H7892

	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:

1-1	SECTION 1. Purpose. – It is the purpose of this act to amend Rhode Island general laws
1-2	so as to be consistent with health insurance market reforms enacted in federal law.
1-3	SECTION 2. Construction. – This act is intended to establish health insurance standards
1-4	in addition to, but not inconsistent with the health insurance standards established in the Patient
1-5	Protection and Affordable Care Act of 2010, as amended by the Health Care and Education
1-6	Reconciliation Act of 2010.
1-7	SECTION 3. Chapter 27-18 of the General Laws entitled "Accident and Sickness
1-8	Insurance Policies" is hereby amended by adding thereto the following section:
1-9	27-18-71. Prohibition on preexisting condition exclusions. – (a) A health insurance
1-10	policy, subscriber contract, or health plan offered, issued, issued for delivery, or issued to cover a
1-11	resident of this state by a health insurance company licensed pursuant to this title and/or chapter:
1-12	(1) Shall not limit or exclude coverage for an individual under the age of nineteen (19) by
1-13	imposing a preexisting condition exclusion on that individual.
1-14	(2) For plan or policy years beginning on or after January 1, 2014, shall not limit or
1-15	exclude coverage for any individual by imposing a preexisting condition exclusion on that
1-16	individual.
1-17	(b) As used in this section:
1-18	(1) “Preexisting condition exclusion” means a limitation or exclusion of benefits,
1-19	including a denial of coverage, based on the fact that the condition (whether physical or mental)
1-20	was present before the effective date of coverage, or if the coverage is denied, the date of denial,
2-1	under a health benefit plan whether or not any medical advice, diagnosis, care or treatment was
2-2	recommended or received before the effective date of coverage.
2-3	(2) “Preexisting condition exclusion” means any limitation or exclusion of benefits,
2-4	including a denial of coverage, applicable to an individual as a result of information relating to an
2-5	individual’s health status before the individual’s effective date of coverage, or if the coverage is
2-6	denied, the date of denial, under the health benefit plan, such as a condition(whether physical or
2-7	mental) identified as a result of a pre-enrollment questionnaire or physical examination given to
2-8	the individual, or review of medical records relating to the pre-enrollment period.
2-9	(c) This section shall not apply to grandfathered health plans providing individual health
2-10	insurance coverage.
2-11	SECTION 4. Chapter 27-18.5 of the General Laws entitled "Individual Health Insurance
2-12	Coverage" is hereby amended by adding thereto the following section:
2-13	27-18.5-10. Prohibition on preexisting condition exclusions. -- (a) A health insurance
2-14	policy, subscriber contract, or health plan offered, issued, issued for delivery, or issued to cover a
2-15	resident of this state by a health insurance company licensed pursuant to this title and/or chapter:
2-16	(1) Shall not limit or exclude coverage for an individual under the age of nineteen (19) by
2-17	imposing a preexisting condition exclusion on that individual.
2-18	(2) For plan or policy years beginning on or after January 1, 2014, shall not limit or
2-19	exclude coverage for any individual by imposing a preexisting condition exclusion on that
2-20	individual.
2-21	(b) As used in this section:
2-22	(1) “Preexisting condition exclusion” means a limitation or exclusion of benefits,
2-23	including a denial of coverage, based on the fact that the condition (whether physical or mental)
2-24	was present before the effective date of coverage, or if the coverage is denied, the date of denial,
2-25	under a health benefit plan whether or not any medical advice, diagnosis, care or treatment was
2-26	recommended or received before the effective date of coverage.
2-27	(2) “Preexisting condition exclusion” means any limitation or exclusion of benefits,
2-28	including a denial of coverage, applicable to an individual as a result of information relating to an
2-29	individual’s health status before the individual’s effective date of coverage, or if the coverage is
2-30	denied, the date of denial, under the health benefit plan, such as a condition(whether physical or
2-31	mental) identified as a result of a pre-enrollment questionnaire or physical examination given to
2-32	the individual, or review of medical records relating to the pre-enrollment period.
