insurance standards established in the Patient

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Protection and Affordable Care Act of 2010, as amended by the Health Care and Education

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Reconciliation Act of 2010.

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     SECTION 3. Chapter 27-18 of the General Laws entitled "Accident and Sickness

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Insurance Policies" is hereby amended by adding thereto the following section:

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     27-18-71. Prohibition on preexisting condition exclusions. – (a) A health insurance

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policy, subscriber contract, or health plan offered, issued, issued for delivery, or issued to cover a

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resident of this state by a health insurance company licensed pursuant to this title and/or chapter:

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     (1) Shall not limit or exclude coverage for an individual under the age of nineteen (19) by

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imposing a preexisting condition exclusion on that individual.

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     (2) For plan or policy years beginning on or after January 1, 2014, shall not limit or

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exclude coverage for any individual by imposing a preexisting condition exclusion on that

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individual.

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     (b) As used in this section:

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     (1) “Preexisting condition exclusion” means a limitation or exclusion of benefits,

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including a denial of coverage, based on the fact that the condition (whether physical or mental)

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was present before the effective date of coverage, or if the coverage is denied, the date of denial,

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under a health benefit plan whether or not any medical advice, diagnosis, care or treatment was

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recommended or received before the effective date of coverage.

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     (2) “Preexisting condition exclusion” means any limitation or exclusion of benefits,

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including a denial of coverage, applicable to an individual as a result of information relating to an

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individual’s health status before the individual’s effective date of coverage, or if the coverage is

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denied, the date of denial, under the health benefit plan, such as a condition(whether physical or

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mental) identified as a result of a pre-enrollment questionnaire or physical examination given to

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the individual, or review of medical records relating to the pre-enrollment period.

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     (c) This section shall not apply to grandfathered health plans providing individual health

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insurance coverage.

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     SECTION 4. Chapter 27-18.5 of the General Laws entitled "Individual Health Insurance

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Coverage" is hereby amended by adding thereto the following section:

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     27-18.5-10. Prohibition on preexisting condition exclusions. -- (a) A health insurance

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policy, subscriber contract, or health plan offered, issued, issued for delivery, or issued to cover a

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resident of this state by a health insurance company licensed pursuant to this title and/or chapter:

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     (1) Shall not limit or exclude coverage for an individual under the age of nineteen (19) by

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imposing a preexisting condition exclusion on that individual.

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     (2) For plan or policy years beginning on or after January 1, 2014, shall not limit or

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exclude coverage for any individual by imposing a preexisting condition exclusion on that

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individual.

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     (b) As used in this section:

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     (1) “Preexisting condition exclusion” means a limitation or exclusion of benefits,

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including a denial of coverage, based on the fact that the condition (whether physical or mental)

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was present before the effective date of coverage, or if the coverage is denied, the date of denial,

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under a health benefit plan whether or not any medical advice, diagnosis, care or treatment was

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recommended or received before the effective date of coverage.

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     (2) “Preexisting condition exclusion” means any limitation or exclusion of benefits,

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including a denial of coverage, applicable to an individual as a result of information relating to an

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individual’s health status before the individual’s effective date of coverage, or if the coverage is

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denied, the date of denial, under the health benefit plan, such as a condition(whether physical or

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mental) identified as a result of a pre-enrollment questionnaire or physical examination given to

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the individual, or review of medical records relating to the pre-enrollment period.

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     (c) This section shall not apply to grandfathered health plans providing individual health

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insurance coverage.

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     SECTION 5. Chapter 27-19 of the General Laws entitled "Nonprofit Hospital Service

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Corporations" is hereby amended by adding thereto the following section:

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     27-19-62. Prohibition on preexisting condition exclusions. -- (a) A health insurance

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policy, subscriber contract, or health plan offered, issued, issued for delivery, or issued to cover a

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resident of this state by a health insurance company licensed pursuant to this title and/or chapter:

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     (1) Shall not limit or exclude coverage for an individual under the age of nineteen (19) by

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imposing a preexisting condition exclusion on that individual.

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     (2) For plan or policy years beginning on or after January 1, 2014, shall not limit or

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exclude coverage for any individual by imposing a preexisting condition exclusion on that

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individual.

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     (b) As used in this section:

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     (1) “Preexisting condition exclusion” means a limitation or exclusion of benefits,

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including a denial of coverage, based on the fact that the condition (whether physical or mental)

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was present before the effective date of coverage, or if the coverage is denied, the date of denial,

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under a health benefit plan whether or not any medical advice, diagnosis, care or treatment was

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recommended or received before the effective date of coverage.

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     (2) “Preexisting condition exclusion” means any limitation or exclusion of benefits,

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including a denial of coverage, applicable to an individual as a result of information relating to an

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individual’s health status before the individual’s effective date of coverage, or if the coverage is

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denied, the date of denial, under the health benefit plan, such as a condition(whether physical or

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mental) identified as a result of a pre-enrollment questionnaire or physical examination given to

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the individual, or review of medical records relating to the pre-enrollment period.

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     (c) This section shall not apply to grandfathered health plans providing individual health

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insurance coverage.

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     SECTION 6. Chapter 27-20 of the General Laws entitled "Nonprofit Medical Service

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Corporations" is hereby amended by adding thereto the following section:

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     27-20-57. Prohibition on preexisting condition exclusions. -- (a) A health insurance

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policy, subscriber contract, or health plan offered, issued, issued for delivery, or issued to cover a

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resident of this state by a health insurance company licensed pursuant to this title and/or chapter:

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     (1) Shall not limit or exclude coverage for an individual under the age of nineteen (19) by

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imposing a preexisting condition exclusion on that individual.

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     (2) For plan or policy years beginning on or after January 1, 2014, shall not limit or

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exclude coverage for any individual by imposing a preexisting condition exclusion on that

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individual.

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     (b) As used in this section:

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     (1) “Preexisting condition exclusion” means a limitation or exclusion of benefits,

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including a denial of coverage, based on the fact that the condition (whether physical or mental)

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was present before the effective date of coverage, or if the coverage is denied, the date of denial,

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under a health benefit plan whether or not any medical advice, diagnosis, care or treatment was

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recommended or received before the effective date of coverage.

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     (2) “Preexisting condition exclusion” means any limitation or exclusion of benefits,

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including a denial of coverage, applicable to an individual as a result of information relating to an

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individual’s health status before the individual’s effective date of coverage, or if the coverage is

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denied, the date of denial, under the health benefit plan, such as a condition(whether physical or

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mental) identified as a result of a pre-enrollment questionnaire or physical examination given to

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the individual, or review of medical records relating to the pre-enrollment period.

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     (c) This section shall not apply to grandfathered health plans providing individual health

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insurance coverage.

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     SECTION 7. Chapter 27-41 of the General Laws entitled "Health Maintenance

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Organizations" is hereby amended by adding thereto the following section:

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     27-41-75. Prohibition on preexisting condition exclusions. -- (a) A health insurance

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policy, subscriber contract, or health plan offered, issued, issued for delivery, or issued to cover a

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resident of this state by a health insurance company licensed pursuant to this title and/or chapter:

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     (1) Shall not limit or exclude coverage for an individual under the age of nineteen (19) by

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imposing a preexisting condition exclusion on that individual.

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     (2) For plan or policy years beginning on or after January 1, 2014, shall not limit or

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exclude coverage for any individual by imposing a preexisting condition exclusion on that

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individual.

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     (b) As used in this section:

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     (1) “Preexisting condition exclusion” means a limitation or exclusion of benefits,

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including a denial of coverage, based on the fact that the condition (whether physical or mental)

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was present before the effective date of coverage, or if the coverage is denied, the date of denial,

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under a health benefit plan whether or not any medical advice, diagnosis, care or treatment was

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recommended or received before the effective date of coverage.

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     (2) “Preexisting condition exclusion” means any limitation or exclusion of benefits,

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including a denial of coverage, applicable to an individual as a result of information relating to an

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individual’s health status before the individual’s effective date of coverage, or if the coverage is

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denied, the date of denial, under the health benefit plan, such as a condition(whether physical or

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mental) identified as a result of a pre-enrollment questionnaire or physical examination given to

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the individual, or review of medical records relating to the pre-enrollment period.

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     (c) This section shall not apply to grandfathered health plans providing individual health

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insurance coverage.

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     SECTION 8. Section 27-18.6-2 and 27-18.6-3 of the General Laws in Chapter 27-18.6

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entitled "Large Group Health Insurance Coverage" are hereby amended to read as follows:

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     27-18.6-2. Definitions. -- The following words and phrases as used in this chapter have

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the following meanings unless a different meaning is required by the context:

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      (1) "Affiliation period" means a period which, under the terms of the health insurance

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coverage offered by a health maintenance organization, must expire before the health insurance

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coverage becomes effective. The health maintenance organization is not required to provide

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health care services or benefits during the period and no premium shall be charged to the

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participant or beneficiary for any coverage during the period;

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      (2) "Beneficiary" has the meaning given that term under section 3(8) of the Employee

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Retirement Security Act of 1974, 29 U.S.C. section 1002(8);

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      (3) "Bona fide association" means, with respect to health insurance coverage in this state,

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an association which:

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      (i) Has been actively in existence for at least five (5) years;

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      (ii) Has been formed and maintained in good faith for purposes other than obtaining

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insurance;

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      (iii) Does not condition membership in the association on any health status-relating

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factor relating to an individual (including an employee of an employer or a dependent of an

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employee);

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      (iv) Makes health insurance coverage offered through the association available to all

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members regardless of any health status-related factor relating to the members (or individuals

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eligible for coverage through a member);

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      (v) Does not make health insurance coverage offered through the association available

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other than in connection with a member of the association;

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      (vi) Is composed of persons having a common interest or calling;

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      (vii) Has a constitution and bylaws; and

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      (viii) Meets any additional requirements that the director may prescribe by regulation;

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      (4) "COBRA continuation provision" means any of the following:

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      (i) Section 4980(B) of the Internal Revenue Code of 1986, 26 U.S.C. section 4980B,

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other than the subsection (f)(1) of that section insofar as it relates to pediatric vaccines;

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      (ii) Part 6 of subtitle B of title 1 of the Employee Retirement Income Security Act of

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1974, 29 U.S.C. section 1161 et seq., other than section 609 of that act, 29 U.S.C. section 1169;

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or

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      (iii) Title XXII of the United States Public Health Service Act, 42 U.S.C. section 300bb-

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1 et seq.;

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      (5) "Creditable coverage" has the same meaning as defined in the United States Public

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Health Service Act, section 2701(c), 42 U.S.C. section 300gg(c), as added by P.L. 104-191;

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      (6) "Church plan" has the meaning given that term under section 3(33) of the Employee

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Retirement Income Security Act of 1974, 29 U.S.C. section 1002(33);

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      (7) "Director" means the director of the department of business regulation;

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      (8) "Employee" has the meaning given that term under section 3(6) of the Employee

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Retirement Income Security Act of 1974, 29 U.S.C. section 1002(6);

