2017 -- H 6156

========

LC002586

========

     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2017

____________

A N   A C T

RELATING TO INSURANCE -- HEALTH INSURANCE COVERAGE

     Introduced By: Representatives Kennedy, Ruggiero, Tanzi, Diaz, and Bennett

     Date Introduced: April 27, 2017

     Referred To: House Corporations

     It is enacted by the General Assembly as follows:

     SECTION 1. Sections 27-18-2.1, 27-18-73 and 27-18-75 of the General Laws in Chapter

27-18 entitled "Accident and Sickness Insurance Policies" are hereby amended to read as follows:

     27-18-2.1. Uniform explanation of benefits and coverage.

     (a) A health insurance carrier shall provide a summary of benefits and coverage

explanation and definitions to policyholders and others required by, and at the times and in the

format required, by the federal regulations adopted under section 2715 [42 U.S.C. § 300gg-15] of

the Public Health Service Act, as amended by the federal Affordable Care Act federal and state

law and regulations. The forms required by this section shall be made available to the

commissioner on request. Nothing in this section shall be construed to limit the authority of the

commissioner under existing state law.

     (b) The provisions of this section shall apply to grandfathered health plans. 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.

     (c) If the commissioner of the office of the health insurance commissioner determines

that the corresponding provision of the federal Patient Protection and Affordable Care Act has

been declared invalid by a final judgment of the federal judicial branch or has been repealed by

an act of Congress, on the date of the commissioner's determination this section shall have its

effectiveness suspended indefinitely, and the commissioner shall take no action to enforce this

section. Nothing in this section shall be construed to limit the authority of the commissioner

under existing state law.

     27-18-73. Prohibition on annual and lifetime limits.

     (a) Annual limits.

     (1) For plan or policy years beginning prior to January 1, 2014, for any individual, a

health insurance carrier and a health benefit plan subject to the jurisdiction of the commissioner

under this chapter may establish an annual limit on the dollar amount of benefits that are essential

health benefits provided the restricted annual limit is not less than the following:

     (A) For a plan or policy year beginning after September 22, 2011, but before September

23, 2012 -- one million two hundred fifty thousand dollars ($1,250,000); and

     (B) For a plan or policy year beginning after September 22, 2012, but before January 1,

2014 -- two million dollars ($2,000,000).

     (2) For plan or policy years beginning on or after January 1, 2014, a A health insurance

carrier and a health benefit plan shall not establish any annual limit on the dollar amount of

essential health benefits for any individual, except:

     (A) A health flexible spending arrangement, as defined in Section 106(c)(2)(i) of the

Federal Internal Revenue Code, a medical savings account, as defined in section 220 of the

federal Internal Revenue Code, and a health savings account, as defined in Section 223 of the

federal Internal Revenue Code are not subject to the requirements of subdivisions (1) and (2) of

this subsection.

     (B) The provisions of this subsection shall not prevent a health insurance carrier and a

health benefit plan from placing annual dollar limits for any individual on specific covered

benefits that are not essential health benefits to the extent that such limits are otherwise permitted

under applicable federal law or the laws and regulations of this state.

     (3) In determining whether an individual has received benefits that meet or exceed the

allowable limits, as provided in subdivision (1) of this subsection, a health insurance carrier and a

health benefit plan shall take into account only essential health benefits.

     (b) Lifetime limits.

     (1) A health insurance carrier and health benefit plan offering group or individual health

insurance coverage shall not establish a lifetime limit on the dollar value of essential health

benefits for any individual.

     (2) Notwithstanding subdivision (1) above, a health insurance carrier and health benefit

plan is not prohibited from placing lifetime dollar limits for any individual on specific covered

LC002586 - Page 2 of 70

benefits that are not essential health benefits, in accordance with federal laws and regulations.

     (c) (1) The provisions of this section relating to lifetime and annual limits apply to any

health insurance carrier providing coverage under an individual or group health plan, including

grandfathered health plans.

     (2) The provisions of this section relating to annual limits apply to any health insurance

carrier providing coverage under a group health plan, including grandfathered health plans, but

the prohibition and limits on annual limits do not apply to grandfathered health plans providing

individual health insurance coverage.

     (d) This section shall not apply to a plan or to policy years prior to January 1, 2014 for

which the Secretary of the U.S. Department of Health and Human Services issued a waiver

pursuant to 45 C.F.R. § 147.126(d)(3). This section also 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.

     (e) If the commissioner of the office of the health insurance commissioner determines

that the corresponding provision of the federal Patient Protection and Affordable Care Act has

been declared invalid by a final judgment of the federal judicial branch or has been repealed by

an act of Congress, on the date of the commissioner's determination this section shall have its

effectiveness suspended indefinitely, and the commissioner shall take no action to enforce this

section. Nothing in this subsection shall be construed to limit the authority of the Commissioner

to regulate health insurance under existing state law.

     27-18-75. Medical loss ratio reporting and rebates.

     (a) A health insurance carrier offering group or individual health insurance coverage of a

health benefit plan, including a grandfathered health plan, shall comply with the provisions of

Section 2718 [42 U.S.C. § 300gg-18] of the Public Health Service Act as amended by the federal

Affordable Care Act, in accordance with regulations adopted thereunder, and state regulations

regarding medical loss ratio.

     (b) Health insurance carriers required to report medical loss ratio and rebate calculations

and other medical loss ratio and rebate information to the U.S. Department of Health and Human

Services shall concurrently file such information with the commissioner.

     SECTION 2. Sections 27-18.5-2, 27-18.5-3, 27-18.5-4, 27-18.5-5, 27-18.5-6 and 27-

18.5-10 of the General Laws in Chapter 27-18.5 entitled "Individual Health Insurance Coverage"

are hereby amended to read as follows:

LC002586 - Page 3 of 70

     27-18.5-2. Definitions.

     The following words and phrases as used in this chapter have the following meanings

unless a different meaning is required by the context:

     (1) "Actuarial Value" means the percentage of total average costs for covered benefits

that a plan will cover.

     (2) "Actuarial Value Tiers" means four (4) levels of covered benefits based on actuarial

values of sixty percent (60%), seventy percent (70%), eighty percent (80%) and ninety percent

(90%), respectively.

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

this state, an association which:

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

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

insurance;

     (iii) 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);

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

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

eligible for coverage through a member);

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

other than in connection with a member of the association;

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

     (vii) Has a constitution and bylaws; and

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

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

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

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

     (ii) Part 6 of subtitle B of Title I of the Employee Retirement Income Security Act of

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

     (iii) Title XXII of the United States Public Health Service Act, 42 U.S.C. § 300bb-1 et

seq.;

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

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

     (4)(6) "Director" "Commissioner" means the director of the department of business

regulation health insurance commissioner;

LC002586 - Page 4 of 70

     (7) "Dependent" means a dependent up to age twenty-six (26) and any dependent for

purposes of state and federal law;

     (5)(8) "Eligible individual" means an individual resident of this state:.