2-33	(c) This section shall not apply to grandfathered health plans providing individual health
2-34	insurance coverage.
3-1	SECTION 5. Chapter 27-19 of the General Laws entitled "Nonprofit Hospital Service
3-2	Corporations" is hereby amended by adding thereto the following section:
3-3	27-19-62. Prohibition on preexisting condition exclusions. -- (a) A health insurance
3-4	policy, subscriber contract, or health plan offered, issued, issued for delivery, or issued to cover a
3-5	resident of this state by a health insurance company licensed pursuant to this title and/or chapter:
3-6	(1) Shall not limit or exclude coverage for an individual under the age of nineteen (19) by
3-7	imposing a preexisting condition exclusion on that individual.
3-8	(2) For plan or policy years beginning on or after January 1, 2014, shall not limit or
3-9	exclude coverage for any individual by imposing a preexisting condition exclusion on that
3-10	individual.
3-11	(b) As used in this section:
3-12	(1) “Preexisting condition exclusion” means a limitation or exclusion of benefits,
3-13	including a denial of coverage, based on the fact that the condition (whether physical or mental)
3-14	was present before the effective date of coverage, or if the coverage is denied, the date of denial,
3-15	under a health benefit plan whether or not any medical advice, diagnosis, care or treatment was
3-16	recommended or received before the effective date of coverage.
3-17	(2) “Preexisting condition exclusion” means any limitation or exclusion of benefits,
3-18	including a denial of coverage, applicable to an individual as a result of information relating to an
3-19	individual’s health status before the individual’s effective date of coverage, or if the coverage is
3-20	denied, the date of denial, under the health benefit plan, such as a condition(whether physical or
3-21	mental) identified as a result of a pre-enrollment questionnaire or physical examination given to
3-22	the individual, or review of medical records relating to the pre-enrollment period.
3-23	(c) This section shall not apply to grandfathered health plans providing individual health
3-24	insurance coverage.
3-25	SECTION 6. Chapter 27-20 of the General Laws entitled "Nonprofit Medical Service
3-26	Corporations" is hereby amended by adding thereto the following section:
3-27	27-20-57. Prohibition on preexisting condition exclusions. -- (a) A health insurance
3-28	policy, subscriber contract, or health plan offered, issued, issued for delivery, or issued to cover a
3-29	resident of this state by a health insurance company licensed pursuant to this title and/or chapter:
3-30	(1) Shall not limit or exclude coverage for an individual under the age of nineteen (19) by
3-31	imposing a preexisting condition exclusion on that individual.
3-32	(2) For plan or policy years beginning on or after January 1, 2014, shall not limit or
3-33	exclude coverage for any individual by imposing a preexisting condition exclusion on that
3-34	individual.
4-1	(b) As used in this section:
4-2	(1) “Preexisting condition exclusion” means a limitation or exclusion of benefits,
4-3	including a denial of coverage, based on the fact that the condition (whether physical or mental)
4-4	was present before the effective date of coverage, or if the coverage is denied, the date of denial,
4-5	under a health benefit plan whether or not any medical advice, diagnosis, care or treatment was
4-6	recommended or received before the effective date of coverage.
4-7	(2) “Preexisting condition exclusion” means any limitation or exclusion of benefits,
4-8	including a denial of coverage, applicable to an individual as a result of information relating to an
4-9	individual’s health status before the individual’s effective date of coverage, or if the coverage is
4-10	denied, the date of denial, under the health benefit plan, such as a condition(whether physical or
4-11	mental) identified as a result of a pre-enrollment questionnaire or physical examination given to
4-12	the individual, or review of medical records relating to the pre-enrollment period.
4-13	(c) This section shall not apply to grandfathered health plans providing individual health
4-14	insurance coverage.
4-15	SECTION 7. Chapter 27-41 of the General Laws entitled "Health Maintenance
4-16	Organizations" is hereby amended by adding thereto the following section:
4-17	27-41-75. Prohibition on preexisting condition exclusions. -- (a) A health insurance
4-18	policy, subscriber contract, or health plan offered, issued, issued for delivery, or issued to cover a
4-19	resident of this state by a health insurance company licensed pursuant to this title and/or chapter:
4-20	(1) Shall not limit or exclude coverage for an individual under the age of nineteen (19) by
4-21	imposing a preexisting condition exclusion on that individual.