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      (9) "Employer" has the meaning given that term under section 3(5) of the Employee

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Retirement Income Security Act of 1974, 29 U.S.C. section 1002(5), except that the term includes

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only employers of two (2) or more employees;

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      (10) "Enrollment date" means, with respect to an individual covered under a group health

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plan or health insurance coverage, the date of enrollment of the individual in the plan or coverage

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or, if earlier, the first day of the waiting period for the enrollment;

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      (11) "Governmental plan" has the meaning given that term under section 3(32) of the

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Employee Retirement Income Security Act of 1974, 29 U.S.C. section 1002(32), and includes any

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governmental plan established or maintained for its employees by the government of the United

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States, the government of any state or political subdivision of the state, or by any agency or

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instrumentality of government;

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      (12) "Group health insurance coverage" means, in connection with a group health plan,

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health insurance coverage offered in connection with that plan;

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      (13) "Group health plan" means an employee welfare benefits plan as defined in section

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3(1) of the Employee Retirement Income Security Act of 1974, 29 U.S.C. section 1002(1), to the

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extent that the plan provides medical care and including items and services paid for as medical

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care to employees or their dependents as defined under the terms of the plan directly or through

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insurance, reimbursement or otherwise;

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      (14) "Health insurance carrier" or "carrier" means any entity subject to the insurance

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laws and regulations of this state, or subject to the jurisdiction of the director, that contracts or

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offers to contract to provide, deliver, arrange for, pay for, or reimburse any of the costs of health

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care services, including, without limitation, an insurance company offering accident and sickness

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insurance, a health maintenance organization, a nonprofit hospital, medical or dental service

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corporation, or any other entity providing a plan of health insurance, health benefits, or health

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services;

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      (15) (i) "Health insurance coverage" means a policy, contract, certificate, or agreement

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offered by a health insurance carrier to provide, deliver, arrange for, pay for, or reimburse any of

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the costs of health care services. Health insurance coverage does include short-term and

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catastrophic health insurance policies, and a policy that pays on a cost-incurred basis, except as

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otherwise specifically exempted in this definition;

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      (ii) "Health insurance coverage" does not include one or more, or any combination of,

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the following "excepted benefits":

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      (A) Coverage only for accident, or disability income insurance, or any combination of

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those;

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      (B) Coverage issued as a supplement to liability insurance;

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      (C) Liability insurance, including general liability insurance and automobile liability

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insurance;

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      (D) Workers' compensation or similar insurance;

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      (E) Automobile medical payment insurance;

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      (F) Credit-only insurance;

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      (G) Coverage for on-site medical clinics; and

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      (H) Other similar insurance coverage, specified in federal regulations issued pursuant to

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P.L. 104-191, under which benefits for medical care are secondary or incidental to other

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insurance benefits;

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      (iii) "Health insurance coverage" does not include the following "limited, excepted

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benefits" if they are provided under a separate policy, certificate of insurance, or are not an

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integral part of the plan:

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      (A) Limited scope dental or vision benefits;

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      (B) Benefits for long-term care, nursing home care, home health care, community-based

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care, or any combination of those; and

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      (C) Any other similar, limited benefits that are specified in federal regulations issued

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pursuant to P.L. 104-191;

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      (iv) "Health insurance coverage" does not include the following "noncoordinated,

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excepted benefits" if the benefits are provided under a separate policy, certificate, or contract of

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insurance, there is no coordination between the provision of the benefits and any exclusion of

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benefits under any group health plan maintained by the same plan sponsor, and the benefits are

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paid with respect to an event without regard to whether benefits are provided with respect to the

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event under any group health plan maintained by the same plan sponsor:

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      (A) Coverage only for a specified disease or illness; and

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      (B) Hospital indemnity or other fixed indemnity insurance;

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      (v) "Health insurance coverage" does not include the following "supplemental, excepted

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benefits" if offered as a separate policy, certificate, or contract of insurance:

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      (A) Medicare supplemental health insurance as defined under section 1882(g)(1) of the

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Social Security Act, 42 U.S.C. section 1395ss(g)(1);

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      (B) Coverage supplemental to the coverage provided under 10 U.S.C. section 1071 et

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seq.; and

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      (C) Similar supplemental coverage provided to coverage under a group health plan;

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      (16) "Health maintenance organization" ("HMO") means a health maintenance

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organization licensed under chapter 41 of this title;

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      (17) "Health status-related factor" means any of the following factors:

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      (i) Health status;

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      (ii) Medical condition, including both physical and mental illnesses;

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      (iii) Claims experience;

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      (iv) Receipt of health care;

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      (v) Medical history;

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      (vi) Genetic information;

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      (vii) Evidence of insurability, including contributions arising out of acts of domestic

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violence; and

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      (viii) Disability;

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      (18) "Large employer" means, in connection with a group health plan with respect to a

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calendar year and a plan year, an employer who employed an average of at least fifty-one (51)

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employees on business days during the preceding calendar year and who employs at least two (2)

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employees on the first day of the plan year. In the case of an employer which was not in existence

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throughout the preceding calendar year, the determination of whether the employer is a large

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employer shall be based on the average number of employees that is reasonably expected the

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employer will employ on business days in the current calendar year;

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      (19) "Large group market" means the health insurance market under which individuals

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obtain health insurance coverage (directly or through any arrangement) on behalf of themselves

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(and their dependents) through a group health plan maintained by a large employer;

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      (20) "Late enrollee" means, with respect to coverage under a group health plan, a

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participant or beneficiary who enrolls under the plan other than during:

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      (i) The first period in which the individual is eligible to enroll under the plan; or

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      (ii) A special enrollment period;

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      (21) "Medical care" means amounts paid for:

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      (i) The diagnosis, cure, mitigation, treatment, or prevention of disease, or amounts paid

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for the purpose of affecting any structure or function of the body;

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      (ii) Amounts paid for transportation primarily for and essential to medical care referred

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to in paragraph (i) of this subdivision; and

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      (iii) Amounts paid for insurance covering medical care referred to in paragraphs (i) and

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(ii) of this subdivision;

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      (22) "Network plan" means health insurance coverage offered by a health insurance

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carrier under which the financing and delivery of medical care including items and services paid

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for as medical care are provided, in whole or in part, through a defined set of providers under

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contract with the carrier;

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      (23) "Participant" has the meaning given such term under section 3(7) of the Employee

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Retirement Income Security Act of 1974, 29 U.S.C. section 1002(7);

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      (24) "Placed for adoption" means, in connection with any placement for adoption of a

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child with any person, the assumption and retention by that person of a legal obligation for total

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or partial support of the child in anticipation of adoption of the child. The child's placement with

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the person terminates upon the termination of the legal obligation;

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      (25) "Plan sponsor" has the meaning given that term under section 3(16)(B) of the

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Employee Retirement Income Security Act of 1974, 29 U.S.C. section 1002(16)(B). "Plan

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sponsor" also includes any bona fide association, as defined in this section;

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      (26) "Preexisting condition exclusion" means, with respect to health insurance coverage,

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a limitation or exclusion of benefits relating to a condition based on the fact that the condition

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was present before the date of enrollment for the coverage, whether or not any medical advice,

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diagnosis, care or treatment was recommended or received before the date; and

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      (27) "Waiting period" means, with respect to a group health plan and an individual who

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is a potential participant or beneficiary in the plan, the period that must pass with respect to the

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individual before the individual is eligible to be covered for benefits under the terms of the plan.

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Provided, further, that large group carrier shall not impose a waiting period greater than sixty (60)

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days.

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     (28) “Grandfathered health plan” means any group health plan or health insurance

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coverage subject to 42 U.S.C. section 18011.

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     27-18.6-3. Limitation on preexisting condition exclusion. -- (a) (1) Notwithstanding

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any of the provisions of this title to the contrary, a group health plan and a health insurance

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carrier offering group health insurance coverage, which is not a grandfathered health plan

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pursuant to 42 U.S.C. section 18011, shall not deny, exclude, or limit benefits with respect to a

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participant or beneficiary because of a preexisting condition exclusion except if:

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      (i) The exclusion relates to a condition (whether physical or mental), regardless of the

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cause of the condition, for which medical advice, diagnosis, care, or treatment was recommended

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or received within the six (6) month period ending on the enrollment date;

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      (ii) The exclusion extends for a period of not more than twelve (12) months (or eighteen

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(18) months in the case of a late enrollee) after the enrollment date; and

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      (iii) The period of the preexisting condition exclusion is reduced by the aggregate of the

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periods of creditable coverage, if any, applicable to the participant or the beneficiary as of the

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enrollment date.

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      (2) For purposes of this section, genetic information shall not be treated as a preexisting

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condition in the absence of a diagnosis of the condition related to that information.

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      (b) With respect to paragraph (a)(1)(iii) of this section, a period of creditable coverage

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shall not be counted, with respect to enrollment of an individual under a group health plan, if,

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after that period and before the enrollment date, there was a sixty-three (63) day period during

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which the individual was not covered under any creditable coverage.

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      (c) Any period that an individual is in a waiting period for any coverage under a group

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health plan or for group health insurance or is in an affiliation period shall not be taken into

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account in determining the continuous period under subsection (b) of this section.

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      (d) Except as otherwise provided in subsection (e) of this section, for purposes of

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applying paragraph (a)(1)(iii) of this section, a group health plan and a health insurance carrier

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offering group health insurance coverage shall count a period of creditable coverage without

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regard to the specific benefits covered during the period.

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      (e) (1) A group health plan or a health insurance carrier offering group health insurance

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may elect to apply paragraph (a)(1)(iii) of this section based on coverage of benefits within each

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of several classes or categories of benefits. Those classes or categories of benefits are to be

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determined by the secretary of the United States Department of Health and Human Services

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pursuant to regulation. The election shall be made on a uniform basis for all participants and

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beneficiaries. Under the election, a group health plan or carrier shall count a period of creditable

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coverage with respect to any class or category of benefits if any level of benefits is covered

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within the class or category.

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      (2) In the case of an election under this subsection with respect to a group health plan

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(whether or not health insurance coverage is provided in connection with that plan), the plan

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shall:

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      (i) Prominently state in any disclosure statements concerning the plan, and state to each

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enrollee under the plan, that the plan has made the election; and

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      (ii) Include in the statements a description of the effect of this election.

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      (3) In the case of an election under this subsection with respect to health insurance

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coverage offered by a carrier in the large group market, the carrier shall:

11-9

      (i) Prominently state in any disclosure statements concerning the coverage, and to each

11-10

employer at the time of the offer or sale of the coverage, that the carrier has made the election;

11-11

and

11-12

      (ii) Include in the statements a description of the effect of the election.

11-13

      (f) (1) A group health plan and a health insurance carrier offering group health insurance

11-14

coverage may not impose any preexisting condition exclusion in the case of an individual who, as

11-15

of the last day of the thirty (30) day period beginning with the date of birth, is covered under

11-16

creditable coverage.