     (i) For whom, as of the date on which the individual seeks coverage under this chapter,

the aggregate of the periods of creditable coverage is eighteen (18) or more months and whose

most recent prior creditable coverage was under a group health plan, a governmental plan

established or maintained for its employees by the government of the United States or by any of

its agencies or instrumentalities, or church plan (as defined by the Employee Retirement Income

Security Act of 1974, 29 U.S.C. § 1001 et seq.);

     (ii) Who is not eligible for coverage under a group health plan, part A or part B of title

XVIII of the Social Security Act, 42 U.S.C. § 1395c et seq. or 42 U.S.C. § 1395j et seq., or any

state plan under title XIX of the Social Security Act, 42 U.S.C. § 1396 et seq. (or any successor

program), and does not have other health insurance coverage;

     (iii) With respect to whom the most recent coverage within the coverage period was not

terminated based on a factor described in § 27-18.5-4(b)(relating to nonpayment of premiums or

fraud);

     (iv) If the individual had been offered the option of continuation coverage under a

COBRA continuation provision, or under chapter 19.1 of this title or under a similar state

program of this state or any other state, who elected the coverage; and

     (v) Who, if the individual elected COBRA continuation coverage, has exhausted the

continuation coverage under the provision or program;

     (9) "Essential health benefits" means the scope of covered benefits and associated limits

of a health plan offered by an issuer that:

     (i) Provides at least the following ten (10) categories of benefits:

     (A) Ambulatory patient services;

     (B) Emergency services;

     (C) Hospitalization;

     (D) Maternity and newborn care;

     (E) Mental health and substance use disorder services, including behavioral health

treatment;

     (F) Prescription drugs;

     (G) Rehabilitative and habilitative services and devices;

     (H) Laboratory services;

     (I) Preventive services without patient cost-sharing requirements, wellness services and

LC002586 - Page 5 of 70

chronic disease management;

     (J) Pediatric services, including oral and vision care; and

     (ii) Limits cost sharing. For plan years after 2018, the commissioner shall establish in his

or her filing instructions annual cost sharing limitations that reflect health care cost inflation and

consumer’s ability to access medically necessary care.

     (6)(10) "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. § 1002(1), to the extent

that the plan provides medical care 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;

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

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

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

costs of health care services, including, without limitation, an insurance company offering

accident and sickness insurance, a health maintenance organization, a nonprofit hospital, medical

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

benefits by which health care services are paid or financed for an eligible individual or his or her

dependents 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 cover a natural person who is a resident of this state, including a certificate issued

to a natural person which evidences coverage under a policy or contract issued to a trust or

association;

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

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

the costs of health care services.

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

following, if coverage complies with all other applicable state and federal regulations for limited

or excepted benefits:

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

those;

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

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

insurance;

     (D) Workers' compensation or similar insurance;

LC002586 - Page 6 of 70

     (E) Automobile medical payment insurance;

     (F) Credit-only insurance;

     (G) Coverage for on-site medical clinics;

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

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

other insurance benefits; and

     (I) Short term limited duration insurance in accordance with regulations adopted by the

commissioner;

     (iii) "Health insurance coverage" does not include the following benefits if they are

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

the coverage:

     (A) Limited scope dental or vision benefits;

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

care, or any combination of these;

     (C) Any other similar, limited benefits that are specified in state and federal regulation

issued pursuant to P.L. 104-191;

     (iv) "Health insurance coverage" 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 the event under any group health plan

maintained by the same plan sponsor if coverage complies with all other applicable state and

federal regulations for limited or excepted benefit plans:

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

     (B) Hospital indemnity or other fixed indemnity insurance; and

     (v) "Health insurance coverage" does not include the following if it is offered as a

separate policy, certificate, or contract of insurance:

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

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

     (B) Coverage supplemental to the coverage provided under 10 U.S.C. § 1071 et seq.; and

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

     (9)(13) "Health status-related factor" means and includes, but is not limited to, any of the

following factors:

     (i) Health status;

LC002586 - Page 7 of 70

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

     (iii) Claims experience;

     (iv) Receipt of health care;

     (v) Medical history;

     (vi) Genetic information;

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

violence; and

     (viii) Disability;

     (10)(14) "Individual market" means the market for health insurance coverage offered to

individuals other than in connection with a group health plan;

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

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;

     (12)(16) "Preexisting condition exclusion" means, with respect to health insurance

coverage, a condition (whether physical or mental), regardless of the cause of the condition, that

was present before the date of enrollment for the coverage, for which medical advice, diagnosis,

care, or treatment was recommended or received within the six (6) month period ending on the

enrollment date. Genetic information shall not be treated as a preexisting condition in the absence

of a diagnosis of the condition related to that information; and a limitation or exclusion of

benefits (including a denial of coverage) based on the fact that the condition was present

before the effective date of coverage (or if coverage is denied, the date of the denial), whether

or not any medical advice, diagnosis, care, or treatment was recommended or received before

that day. A preexisting condition exclusion includes 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 coverage is

denied, the date of the denial), such as a condition 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.

     (13) "High-risk individuals" means those individuals who do not pass medical

underwriting standards, due to high health care needs or risks;

     (14) "Wellness health benefit plan" means that health benefit plan offered in the

individual market pursuant to § 27-18.5-8; and

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

LC002586 - Page 8 of 70

     27-18.5-3. Guaranteed availability to certain individuals.

     (a) Notwithstanding any of the provisions of this title to the contrary Subject to

subsections (b) through (g) of this section, all health insurance carriers that offer health insurance

coverage in the individual market in this state shall provide for the guaranteed availability of

coverage to an eligible individual. A carrier offering health insurance coverage in the individual

market must offer to any eligible individual in the state all health insurance coverage plans of that

carrier that are approved for sale in the individual market, and must accept any eligible individual

that applies for coverage under those plans or an individual who has had health insurance

coverage, including coverage in the individual market, or coverage under a group health plan or

coverage under 5 U.S.C. § 8901 et seq. and had that coverage continuously for at least twelve

(12) consecutive months and who applies for coverage in the individual market no later than

sixty-three (63) days following termination of the coverage, desiring to enroll in individual health

insurance coverage, and who is not eligible for coverage under a group health plan, part A or part

B or title XVIII of the Social Security Act, 42 U.S.C. § 1395c et seq. or 42 U.S.C. § 1395j et seq.,

or any state plan under title XIX of the Social Security Act, 42 U.S.C. § 1396 et seq. (or any

successor program) and does not have other health insurance coverage (provided, that eligibility

for the other coverage shall not disqualify an individual with twelve (12) months of consecutive

coverage if that individual applies for coverage in the individual market for the primary purpose

of obtaining coverage for a specific pre-existing condition, and the other available coverage

excludes coverage for that pre-existing condition) and A carrier may not:

     (1) Decline to offer the coverage to, or deny enrollment of, the individual; or

     (2) Impose any preexisting condition exclusion with respect to the coverage.