4-22	(2) For plan or policy years beginning on or after January 1, 2014, shall not limit or
4-23	exclude coverage for any individual by imposing a preexisting condition exclusion on that
4-24	individual.
4-25	(b) As used in this section:
4-26	(1) “Preexisting condition exclusion” means a limitation or exclusion of benefits,
4-27	including a denial of coverage, based on the fact that the condition (whether physical or mental)
4-28	was present before the effective date of coverage, or if the coverage is denied, the date of denial,
4-29	under a health benefit plan whether or not any medical advice, diagnosis, care or treatment was
4-30	recommended or received before the effective date of coverage.
4-31	(2) “Preexisting condition exclusion” means any limitation or exclusion of benefits,
4-32	including a denial of coverage, applicable to an individual as a result of information relating to an
4-33	individual’s health status before the individual’s effective date of coverage, or if the coverage is
4-34	denied, the date of denial, under the health benefit plan, such as a condition(whether physical or
5-1	mental) identified as a result of a pre-enrollment questionnaire or physical examination given to
5-2	the individual, or review of medical records relating to the pre-enrollment period.
5-3	(c) This section shall not apply to grandfathered health plans providing individual health
5-4	insurance coverage.
5-5	SECTION 8. Section 27-18.6-2 and 27-18.6-3 of the General Laws in Chapter 27-18.6
5-6	entitled "Large Group Health Insurance Coverage" are hereby amended to read as follows:
5-7	27-18.6-2. Definitions. -- The following words and phrases as used in this chapter have
5-8	the following meanings unless a different meaning is required by the context:
5-9	(1) "Affiliation period" means a period which, under the terms of the health insurance
5-10	coverage offered by a health maintenance organization, must expire before the health insurance
5-11	coverage becomes effective. The health maintenance organization is not required to provide
5-12	health care services or benefits during the period and no premium shall be charged to the
5-13	participant or beneficiary for any coverage during the period;
5-14	(2) "Beneficiary" has the meaning given that term under section 3(8) of the Employee
5-15	Retirement Security Act of 1974, 29 U.S.C. section 1002(8);
5-16	(3) "Bona fide association" means, with respect to health insurance coverage in this state,
5-17	an association which:
5-18	(i) Has been actively in existence for at least five (5) years;
5-19	(ii) Has been formed and maintained in good faith for purposes other than obtaining
5-20	insurance;
5-21	(iii) Does not condition membership in the association on any health status-relating
5-22	factor relating to an individual (including an employee of an employer or a dependent of an
5-23	employee);
5-24	(iv) Makes health insurance coverage offered through the association available to all
5-25	members regardless of any health status-related factor relating to the members (or individuals
5-26	eligible for coverage through a member);
5-27	(v) Does not make health insurance coverage offered through the association available
5-28	other than in connection with a member of the association;
5-29	(vi) Is composed of persons having a common interest or calling;
5-30	(vii) Has a constitution and bylaws; and
5-31	(viii) Meets any additional requirements that the director may prescribe by regulation;
5-32	(4) "COBRA continuation provision" means any of the following:
5-33	(i) Section 4980(B) of the Internal Revenue Code of 1986, 26 U.S.C. section 4980B,
5-34	other than the subsection (f)(1) of that section insofar as it relates to pediatric vaccines;
6-1	(ii) Part 6 of subtitle B of title 1 of the Employee Retirement Income Security Act of
6-2	1974, 29 U.S.C. section 1161 et seq., other than section 609 of that act, 29 U.S.C. section 1169;
6-3	or
6-4	(iii) Title XXII of the United States Public Health Service Act, 42 U.S.C. section 300bb-
6-5	1 et seq.;
6-6	(5) "Creditable coverage" has the same meaning as defined in the United States Public
6-7	Health Service Act, section 2701(c), 42 U.S.C. section 300gg(c), as added by P.L. 104-191;
6-8	(6) "Church plan" has the meaning given that term under section 3(33) of the Employee
6-9	Retirement Income Security Act of 1974, 29 U.S.C. section 1002(33);
6-10	(7) "Director" means the director of the department of business regulation;
6-11	(8) "Employee" has the meaning given that term under section 3(6) of the Employee
6-12	Retirement Income Security Act of 1974, 29 U.S.C. section 1002(6);