11-17

      (2) Subdivision (1) of this subsection shall no longer apply to an individual after the end

11-18

of the first sixty-three (63) day period during all of which the individual was not covered under

11-19

any creditable coverage. Moreover, any period that an individual is in a waiting period for any

11-20

coverage under a group health plan (or for group health insurance coverage) or is in an affiliation

11-21

period shall not be taken into account in determining the continuous period for purposes of

11-22

determining creditable coverage.

11-23

      (g) (1) A group health plan and a health insurance carrier offering group health insurance

11-24

coverage may not impose any preexisting condition exclusion in the case of a child who is

11-25

adopted or placed for adoption before attaining eighteen (18) years of age and who, as of the last

11-26

day of the thirty (30) day period beginning on the date of the adoption or placement for adoption,

11-27

is covered under creditable coverage. The previous sentence does not apply to coverage before

11-28

the date of the adoption or placement for adoption.

11-29

      (2) Subdivision (1) of this subsection shall no longer apply to an individual after the end

11-30

of the first sixty-three (63) day period during all of which the individual was not covered under

11-31

any creditable coverage. Any period that an individual is in a waiting period for any coverage

11-32

under a group health plan (or for group health insurance coverage) or is in an affiliation period

11-33

shall not be taken into account in determining the continuous period for purposes of determining

11-34

creditable coverage.

12-1

      (h) A group health plan and a health insurance carrier offering group health insurance

12-2

coverage may not impose any preexisting condition exclusion relating to pregnancy as a

12-3

preexisting condition or with regard to an individual who is under nineteen (19) years of age.

12-4

      (i) (1) Periods of creditable coverage with respect to an individual shall be established

12-5

through presentation of certifications. A group health plan and a health insurance carrier offering

12-6

group health insurance coverage shall provide certifications:

12-7

      (i) At the time an individual ceases to be covered under the plan or becomes covered

12-8

under a COBRA continuation provision;

12-9

      (ii) In the case of an individual becoming covered under a continuation provision, at the

12-10

time the individual ceases to be covered under that provision; and

12-11

      (iii) On the request of an individual made not later than twenty-four (24) months after the

12-12

date of cessation of the coverage described in paragraph (i) or (ii) of this subdivision, whichever

12-13

is later.

12-14

      (2) The certification under this subsection may be provided, to the extent practicable, at a

12-15

time consistent with notices required under any applicable COBRA continuation provision.

12-16

      (3) The certification described in this subsection is a written certification of:

12-17

      (i) The period of creditable coverage of the individual under the plan and the coverage (if

12-18

any) under the COBRA continuation provision; and

12-19

      (ii) The waiting period (if any)(and affiliation period, if applicable) imposed with respect

12-20

to the individual for any coverage under the plan.

12-21

      (4) To the extent that medical care under a group health plan consists of group health

12-22

insurance coverage, the plan is deemed to have satisfied the certification requirement under this

12-23

subsection if the health insurance carrier offering the coverage provides for the certification in

12-24

accordance with this subsection.

12-25

      (5) In the case of an election taken pursuant to subsection (e) of this section by a group

12-26

health plan or a health insurance carrier, if the plan or carrier enrolls an individual for coverage

12-27

under the plan and the individual provides a certification of creditable coverage, upon request of

12-28

the plan or carrier, the entity which issued the certification shall promptly disclose to the

12-29

requisition plan or carrier information on coverage of classes and categories of health benefits

12-30

available under that entity's plan or coverage, and the entity may charge the requesting plan or

12-31

carrier for the reasonable cost of disclosing the information.

12-32

      (6) Failure of an entity to provide information under this subsection with respect to

12-33

previous coverage of an individual so as to adversely affect any subsequent coverage of the

12-34

individual under another group health plan or health insurance coverage, as determined in

13-1

accordance with rules and regulations established by the secretary of the United States

13-2

Department of Health and Human Services, is a violation of this chapter.

13-3

      (j) A group health plan and a health insurance carrier offering group health insurance

13-4

coverage in connection with a group health plan shall permit an employee who is eligible, but not

13-5

enrolled, for coverage under the terms of the plan (or a dependent of an employee if the

13-6

dependent is eligible, but not enrolled, for coverage under the terms) to enroll for coverage under

13-7

the terms of the plan if each of the following conditions are met:

13-8

      (1) The employee or dependent was covered under a group health plan or had health

13-9

insurance coverage at the time coverage was previously offered to the employee or dependent;

13-10

      (2) The employee stated in writing at the time that coverage under a group health plan or

13-11

health insurance coverage was the reason for declining enrollment, but only if the plan sponsor or

13-12

carrier (if applicable) required a statement at the time and provided the employee with notice of

13-13

that requirement (and the consequences of the requirement) at the time;

13-14

      (3) The employee's or dependent's coverage described in subsection (j)(1):

13-15

      (i) Was under a COBRA continuation provision and the coverage under that provision

13-16

was exhausted; or

13-17

      (ii) Was not under a continuation provision and either the coverage was terminated as a

13-18

result of loss of eligibility for the coverage (including as a result of legal separation, divorce,

13-19

death, termination of employment, or reduction in the number of hours of employment) or

13-20

employer contributions towards the coverage were terminated; and

13-21

      (4) Under the terms of the plan, the employee requests enrollment not later than thirty

13-22

(30) days after the date of exhaustion of coverage described in paragraph (3)(i) of this subsection

13-23

or termination of coverage or employer contribution described in paragraph (3)(ii) of this

13-24

subsection.

13-25

      (k) (1) If a group health plan makes coverage available with respect to a dependent of an

13-26

individual, the individual is a participant under the plan (or has met any waiting period applicable

13-27

to becoming a participant under the plan and is eligible to be enrolled under the plan but for a

13-28

failure to enroll during a previous enrollment period), and a person becomes a dependent of the

13-29

individual through marriage, birth, or adoption or placement through adoption, the group health

13-30

plan shall provide for a dependent special enrollment period during which the person (or, if not

13-31

enrolled, the individual) may be enrolled under the plan as a dependent of the individual, and in

13-32

the case of the birth or adoption of a child, the spouse of the individual may be enrolled as a

13-33

dependent of the individual if the spouse is eligible for coverage.

14-34

      (2) A dependent special enrollment period shall be a period of not less than thirty (30)

14-35

days and shall begin on the later of:

14-36

      (i) The date dependent coverage is made available; or

14-37

      (ii) The date of the marriage, birth, or adoption or placement for adoption (as the case

14-38

may be).

14-39

      (3) If an individual seeks to enroll a dependent during the first thirty (30) days of a

14-40

dependent special enrollment period, the coverage of the dependent shall become effective:

14-41

      (i) In the case of marriage, not later than the first day of the first month beginning after

14-42

the date the completed request for enrollment is received;

14-43

      (ii) In the case of a dependent's birth, as of the date of the birth; or

14-44

      (iii) In the case of a dependent's adoption or placement for adoption, the date of the

14-45

adoption or placement for adoption.

14-46

      (l) (1) A health maintenance organization which offers health insurance coverage in

14-47

connection with a group health plan and which does not impose any preexisting condition

14-48

exclusion allowed under subsection (a) of this section with respect to any particular coverage

14-49

option may impose an affiliation period for the coverage option, but only if that period is applied

14-50

uniformly without regard to any health status-related factors, and the period does not exceed two

14-51

(2) months (or three (3) months in the case of a late enrollee).

14-52

      (2) For the purposes of this subsection, an affiliation shall begin on the enrollment date.

14-53

      (3) An affiliation period under a plan shall run concurrently with any waiting period

14-54

under the plan.

14-55

      (4) The director may approve alternative methods from those described under this

14-56

subsection to address adverse selection.

14-57

      (m) For the purpose of determining creditable coverage pursuant to this chapter, no

14-58

period before July 1, 1996, shall be taken into account. Individuals who need to establish

14-59

creditable coverage for periods before July 1, 1996, and who would have the coverage credited

14-60

but for the prohibition in the preceding sentence may be given credit for creditable coverage for

14-61

those periods through the presentation of documents or other means in accordance with any rule

14-62

or regulation that may be established by the secretary of the United States Department of Health

14-63

and Human Services.

14-64

      (n) In the case of an individual who seeks to establish creditable coverage for any period

14-65

for which certification is not required because it relates to an event occurring before June 30,

14-66

1996, the individual may present other credible evidence of coverage in order to establish the

14-67

period of creditable coverage. The group health plan and a health insurance carrier shall not be

14-68

subject to any penalty or enforcement action with respect to the plan's or carrier's crediting (or not

15-1

crediting) the coverage if the plan or carrier has sought to comply in good faith with the

15-2

applicable requirements of this section.

15-3

     (o) Notwithstanding the provisions of any general or public law to the contrary, for plan

15-4

or policy years beginning on and after January 1,2014, a group health plan and a health insurance

15-5

carrier offering group health insurance coverage which is not a grandfathered health plan, as such

15-6

term is defined in 42 U.S.C. section 18011, shall not deny, exclude, or limit benefits with respect

15-7

to a participant or beneficiary because of a preexisting condition exclusion.

15-8

     SECTION 9. Sections 27-50-3, 27-50-4, 27-50-5, 27-50-6 and 27-50-7 of the General

15-9

Laws in Chapter 27-50 entitled "Small Employer Health Insurance Availability Act" are hereby

15-10

amended to read as follows:

15-11

     27-50-3. Definitions. [Effective December 31, 2010.] -- (a) "Actuarial certification"

15-12

means a written statement signed by a member of the American Academy of Actuaries or other

15-13

individual acceptable to the director that a small employer carrier is in compliance with the

15-14

provisions of section 27-50-5, based upon the person's examination and including a review of the

15-15

appropriate records and the actuarial assumptions and methods used by the small employer carrier

15-16

in establishing premium rates for applicable health benefit plans.

15-17

      (b) "Adjusted community rating" means a method used to develop a carrier's premium

15-18

which spreads financial risk across the carrier's entire small group population in accordance with

15-19

the requirements in section 27-50-5.

15-20

      (c) "Affiliate" or "affiliated" means any entity or person who directly or indirectly

15-21

through one or more intermediaries controls or is controlled by, or is under common control with,

15-22

a specified entity or person.

15-23

      (d) "Affiliation period" means a period of time that must expire before health insurance

15-24

coverage provided by a carrier becomes effective, and during which the carrier is not required to

15-25

provide benefits.

15-26

      (e) "Bona fide association" means, with respect to health benefit plans offered in this

15-27

state, an association which:

15-28

      (1) Has been actively in existence for at least five (5) years;

15-29

      (2) Has been formed and maintained in good faith for purposes other than obtaining

15-30

insurance;

15-31

      (3) Does not condition membership in the association on any health-status related factor

15-32

relating to an individual (including an employee of an employer or a dependent of an employee);

15-33

      (4) Makes health insurance coverage offered through the association available to all

15-34

members regardless of any health status-related factor relating to those members (or individuals

16-1

eligible for coverage through a member);

16-2

      (5) Does not make health insurance coverage offered through the association available

16-3

other than in connection with a member of the association;

16-4

      (6) Is composed of persons having a common interest or calling;

16-5

      (7) Has a constitution and bylaws; and

16-6

      (8) Meets any additional requirements that the director may prescribe by regulation.

