2014 -- S 2221

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LC003873

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2014

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A N   A C T

RELATING TO INSURANCE -- GENDER RATING

     Introduced By: Senators Sosnowski, Miller, Nesselbush, Cool Rumsey, and Gallo

     Date Introduced: January 30, 2014

     Referred To: Senate Health & Human Services

     It is enacted by the General Assembly as follows:

     SECTION 1. Chapter 27-18 of the General Laws entitled "Accident and Sickness

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

     27-18-82. Gender rating. – (a) Effective January 1, 2015, no individual or small group

health insurance contract, plan, or policy delivered, issued for delivery, or renewed in this state,

which provides medical coverage that includes coverage for physician services in a physician’s

office, and no policy which provides major medical and/or similar comprehensive-type coverage,

excluding policies listed in (c), shall vary the premium rate for a health coverage plan based on

the gender of the individual policy holders, enrollees, subscribers, or members.

     (b) Effective April 1, 2016, no large group health insurance employer contract, plan, or

policy delivered, issued for delivery, or renewed in this state, which provides medical coverage

that includes coverage for physician services in a physician’s office and any policy which

provides major medical and/or similar comprehensive-type coverage, excluding policies listed in

(c), shall vary the premium rate based on the gender of the individual policy holders, enrollees,

subscribers, or members in any one age group.

     (c) This section shall not apply to insurance coverage providing benefits for any of the

following:

     (1) Hospital confinement indemnity;

     (2) Disability income;

     (3) Accident only;

     (4) Long-term care;

     (5) Medicare supplement;

     (6) Limited benefit health;

     (7) Specified diseased indemnity;

     (8) Sickness of bodily injury or death by accident or both;

     (9) Other limited benefit policies.

     SECTION 2. Chapter 27-19 of the General Laws entitled "Nonprofit Hospital Service

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

     27-19-73. Gender rating. -- (a) Effective January 1, 2015, no individual or small group

health insurance contract, plan, or policy delivered, issued for delivery, or renewed in this state,

which provides medical coverage that includes coverage for physician services in a physician’s

office, and no policy which provides major medical and/or similar comprehensive-type coverage,

excluding policies listed in (c), shall vary the premium rate for a health coverage plan based on

the gender of the individual policy holders, enrollees, subscribers, or members.

     (b) Effective April 1, 2016, no large group health insurance employer contract, plan, or

policy delivered, issued for delivery, or renewed in this state, which provides medical coverage

that includes coverage for physician services in a physician’s office and any policy which

provides major medical and/or similar comprehensive-type coverage, excluding policies listed in

(c), shall vary the premium rate based on the gender of the individual policy holders, enrollees,

subscribers, or members in any one age group.

     (c) This section shall not apply to insurance coverage providing benefits for any of the

following:

     (1) Hospital confinement indemnity;

     (2) Disability income;

     (3) Accident only;

     (4) Long-term care;

     (5) Medicare supplement;

     (6) Limited benefit health;

     (7) Specified diseased indemnity;

     (8) Sickness of bodily injury or death by accident or both;

     (9) Other limited benefit policies.

     SECTION 3. Chapter 27-20 of the General Laws entitled "Nonprofit Medical Service

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

     27-20-69. Gender rating. -- (a) Effective January 1, 2015, no individual or small group

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health insurance contract, plan, or policy delivered, issued for delivery, or renewed in this state,

which provides medical coverage that includes coverage for physician services in a physician’s

office, and no policy which provides major medical and/or similar comprehensive-type coverage,

excluding policies listed in (c), shall vary the premium rate for a health coverage plan based on

the gender of the individual policy holders, enrollees, subscribers, or members.

     (b) Effective April 1, 2016, no large group health insurance employer contract, plan, or

policy delivered, issued for delivery, or renewed in this state, which provides medical coverage

that includes coverage for physician services in a physician’s office and any policy which

provides major medical and/or similar comprehensive-type coverage, excluding policies listed in

(c), shall vary the premium rate based on the gender of the individual policy holders, enrollees,

subscribers, or members in any one age group.