     (b)(1) All health insurance carriers that offer health insurance coverage in the individual

market in this state shall offer, to all eligible individuals, all policy forms of health insurance

coverage. Such policies shall offer coverage of essential health benefits and shall offer plans in

accordance with the actuarial value tiers.

     Provided, the carrier may elect to limit the coverage offered so long as it offers at least

two (2) different policy forms of health insurance coverage (policy forms which have different

cost-sharing arrangements or different riders shall be considered to be different policy forms)

both of which:

     (i) Are designed for, made generally available to, and actively market to, and enroll both

eligible and other individuals by the carrier; and

     (ii) Meet the requirements of subparagraph (A) or (B) of this paragraph as elected by the

carrier:

LC002586 - Page 9 of 70

     (A) If the carrier offers the policy forms with the largest, and next to the largest, premium

volume of all the policy forms offered by the carrier in this state; or

     (B) If the carrier offers a choice of two (2) policy forms with representative coverage,

consisting of a lower-level coverage policy form and a higher-level coverage policy form each of

which includes benefits substantially similar to other individual health insurance coverage offered

by the carrier in this state and each of which is covered under a method that provides for risk

adjustment, risk spreading, or financial subsidization.

     (2) For the purposes of this subsection, "lower-level coverage" means a policy form for

which the actuarial value of the benefits under the coverage is at least eighty-five percent (85%)

but not greater than one hundred percent (100%) of the policy form weighted average.

     (3) For the purposes of this subsection, "higher-level coverage" means a policy form for

which the actuarial value of the benefits under the coverage is at least fifteen percent (15%)

greater than the actuarial value of lower-level coverage offered by the carrier in this state, and the

actuarial value of the benefits under the coverage is at least one hundred percent (100%) but not

greater than one hundred twenty percent (120%) of the policy form weighted average.

     (4) For the purposes of this subsection, "policy form weighted average" means the

average actuarial value of the benefits provided by all the health insurance coverage issued (as

elected by the carrier) either by that carrier or, if the data are available, by all carriers in this state

in the individual market during the previous year (not including coverage issued under this

subsection), weighted by enrollment for the different coverage. The actuarial value of benefits

shall be calculated based on a standardized population and a set of standardized utilization and

cost factors.

     (5) The carrier elections under this subsection shall apply uniformly to all eligible

individuals in this state for that carrier. The election shall be effective for policies offered during

a period of not shorter than two (2) years.

     (c) (1) A carrier may deny health insurance coverage in the individual market to an

eligible individual if the carrier has demonstrated to the director commissioner that:

     (i) It does not have the financial reserves necessary to underwrite additional coverage;

and

     (ii) It is applying this subsection uniformly to all individuals in the individual market in

this state consistent with applicable state law and without regard to any health status-related

factor of the individuals and without regard to whether the individuals are eligible individuals.

     (2) A carrier upon denying individual health insurance coverage in this state in

accordance with this subsection may not offer that coverage in the individual market in this state

LC002586 - Page 10 of 70

for a period of one hundred eighty (180) days after the date the coverage is denied or until the

carrier has demonstrated to the director commissioner that the carrier has sufficient financial

reserves to underwrite additional coverage, whichever is later.

     (d) Nothing in this section shall be construed to require that a carrier offering health

insurance coverage only in connection with group health plans or through one or more bona fide

associations, or both, offer health insurance coverage in the individual market.

     (e)(d) A carrier offering health insurance coverage in connection with group health plans

under this title shall not be deemed to be a health insurance carrier offering individual health

insurance coverage solely because the carrier offers a conversion policy.

     (e) A carrier shall develop its rates based on an adjusted community rate and may only

vary the adjusted community rate for age. The age of an enrollee shall be determined as of the

date of plan issuance or renewal. For each health benefit plan offered by a carrier, the premium

rate for the age sixty-four (64) years of age or older bracket shall not exceed three (3) times the

premium rate that could be charged for the youngest adult age bracket.

     (f) Except for any high risk pool rating rules to be established by the Office of the Health

Insurance Commissioner (OHIC) as described in this section, nothing Nothing in this section

shall be construed to create additional restrictions on the amount of premium rates that a carrier

may charge an individual for health insurance coverage provided in the individual market; or to

prevent a health insurance carrier offering health insurance coverage in the individual market

from establishing premium rates discounts or modifying applicable copayments or deductibles in

return for adherence to programs of health promotion and disease prevention in accordance with

federal and state laws and regulations.

     (g) OHIC may pursue federal funding in support of the development of a high risk pool

program, reinsurance program, a risk adjustment program, or any other program designed to

maintain market stability for the individual market, as defined in § 27-18.5-2, contingent upon a

thorough assessment of any financial obligation of the state related to the receipt of said federal

funding being presented to, and approved by, the general assembly by passage of concurrent

general assembly resolution. The components of the high risk pool program such programs,

including, but not limited to, rating rules, eligibility requirements and administrative processes,

shall be designed in accordance with § 2745 of the Public Health Service Act (42 U.S.C. § 300gg-

45) also known as the State High Risk Pool Funding Extension Act of 2006 and defined in

regulations promulgated by the office of the health insurance commissioner on or before October

1, 2007 federal and state laws and regulations.

     (h) (1) In the case of a health insurance carrier that offers health insurance coverage in the

LC002586 - Page 11 of 70

individual market through a network plan, the carrier may limit the individuals who may be

enrolled under that coverage to those who live, reside, or work within the service areas for which

can be served by the providers and facilities that are participating in the network plan, consistent

with state and federal network adequacy requirements; and within the service areas of the plan,

deny coverage to individuals if the carrier has demonstrated to the director commissioner that:

     (i) It will not have the capacity to deliver services adequately to additional individual

enrollees because of its obligations to existing group contract holders and enrollees and individual

enrollees; and

     (ii) It is applying this subsection uniformly to individuals without regard to any health

status-related factor of the individuals and without regard to whether the individuals are eligible

individuals.

     (2) Upon denying health insurance coverage in any service area in accordance with the

terms of this subsection, a carrier may not offer coverage in the individual market within the

service area for a period of one hundred eighty (180) days after the coverage is denied.

     (i) Open enrollment. An eligible individual is entitled to enroll under the terms of the

health benefit plan during an open enrollment period held at least annually for a period to be

determined by the commissioner and to be consistent with any federal requirements.