16-7

      (f) "Carrier" or "small employer carrier" means all entities licensed, or required to be

16-8

licensed, in this state that offer health benefit plans covering eligible employees of one or more

16-9

small employers pursuant to this chapter. For the purposes of this chapter, carrier includes an

16-10

insurance company, a nonprofit hospital or medical service corporation, a fraternal benefit

16-11

society, a health maintenance organization as defined in chapter 41 of this title or as defined in

16-12

chapter 62 of title 42, or any other entity subject to state insurance regulation that provides

16-13

medical care as defined in subsection (y) that is paid or financed for a small employer by such

16-14

entity on the basis of a periodic premium, paid directly or through an association, trust, or other

16-15

intermediary, and issued, renewed, or delivered within or without Rhode Island to a small

16-16

employer pursuant to the laws of this or any other jurisdiction, including a certificate issued to an

16-17

eligible employee which evidences coverage under a policy or contract issued to a trust or

16-18

association.

16-19

      (g) "Church plan" has the meaning given this term under section 3(33) of the Employee

16-20

Retirement Income Security Act of 1974 [29 U.S.C. section 1002(33)_.

16-21

      (h) "Control" is defined in the same manner as in chapter 35 of this title.

16-22

      (i) (1) "Creditable coverage" means, with respect to an individual, health benefits or

16-23

coverage provided under any of the following:

16-24

      (i) A group health plan;

16-25

      (ii) A health benefit plan;

16-26

      (iii) Part A or part B of Title XVIII of the Social Security Act, 42 U.S.C. section 1395c

16-27

et seq., or 42 U.S.C. section 1395j et seq., (Medicare);

16-28

      (iv) Title XIX of the Social Security Act, 42 U.S.C. section 1396 et seq., (Medicaid),

16-29

other than coverage consisting solely of benefits under 42 U.S.C. section 1396s (the program for

16-30

distribution of pediatric vaccines);

16-31

      (v) 10 U.S.C. section 1071 et seq., (medical and dental care for members and certain

16-32

former members of the uniformed services, and for their dependents)(Civilian Health and

16-33

Medical Program of the Uniformed Services)(CHAMPUS). For purposes of 10 U.S.C. section

16-34

1071 et seq., "uniformed services" means the armed forces and the commissioned corps of the

17-1

National Oceanic and Atmospheric Administration and of the Public Health Service;

17-2

      (vi) A medical care program of the Indian Health Service or of a tribal organization;

17-3

      (vii) A state health benefits risk pool;

17-4

      (viii) A health plan offered under 5 U.S.C. section 8901 et seq., (Federal Employees

17-5

Health Benefits Program (FEHBP));

17-6

      (ix) A public health plan, which for purposes of this chapter, means a plan established or

17-7

maintained by a state, county, or other political subdivision of a state that provides health

17-8

insurance coverage to individuals enrolled in the plan; or

17-9

      (x) A health benefit plan under section 5(e) of the Peace Corps Act (22 U.S.C. section

17-10

2504(e)).

17-11

      (2) A period of creditable coverage shall not be counted, with respect to enrollment of an

17-12

individual under a group health plan, if, after the period and before the enrollment date, the

17-13

individual experiences a significant break in coverage.

17-14

      (j) "Dependent" means a spouse, a child under the age of twenty-six (26) years an

17-15

unmarried child under the age of nineteen (19) years, an unmarried child who is a student under

17-16

the age of twenty-five (25) years, and an unmarried child of any age who is financially dependent

17-17

upon, the parent and is medically determined to have a physical or mental impairment which can

17-18

be expected to result in death or which has lasted or can be expected to last for a continuous

17-19

period of not less than twelve (12) months.

17-20

      (k) "Director" means the director of the department of business regulation.

17-21

      (l) [Deleted by P.L. 2006, ch. 258, section 2, and P.L. 2006, ch. 296, section 2.]

17-22

      (m) "Eligible employee" means an employee who works on a full-time basis with a

17-23

normal work week of thirty (30) or more hours, except that at the employer's sole discretion, the

17-24

term shall also include an employee who works on a full-time basis with a normal work week of

17-25

anywhere between at least seventeen and one-half (17.5) and thirty (30) hours, so long as this

17-26

eligibility criterion is applied uniformly among all of the employer's employees and without

17-27

regard to any health status-related factor. The term includes a self-employed individual, a sole

17-28

proprietor, a partner of a partnership, and may include an independent contractor, if the self-

17-29

employed individual, sole proprietor, partner, or independent contractor is included as an

17-30

employee under a health benefit plan of a small employer, but does not include an employee who

17-31

works on a temporary or substitute basis or who works less than seventeen and one-half (17.5)

17-32

hours per week. Any retiree under contract with any independently incorporated fire district is

17-33

also included in the definition of eligible employee, as well as any former employee of an

17-34

employer who retired before normal retirement age, as defined by 42 U.S.C. 18002(a)(2)(c) while

18-1

the employer participates in the early retiree reinsurance program defined by that chapter. Persons

18-2

covered under a health benefit plan pursuant to the Consolidated Omnibus Budget Reconciliation

18-3

Act of 1986 shall not be considered "eligible employees" for purposes of minimum participation

18-4

requirements pursuant to section 27-50-7(d)(9).

18-5

     (n) “Eligible individual” means an individual who is not eligible for coverage under a

18-6

group health plan, part A or part B of title XVIII of the Social Security Act, 42 U.S.C. section

18-7

1395c et seq. or 42 U.S.C. section 1395j et seq., or any state plan under title XIX of the Social

18-8

Security Act, 42 U.S.C. section 1396 et seq. (or any successor program), and does not have other

18-9

health insurance coverage.

18-10

      (n)(o) "Enrollment date" means the first day of coverage or, if there is a waiting period,

18-11

the first day of the waiting period, whichever is earlier.

18-12

      (o)(p) "Established geographic service area" means a geographic area, as approved by

18-13

the director and based on the carrier's certificate of authority to transact insurance in this state,

18-14

within which the carrier is authorized to provide coverage.

18-15

      (p)(q) "Family composition" means:

18-16

      (1) Enrollee;

18-17

      (2) Enrollee, spouse and children;

18-18

      (3) Enrollee and spouse; or

18-19

      (4) Enrollee and children.

18-20

      (q)(r) "Genetic information" means information about genes, gene products, and

18-21

inherited characteristics that may derive from the individual or a family member. This includes

18-22

information regarding carrier status and information derived from laboratory tests that identify

18-23

mutations in specific genes or chromosomes, physical medical examinations, family histories, and

18-24

direct analysis of genes or chromosomes.

18-25

      (r)(s) "Governmental plan" has the meaning given the term under section 3(32) of the

18-26

Employee Retirement Income Security Act of 1974, 29 U.S.C. section 1002(32), and any federal

18-27

governmental plan.

18-28

     (t) “Grandfathered health plan” means any group health plan or health insurance coverage

18-29

subject to 42 USC section 18011.

18-30

     (s)(u) (1) "Group health plan" means an employee welfare benefit plan as defined in

18-31

section 3(1) of the Employee Retirement Income Security Act of 1974, 29 U.S.C. section

18-32

1002(1), to the extent that the plan provides medical care, as defined in subsection (y) of this

18-33

section, and including items and services paid for as medical care to employees or their

18-34

dependents as defined under the terms of the plan directly or through insurance, reimbursement,

19-1

or otherwise.

19-2

      (2) For purposes of this chapter:

19-3

      (i) Any plan, fund, or program that would not be, but for PHSA Section 2721(e), 42

19-4

U.S.C. section 300gg(e), as added by P.L. 104-191, an employee welfare benefit plan and that is

19-5

established or maintained by a partnership, to the extent that the plan, fund or program provides

19-6

medical care, including items and services paid for as medical care, to present or former partners

19-7

in the partnership, or to their dependents, as defined under the terms of the plan, fund or program,

19-8

directly or through insurance, reimbursement or otherwise, shall be treated, subject to paragraph

19-9

(ii) of this subdivision, as an employee welfare benefit plan that is a group health plan;

19-10

      (ii) In the case of a group health plan, the term "employer" also includes the partnership

19-11

in relation to any partner; and

19-12

      (iii) In the case of a group health plan, the term "participant" also includes an individual

19-13

who is, or may become, eligible to receive a benefit under the plan, or the individual's beneficiary

19-14

who is, or may become, eligible to receive a benefit under the plan, if:

19-15

      (A) In connection with a group health plan maintained by a partnership, the individual is

19-16

a partner in relation to the partnership; or

19-17

      (B) In connection with a group health plan maintained by a self-employed individual,

19-18

under which one or more employees are participants, the individual is the self-employed

19-19

individual.

19-20

      (t)(v) (1) "Health benefit plan" means any hospital or medical policy or certificate, major

19-21

medical expense insurance, hospital or medical service corporation subscriber contract, or health

19-22

maintenance organization subscriber contract. Health benefit plan includes short-term and

19-23

catastrophic health insurance policies, and a policy that pays on a cost-incurred basis, except as

19-24

otherwise specifically exempted in this definition.

19-25

      (2) "Health benefit plan" does not include one or more, or any combination of, the

19-26

following:

19-27

      (i) Coverage only for accident or disability income insurance, or any combination of

19-28

those;

19-29

      (ii) Coverage issued as a supplement to liability insurance;

19-30

      (iii) Liability insurance, including general liability insurance and automobile liability

19-31

insurance;

19-32

      (iv) Workers' compensation or similar insurance;

19-33

      (v) Automobile medical payment insurance;

20-34

      (vi) Credit-only insurance;

20-35

      (vii) Coverage for on-site medical clinics; and

20-36

      (viii) Other similar insurance coverage, specified in federal regulations issued pursuant

20-37

to Pub. L. No. 104-191, under which benefits for medical care are secondary or incidental to other

20-38

insurance benefits.

20-39

      (3) "Health benefit plan" does not include the following benefits if they are provided

20-40

under a separate policy, certificate, or contract of insurance or are otherwise not an integral part

20-41

of the plan:

20-42

      (i) Limited scope dental or vision benefits;

20-43

      (ii) Benefits for long-term care, nursing home care, home health care, community-based

20-44

care, or any combination of those; or

20-45

      (iii) Other similar, limited benefits specified in federal regulations issued pursuant to

20-46

Pub. L. No. 104-191.

20-47

      (4) "Health benefit plan" does not include the following benefits if the benefits are

20-48

provided under a separate policy, certificate or contract of insurance, there is no coordination

20-49

between the provision of the benefits and any exclusion of benefits under any group health plan

20-50

maintained by the same plan sponsor, and the benefits are paid with respect to an event without

20-51

regard to whether benefits are provided with respect to such an event under any group health plan

20-52

maintained by the same plan sponsor:

20-53

      (i) Coverage only for a specified disease or illness; or

20-54

      (ii) Hospital indemnity or other fixed indemnity insurance.