     (c) This section shall not apply to insurance coverage providing benefits for any of the

     following:

     (1) Hospital confinement indemnity;

     (2) Disability income;

     (3) Accident only;

     (4) Long-term care;

     (5) Medicare supplement;

     (6) Limited benefit health;

     (7) Specified diseased indemnity;

     (8) Sickness of bodily injury or death by accident 1 or both;

     (9) Other limited benefit policies.

     SECTION 4. Chapter 27-41 of the General Laws entitled "Health Maintenance

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

     27-41-86. Gender rating. -- (a) Effective January 1, 2015, no individual or small group

health insurance contract, plan, or policy delivered, issued for delivery, or renewed in this state,

which provides medical coverage that includes coverage for physician services in a physician’s

office, and no policy which provides major medical and/or similar comprehensive-type coverage,

excluding policies listed in (c), shall vary the premium rate for a health coverage plan based on

the gender of the individual policy holders, enrollees, subscribers, or members.

     (b) Effective April 1, 2016, no large group health insurance employer contract, plan, or

policy delivered, issued for delivery, or renewed in this state, which provides medical coverage

that includes coverage for physician services in a physician’s office and any policy which

provides major medical and/or similar comprehensive-type coverage, excluding policies listed in

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(c), shall vary the premium rate based on the gender of the individual policy holders, enrollees,

subscribers, or members in any one age group.

     (c) This section shall not apply to insurance coverage providing benefits for any of the

     following:

     (1) Hospital confinement indemnity;

     (2) Disability income;

     (3) Accident only;

     (4) Long-term care;

     (5) Medicare supplement;

     (6) Limited benefit health;

     (7) Specified diseased indemnity;

     (8) Sickness of bodily injury or death by accident or both;

     (9) Other limited benefit policies.

     SECTION 5. Section 27-50-5 of the General Laws in Chapter 27-50 entitled "Small

Employer Health Insurance Availability Act" is hereby amended to read as follows:

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

subject to this chapter are subject to the following provisions:

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

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

rate for:

     (i) Age; and

     (ii) Gender in accordance with §§ 27-41-86, 27-20-69. 27-19-73, 27-18-82; and

     (iii) Family composition;

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

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

and end with age sixty-five (65).

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

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

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

of this subsection.

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

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

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

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

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

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

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

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

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

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

small employer group in the prior rate year.

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

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

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

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

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

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

section.

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

small employers. Rating factors shall produce premiums for identical groups that differ only by

the amounts attributable to plan design and do not reflect differences due to the nature of the

groups assumed to select particular health benefit plans. Two groups that are otherwise identical,

but which have different prior year rate factors may, however, have rating factors that produce

premiums that differ because of the requirements of subdivision 27-50-5(a)(6). Nothing in this

section shall be construed to prevent a group health plan and a health insurance carrier offering

health insurance coverage from establishing premium discounts or rebates or modifying

otherwise applicable copayments or deductibles in return for adherence to programs of health

promotion and disease prevention, including those included in affordable health benefit plans,

provided that the resulting rates comply with the other requirements of this section, including

subdivision (a)(5) of this section.

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

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

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

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

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

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

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

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

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

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

substantial differences in claim costs.

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

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

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

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

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

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

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

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

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

a small employer carrier shall make a reasonable disclosure, as part of its solicitation and sales

materials, of all of the following:

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

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

premium rates;

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

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

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

     benefit plans for which the small employer is qualified.

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

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

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

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

actuarial principles.

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

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

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

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

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

business.

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

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

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

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

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

competent jurisdiction.

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

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

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

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

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

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

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

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

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

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

or after October 1, 2000.

     SECTION 6. Section 27-18-71 of the General Laws in Chapter 27-18 entitled "Accident

and Sickness Insurance Policies" is hereby amended to read as follows:

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

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

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

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

imposing a preexisting condition exclusion on that individual.

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

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

individual.

     (b) As used in this section:

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

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

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

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

recommended or received before the effective date of coverage.

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

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

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

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

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

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

     "Preexisting condition exclusion" means: with respect to coverage, a limitation or

exclusion of benefits relating to a condition based on the fact that the condition was present

before the date of enrollment for such coverage, whether or not any medical advice, diagnosis,

care, or treatment was recommended or received before such date.