     27-18.5-4. Continuation of coverage -- Renewability.

     (a) A health insurance carrier that provides individual health insurance coverage to an

eligible individual in this state shall renew or continue in force that coverage at the option of the

individual.

     (b) A health insurance carrier may nonrenew non-renew or discontinue health insurance

coverage of an eligible individual in the individual market based only on one or more of the

following:

     (1) The eligible individual has failed to pay premiums or contributions in accordance

with the terms of the health insurance coverage, including terms relating to or the carrier has not

received timely premium payments;

     (2) The eligible individual has performed an act or practice that constitutes fraud or made

an intentional misrepresentation of material fact under the terms of the coverage within two (2)

years after the act or practice. After two (2) years, the carrier may not renew or discontinue under

this subsection only if the eligible individual has failed to reimburse the carrier for the costs

associated with the fraud or misrepresentation;

     (3) The carrier is ceasing to offer coverage in accordance with subsections (c) and (d) of

this section;

LC002586 - Page 12 of 70

     (4) In the case of a carrier that offers health insurance coverage in the market through a

geographically-restricted network plan, the individual no longer resides, lives, or works in the

service area (or in an area for which the carrier is authorized to do business) but only if the

coverage is terminated uniformly without regard to any health status-related factor of covered

individuals; or

     (5) In the case of health insurance coverage that is made available in the individual

market only through one or more bona fide associations, the membership of the eligible

individual in the association (on the basis of which the coverage is provided) ceases but only if

the coverage is terminated uniformly and without regard to any health status-related factor of

covered individuals.

     (c) In any case in which a carrier decides to discontinue offering a particular type of

health insurance coverage offered plan policy form in the individual market, coverage of that type

under that form may be discontinued only if:

     (1) The carrier provides notice, to each covered individual provided coverage of this type

in the market, of the discontinuation at least ninety (90) days prior to the date of discontinuation

of the coverage;

     (2) The carrier offers to each individual in the individual market provided coverage of

this type, the opportunity to purchase any other individual health insurance coverage currently

being offered by the carrier for individuals in the market; and

     (3) In exercising this option to discontinue coverage of this type and in offering the

option of coverage under subdivision (2) of this subsection, the carrier acts uniformly without

regard to any health status-related factor of enrolled individuals or individuals who may become

eligible for the coverage.

     (d) In any case in which a carrier elects to discontinue offering all health insurance

coverage in the individual market in this state, health insurance coverage may be discontinued

only if:

     (1) The carrier provides notice to the director commissioner and to each individual of the

discontinuation at least one hundred eighty (180) days prior to the date of the expiration of the

coverage; and

     (2) All health insurance issued or delivered in this state in the market is discontinued and

coverage under this health insurance coverage in the market is not renewed.

     (e) In the case of a discontinuation under subsection (d) of this section, the carrier may

not provide for the issuance of any health insurance coverage in the individual market in this state

during the five (5) year period beginning on the date the carrier filed its notice with the

LC002586 - Page 13 of 70

department to withdraw from the individual health insurance market in this state. This five (5)

year period may be reduced to a minimum of three (3) years at the discretion of the health

insurance commissioner, based on his/her analysis of market conditions and other related factors.

     (f) The provisions of subsections (d) and (e) of this section do not apply if, at the time of

coverage renewal, a health insurance carrier modifies the health insurance coverage for a policy

form offered to individuals in the individual market so long as the modification is consistent with

this chapter and other applicable law and effective on a uniform basis among all individuals with

that policy form.

     (g) In applying this section in the case of health insurance coverage made available by a

carrier in the individual market to individuals only through one or more associations, a reference

to an "individual" includes a reference to the association (of which the individual is a member).

     27-18.5-5. Enforcement -- Limitation on actions.

     The director commissioner has the power to enforce the provisions of this chapter in

accordance with § 42-14-16 and all other applicable laws.

     27-18.5-6. Rules and regulations.

     The director commissioner may promulgate rules and regulations necessary to effectuate

the purposes of this chapter. The commissioner's regulations may include provisions which

strengthen consumer protection and public interest requirements in federal law. A carrier shall

comply with all federal and state laws and regulations relating to health insurance coverage in the

individual market.

     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: shall not limit or exclude coverage for any individual by

imposing a preexisting condition exclusion on that individual.

     (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,

LC002586 - Page 14 of 70

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.

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

health insurance coverage.

     (d)(c) 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 3. Sections 27-18.5-8 and 27-18.5-9 of the General Laws in Chapter 27-18.5

entitled "Individual Health Insurance Coverage" are hereby repealed.

     27-18.5-8. Wellness health benefit plan.

     All carriers that offer health insurance in the individual market shall actively market and

offer the wellness health direct benefit plan to eligible individuals. The wellness health direct

benefit plan shall be determined by regulation promulgated by the office of the health insurance

commissioner (OHIC). The OHIC shall develop the criteria for the direct wellness health benefit

plan, including, but not limited to, benefit levels, cost sharing levels, exclusions and limitations in

accordance with the following:

     (1) Form and utilize an advisory committee in accordance with subsection 27-50-10(5).

     (2) Set a target for the average annualized individual premium rate for the direct wellness

health benefit plan to be less than ten percent (10%) of the average annual statewide wage,

dependent upon the availability of reinsurance funds, as reported by the Rhode Island department

of labor and training, in their report entitled "Quarterly Census of Rhode Island Employment and

Wages." In the event that this report is no longer available, or the OHIC determines that it is no

longer appropriate for the determination of maximum annualized premium, an alternative method

shall be adopted in regulation by the OHIC. The maximum annualized individual premium rate

shall be determined no later than August 1st of each year, to be applied to the subsequent calendar

year premiums rates.

     (3) Ensure that the direct wellness health benefit plan creates appropriate incentives for

LC002586 - Page 15 of 70

employers, providers, health plans and consumers to, among other things:

     (i) Focus on primary care, prevention and wellness;

     (ii) Actively manage the chronically ill population;

     (iii) Use the least cost, most appropriate setting; and

     (iv) Use evidence based, quality care.

     (4) The plan shall be made available in accordance with title 27, chapter 18.5 as required

by regulation on or before May 1, 2007.

     27-18.5-9. Affordable health plan reinsurance program for individuals.

     (a) The commissioner shall allocate funds from the affordable health plan reinsurance

fund for the affordable health reinsurance program.

     (b) The affordable health reinsurance program for individuals shall only be available to

high-risk individuals as defined in § 27-18.5-2, and who purchase the direct wellness health

benefit plan pursuant to the provisions of this section. Eligibility shall be determined based on

state and federal income tax filings.