20-55

      (5) "Health benefit plan" does not include the following if offered as a separate policy,

20-56

certificate, or contract of insurance:

20-57

      (i) Medicare supplemental health insurance as defined under section 1882(g)(1) of the

20-58

Social Security Act, 42 U.S.C. section 1395ss(g)(1);

20-59

      (ii) Coverage supplemental to the coverage provided under 10 U.S.C. section 1071 et

20-60

seq.; or

20-61

      (iii) Similar supplemental coverage provided to coverage under a group health plan.

20-62

      (6) A carrier offering policies or certificates of specified disease, hospital confinement

20-63

indemnity, or limited benefit health insurance shall comply with the following:

20-64

      (i) The carrier files on or before March 1 of each year a certification with the director

20-65

that contains the statement and information described in paragraph (ii) of this subdivision;

20-66

      (ii) The certification required in paragraph (i) of this subdivision shall contain the

20-67

following:

21-68

      (A) A statement from the carrier certifying that policies or certificates described in this

21-69

paragraph are being offered and marketed as supplemental health insurance and not as a substitute

21-70

for hospital or medical expense insurance or major medical expense insurance; and

21-71

      (B) A summary description of each policy or certificate described in this paragraph,

21-72

including the average annual premium rates (or range of premium rates in cases where premiums

21-73

vary by age or other factors) charged for those policies and certificates in this state; and

21-74

      (iii) In the case of a policy or certificate that is described in this paragraph and that is

21-75

offered for the first time in this state on or after July 13, 2000, the carrier shall file with the

21-76

director the information and statement required in paragraph (ii) of this subdivision at least thirty

21-77

(30) days prior to the date the policy or certificate is issued or delivered in this state.

21-78

      (u)(w) "Health maintenance organization" or "HMO" means a health maintenance

21-79

organization licensed under chapter 41 of this title.

21-80

      (v)(x) "Health status-related factor" means any of the following factors:

21-81

      (1) Health status;

21-82

      (2) Medical condition, including both physical and mental illnesses;

21-83

      (3) Claims experience;

21-84

      (4) Receipt of health care;

21-85

      (5) Medical history;

21-86

      (6) Genetic information;

21-87

      (7) Evidence of insurability, including conditions arising out of acts of domestic

21-88

violence; or

21-89

      (8) Disability.

21-90

      (w)(y) (1) "Late enrollee" means an eligible employee or dependent who requests

21-91

enrollment in a health benefit plan of a small employer following the initial enrollment period

21-92

during which the individual is entitled to enroll under the terms of the health benefit plan,

21-93

provided that the initial enrollment period is a period of at least thirty (30) days.

21-94

      (2) "Late enrollee" does not mean an eligible employee or dependent:

21-95

      (i) Who meets each of the following provisions:

21-96

      (A) The individual was covered under creditable coverage at the time of the initial

21-97

enrollment;

21-98

      (B) The individual lost creditable coverage as a result of cessation of employer

21-99

contribution, termination of employment or eligibility, reduction in the number of hours of

21-100

employment, involuntary termination of creditable coverage, or death of a spouse, divorce or

21-101

legal separation, or the individual and/or dependents are determined to be eligible for RIteCare

21-102

under chapter 5.1 of title 40 or chapter 12.3 of title 42 or for RIteShare under chapter 8.4 of title

22-1

40; and

22-2

      (C) The individual requests enrollment within thirty (30) days after termination of the

22-3

creditable coverage or the change in conditions that gave rise to the termination of coverage;

22-4

      (ii) If, where provided for in contract or where otherwise provided in state law, the

22-5

individual enrolls during the specified bona fide open enrollment period;

22-6

      (iii) If the individual is employed by an employer which offers multiple health benefit

22-7

plans and the individual elects a different plan during an open enrollment period;

22-8

      (iv) If a court has ordered coverage be provided for a spouse or minor or dependent child

22-9

under a covered employee's health benefit plan and a request for enrollment is made within thirty

22-10

(30) days after issuance of the court order;

22-11

      (v) If the individual changes status from not being an eligible employee to becoming an

22-12

eligible employee and requests enrollment within thirty (30) days after the change in status;

22-13

      (vi) If the individual had coverage under a COBRA continuation provision and the

22-14

coverage under that provision has been exhausted; or

22-15

      (vii) Who meets the requirements for special enrollment pursuant to section 27-50-7 or

22-16

27-50-8.

22-17

      (x)(z) "Limited benefit health insurance" means that form of coverage that pays stated

22-18

predetermined amounts for specific services or treatments or pays a stated predetermined amount

22-19

per day or confinement for one or more named conditions, named diseases or accidental injury.

22-20

      (y)(aa) "Medical care" means amounts paid for:

22-21

      (1) The diagnosis, care, mitigation, treatment, or prevention of disease, or amounts paid

22-22

for the purpose of affecting any structure or function of the body;

22-23

      (2) Transportation primarily for and essential to medical care referred to in subdivision

22-24

(1); and

22-25

      (3) Insurance covering medical care referred to in subdivisions (1) and (2) of this

22-26

subsection.

22-27

      (z)(bb) "Network plan" means a health benefit plan issued by a carrier under which the

22-28

financing and delivery of medical care, including items and services paid for as medical care, are

22-29

provided, in whole or in part, through a defined set of providers under contract with the carrier.

22-30

      (aa)(cc) "Person" means an individual, a corporation, a partnership, an association, a

22-31

joint venture, a joint stock company, a trust, an unincorporated organization, any similar entity, or

22-32

any combination of the foregoing.

22-33

      (bb)(dd) "Plan sponsor" has the meaning given this term under section 3(16)(B) of the

22-34

Employee Retirement Income Security Act of 1974, 29 U.S.C. section 1002(16)(B).

23-1

      (cc)(ee) (1) "Preexisting condition" means a condition, regardless of the cause of the

23-2

condition, for which medical advice, diagnosis, care, or treatment was recommended or received

23-3

during the six (6) months immediately preceding the enrollment date of the coverage.

23-4

      (2) "Preexisting condition" does not mean a condition for which medical advice,

23-5

diagnosis, care, or treatment was recommended or received for the first time while the covered

23-6

person held creditable coverage and that was a covered benefit under the health benefit plan,

23-7

provided that the prior creditable coverage was continuous to a date not more than ninety (90)

23-8

days prior to the enrollment date of the new coverage.

23-9

      (3) Genetic information shall not be treated as a condition under subdivision (1) of this

23-10

subsection for which a preexisting condition exclusion may be imposed in the absence of a

23-11

diagnosis of the condition related to the information.

23-12

     (4) The limitations of coverage permitted by this subsection 27-50-3(ee) shall not apply

23-13

to health benefit plans regulated under this chapter after January 1, 2014, except that the

23-14

limitations of coverage permitted by this subsection 27-50-3(ee) shall continue to apply to

23-15

grandfathered health plans covering eligible individuals, as such term is defined in 42 USC

23-16

section 18011, after January 1, 2014.

23-17

     (dd)(ff) "Premium" means all moneys paid by a small employer and eligible employees

23-18

as a condition of receiving coverage from a small employer carrier, including any fees or other

23-19

contributions associated with the health benefit plan.

23-20

      (ee)(gg) "Producer" means any insurance producer licensed under chapter 2.4 of this

23-21

title.

23-22

      (ff)(hh) "Rating period" means the calendar period for which premium rates established

23-23

by a small employer carrier are assumed to be in effect.

23-24

      (gg)(ii) "Restricted network provision" means any provision of a health benefit plan that

23-25

conditions the payment of benefits, in whole or in part, on the use of health care providers that

23-26

have entered into a contractual arrangement with the carrier pursuant to provide health care

23-27

services to covered individuals.

23-28

      (hh)(jj) "Risk adjustment mechanism" means the mechanism established pursuant to

23-29

section 27-50-16.

23-30

      (ii) "Self-employed individual" means an individual or sole proprietor who derives a

23-31

substantial portion of his or her income from a trade or business through which the individual or

23-32

sole proprietor has attempted to earn taxable income and for which he or she has filed the

23-33

appropriate Internal Revenue Service Form 1040, Schedule C or F, for the previous taxable year.

24-34

      (jj)(kk) "Significant break in coverage" means a period of ninety (90) consecutive days

24-35

during all of which the individual does not have any creditable coverage, except that neither a

24-36

waiting period nor an affiliation period is taken into account in determining a significant break in

24-37

coverage.

24-38

      (kk)(ll) "Small employer" means, except for its use in section 27-50-7, any person, firm,

24-39

corporation, partnership, association, political subdivision, or self-employed individual that is

24-40

actively engaged in business including, but not limited to, a business or a corporation organized

24-41

under the Rhode Island Non-Profit Corporation Act, chapter 6 of title 7, or a similar act of

24-42

another state that, on at least fifty percent (50%) of its working days during the preceding

24-43

calendar quarter, employed no more than fifty (50) eligible employees, with a normal work week

24-44

of thirty (30) or more hours, the majority of whom were employed within this state, and is not

24-45

formed primarily for purposes of buying health insurance and in which a bona fide employer-

24-46

employee relationship exists. In determining the number of eligible employees, companies that

24-47

are affiliated companies, or that are eligible to file a combined tax return for purposes of taxation

24-48

by this state, shall be considered one employer. Subsequent to the issuance of a health benefit

24-49

plan to a small employer and for the purpose of determining continued eligibility, the size of a

24-50

small employer shall be determined annually. Except as otherwise specifically provided,

24-51

provisions of this chapter that apply to a small employer shall continue to apply at least until the

24-52

plan anniversary following the date the small employer no longer meets the requirements of this

24-53

definition. The term small employer includes a self-employed individual.

24-54

      (ll)(mm) "Waiting period" means, with respect to a group health plan and an individual

24-55

who is a potential enrollee in the plan, the period that must pass with respect to the individual

24-56

before the individual is eligible to be covered for benefits under the terms of the plan. For

24-57

purposes of calculating periods of creditable coverage pursuant to subsection (j)(2) of this section,

24-58

a waiting period shall not be considered a gap in coverage. Provided, further, that a waiting

24-59

period shall not exceed sixty (60) days.

24-60

      (mm)(nn) "Wellness health benefit plan" means a plan developed pursuant to section 27-

24-61

50-10.

24-62

      (nn)(oo) "Health insurance commissioner" or "commissioner" means that individual

24-63

appointed pursuant to section 42-14.5-1 of the general laws and afforded those powers and duties

24-64

as set forth in sections 42-14.5-2 and 42-14.5-3 of title 42.

24-65

      (oo)(pp) "Low-wage firm" means those with average wages that fall within the bottom

24-66

quartile of all Rhode Island employers.