6-13	(9) "Employer" has the meaning given that term under section 3(5) of the Employee
6-14	Retirement Income Security Act of 1974, 29 U.S.C. section 1002(5), except that the term includes
6-15	only employers of two (2) or more employees;
6-16	(10) "Enrollment date" means, with respect to an individual covered under a group health
6-17	plan or health insurance coverage, the date of enrollment of the individual in the plan or coverage
6-18	or, if earlier, the first day of the waiting period for the enrollment;
6-19	(11) "Governmental plan" has the meaning given that term under section 3(32) of the
6-20	Employee Retirement Income Security Act of 1974, 29 U.S.C. section 1002(32), and includes any
6-21	governmental plan established or maintained for its employees by the government of the United
6-22	States, the government of any state or political subdivision of the state, or by any agency or
6-23	instrumentality of government;
6-24	(12) "Group health insurance coverage" means, in connection with a group health plan,
6-25	health insurance coverage offered in connection with that plan;
6-26	(13) "Group health plan" means an employee welfare benefits plan as defined in section
6-27	3(1) of the Employee Retirement Income Security Act of 1974, 29 U.S.C. section 1002(1), to the
6-28	extent that the plan provides medical care and including items and services paid for as medical
6-29	care to employees or their dependents as defined under the terms of the plan directly or through
6-30	insurance, reimbursement or otherwise;
6-31	(14) "Health insurance carrier" or "carrier" means any entity subject to the insurance
6-32	laws and regulations of this state, or subject to the jurisdiction of the director, that contracts or
6-33	offers to contract to provide, deliver, arrange for, pay for, or reimburse any of the costs of health
6-34	care services, including, without limitation, an insurance company offering accident and sickness
7-1	insurance, a health maintenance organization, a nonprofit hospital, medical or dental service
7-2	corporation, or any other entity providing a plan of health insurance, health benefits, or health
7-3	services;
7-4	(15) (i) "Health insurance coverage" means a policy, contract, certificate, or agreement
7-5	offered by a health insurance carrier to provide, deliver, arrange for, pay for, or reimburse any of
7-6	the costs of health care services. Health insurance coverage does include short-term and
7-7	catastrophic health insurance policies, and a policy that pays on a cost-incurred basis, except as
7-8	otherwise specifically exempted in this definition;
7-9	(ii) "Health insurance coverage" does not include one or more, or any combination of,
7-10	the following "excepted benefits":
7-11	(A) Coverage only for accident, or disability income insurance, or any combination of
7-12	those;
7-13	(B) Coverage issued as a supplement to liability insurance;
7-14	(C) Liability insurance, including general liability insurance and automobile liability
7-15	insurance;
7-16	(D) Workers' compensation or similar insurance;
7-17	(E) Automobile medical payment insurance;
7-18	(F) Credit-only insurance;
7-19	(G) Coverage for on-site medical clinics; and
7-20	(H) Other similar insurance coverage, specified in federal regulations issued pursuant to
7-21	P.L. 104-191, under which benefits for medical care are secondary or incidental to other
7-22	insurance benefits;
7-23	(iii) "Health insurance coverage" does not include the following "limited, excepted
7-24	benefits" if they are provided under a separate policy, certificate of insurance, or are not an
7-25	integral part of the plan:
7-26	(A) Limited scope dental or vision benefits;
7-27	(B) Benefits for long-term care, nursing home care, home health care, community-based
7-28	care, or any combination of those; and
7-29	(C) Any other similar, limited benefits that are specified in federal regulations issued
7-30	pursuant to P.L. 104-191;
7-31	(iv) "Health insurance coverage" does not include the following "noncoordinated,
7-32	excepted benefits" if the benefits are provided under a separate policy, certificate, or contract of
7-33	insurance, there is no coordination between the provision of the benefits and any exclusion of
7-34	benefits under any group health plan maintained by the same plan sponsor, and the benefits are
8-1	paid with respect to an event without regard to whether benefits are provided with respect to the
8-2	event under any group health plan maintained by the same plan sponsor:
8-3	(A) Coverage only for a specified disease or illness; and
8-4	(B) Hospital indemnity or other fixed indemnity insurance;