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

insurance coverage.

     (d) This section shall not apply to insurance coverage providing benefits for: (1) Hospital

confinement indemnity; (2) Disability income; (3) Accident only; (4) Long-term care; (5)

Medicare supplement; (6) Limited benefit health; (7) Specified disease indemnity; (8) Sickness or

bodily injury or death by accident or both; and (9) Other limited benefit policies.

     SECTION 7. Section 27-18.5-10 of the General Laws in Chapter 27-18.5 entitled

"Individual Health Insurance Coverage" is hereby amended to read as follows:

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

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

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

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

imposing a preexisting condition exclusion on that individual.

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

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

individual.

     (b) As used in this section:

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

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

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

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

recommended or received before the effective date of coverage.

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

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

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

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

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

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

     "Preexisting condition exclusion" means: with respect to coverage, a limitation or

exclusion of benefits relating to a condition based on the fact that the condition was present

before the date of enrollment for such coverage, whether or not any medical advice, diagnosis,

care, or treatment was recommended or received before such date.

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

insurance coverage.

     (d) This section shall not apply to insurance coverage providing benefits for: (1) Hospital

confinement indemnity; (2) Disability income; (3) Accident only; (4) Long-term care; (5)

Medicare supplement; (6) Limited benefit health; (7) Specified disease indemnity; (8) Sickness or

bodily injury or death by accident or both; and (9) Other limited benefit policies.

     SECTION 8. Section 27-19-68 of the General Laws in Chapter 27-19 entitled "Nonprofit

Hospital Service Corporations" is hereby amended to read as follows:

     27-19-68. Prohibition preexisting condition exclusions. -- (a) A health insurance

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

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

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

imposing a preexisting condition exclusion on that individual.

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

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

individual.

     (b) As used in this section:

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

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

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

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

recommended or received before the effective date of coverage.

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

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

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

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

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

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

     "Preexisting condition exclusion" means: with respect to coverage, a limitation or

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exclusion of benefits relating to a condition based on the fact that the condition was present

before the date of enrollment for such coverage, whether or not any medical advice, diagnosis,

care, or treatment was recommended or received before such date.

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

insurance coverage.

     (d) This section shall not apply to insurance coverage providing benefits for: (1) Hospital

confinement indemnity; (2) Disability income; (3) Accident only; (4) Long-term care; (5)

Medicare supplement; (6) Limited benefit health; (7) Specified disease indemnity; (8) Sickness or

bodily injury or death by accident or both; and (9) Other limited benefit policies.

     SECTION 9. Section 27-20-57 of the General Laws in Chapter 27-20 entitled "Nonprofit

Medical Service Corporations" is hereby amended to read as follows:

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

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

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

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

imposing a preexisting condition exclusion on that individual.

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

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

individual.

     (b) As used in this section:

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

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

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

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

recommended or received before the effective date of coverage.

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

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

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

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

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

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

     "Preexisting condition exclusion" means: with respect to coverage, a limitation or

exclusion of benefits relating to a condition based on the fact that the condition was present

before the date of enrollment for such coverage, whether or not any medical advice, diagnosis,

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care, or treatment was recommended or received before such date.

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

insurance coverage.

     (d) This section shall not apply to insurance coverage providing benefits for: (1) Hospital

confinement indemnity; (2) Disability income; (3) Accident only; (4) Long-term care; (5)

Medicare supplement; (6) Limited benefit health; (7) Specified disease indemnity; (8) Sickness or

bodily injury or death by accident or both; and (9) Other limited benefit policies.

     SECTION 10. Section 27-41-81 of the General Laws in Chapter 27-41 entitled "Health

Maintenance Organizations" is hereby amended to read as follows:

     27-41-81. Prohibition preexisting condition exclusions. -- (a) A health insurance

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

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

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

imposing a preexisting condition exclusion on that individual.

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

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

individual.

     (b) As used in this section:

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

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

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

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

recommended or received before the effective date of coverage.