24-67

      (pp)(qq) "Wellness health benefit plan" means the health benefit plan offered by each

24-68

small employer carrier pursuant to section 27-50-7.

25-1

      (qq)(rr) "Commissioner" means the health insurance commissioner.

25-2

     27-50-4. Applicability and scope. -- (a) This chapter applies to any health benefit plan

25-3

that provides coverage to eligible individuals, and to the employees of a small employer in this

25-4

state, whether issued directly by a carrier or through a trust, association, or other intermediary,

25-5

and regardless of issuance or delivery of the policy, if any of the following conditions with

25-6

respect to small employer coverage are met:

25-7

      (1) Any portion of the premium or benefits is paid by or on behalf of the small employer;

25-8

      (2) An eligible employee or dependent is reimbursed, whether through wage adjustments

25-9

or otherwise, by or on behalf of the small employer for any portion of the premium;

25-10

      (3) The health benefit plan is treated by the employer or any of the eligible employees or

25-11

dependents as part of a plan or program for the purposes of Section 162, Section 125, or Section

25-12

106 of the United States Internal Revenue Code, 26 U.S.C. section 162, 125, or 106; or

25-13

      (4) The health benefit plan is marketed to individual employees through an employer.

25-14

      (b) (1) Except as provided in subdivision (2) of this subsection, for the purposes of this

25-15

chapter, carriers that are affiliated companies or that are eligible to file a consolidated tax return

25-16

shall be treated as one carrier and any restrictions or limitations imposed by this chapter shall

25-17

apply as if all health benefit plans delivered or issued for delivery to small employers in this state

25-18

by the affiliated carriers were issued by one carrier.

25-19

      (2) An affiliated carrier that is a health maintenance organization having a license under

25-20

chapter 41 of this title or a health maintenance organization as defined in chapter 62 of title 42

25-21

may be considered to be a separate carrier for the purposes of this chapter.

25-22

      (3) Unless otherwise authorized by the director, a small employer carrier shall not enter

25-23

into one or more ceding arrangements with respect to health benefit plans delivered or issued for

25-24

delivery to small employers in this state if those arrangements would result in less than fifty

25-25

percent (50%) of the insurance obligation or risk for the health benefit plans being retained by the

25-26

ceding carrier. The department of business regulation's statutory provisions under this title shall

25-27

apply if a small employer carrier cedes or assumes all of the insurance obligation or risk with

25-28

respect to one or more health benefit plans delivered or issued for delivery to small employers in

25-29

this state.

25-30

     (c) The commissioner shall adopt rules to effectuate the orderly merger of the individual

25-31

health insurance market into the small employer market no earlier than January 1, 2014, and no

25-32

later than December 31, 2014. Actions pursuant to this subsection shall include the repealing of

25-33

chapter 27-18.5 relating to individual health insurance coverage pursuant to whatever legislation

25-34

is necessary.

26-1

     (d) On and after the effective date of the rules relating to the individual health insurance

26-2

market adopted under subsection (c) of this section, this chapter shall apply to health insurance

26-3

policies, subscriber contracts, and health benefit plans issued or issued for delivery to a small

26-4

employer, and to any individual health insurance policy, subscriber contract, or other health

26-5

benefit plan offered or issued in this state, or issued for delivery in this state, or issued for

26-6

delivery in another state if the policy, contract or plan certificate covers any individual residing in

26-7

this state.

26-8

     27-50-5. Restrictions relating to premium rates. -- (a) Premium rates for health benefit

26-9

plans subject to this chapter are subject to the following provisions:

26-10

      (1) Subject to subdivision (2) of this subsection, a small employer carrier shall develop

26-11

its rates based on an adjusted community rate and may only vary the adjusted community rate for:

26-12

      (i) Age except that the community rate shall not vary by more than three (3) to one based

26-13

on age;

26-14

      (ii) Gender Rating area, except that the state of Rhode Island shall constitute a single

26-15

area; and

26-16

      (iii) Family composition;

26-17

      (2) The adjustment for age in paragraph (1)(i) of this subsection may not use age

26-18

brackets smaller than five (5) year increments and these shall begin with age thirty (30) and end

26-19

with age sixty-five (65).

26-20

      (3) The small employer carriers are permitted to develop separate rates for individuals

26-21

age sixty-five (65) or older for coverage for which Medicare is the primary payer and coverage

26-22

for which Medicare is not the primary payer. Both rates are subject to the requirements of this

26-23

subsection.

26-24

      (4) For each health benefit plan offered by a carrier, the highest premium rate for each

26-25

family composition type shall not exceed four (4) times the premium rate that could be charged to

26-26

a small employer with the lowest premium rate for that family composition.

26-27

      (5) Premium rates for bona fide associations except for the Rhode Island Builders'

26-28

Association whose membership is limited to those who are actively involved in supporting the

26-29

construction industry in Rhode Island shall comply with the requirements of section 27-50-5.

26-30

      (6) For a small employer group renewing its health insurance with the same small

26-31

employer carrier which provided it small employer health insurance in the prior year, the

26-32

combined adjustment factor for age and gender for that small employer group will not exceed one

26-33

hundred twenty percent (120%) of the combined adjustment factor for age and gender for that

26-34

small employer group in the prior rate year.

27-1

      (b) The premium charged for a health benefit plan may not be adjusted more frequently

27-2

than annually except that the rates may be changed to reflect:

27-3

      (1) Changes to the enrollment of the small employer;

27-4

      (2) Changes to the family composition of the employee; or

27-5

      (3) Changes to the health benefit plan requested by the small employer.

27-6

      (c) Premium rates for health benefit plans shall comply with the requirements of this

27-7

section.

27-8

      (d) Small employer carriers shall apply rating factors consistently with respect to all

27-9

small employers and to eligible individuals. Rating factors shall produce premiums for identical

27-10

groups or individuals that differ only by the amounts attributable to plan design and do not reflect

27-11

differences due to the nature of the groups assumed to select particular health benefit plans. Two

27-12

groups that are otherwise identical, but which have different prior year rate factors may, however,

27-13

have rating factors that produce premiums that differ because of the requirements of subdivision

27-14

27-50-5(a)(6). Nothing in this section shall be construed to prevent a group health plan and a

27-15

health insurance carrier offering health insurance coverage from establishing premium discounts

27-16

or rebates or modifying otherwise applicable copayments or deductibles in return for adherence to

27-17

programs of health promotion and disease prevention, including those included in affordable

27-18

health benefit plans, provided that the resulting rates comply with the other requirements of this

27-19

section, including subdivision (a)(5) of this section.

27-20

      The calculation of premium discounts, rebates, or modifications to otherwise applicable

27-21

copayments or deductibles for affordable health benefit plans shall be made in a manner

27-22

consistent with accepted actuarial standards and based on actual or reasonably anticipated small

27-23

employer claims experience. As used in the preceding sentence, "accepted actuarial standards"

27-24

includes actuarially appropriate use of relevant data from outside the claims experience of small

27-25

employers covered by affordable health plans, including, but not limited to, experience derived

27-26

from the large group market, as this term is defined in section 27-18.6-2(19).

27-27

      (e) For the purposes of this section, a health benefit plan that contains a restricted

27-28

network provision shall not be considered similar coverage to a health benefit plan that does not

27-29

contain such a provision, provided that the restriction of benefits to network providers results in

27-30

substantial differences in claim costs.

27-31

      (f) The health insurance commissioner may establish regulations to implement the

27-32

provisions of this section and to assure that rating practices used by small employer carriers are

27-33

consistent with the purposes of this chapter, including regulations that assure that differences in

27-34

rates charged for health benefit plans by small employer carriers are reasonable and reflect

28-1

objective differences in plan design or coverage (not including differences due to the nature of the

28-2

groups assumed to select particular health benefit plans or separate claim experience for

28-3

individual health benefit plans) and to ensure that small employer groups with one eligible

28-4

subscriber are notified of rates for health benefit plans in the individual market.

28-5

      (g) In connection with the offering for sale of any health benefit plan to a small employer

28-6

and to eligible individuals, a small employer carrier shall make a reasonable disclosure, as part of

28-7

its solicitation and sales materials, of all of the following:

28-8

      (1) The provisions of the health benefit plan concerning the small employer carrier's

28-9

right to change premium rates and the factors, other than claim experience, that affect changes in

28-10

premium rates;

28-11

      (2) The provisions relating to renewability of policies and contracts;

28-12

      (3) The provisions relating to any preexisting condition provision; and

28-13

      (4) A listing of and descriptive information, including benefits and premiums, about all

28-14

benefit plans for which the small employer is qualified.

28-15

      (h) (1) Each small employer carrier shall maintain at its principal place of business a

28-16

complete and detailed description of its rating practices and renewal underwriting practices,

28-17

including information and documentation that demonstrate that its rating methods and practices

28-18

are based upon commonly accepted actuarial assumptions and are in accordance with sound

28-19

actuarial principles.

28-20

      (2) Each small employer carrier shall file with the commissioner annually on or before

28-21

March 15 an actuarial certification certifying that the carrier is in compliance with this chapter

28-22

and that the rating methods of the small employer carrier are actuarially sound. The certification

28-23

shall be in a form and manner, and shall contain the information, specified by the commissioner.

28-24

A copy of the certification shall be retained by the small employer carrier at its principal place of

28-25

business.

28-26

      (3) A small employer carrier shall make the information and documentation described in

28-27

subdivision (1) of this subsection available to the commissioner upon request. Except in cases of

28-28

violations of this chapter, the information shall be considered proprietary and trade secret

28-29

information and shall not be subject to disclosure by the director to persons outside of the

28-30

department except as agreed to by the small employer carrier or as ordered by a court of

28-31

competent jurisdiction.

28-32

      (4) For the wellness health benefit plan described in section 27-50-10, the rates proposed

28-33

to be charged and the plan design to be offered by any carrier shall be filed by the carrier at the

28-34

office of the commissioner no less than thirty (30) days prior to their proposed date of use. The

29-1

carrier shall be required to establish that the rates proposed to be charged and the plan design to

29-2

be offered are consistent with the proper conduct of its business and with the interest of the

29-3

public. The commissioner may approve, disapprove, or modify the rates and/or approve or

29-4

disapprove the plan design proposed to be offered by the carrier. Any disapproval by the

29-5

commissioner of a plan design proposed to be offered shall be based upon a determination that

29-6

the plan design is not consistent with the criteria established pursuant to subsection 27-50-10(b).

29-7

      (i) The requirements of this section apply to all health benefit plans issued or renewed on

29-8

or after October 1, 2000.