     (c) The affordable health plan reinsurance shall be in the form of a carrier cost-sharing

arrangement, which encourages carriers to offer a discounted premium rate to participating

individuals, and whereby the reinsurance fund subsidizes the carriers' losses within a prescribed

corridor of risk as determined by regulation.

     (d) The specific structure of the reinsurance arrangement shall be defined by regulations

promulgated by the commissioner.

     (e) The commissioner shall determine total eligible enrollment under qualifying

individual health insurance contracts by dividing the funds available for distribution from the

reinsurance fund by the estimated per member annual cost of claims reimbursement from the

reinsurance fund.

     (f) The commissioner shall suspend the enrollment of new individuals under qualifying

individual health insurance contracts if the director determines that the total enrollment reported

under such contracts is projected to exceed the total eligible enrollment, thereby resulting in

anticipated annual expenditures from the reinsurance fund in excess of ninety-five percent (95%)

of the total funds available for distribution from the fund.

     (g) The commissioner shall provide the health maintenance organization, health insurers

and health plans with notification of any enrollment suspensions as soon as practicable after

receipt of all enrollment data.

     (h) The premiums of qualifying individual health insurance contracts must be no more

than ninety percent (90%) of the actuarially-determined and commissioner approved premium for

LC002586 - Page 16 of 70

this health plan without the reinsurance program assistance.

     (i) The commissioner shall prepare periodic public reports in order to facilitate evaluation

and ensure orderly operation of the funds, including, but not limited to, an annual report of the

affairs and operations of the fund, containing an accounting of the administrative expenses

charged to the fund. Such reports shall be delivered to the co-chairs of the joint legislative

committee on health care oversight by March 1st of each year.

     SECTION 4. Sections 27-18.6-2, 27-18.6-3, 27-18.6-5, 27-18.6-8 and 27-18.6-9 of the

General Laws in Chapter 27-18.6 entitled "Large Group Health Insurance Coverage" are hereby

amended to read as follows:

     27-18.6-2. Definitions.

     The following words and phrases as used in this chapter have the following meanings

unless a different meaning is required by the context:

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

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

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

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

participant or beneficiary for any coverage during the period;

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

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

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

state, an association which:

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

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

insurance;

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

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

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

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

eligible for coverage through a member);

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

other than in connection with a member of the association;

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

     (vii) Has a constitution and bylaws; and

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

LC002586 - Page 17 of 70

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

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

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

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

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

     (iii) Title XXII of the United States Public Health Service Act, 42 U.S.C. § 300bb-1 et

seq.;

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

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

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

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

     (7)(6) "Director" "Commissioner" means the director health insurance commissioner of

the department of business regulation;

     (7) "Dependent" means a dependent up to age twenty-six (26) and any dependent for

purposes of state or federal law.

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

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

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

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

employers of two (2) or more employees;

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

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

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

     (11) "Essential health benefits" means the scope of covered benefits and associated limits

of a health plan offered by an issuer that:

     (i) Provides at least the following ten (10) categories of benefits:

     (A) Ambulatory patient services;

     (B) Emergency services;

     (C) Hospitalization;

     (D) Maternity and newborn care;

     (E) Mental health and substance use disorder services, including behavioral health

treatment;

     (F) Prescription drugs;

     (G) Rehabilitative and habilitative services and devices;

LC002586 - Page 18 of 70

     (H) Laboratory services;

     (I) Preventive services without patient cost-sharing requirements, wellness services and

chronic disease management;

     (J) Pediatric services, including oral and vision care; and

     (ii) Limits cost sharing. For plan years after 2018, the commissioner shall establish in

their form filing instructions annual cost sharing limitations that reflect health care cost inflation

and consumer's ability to access medically necessary care.

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

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

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

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

instrumentality of government;

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

plan, health insurance coverage offered in connection with that plan;

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

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

the extent that the plan provides medical care 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;

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

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

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

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

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

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

services;

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

agreement offered by a health insurance carrier to provide, deliver, arrange for, pay for, or

reimburse any of the costs of health care services. Health insurance coverage does include 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;.

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

following "excepted benefits":

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

LC002586 - Page 19 of 70

those;

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

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

insurance;

     (D) Workers' compensation or similar insurance;

     (E) Automobile medical payment insurance;

     (F) Credit-only insurance;

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

     (H) Other similar insurance coverage, specified in state and federal regulations issued

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

other insurance benefits;

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

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

integral part of the plan:

     (A) Limited scope dental or vision benefits;

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

care, or any combination of those; and

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

issued pursuant to P.L. 104-191;

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

excepted benefits" if the benefits meet state and federal regulations for excepted benefits and 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 the event under any group health plan

maintained by the same plan sponsor:

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

     (B) Hospital indemnity or other fixed indemnity insurance;

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

benefits" if offered as a separate policy, certificate, or contract of insurance under state or federal

regulations:

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

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

     (B) Coverage supplemental to the coverage provided under 10 U.S.C. § 1071 et seq.; and

LC002586 - Page 20 of 70

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

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

organization licensed under chapter 41 of this title;

     (17)(18) "Health status-related factor" means and includes, but is not limited to, any of

the following factors:

     (i) Health status;

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

     (iii) Claims experience;

     (iv) Receipt of health care;

     (v) Medical history;

     (vi) Genetic information;

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

violence; and

     (viii) Disability;

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

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

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

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

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

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

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

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

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

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

     (21) "Large group health plan" means health insurance coverage offered to a large

employer in the large group market. Said plan shall provide coverage that constitutes minimum

value for plan participants.

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

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

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

     (ii) A special enrollment period;

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

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

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

LC002586 - Page 21 of 70

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

in paragraph (i) of this subdivision; and

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

(ii) of this subdivision;

     (24) “Minimum value” means coverage under a large group plan that offers the ten (10)

essential health benefits and that has an actuarial value of at least sixty percent (60%).

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

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;

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

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

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

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

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

the person terminates upon the termination of the legal obligation;

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

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

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

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

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 the coverage, whether or not any medical

advice, diagnosis, care or treatment was recommended or received before the date (including a

denial of coverage) based on the fact that the condition was present before the effective date of

coverage (or if coverage is denied, the date of the denial), whether or not any medical advice,

diagnosis, care, or treatment was recommended or received before that day. A preexisting

condition exclusion includes 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 coverage is denied, the date of the

denial), such as a condition 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; and

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

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

LC002586 - Page 22 of 70

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

plan.

     27-18.6-3. Limitation on preexisting condition exclusion. Preexisting conditions.

     (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

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

LC002586 - Page 23 of 70

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.

     (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

LC002586 - Page 24 of 70

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:

     (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

LC002586 - Page 25 of 70

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

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

LC002586 - Page 26 of 70

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:

     (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

LC002586 - Page 27 of 70

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 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 coverage or

benefits with respect to a participant or beneficiary because of a preexisting condition exclusion.