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

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

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

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

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

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

     "Preexisting condition exclusion" means: with respect to coverage, a limitation or

exclusion of benefits relating to a condition based on the fact that the condition was present

before the date of enrollment for such coverage, whether or not any medical advice, diagnosis,

care, or treatment was recommended or received before such date.

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

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insurance coverage.

     (d) This section shall not apply to insurance coverage providing benefits for: (1) Hospital

confinement indemnity; (2) Disability income; (3) Accident only; (4) Long-term care; (5)

Medicare supplement; (6) Limited benefit health; (7) Specified disease indemnity; (8) Sickness or

bodily injury or death by accident or both; and (9) Other limited benefit policies.

     SECTION 11. Sections 27-50-3 and 27-50-7 of the General Laws in Chapter 27-50

entitled "Small Employer Health Insurance Availability Act" are hereby amended to read as

follows:

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

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

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

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

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

in establishing premium rates for applicable health benefit plans.

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

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

the requirements in section 27-50-5.

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

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

a specified entity or person.

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

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

provide benefits.

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

state, an association which:

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

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

insurance;

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

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

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

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

eligible for coverage through a member);

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

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other than in connection with a member of the association;

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

      (7) Has a constitution and bylaws; and

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

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

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

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

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

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

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

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

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

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

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

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

association.

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

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

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

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

coverage provided under any of the following:

      (i) A group health plan;

      (ii) A health benefit plan;

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

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

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

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

distribution of pediatric vaccines);

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

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

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

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

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

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

LC003873 - Page 13 of 34

      (vii) A state health benefits risk pool;

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

Health Benefits Program (FEHBP));

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

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

insurance coverage to individuals enrolled in the plan; or

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

2504(e)).

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

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

individual experiences a significant break in coverage.

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

unmarried child of any age who is financially dependent upon, the parent and is medically

determined to have a physical or mental impairment which can be expected to result in death or

which has lasted or can be expected to last for a continuous period of not less than twelve (12)

months.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

LC003873 - Page 14 of 34

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

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

first day of the waiting period, whichever is earlier.

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

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

which the carrier is authorized to provide coverage.

      (p) "Family composition" means:

      (1) Enrollee;

      (2) Enrollee, spouse and children;

      (3) Enrollee and spouse; or

      (4) Enrollee and children.

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

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

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

specific genes or chromosomes, physical medical examinations, family histories, and direct

analysis of genes or chromosomes.

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

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

governmental plan.

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

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

extent that the plan provides medical care, as defined in subsection (y) of this section, and

including items and services paid for as medical care to employees or their dependents as defined

under the terms of the plan directly or through insurance, reimbursement, or otherwise.

      (2) For purposes of this chapter:

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

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

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

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

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

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

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

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

in relation to any partner; and

LC003873 - Page 15 of 34

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

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

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

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

a partner in relation to the partnership; or

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

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

individual.

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

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

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

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

otherwise specifically exempted in this definition.

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

following:

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

those;

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

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

insurance;

      (iv) Workers' compensation or similar insurance;

      (v) Automobile medical payment insurance;

      (vi) Credit-only insurance;

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

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

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

insurance benefits.

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

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

of the plan:

      (i) Limited scope dental or vision benefits;

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

care, or any combination of those; or

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

LC003873 - Page 16 of 34

Pub. L. No. 104-191.

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

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

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

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

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

maintained by the same plan sponsor:

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

      (ii) Hospital indemnity or other fixed indemnity insurance.

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

certificate, or contract of insurance:

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

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

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

seq.; or

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

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

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

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

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

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

following:

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

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

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

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

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

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

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

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

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

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

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

organization licensed under chapter 41 of this title.

LC003873 - Page 17 of 34

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

      (1) Health status;

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

      (3) Claims experience;

      (4) Receipt of health care;

      (5) Medical history;

      (6) Genetic information;

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

violence; or

      (8) Disability.

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

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

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

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

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

      (i) Who meets each of the following provisions:

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

enrollment;

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

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

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

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

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

40; and

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

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

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

individual enrolls during the specified bona fide open enrollment period;

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

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

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

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

(30) days after issuance of the court order;

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

LC003873 - Page 18 of 34

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

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

coverage under that provision has been exhausted; or

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

27-50-8.