29-9

     27-50-6. Renewability of coverage. -- (a) A health benefit plan subject to this chapter is

29-10

renewable with respect to all eligible employees or dependents, at the option of the small

29-11

employer and to all eligible individuals of dependents at the option of the eligible individual

29-12

unless the, except in any of the following cases: (1) The plan sponsor has failed to pay premiums

29-13

or contributions in accordance with the terms of the health benefit plan or the carrier has not

29-14

received timely premium payments;

29-15

     (b) With respect to small employer coverage, a health benefit plan subject to this chapter

29-16

is renewable with respect to all eligible employees or dependents, at the option of the small

29-17

employer, except in the following cases:

29-18

      (2)(1) The plan sponsor or, with respect to coverage of individual insured under the

29-19

health benefit plan, the insured or the insured's representative has performed an act or practice

29-20

that constitutes fraud or made an intentional misrepresentation of material fact under the terms of

29-21

coverage;

29-22

      (3)(2) Noncompliance with the carrier's minimum participation requirements;

29-23

      (4)(3) Noncompliance with the carrier's employer contribution requirements;

29-24

      (5)(4) The small employer carrier elects to discontinue offering all of its health benefit

29-25

plans delivered or issued for delivery to small employers in this state if the carrier:

29-26

      (i) Provides advance notice of its decision under this paragraph to the commissioner in

29-27

each state in which it is licensed; and

29-28

      (ii) Provides notice of the decision to:

29-29

      (A) All affected small employers and enrollees and their dependents; and

29-30

      (B) The insurance commissioner in each state in which an affected insured individual is

29-31

known to reside at least one hundred and eighty (180) days prior to the nonrenewal of any health

29-32

benefit plans by the carrier, provided the notice to the commissioner under this subparagraph is

29-33

sent at least three (3) working days prior to the date the notice is sent to the affected small

29-34

employers and enrollees and their dependents;

30-1

      (6)(5) The director:

30-2

      (i) Finds that the continuation of the coverage would not be in the best interests of the

30-3

policyholders or certificate holders or would impair the carrier's ability to meet its contractual

30-4

obligations; and

30-5

      (ii) Assists affected small employers in finding replacement coverage;

30-6

      (7)(6) The small employer carrier decides to discontinue offering a particular type of

30-7

health benefit plan in the state's small employer market if the carrier:

30-8

      (i) Provides notice of the decision not to renew coverage at least ninety (90) days prior to

30-9

the nonrenewal of any health benefit plans to all affected small employers and enrollees and their

30-10

dependents;

30-11

      (ii) Offers to each small employer issued a particular type of health benefit plan the

30-12

option to purchase all other health benefit plans currently being offered by the carrier to small

30-13

employers in the state; and

30-14

      (iii) In exercising this option to discontinue a particular type of health benefit plan and in

30-15

offering the option of coverage pursuant to paragraph (7)(6)(ii) of this subsection acts uniformly

30-16

without regard to the claims experience of those small employers or any health status-related

30-17

factor relating to any enrollee or dependent of an enrollee or enrollees and their dependents

30-18

covered or new enrollees and their dependents who may become eligible for coverage;

30-19

      (8)(7) In the case of health benefit plans that are made available in the small group

30-20

market through a network plan, there is no longer an employee of the small employer living,

30-21

working or residing within the carrier's established geographic service area and the carrier would

30-22

deny enrollment in the plan pursuant to section 27-50-7(e)(1)(ii); or

30-23

      (9)(8) In the case of a health benefit plan that is made available in the small employer

30-24

market only through one or more bona fide associations, the membership of an employer in the

30-25

bona fide association, on the basis of which the coverage is provided, ceases, but only if the

30-26

coverage is terminated under this paragraph uniformly without regard to any health status-related

30-27

factor relating to any covered individual.

30-28

      (b)(c) (1) A small employer carrier that elects not to renew health benefit plan coverage

30-29

pursuant to subdivision (a)(b)(2) of this section because of the small employer's fraud or

30-30

intentional misrepresentation of material fact under the terms of coverage may choose not to issue

30-31

a health benefit plan to that small employer for one year after the date of nonrenewal.

30-32

      (2) This subsection shall not be construed to affect the requirements of section 27-50-7

30-33

as to the obligations of other small employer carriers to issue any health benefit plan to the small

30-34

employer.

31-1

      (c)(d) (1) A small employer carrier that elects to discontinue offering health benefit plans

31-2

under subdivision (a)(b)(5) of this section is prohibited from writing new business in the small

31-3

employer market in this state for a period of five (5) years beginning on the date the carrier

31-4

ceased offering new coverage in this state.

31-5

      (2) In the case of a small employer carrier that ceases offering new coverage in this state

31-6

pursuant to subdivision (a)(5) of this section, the small employer carrier, as determined by the

31-7

director, may renew its existing business in the small employer market in the state or may be

31-8

required to nonrenew all of its existing business in the small employer market in the state.

31-9

      (d)(e) A small employer carrier offering coverage through a network plan is not required

31-10

to offer coverage or accept applications pursuant to subsection (a) or (b) or (c) of this section in

31-11

the case of the following:

31-12

      (1) To an eligible person who no longer resides, lives, or works in the service area, or in

31-13

an area for which the carrier is authorized to do business, but only if coverage is terminated under

31-14

this subdivision uniformly without regard to any health status-related factor of covered

31-15

individuals; or

31-16

      (2) To a small employer that no longer has any enrollee in connection with the plan who

31-17

lives, resides, or works in the service area of the carrier, or the area for which the carrier is

31-18

authorized to do business.

31-19

      (e)(f) At the time of coverage renewal, a small employer carrier may modify the health

31-20

insurance coverage for a product offered to a group health plan if, for coverage that is available in

31-21

the small group market other than only through one or more bona fide associations, such

31-22

modification is consistent with otherwise applicable law and effective on a uniform basis among

31-23

group health plans with that product.

31-24

     27-50-7. Availability of coverage. -- (a) Until October 1, 2004, for purposes of this

31-25

section, "small employer" includes any person, firm, corporation, partnership, association, or

31-26

political subdivision that is actively engaged in business that on at least fifty percent (50%) of its

31-27

working days during the preceding calendar quarter, employed a combination of no more than

31-28

fifty (50) and no less than two (2) eligible employees and part-time employees, the majority of

31-29

whom were employed within this state, and is not formed primarily for purposes of buying health

31-30

insurance and in which a bona fide employer-employee relationship exists. After October 1, 2004,

31-31

for the purposes of this section, "small employer" has the meaning used in section 27-50-3(kk).

31-32

      (b) (1) Every small employer carrier shall, as a condition of transacting business in this

31-33

state with small employers, actively offer to eligible individuals and small employers all health

31-34

benefit plans it actively markets to small employers in this state including a wellness health

32-1

benefit plan. A small employer carrier shall be considered to be actively marketing a health

32-2

benefit plan if it offers that plan to any small employer not currently receiving a health benefit

32-3

plan from the small employer carrier. For the purpose of promoting stability in health insurance

32-4

coverage for consumers across all markets in this state, and to mitigate against improper

32-5

incentives for adverse selection between markets, every health insurance company, hospital or

32-6

medical service corporation, and health maintenance organization which offers coverage through

32-7

qualified health plans in the Rhode Island health insurance exchange established in accordance

32-8

with the Affordable Care Act shall actively market and offer the same qualified health plans in

32-9

the small employer and individual markets.

32-10

     (2) Subject to subdivision (1) of this subsection, a small employer carrier shall issue any

32-11

health benefit plan to any eligible small employer that applies for that plan and agrees to make the

32-12

required premium payments and to satisfy the other reasonable provisions of the health benefit

32-13

plan not inconsistent with this chapter. However, no carrier is required to issue a health benefit

32-14

plan to any self-employed individual who is covered by, or is eligible for coverage under, a health

32-15

benefit plan offered by an employer.

32-16

      (c) (1) A small employer carrier shall file with the director, in a format and manner

32-17

prescribed by the director, the health benefit plans to be used by the carrier. A health benefit plan

32-18

filed pursuant to this subdivision may be used by a small employer carrier beginning thirty (30)

32-19

days after it is filed unless the director disapproves its use.

32-20

      (2) The director may at any time may, after providing notice and an opportunity for a

32-21

hearing to the small employer carrier, disapprove the continued use by a small employer carrier of

32-22

a health benefit plan on the grounds that the plan does not meet the requirements of this chapter.

32-23

      (d) Health benefit plans covering small employers shall comply with the following

32-24

provisions:

32-25

      (1) A health benefit plan shall not deny, exclude, or limit benefits for a covered

32-26

individual for losses incurred more than six (6) months following the enrollment date of the

32-27

individual's coverage due to a preexisting condition, or the first date of the waiting period for

32-28

enrollment if that date is earlier than the enrollment date. A health benefit plan shall not define a

32-29

preexisting condition more restrictively than as defined in section 27-50-3.

32-30

      (2) (i) Except as provided in subdivision (3) of this subsection, a small employer carrier

32-31

shall reduce the period of any preexisting condition exclusion by the aggregate of the periods of

32-32

creditable coverage without regard to the specific benefits covered during the period of creditable

32-33

coverage, provided that the last period of creditable coverage ended on a date not more than

32-34

ninety (90) days prior to the enrollment date of new coverage.

33-1

      (ii) The aggregate period of creditable coverage does not include any waiting period or

33-2

affiliation period for the effective date of the new coverage applied by the employer or the carrier,

33-3

or for the normal application and enrollment process following employment or other triggering

33-4

event for eligibility.

33-5

      (iii) A carrier that does not use preexisting condition limitations in any of its health

33-6

benefit plans may impose an affiliation period that:

33-7

      (A) Does not exceed sixty (60) days for new entrants and not to exceed ninety (90) days

33-8

for late enrollees;

33-9

      (B) During which the carrier charges no premiums and the coverage issued is not

33-10

effective; and

33-11

      (C) Is applied uniformly, without regard to any health status-related factor.

33-12

      (iv) This section does not preclude application of any waiting period applicable to all

33-13

new enrollees under the health benefit plan, provided that any carrier-imposed waiting period is

33-14

no longer than sixty (60) days.

33-15

      (3) (i) Instead of as provided in paragraph (2)(i) of this subsection, a small employer

33-16

carrier may elect to reduce the period of any preexisting condition exclusion based on coverage of

33-17

benefits within each of several classes or categories of benefits specified in federal regulations.

33-18

      (ii) A small employer electing to reduce the period of any preexisting condition

33-19

exclusion using the alternative method described in paragraph (i) of this subdivision shall:

33-20

      (A) Make the election on a uniform basis for all enrollees; and

33-21

      (B) Count a period of creditable coverage with respect to any class or category of

33-22

benefits if any level of benefits is covered within the class or category.

33-23

      (iii) A small employer carrier electing to reduce the period of any preexisting condition

33-24

exclusion using the alternative method described under paragraph (i) of this subdivision shall:

33-25

      (A) Prominently state that the election has been made in any disclosure statements

33-26

concerning coverage under the health benefit plan to each enrollee at the time of enrollment under

33-27

the plan and to each small employer at the time of the offer or sale of the coverage; and

33-28

      (B) Include in the disclosure statements the effect of the election.

33-29

      (4) (i) A health benefit plan shall accept late enrollees, but may exclude coverage for late

33-30

enrollees for preexisting conditions for a period not to exceed twelve (12) months.