8-5	(v) "Health insurance coverage" does not include the following "supplemental, excepted
8-6	benefits" if offered as a separate policy, certificate, or contract of insurance:
8-7	(A) Medicare supplemental health insurance as defined under section 1882(g)(1) of the
8-8	Social Security Act, 42 U.S.C. section 1395ss(g)(1);
8-9	(B) Coverage supplemental to the coverage provided under 10 U.S.C. section 1071 et
8-10	seq.; and
8-11	(C) Similar supplemental coverage provided to coverage under a group health plan;
8-12	(16) "Health maintenance organization" ("HMO") means a health maintenance
8-13	organization licensed under chapter 41 of this title;
8-14	(17) "Health status-related factor" means any of the following factors:
8-15	(i) Health status;
8-16	(ii) Medical condition, including both physical and mental illnesses;
8-17	(iii) Claims experience;
8-18	(iv) Receipt of health care;
8-19	(v) Medical history;
8-20	(vi) Genetic information;
8-21	(vii) Evidence of insurability, including contributions arising out of acts of domestic
8-22	violence; and
8-23	(viii) Disability;
8-24	(18) "Large employer" means, in connection with a group health plan with respect to a
8-25	calendar year and a plan year, an employer who employed an average of at least fifty-one (51)
8-26	employees on business days during the preceding calendar year and who employs at least two (2)
8-27	employees on the first day of the plan year. In the case of an employer which was not in existence
8-28	throughout the preceding calendar year, the determination of whether the employer is a large
8-29	employer shall be based on the average number of employees that is reasonably expected the
8-30	employer will employ on business days in the current calendar year;
8-31	(19) "Large group market" means the health insurance market under which individuals
8-32	obtain health insurance coverage (directly or through any arrangement) on behalf of themselves
8-33	(and their dependents) through a group health plan maintained by a large employer;
9-34	(20) "Late enrollee" means, with respect to coverage under a group health plan, a
9-35	participant or beneficiary who enrolls under the plan other than during:
9-36	(i) The first period in which the individual is eligible to enroll under the plan; or
9-37	(ii) A special enrollment period;
9-38	(21) "Medical care" means amounts paid for:
9-39	(i) The diagnosis, cure, mitigation, treatment, or prevention of disease, or amounts paid
9-40	for the purpose of affecting any structure or function of the body;
9-41	(ii) Amounts paid for transportation primarily for and essential to medical care referred
9-42	to in paragraph (i) of this subdivision; and
9-43	(iii) Amounts paid for insurance covering medical care referred to in paragraphs (i) and
9-44	(ii) of this subdivision;
9-45	(22) "Network plan" means health insurance coverage offered by a health insurance
9-46	carrier under which the financing and delivery of medical care including items and services paid
9-47	for as medical care are provided, in whole or in part, through a defined set of providers under
9-48	contract with the carrier;
9-49	(23) "Participant" has the meaning given such term under section 3(7) of the Employee
9-50	Retirement Income Security Act of 1974, 29 U.S.C. section 1002(7);
9-51	(24) "Placed for adoption" means, in connection with any placement for adoption of a
9-52	child with any person, the assumption and retention by that person of a legal obligation for total
9-53	or partial support of the child in anticipation of adoption of the child. The child's placement with
9-54	the person terminates upon the termination of the legal obligation;
9-55	(25) "Plan sponsor" has the meaning given that term under section 3(16)(B) of the
9-56	Employee Retirement Income Security Act of 1974, 29 U.S.C. section 1002(16)(B). "Plan
9-57	sponsor" also includes any bona fide association, as defined in this section;
9-58	(26) "Preexisting condition exclusion" means, with respect to health insurance coverage,
9-59	a limitation or exclusion of benefits relating to a condition based on the fact that the condition
9-60	was present before the date of enrollment for the coverage, whether or not any medical advice,
9-61	diagnosis, care or treatment was recommended or received before the date; and
9-62	(27) "Waiting period" means, with respect to a group health plan and an individual who
9-63	is a potential participant or beneficiary in the plan, the period that must pass with respect to the
9-64	individual before the individual is eligible to be covered for benefits under the terms of the plan.