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

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

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

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

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

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

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

(1); and

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

subsection.

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

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

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

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

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

combination of the foregoing.

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

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

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

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

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

respect to coverage, a limitation or exclusion of benefits relating to a condition based on the fact

the condition was present before the date of enrollment for such coverage, whether or not any

medical advice, diagnosis, care, or treatment was recommended or received before such date.

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

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

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

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

days prior to the enrollment date of the new coverage.

LC003873 - Page 19 of 34

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

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

diagnosis of the condition related to the information.

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

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

contributions associated with the health benefit plan.

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

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

small employer carrier are assumed to be in effect.

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

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

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

services to covered individuals.

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

27-50-16.

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

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

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

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

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

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

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

coverage.

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

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

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

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

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

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

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

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

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

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

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

LC003873 - Page 20 of 34

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

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

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

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

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

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

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

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

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

period shall not be considered a gap in coverage.

      (mm) "Wellness health benefit plan" means a plan developed pursuant to section 27-50-

10.

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

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

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

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

quartile of all Rhode Island employers.

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

employer carrier pursuant to section 27-50-7.

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

     27-50-7. Availability of coverage. -- (a) Until October 1, 2004, for purposes of this

section, "small employer" includes any person, firm, corporation, partnership, association, or

political subdivision that is actively engaged in business that on at least fifty percent (50%) of its

working days during the preceding calendar quarter, employed a combination of no more than

fifty (50) and no less than two (2) eligible employees and part-time employees, the majority of

whom were employed within this state, and is not formed primarily for purposes of buying health

insurance and in which a bona fide employer-employee relationship exists. After October 1, 2004,

for the purposes of this section, "small employer" has the meaning used in section 27-50-3(kk).

      (b) (1) Every small employer carrier shall, as a condition of transacting business in this

state with small employers, actively offer to small employers all health benefit plans it actively

markets to small employers in this state including a wellness health benefit plan. A small

employer carrier shall be considered to be actively marketing a health benefit plan if it offers that

plan to any small employer not currently receiving a health benefit plan from the small employer

carrier.

LC003873 - Page 21 of 34

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

health benefit plan to any eligible small employer that applies for that plan and agrees to make the

required premium payments and to satisfy the other reasonable provisions of the health benefit

plan not inconsistent with this chapter. However, no carrier is required to issue a health benefit

plan to any self-employed individual who is covered by, or is eligible for coverage under, a health

benefit plan offered by an employer.

      (c) (1) A small employer carrier shall file with the director, in a format and manner

prescribed by the director, the health benefit plans to be used by the carrier. A health benefit plan

filed pursuant to this subdivision may be used by a small employer carrier beginning thirty (30)

days after it is filed unless the director disapproves its use.

      (2) The director may at any time may, after providing notice and an opportunity for a

hearing to the small employer carrier, disapprove the continued use by a small employer carrier of

a health benefit plan on the grounds that the plan does not meet the requirements of this chapter.

      (d) Health benefit plans covering small employers shall comply with the following

provisions:

      (1) A health benefit plan shall not deny, exclude, or limit benefits for a covered

individual for losses incurred more than six (6) months following the enrollment date of the

individual's coverage due to a preexisting condition, or the first date of the waiting period for

enrollment if that date is earlier than the enrollment date. A health benefit plan shall not define a

preexisting condition more restrictively than as defined in section 27-50-3.

      (2) (i) Except as provided in subdivision (3) of this subsection, a small employer carrier

shall reduce the period of any preexisting condition exclusion by the aggregate of the periods of

creditable coverage without regard to the specific benefits covered during the period of creditable

coverage, provided that the last period of creditable coverage ended on a date not more than

ninety (90) days prior to the enrollment date of new coverage.

      (ii) The aggregate period of creditable coverage does not include any waiting period or

affiliation period for the effective date of the new coverage applied by the employer or the carrier,

or for the normal application and enrollment process following employment or other triggering

event for eligibility.