     27-18.6-5. Continuation of coverage -- Renewability.

     (a) Notwithstanding any of the provisions of this title to the contrary, a health insurance

carrier that offers health insurance coverage in the large group market in this state in connection

with a group health plan shall renew or continue in force that coverage at the option of the plan

sponsor of the plan.

     (b) A health insurance carrier may nonrenew non-renew or discontinue health insurance

coverage offered in connection with a group health plan in the large group market based only on

one or more of the following:

     (1) The plan sponsor has failed to pay premiums or contributions in accordance with the

terms of the health insurance coverage or the carrier has not received timely premium payments;

     (2) The plan sponsor has performed an act or practice that constitutes fraud or made an

intentional misrepresentation of material fact under the terms of the coverage within two (2) years

from the date of coverage application. After two (2) years, the carrier may non-renew under this

subsection only if the plan sponsor has failed to reimburse the carrier for the costs associated with

the fraud or misrepresentation;

     (3) The plan sponsor has failed to comply with a material plan provision relating to

employer contribution or group participation rules, as permitted by the director commissioner

pursuant to rule or regulation;

     (4) The carrier is ceasing to offer coverage in accordance with subsections (c) and (d) of

this section;

     (5) The director commissioner finds that the continuation of the coverage would:

     (i) Not be in the best interests of the policyholders or certificate holders; or

     (ii) Impair the carrier's ability to meet its contractual obligations;

     (6) In the case of a health insurance carrier that offers health insurance coverage in the

large group market through a restricted provider network plan, there is no longer any enrollee in

connection with that plan who resides, lives, or works in the service area of the carrier (or in an

LC002586 - Page 28 of 70

area for which the carrier is authorized to do business); and

     (7) In the case of health insurance coverage that is made available in the large group

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

association (on the basis of which the coverage is provided) ceases, but only if the coverage is

terminated under this section uniformly without regard to any health status-related factor relating

to any covered individual.

     (c) In any case in which a carrier decides to discontinue offering a particular type of

group health insurance coverage offered in the large group market, coverage of that type may be

discontinued by the carrier only if:

     (1) The carrier provides notice of the decision to all affected plan sponsors, participants,

and beneficiaries at least ninety (90) days prior to the date of discontinuation of coverage;

     (2) The carrier offers to each plan sponsor provided coverage of this type in the large

group market the option to purchase any other health insurance coverage currently being offered

by the carrier to a group health plan in the market; and

     (3) In exercising this option to discontinue coverage of this type and in offering the

option of coverage under subdivision (3)(2) of this subsection, the carrier acts uniformly without

regard to the claims experience of those plan sponsors or any health status-related factor relating

to any participants or beneficiaries covered or new participants or beneficiaries who may become

eligible for coverage.

     (d) In any case in which a carrier elects to discontinue offering and to nonrenew non-

renew all of its health insurance coverage in the large group market in this state, the carrier shall:

     (1) Provide advance notice to the director commissioner, to the insurance commissioner

in each state in which the carrier is licensed, and to each plan sponsor (and participants and

beneficiaries covered under that coverage and to the insurance commissioner in each state in

which an affected insured individual is known to reside) of the decision at least one hundred

eighty (180) days prior to the date of the discontinuation of coverage. Notice to the insurance

commissioner shall be provided at least three (3) working days prior to the notice to the affected

plan sponsors, participants, and beneficiaries; and

     (2) Discontinue all health insurance issued or delivered for issuance in this state's large

group market and not renew coverage under any health insurance coverage issued to a large

employer.

     (e) In the case of a discontinuation under subsection (d) of this section, the carrier shall

be prohibited from the issuance of any health insurance coverage in the large group market in this

state for a period of five (5) years from the date of notice to the director commissioner.

LC002586 - Page 29 of 70

     (f) At the time of coverage renewal, a health insurance carrier may modify the health

insurance coverage for a product offered to a group health plan in the large group market.

     (g) In applying this section in the case of health insurance coverage that is made available

by a carrier in the large group market to employers only through one or more associations, a

reference to a "plan sponsor" is deemed, with respect to coverage provided to an employer

member of the association, to include a reference to that employer.

     27-18.6-8. Enforcement -- Limitation on actions.

     The director commissioner has the power to enforce the provisions of this chapter in

accordance with § 42-14-16 and all other applicable state law.

     27-18.6-9. Rules and regulations.

     The director commissioner may promulgate rules and regulations necessary to effectuate

the purposes of this chapter. The commissioner's rules and regulations may include provisions

which strengthen consumer protection and public interest requirements in federal law.

     SECTION 5. Sections 27-19-7.1, 27-19-63 and 27-19-65 of the General Laws in Chapter

27-19 entitled "Nonprofit Hospital Service Corporations" are hereby amended to read as follows:

     27-19-7.1. Uniform explanation of benefits and coverage.

     (a) A nonprofit hospital service corporation shall provide a summary of benefits and

coverage explanation and definitions to policyholders and others required by, and at the times and

in the format required, by the federal regulations adopted under section 2715 of the Public Health

Service Act, as amended by the federal Affordable Care Act [42 U.S.C. § 300gg-15] federal

and/or state law and regulation. The forms required by this section shall be made available to the

commissioner on request. Nothing in this section shall be construed to limit the authority of the

commissioner under existing state law.

     (b) The provisions of this section shall apply to grandfathered health plans. 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.

     (c) If the commissioner of the office of the health insurance commissioner determines

that the corresponding provision of the federal Patient Protection and Affordable Care Act has

been declared invalid by a final judgment of the federal judicial branch or has been repealed by

an act of Congress, on the date of the commissioner's determination this section shall have its

effectiveness suspended indefinitely, and the commissioner shall take no action to enforce this

section. Nothing in this section shall be construed to limit the authority of the commissioner

LC002586 - Page 30 of 70

under existing state law.

     27-19-63. Prohibition on annual and lifetime limits.

     (a) Annual limits.

     (1) For plan or policy years beginning prior to January 1, 2014, for any individual, a

health insurance carrier and health benefit plan subject to the jurisdiction of the commissioner

under this chapter may establish an annual limit on the dollar amount of benefits that are essential

health benefits provided the restricted annual limit is not less than the following:

     (A) For a plan or policy year beginning after September 22, 2011, but before September

23, 2012 -- one million two hundred fifty thousand dollars ($1,250,000); and

     (B) For a plan or policy year beginning after September 22, 2012, but before January 1,

2014 -- two million dollars ($2,000,000).