9-65	Provided, further, that large group carrier shall not impose a waiting period greater than sixty (60)
9-66	days.
9-67	(28) “Grandfathered health plan” means any group health plan or health insurance
9-68	coverage subject to 42 U.S.C. section 18011.
10-1	27-18.6-3. Limitation on preexisting condition exclusion. -- (a) (1) Notwithstanding
10-2	any of the provisions of this title to the contrary, a group health plan and a health insurance
10-3	carrier offering group health insurance coverage, which is not a grandfathered health plan
10-4	pursuant to 42 U.S.C. section 18011, shall not deny, exclude, or limit benefits with respect to a
10-5	participant or beneficiary because of a preexisting condition exclusion except if:
10-6	(i) The exclusion relates to a condition (whether physical or mental), regardless of the
10-7	cause of the condition, for which medical advice, diagnosis, care, or treatment was recommended
10-8	or received within the six (6) month period ending on the enrollment date;
10-9	(ii) The exclusion extends for a period of not more than twelve (12) months (or eighteen
10-10	(18) months in the case of a late enrollee) after the enrollment date; and
10-11	(iii) The period of the preexisting condition exclusion is reduced by the aggregate of the
10-12	periods of creditable coverage, if any, applicable to the participant or the beneficiary as of the
10-13	enrollment date.
10-14	(2) For purposes of this section, genetic information shall not be treated as a preexisting
10-15	condition in the absence of a diagnosis of the condition related to that information.
10-16	(b) With respect to paragraph (a)(1)(iii) of this section, a period of creditable coverage
10-17	shall not be counted, with respect to enrollment of an individual under a group health plan, if,
10-18	after that period and before the enrollment date, there was a sixty-three (63) day period during
10-19	which the individual was not covered under any creditable coverage.
10-20	(c) Any period that an individual is in a waiting period for any coverage under a group
10-21	health plan or for group health insurance or is in an affiliation period shall not be taken into
10-22	account in determining the continuous period under subsection (b) of this section.
10-23	(d) Except as otherwise provided in subsection (e) of this section, for purposes of
10-24	applying paragraph (a)(1)(iii) of this section, a group health plan and a health insurance carrier
10-25	offering group health insurance coverage shall count a period of creditable coverage without
10-26	regard to the specific benefits covered during the period.
10-27	(e) (1) A group health plan or a health insurance carrier offering group health insurance
10-28	may elect to apply paragraph (a)(1)(iii) of this section based on coverage of benefits within each
10-29	of several classes or categories of benefits. Those classes or categories of benefits are to be
10-30	determined by the secretary of the United States Department of Health and Human Services
10-31	pursuant to regulation. The election shall be made on a uniform basis for all participants and
10-32	beneficiaries. Under the election, a group health plan or carrier shall count a period of creditable
10-33	coverage with respect to any class or category of benefits if any level of benefits is covered
10-34	within the class or category.
11-1	(2) In the case of an election under this subsection with respect to a group health plan
11-2	(whether or not health insurance coverage is provided in connection with that plan), the plan
11-3	shall:
11-4	(i) Prominently state in any disclosure statements concerning the plan, and state to each
11-5	enrollee under the plan, that the plan has made the election; and
11-6	(ii) Include in the statements a description of the effect of this election.
11-7	(3) In the case of an election under this subsection with respect to health insurance
11-8	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.

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	LC02083
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	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.

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	LC02083
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H7892