      (iii) A carrier that does not use preexisting condition limitations in any of its health

benefit plans may impose an affiliation period that:

      (A) Does not exceed sixty (60) days for new entrants and not to exceed ninety (90) days

for late enrollees;

      (B) During which the carrier charges no premiums and the coverage issued is not

LC003873 - Page 22 of 34

effective; and

      (C) Is applied uniformly, without regard to any health status-related factor.

      (iv) This section does not preclude application of any waiting period applicable to all

new enrollees under the health benefit plan, provided that any carrier-imposed waiting period is

no longer than sixty (60) days.

      (3) (i) Instead of as provided in paragraph (2)(i) of this subsection, a small employer

carrier may elect to reduce the period of any preexisting condition exclusion based on coverage of

benefits within each of several classes or categories of benefits specified in federal regulations.

      (ii) A small employer electing to reduce the period of any preexisting condition

exclusion using the alternative method described in paragraph (i) of this subdivision shall:

      (A) Make the election on a uniform basis for all enrollees; and

      (B) Count a period of creditable coverage with respect to any class or category of

benefits if any level of benefits is covered within the class or category.

      (iii) A small employer carrier electing to reduce the period of any preexisting condition

exclusion using the alternative method described under paragraph (i) of this subdivision shall:

      (A) Prominently state that the election has been made in any disclosure statements

concerning coverage under the health benefit plan to each enrollee at the time of enrollment under

the plan and to each small employer at the time of the offer or sale of the coverage; and

      (B) Include in the disclosure statements the effect of the election.

      (4) (i) A health benefit plan shall accept late enrollees, but may exclude coverage for late

enrollees for preexisting conditions for a period not to exceed twelve (12) months.

      (ii) A small employer carrier shall reduce the period of any preexisting condition

exclusion pursuant to subdivision (2) or (3) of this subsection.

      (5) A small employer carrier shall not impose a preexisting condition exclusion:

      (i) Relating to pregnancy as a preexisting condition; or

      (ii) With regard to a child who is covered under any creditable coverage within thirty

(30) days of birth, adoption, or placement for adoption, provided that the child does not

experience a significant break in coverage, and provided that the child was adopted or placed for

adoption before attaining eighteen (18) years of age.

      (6) A small employer carrier shall not impose a preexisting condition exclusion in the

case of a condition for which medical advice, diagnosis, care or treatment was recommended or

received for the first time while the covered person held creditable coverage, and the medical

advice, diagnosis, care or treatment was a covered benefit under the plan, provided that the

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

LC003873 - Page 23 of 34

enrollment date of the new coverage.

      (7) (i) A small employer carrier shall permit an employee or a dependent of the

employee, who is eligible, but not enrolled, to enroll for coverage under the terms of the group

health plan of the small employer during a special enrollment period if:

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

under a health benefit plan at the time coverage was previously offered to the employee or

dependent;

      (B) The employee stated in writing at the time coverage was previously offered that

coverage under a group health plan or other health benefit plan was the reason for declining

enrollment, but only if the plan sponsor or carrier, if applicable, required that statement at the

time coverage was previously offered and provided notice to the employee of the requirement and

the consequences of the requirement at that time;

      (C) The employee's or dependent's coverage described under subparagraph (A) of this

paragraph:

      (I) Was under a COBRA continuation provision and the coverage under this provision

has been exhausted; or

      (II) Was not under a COBRA continuation provision and that other coverage has been

terminated as a result of loss of eligibility for coverage, including as a result of a legal separation,

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

employer contributions towards that other coverage have been terminated; and

      (D) Under terms of the group health plan, the employee requests enrollment not later

than thirty (30) days after the date of exhaustion of coverage described in item (C)(I) of this

paragraph or termination of coverage or employer contribution described in item (C)(II) of this

paragraph.

      (ii) If an employee requests enrollment pursuant to subparagraph (i)(D) of this

subdivision, the enrollment is effective not later than the first day of the first calendar month

beginning after the date the completed request for enrollment is received.