     (2) For plan or policy years beginning on or after January 1, 2014, a A health insurance

carrier and health benefit plan shall not establish any annual limit on the dollar amount of

essential health benefits for any individual, except:

     (A) A health flexible spending arrangement, as defined in Section 106(c)(2) of the federal

Internal Revenue Code, a medical savings account, as defined in Section 220 of the federal

Internal Revenue Code, and a health savings account, as defined in Section 223 of the federal

Internal Revenue Code, are not subject to the requirements of subdivisions (1) and (2) of this

subsection.

     (B) The provisions of this subsection shall not prevent a health insurance carrier and

health benefit plan from placing annual dollar limits for any individual on specific covered

benefits that are not essential health benefits to the extent that such limits are otherwise permitted

under applicable federal law or the laws and regulations of this state.

     (3) In determining whether an individual has received benefits that meet or exceed the

allowable limits, as provided in subdivision (1) of this subsection, a health insurance carrier and

health benefit plan shall take into account only essential health benefits.

     (b) Lifetime limits.

     (1) A health insurance carrier and health benefit plan offering group or individual health

insurance coverage shall not establish a lifetime limit on the dollar value of essential health

benefits for any individual.

     (2) Notwithstanding subdivision (1) above, a health insurance carrier and health benefit

plan is not prohibited from placing lifetime dollar limits for any individual on specific covered

benefits that are not essential health benefits in accordance with federal laws and regulations.

     (c) (1) The provisions of this section relating to lifetime and annual limits apply to any

LC002586 - Page 31 of 70

health insurance carrier providing coverage under an individual or group health plan, including

grandfathered health plans.

     (2) The provisions of this section relating to annual limits apply to any health insurance

carrier providing coverage under a group health plan, including grandfathered health plans, but

the prohibition and limits on annual limits do not apply to grandfathered health plans providing

individual health insurance coverage.

     (d) This section shall not apply to a plan or to policy years prior to January 1, 2014 for

which the Secretary of the U.S. Department of Health and Human Services issued a waiver

pursuant to 45 C.F.R. § 147.126(d)(3). This section also 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.

     (e) If the commissioner of the office of the health insurance commissioner determines

that the corresponding provision of the federal Patient Protection and Affordable Care Act has

been declared invalid by a final judgment of the federal judicial branch or has been repealed by

an act of Congress, on the date of the commissioner's determination this section shall have its

effectiveness suspended indefinitely, and the commissioner shall take no action to enforce this

section. Nothing in this subsection shall be construed to limit the authority of the Commissioner

to regulate health insurance under existing state law.

     27-19-65. Medical loss ratio reporting and rebates.

     (a) A nonprofit hospital service corporation offering group or individual health insurance

coverage of a health benefit plan, including a grandfathered health plan, shall comply with the

provisions of Section 2718 of the Public Health Service Act as amended by the federal

Affordable Care Act [42 U.S.C. § 300gg-18] in accordance with regulations adopted thereunder

and state regulations regarding medical loss ratio.

     (b) Health insurance carriers required to report medical loss ratio and rebate calculations

and other medical loss ratio and rebate information to the U.S. Department of Health and Human

Services shall concurrently file such information with the commissioner.

     SECTION 6. Sections 27-20-6.1, 27-20-59 and 27-20-61 of the General Laws in Chapter

27-20 entitled "Nonprofit Medical Service Corporations" are hereby amended to read as follows:

     27-20-6.1. Uniform explanation of benefits and coverage.

     (a) A nonprofit medical service corporation shall provide a summary of benefits and

coverage explanation and definitions to policyholders and others required by, and at the times and

LC002586 - Page 32 of 70

in the format required, by the federal regulations adopted under section 2715 of the Public Health

Service Act, as amended by the federal Affordable Care Act [42 U.S.C. § 300gg-15] federal and

state law and regulations. The forms required by this section shall be made available to the

commissioner on request. Nothing in this section shall be construed to limit the authority of the

commissioner under existing state law.

     (b) The provisions of this section shall apply to grandfathered health plans. 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.

     (c) If the commissioner of the office of the health insurance commissioner determines

that the corresponding provision of the federal Patient Protection and Affordable Care Act has

been declared invalid by a final judgment of the federal judicial branch or has been repealed by

an act of Congress, on the date of the commissioner's determination this section shall have its

effectiveness suspended indefinitely, and the commissioner shall take no action to enforce this

section. Nothing in this section shall be construed to limit the authority of the commissioner

under existing state law.

     27-20-59. Annual and lifetime limits.

     (a) Annual limits.

     (1) For plan or policy years beginning prior to January 1, 2014, for any individual, a

health insurance carrier and health benefit plan subject to the jurisdiction of the commissioner

under this chapter may establish an annual limit on the dollar amount of benefits that are essential

health benefits provided the restricted annual limit is not less than the following:

     (A) For a plan or policy year beginning after September 22, 2011, but before September

23, 2012 -- one million two hundred fifty thousand dollars ($1,250,000); and

     (B) For a plan or policy year beginning after September 22, 2012, but before January 1,

2014 -- two million dollars ($2,000,000).

     (2) For plan or policy years beginning on or after January 1, 2014, a A health insurance

carrier and health benefit plan shall not establish any annual limit on the dollar amount of

essential health benefits for any individual, except:

     (A) A health flexible spending arrangement, as defined in section 106(c)(2)(i) of the

federal Internal Revenue Code, a medical savings account, as defined in section 220 of the federal

Internal Revenue Code, and a health savings account, as defined in section 223 of the federal

Internal Revenue Code are not subject to the requirements of subdivisions (1) and (2) of this

LC002586 - Page 33 of 70

subsection.

     (B) The provisions of this subsection shall not prevent a health insurance carrier from

placing annual dollar limits for any individual on specific covered benefits that are not essential

health benefits to the extent that such limits are otherwise permitted under applicable federal law

or the laws and regulations of this state.

     (3)(2) In determining whether an individual has received benefits that meet or exceed the

allowable limits, as provided in subdivision (1) of this subsection, a health insurance carrier shall

take into account only essential health benefits.

     (b) Lifetime limits.

     (1) A health insurance carrier and health benefit plan offering group or individual health

insurance coverage shall not establish a lifetime limit on the dollar value of essential health

benefits for any individual.

     (2) Notwithstanding subdivision (1) above, a health insurance carrier and health benefit

plan is not prohibited from placing lifetime dollar limits for any individual on specific covered

benefits that are not essential health benefits, as designated pursuant to a state determination and

in accordance with federal laws and regulations.

     (c) (1) Except as provided in subdivision (2) of this subsection, this section applies to any

health insurance carrier providing coverage under an individual or group health plan.

     (2) (A) The prohibition on lifetime limits applies to grandfathered health plans.