33-31

      (ii) A small employer carrier shall reduce the period of any preexisting condition

33-32

exclusion pursuant to subdivision (2) or (3) of this subsection.

33-33

      (5) A small employer carrier shall not impose a preexisting condition exclusion:

34-34

      (i) Relating to pregnancy as a preexisting condition; or

34-35

      (ii) With regard to a child who is covered under any creditable coverage within thirty

34-36

(30) days of birth, adoption, or placement for adoption, provided that the child does not

34-37

experience a significant break in coverage, and provided that the child was adopted or placed for

34-38

adoption before attaining eighteen (18) years of age. ; or

34-39

     (iii) With regard to an individual who is less than nineteen (19) years of age for policy

34-40

years. The provisions of this subdivision 27-50-7(d)(5)(iii) shall apply to any health insurance

34-41

carrier providing coverage under a group health plan, including grandfathered health plans, but

34-42

the provisions of this subdivision 27-50-7(d)(5)(iii) shall not apply to grandfathered health plans

34-43

providing individual health insurance coverage..

34-44

      (6) A small employer carrier shall not impose a preexisting condition exclusion in the

34-45

case of a condition for which medical advice, diagnosis, care or treatment was recommended or

34-46

received for the first time while the covered person held creditable coverage, and the medical

34-47

advice, diagnosis, care or treatment was a covered benefit under the plan, provided that the

34-48

creditable coverage was continuous to a date not more than ninety (90) days prior to the

34-49

enrollment date of the new coverage.

34-50

      (7) (i) A small employer carrier shall permit an employee or a dependent of the

34-51

employee, who is eligible, but not enrolled, to enroll for coverage under the terms of the group

34-52

health plan of the small employer during a special enrollment period if:

34-53

      (A) The employee or dependent was covered under a group health plan or had coverage

34-54

under a health benefit plan at the time coverage was previously offered to the employee or

34-55

dependent;

34-56

      (B) The employee stated in writing at the time coverage was previously offered that

34-57

coverage under a group health plan or other health benefit plan was the reason for declining

34-58

enrollment, but only if the plan sponsor or carrier, if applicable, required that statement at the

34-59

time coverage was previously offered and provided notice to the employee of the requirement and

34-60

the consequences of the requirement at that time;

34-61

      (C) The employee's or dependent's coverage described under subparagraph (A) of this

34-62

paragraph:

34-63

      (I) Was under a COBRA continuation provision and the coverage under this provision

34-64

has been exhausted; or

34-65

      (II) Was not under a COBRA continuation provision and that other coverage has been

34-66

terminated as a result of loss of eligibility for coverage, including as a result of a legal separation,

34-67

divorce, death, termination of employment, or reduction in the number of hours of employment or

34-68

employer contributions towards that other coverage have been terminated; and

35-1

      (D) Under terms of the group health plan, the employee requests enrollment not later

35-2

than thirty (30) days after the date of exhaustion of coverage described in item (C)(I) of this

35-3

paragraph or termination of coverage or employer contribution described in item (C)(II) of this

35-4

paragraph.

35-5

      (ii) If an employee requests enrollment pursuant to subparagraph (i)(D) of this

35-6

subdivision, the enrollment is effective not later than the first day of the first calendar month

35-7

beginning after the date the completed request for enrollment is received.

35-8

      (8) (i) A small employer carrier that makes coverage available under a group health plan

35-9

with respect to a dependent of an individual shall provide for a dependent special enrollment

35-10

period described in paragraph (ii) of this subdivision during which the person or, if not enrolled,

35-11

the individual may be enrolled under the group health plan as a dependent of the individual and,

35-12

in the case of the birth or adoption of a child, the spouse of the individual may be enrolled as a

35-13

dependent of the individual if the spouse is eligible for coverage if:

35-14

      (A) The individual is a participant under the health benefit plan or has met any waiting

35-15

period applicable to becoming a participant under the plan and is eligible to be enrolled under the

35-16

plan, but for a failure to enroll during a previous enrollment period; and

35-17

      (B) A person becomes a dependent of the individual through marriage, birth, or adoption

35-18

or placement for adoption.

35-19

      (ii) The special enrollment period for individuals that meet the provisions of paragraph

35-20

(i) of this subdivision is a period of not less than thirty (30) days and begins on the later of:

35-21

      (A) The date dependent coverage is made available; or

35-22

      (B) The date of the marriage, birth, or adoption or placement for adoption described in

35-23

subparagraph (i)(B) of this subdivision.

35-24

      (iii) If an individual seeks to enroll a dependent during the first thirty (30) days of the

35-25

dependent special enrollment period described under paragraph (ii) of this subdivision, the

35-26

coverage of the dependent is effective:

35-27

      (A) In the case of marriage, not later than the first day of the first month beginning after

35-28

the date the completed request for enrollment is received;

35-29

      (B) In the case of a dependent's birth, as of the date of birth; and

35-30

      (C) In the case of a dependent's adoption or placement for adoption, the date of the

35-31

adoption or placement for adoption.

35-32

      (9) (i) Except as provided in this subdivision, requirements used by a small employer

35-33

carrier in determining whether to provide coverage to a small employer, including requirements

35-34

for minimum participation of eligible employees and minimum employer contributions, shall be

36-1

applied uniformly among all small employers applying for coverage or receiving coverage from

36-2

the small employer carrier.

36-3

      (ii) For health benefit plans issued or renewed on or after October 1, 2000, a small

36-4

employer carrier shall not require a minimum participation level greater than seventy-five percent

36-5

(75%) of eligible employees.

36-6

      (iii) In applying minimum participation requirements with respect to a small employer, a

36-7

small employer carrier shall not consider employees or dependents who have creditable coverage

36-8

in determining whether the applicable percentage of participation is met.

36-9

      (iv) A small employer carrier shall not increase any requirement for minimum employee

36-10

participation or modify any requirement for minimum employer contribution applicable to a small

36-11

employer at any time after the small employer has been accepted for coverage.

36-12

      (10) (i) If a small employer carrier offers coverage to a small employer, the small

36-13

employer carrier shall offer coverage to all of the eligible employees of a small employer and

36-14

their dependents who apply for enrollment during the period in which the employee first becomes

36-15

eligible to enroll under the terms of the plan. A small employer carrier shall not offer coverage to

36-16

only certain individuals or dependents in a small employer group or to only part of the group.

36-17

      (ii) A small employer carrier shall not place any restriction in regard to any health status-

36-18

related factor on an eligible employee or dependent with respect to enrollment or plan

36-19

participation.

36-20

      (iii) Except as permitted under subdivisions (1) and (4) of this subsection, a For a health

36-21

benefit plan issued after January 1, 2014 a small employer carrier shall not modify a health

36-22

benefit plan with respect to an eligible individual to his or her dependents or a small employer or

36-23

any eligible employee or dependent, through riders, endorsements, or otherwise, to restrict or

36-24

exclude coverage or benefits for specific diseases, medical conditions, or services covered by the

36-25

plan. The provisions of this subdivision shall not apply to any grandfathered plan offered to

36-26

eligible individuals.

36-27

      (e) (1) Subject to subdivision (3) of this subsection, a small employer carrier is not

36-28

required to offer coverage or accept applications pursuant to subsection (b) of this section in the

36-29

case of the following:

36-30

      (i) To a small employer, where the small employer does not have eligible individuals

36-31

who live, work, or reside in the established geographic service area for the network plan;

36-32

      (ii) To an employee, when the employee does not live, work, or reside within the

36-33

carrier's established geographic service area; or

37-34

      (iii) Within an area where the small employer carrier reasonably anticipates, and

37-35

demonstrates to the satisfaction of the director, that it will not have the capacity within its

37-36

established geographic service area to deliver services adequately to enrollees of any additional

37-37

groups because of its obligations to existing group policyholders and enrollees.

37-38

      (2) A small employer carrier that cannot offer coverage pursuant to paragraph (1)(iii) of

37-39

this subsection may not offer coverage in the applicable area to new cases of employer groups

37-40

until the later of one hundred and eighty (180) days following each refusal or the date on which

37-41

the carrier notifies the director that it has regained capacity to deliver services to new employer

37-42

groups.

37-43

      (3) A small employer carrier shall apply the provisions of this subsection uniformly to all

37-44

small employers without regard to the claims experience of a small employer and its employees

37-45

and their dependents or any health status-related factor relating to the employees and their

37-46

dependents.

37-47

      (f) (1) A small employer carrier is not required to provide coverage to small employers

37-48

pursuant to subsection (b) of this section if:

37-49

      (i) For any period of time the director determines the small employer carrier does not

37-50

have the financial reserves necessary to underwrite additional coverage; and

37-51

      (ii) The small employer carrier is applying this subsection uniformly to all small

37-52

employers in the small group market in this state consistent with applicable state law and without

37-53

regard to the claims experience of a small employer and its employees and their dependents or

37-54

any health status-related factor relating to the employees and their dependents.

37-55

      (2) A small employer carrier that denies coverage in accordance with subdivision (1) of

37-56

this subsection may not offer coverage in the small group market for the later of:

37-57

      (i) A period of one hundred and eighty (180) days after the date the coverage is denied;

37-58

or

37-59

      (ii) Until the small employer has demonstrated to the director that it has sufficient

37-60

financial reserves to underwrite additional coverage.

37-61

      (g) (1) A small employer carrier is not required to provide coverage to small employers

37-62

pursuant to subsection (b) of this section if the small employer carrier elects not to offer new

37-63

coverage to small employers in this state.

37-64

      (2) A small employer carrier that elects not to offer new coverage to small employers

37-65

under this subsection may be allowed, as determined by the director, to maintain its existing

37-66

policies in this state.

37-67

      (3) A small employer carrier that elects not to offer new coverage to small employers

37-68

under subdivision (g)(1) shall provide at least one hundred and twenty (120) days notice of its

38-1

election to the director and is prohibited from writing new business in the small employer market

38-2

in this state for a period of five (5) years beginning on the date the carrier ceased offering new

38-3

coverage in this state.

38-4

     (g) The provisions of subsections 27-50-7(d)(1), 27-50-7(d)(4), 27-50-7(d)(5) and 27-50-

38-5

7(d)(6) shall apply to health benefit plans issued before January 1, 2014. With respect to health

38-6

benefit plans issued on and after January 1, 2014 a small employer carrier shall offer and issue

38-7

coverage to small employers and eligible individuals notwithstanding any pre-existing condition

38-8

of an employee, member, of individual, or their dependents. This subsection shall not apply to

38-9

grandfathered health benefit plans providing coverage to eligible individuals.

38-10

     SECTION 10. This act shall take effect upon passage.

     

=======

LC02083

========

EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N A C T

RELATING TO INSURANCE -- ACCIDENT AND SICKNESS INSURANCE POLICIES

***

39-1

     This act would make various amendments to healthcare chapters to ensure consistency

39-2

with applicable federal law.

39-3

     This act would take effect upon passage.

     

=======

LC02083

=======

H7892