      (8) (i) A small employer carrier that makes coverage available under a group health plan

with respect to a dependent of an individual shall provide for a dependent special enrollment

period described in paragraph (ii) of this subdivision during which the person or, if not enrolled,

the individual may be enrolled under the group health plan as a dependent of the individual and,

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

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

      (A) The individual is a participant under the health benefit plan or has met any waiting

LC003873 - Page 24 of 34

period applicable to becoming a participant under the plan and is eligible to be enrolled under the

plan, but for a failure to enroll during a previous enrollment period; and

      (B) A person becomes a dependent of the individual through marriage, birth, or adoption

or placement for adoption.

      (ii) The special enrollment period for individuals that meet the provisions of paragraph

(i) of this subdivision is a period of not less than thirty (30) days and begins on the later of:

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

      (B) The date of the marriage, birth, or adoption or placement for adoption described in

subparagraph (i)(B) of this subdivision.

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

dependent special enrollment period described under paragraph (ii) of this subdivision, the

coverage of the dependent is effective:

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

the date the completed request for enrollment is received;

      (B) In the case of a dependent's birth, as of the date of birth; and

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

adoption or placement for adoption.

      (9) (i) Except as provided in this subdivision, requirements used by a small employer

carrier in determining whether to provide coverage to a small employer, including requirements

for minimum participation of eligible employees and minimum employer contributions, shall be

applied uniformly among all small employers applying for coverage or receiving coverage from

the small employer carrier.

      (ii) For health benefit plans issued or renewed on or after October 1, 2000, a small

employer carrier shall not require a minimum participation level greater than seventy-five percent

(75%) of eligible employees.

      (iii) In applying minimum participation requirements with respect to a small employer, a

small employer carrier shall not consider employees or dependents who have creditable coverage

in determining whether the applicable percentage of participation is met.

      (iv) A small employer carrier shall not increase any requirement for minimum employee

participation or modify any requirement for minimum employer contribution applicable to a small

employer at any time after the small employer has been accepted for coverage.

      (10) (i) If a small employer carrier offers coverage to a small employer, the small

employer carrier shall offer coverage to all of the eligible employees of a small employer and

their dependents who apply for enrollment during the period in which the employee first becomes

LC003873 - Page 25 of 34

eligible to enroll under the terms of the plan. A small employer carrier shall not offer coverage to

only certain individuals or dependents in a small employer group or to only part of the group.

      (ii) A small employer carrier shall not place any restriction in regard to any health status-

related factor on an eligible employee or dependent with respect to enrollment or plan

participation.

      (iii) Except as permitted under subdivisions (1) and (4) of this subsection, a small

employer carrier shall not modify a health benefit plan with respect to a small employer or any

eligible employee or dependent, through riders, endorsements, or otherwise, to restrict or exclude

coverage or benefits for specific diseases, medical conditions, or services covered by the plan.

      (e) (1) Subject to subdivision (3) of this subsection, a small employer carrier is not

required to offer coverage or accept applications pursuant to subsection (b) of this section in the

case of the following:

      (i) To a small employer, where the small employer does not have eligible individuals

who live, work, or reside in the established geographic service area for the network plan;

      (ii) To an employee, when the employee does not live, work, or reside within the

carrier's established geographic service area; or

      (iii) Within an area where the small employer carrier reasonably anticipates, and

demonstrates to the satisfaction of the director, that it will not have the capacity within its

established geographic service area to deliver services adequately to enrollees of any additional

groups because of its obligations to existing group policyholders and enrollees.

      (2) A small employer carrier that cannot offer coverage pursuant to paragraph (1)(iii) of

this subsection may not offer coverage in the applicable area to new cases of employer groups

until the later of one hundred and eighty (180) days following each refusal or the date on which

the carrier notifies the director that it has regained capacity to deliver services to new employer

groups.

      (3) A small employer carrier shall apply the provisions of this subsection uniformly to all

small employers without regard to the claims experience of a small employer and its employees

and their dependents or any health status-related factor relating to the employees and their

dependents.

      (f) (1) A small employer carrier is not required to provide coverage to small employers

pursuant to subsection (b) of this section if:

      (i) For any period of time the director determines the small employer carrier does not

have the financial reserves necessary to underwrite additional coverage; and

      (ii) The small employer carrier is applying this subsection uniformly to all small

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employers in the small group market in this state consistent with applicable state law and without

regard to the claims experience of a small employer and its employees and their dependents or

any health status-related factor relating to the employees and their dependents.

      (2) A small employer carrier that denies coverage in accordance with subdivision (1) of

this subsection may not offer coverage in the small group market for the later of:

      (i) A period of one hundred and eighty (180) days after the date the coverage is denied;

or

      (ii) Until the small employer has demonstrated to the director that it has sufficient

financial reserves to underwrite additional coverage.

      (g) (1) A small employer carrier is not required to provide coverage to small employers

pursuant to subsection (b) of this section if the small employer carrier elects not to offer new

coverage to small employers in this state.

      (2) A small employer carrier that elects not to offer new coverage to small employers

under this subsection may be allowed, as determined by the director, to maintain its existing

policies in this state.

      (3) A small employer carrier that elects not to offer new coverage to small employers

under subdivision (g)(1) shall provide at least one hundred and twenty (120) days notice of its

election to the director and is prohibited from writing new business in the small employer market

in this state for a period of five (5) years beginning on the date the carrier ceased offering new

coverage in this state.

      (h) No small group carrier may impose a pre-existing condition exclusion pursuant to the

provisions of subdivisions 27-50-7(d)(1), 27-50-7(d)(2), 27-50-7(d)(3), 27-50-7(d)(4), 27-50-

7(d)(5) and 27-50-7(d)(6) with regard to an individual that is less than nineteen (19) years of age.

Notwithstanding any provision of this section or of any general or public law to the contrary,

With with respect to health benefit plans issued on and after January 1, 2014 a small employer

carrier shall offer and issue coverage to small employers and eligible individuals notwithstanding

any pre-existing condition of an employee, member, or individual, or their dependents.

     SECTION 12. Section 27-18.6-3 of the General Laws in Chapter 27-18.6 entitled "Large

Group Health Insurance Coverage" is hereby amended to read as follows:

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

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

carrier offering group health insurance coverage shall not deny, exclude, or limit benefits with

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

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

LC003873 - Page 27 of 34

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

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

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

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

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

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

enrollment date.

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

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

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

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

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

which the individual was not covered under any creditable coverage.

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

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

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

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

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

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

regard to the specific benefits covered during the period.

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

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

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

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

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

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

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

within the class or category.

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

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

shall:

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

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

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

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

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

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

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

and

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

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

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

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

creditable coverage.

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

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

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

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

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

determining creditable coverage.

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

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

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

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

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

the date of the adoption or placement for adoption.

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

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

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

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

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

creditable coverage.

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

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

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

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

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

group health insurance coverage shall provide certifications:

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

under a COBRA continuation provision;

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

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

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

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

is later.

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

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

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

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

any) under the COBRA continuation provision; and

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

respect to the individual for any coverage under the plan.

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

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

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

accordance with this subsection.

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

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

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

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

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

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

carrier for the reasonable cost of disclosing the information.

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

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

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

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

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

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

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

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

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

LC003873 - Page 30 of 34

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

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

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

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

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

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

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

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

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

was exhausted; or

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

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

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

employer contributions towards the coverage were terminated; and

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

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

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

subsection.

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

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

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

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

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

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

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

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

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

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

days and shall begin on the later of:

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

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

may be).

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

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

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

the date the completed request for enrollment is received;

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

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

adoption or placement for adoption.

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

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

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

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

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

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

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

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

under the plan.

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

subsection to address adverse selection.

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

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

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

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

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

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

and Human Services.

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

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

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

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

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

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

applicable requirements of this section.

      (o) Notwithstanding the provisions of this section, or of any general or public law to the

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

a health insurance carrier offering group health insurance coverage shall not deny, exclude, or

limit benefits with respect to a participant or beneficiary because of a preexisting condition

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exclusion.

     SECTION 13. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO INSURANCE -- GENDER RATING

***

     This act would provide that insurance companies shall not vary the premium rates

charged for a health coverage plan based on the gender of the individual policy holder, enrollee,

subscriber, or member.

     This act would take effect upon passage.

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