     (B) The prohibition and limits on annual limits apply to grandfathered health plans

providing group health insurance coverage, but the prohibition and limits on annual limits do not

apply to grandfathered health plans providing individual health insurance coverage.

     (d) This section shall not apply to a plan or to policy years prior to January 1, 2014 for

which the Secretary of the U.S. Department of Health and Human Services issued a waiver

pursuant to 45 C.F.R. § 147.126(d)(3). This section also 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.

     (e) If the commissioner of the office of the health insurance commissioner determines

that the corresponding provision of the federal Patient Protection and Affordable Care Act has

been declared invalid by a final judgment of the federal judicial branch or has been repealed by

an act of Congress, on the date of the commissioner's determination this section shall have its

effectiveness suspended indefinitely, and the commissioner shall take no action to enforce this

LC002586 - Page 34 of 70

section. Nothing in this subsection shall be construed to limit the authority of the Commissioner

to regulate health insurance under existing state law.

     27-20-61. Medical loss ratio reporting and rebates.

     (a) A nonprofit medical service corporation offering group or individual health insurance

coverage of a health benefit plan, including a grandfathered health plan, shall comply with the

provisions of Section 2718 of the Public Health Service Act as amended by the federal

Affordable Care Act [42 U.S.C. § 300gg-18] in accordance with regulations adopted thereunder;

and state regulations regarding medical loss ratio.

     (b) Nonprofit medical service corporations required to report medical loss ratio and

rebate calculations and any other medical loss ratio and rebate information to the U.S.

Department of Health and Human Services shall concurrently file such information with the

commissioner.

     SECTION 7. Sections 27-41-29.1, 27-41-76 and 27-41-78 of the General Laws in

Chapter 27-41 entitled "Health Maintenance Organizations" are hereby amended to read as

follows:

     27-41-29.1. Uniform explanation of benefits and coverage.

     (a) A health maintenance organization shall provide a summary of benefits and coverage

explanation and definitions to policyholders and others required by, and at the times and in the

format required, by the federal regulations adopted under section 2715 of the Public Health

Service Act, as amended by the federal Affordable Care Act [42 U.S.C. § 300gg-15] federal and

state law and regulation. The forms required by this section shall be made available to the

commissioner on request. Nothing in this section shall be construed to limit the authority of the

commissioner under existing state law.

     (b) The provisions of this section shall apply to grandfathered health plans. 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.

     (c) If the commissioner of the office of the health insurance commissioner determines

that the corresponding provision of the federal Patient Protection and Affordable Care Act has

been declared invalid by a final judgment of the federal judicial branch or has been repealed by

an act of Congress, on the date of the commissioner's determination this section shall have its

effectiveness suspended indefinitely, and the commissioner shall take no action to enforce this

section. Nothing in this section shall be construed to limit the authority of the commissioner

LC002586 - Page 35 of 70

under existing state law.

     27-41-76. Prohibition on annual and lifetime limits.

     (a) Annual limits.

     (1) For plan or policy years beginning prior to January 1, 2014, for any individual, a

health maintenance organization subject to the jurisdiction of the commissioner under this chapter

may establish an annual limit on the dollar amount of benefits that are essential health benefits

provided the restricted annual limit is not less than the following:

     (A) For a plan or policy year beginning after September 22, 2011, but before September

23, 2012 -- one million two hundred fifty thousand dollars ($1,250,000); and

     (B) For a plan or policy year beginning after September 22, 2012, but before January 1,

2014 -- two million dollars ($2,000,000).

     (2) For plan or policy years beginning on or after January 1, 2014, a A health

maintenance organization shall not establish any annual limit on the dollar amount of essential

health benefits for any individual, except:

     (A) A health flexible spending arrangement, as defined in section 106(c)(2)(i) of the

federal Internal Revenue Code, a medical savings account, as defined in section 220 of the federal

Internal Revenue Code, and a health savings account, as defined in section 223 of the federal

Internal Revenue Code are not subject to the requirements of subdivisions (1) and (2) of this

subsection.

     (B) The provisions of this subsection shall not prevent a health maintenance organization

from placing annual dollar limits for any individual on specific covered benefits that are not

essential health benefits to the extent that such limits are otherwise permitted under applicable

federal law or the laws and regulations of this state.

     (3)(2) In determining whether an individual has received benefits that meet or exceed the

allowable limits, as provided in subdivision (1) of this subsection, a health maintenance

organization shall take into account only essential health benefits.

     (b) Lifetime limits.

     (1) A health insurance carrier and health benefit plan offering group or individual health

insurance coverage shall not establish a lifetime limit on the dollar value of essential health

benefits for any individual.

     (2) Notwithstanding subdivision (1) above, a health insurance carrier and health benefit

plan is not prohibited from placing lifetime dollar limits for any individual on specific covered

benefits that are not essential health benefits in accordance with federal laws and regulations.

     (c) (1) The provisions of this section relating to annual and lifetime limits apply to any

LC002586 - Page 36 of 70

health maintenance organization or health insurance carrier providing coverage under an

individual or group health plan, including grandfathered health plans.

     (2) The provisions of this section relating to annual limits apply to any health

maintenance organization or health insurance carrier providing coverage under a group health

plan, including grandfathered health plans, but the prohibition and limits on annual limits do not

apply to grandfathered health plans providing individual health insurance coverage.

     (d) This section shall not apply to a plan or to policy years prior to January 1, 2014 for

which the Secretary of the U.S. Department of Health and Human Services issued a waiver

pursuant to 45 C.F.R. § 147.126(d)(3). This section also 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.

     (e) If the commissioner of the office of the health insurance commissioner determines

that the corresponding provision of the federal Patient Protection and Affordable Care Act has

been declared invalid by a final judgment of the federal judicial branch or has been repealed by

an act of Congress, on the date of the commissioner's determination this section shall have its

effectiveness suspended indefinitely, and the commissioner shall take no action to enforce this

section. Nothing in this subsection shall be construed to limit the authority of the Commissioner

to regulate health insurance under existing state law.

     27-41-78. Medical loss ratio reporting and rebates.

     (a) A health maintenance organization offering group or individual health insurance

coverage of a health benefit plan, including a grandfathered health plan, shall comply with the

provisions of Section 2718 of the Public Health Service Act as amended by the federal

Affordable Care Act [42 U.S.C. § 300gg-18] in accordance with regulations adopted thereunder

and state regulations regarding medical loss ratio.

     (b) Health maintenance organizations required to report medical loss ratio and rebate

calculations and any other medical loss ratio or rebate information to the U.S. Department of

Health and Human Services shall concurrently file such information with the commissioner.

     SECTION 8. Sections 27-50-3, 27-50-4, 27-50-5, 27-50-6, 27-50-7, 27-50-11, 27-50-12,

27-50-14, and 27-50-15 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.

     The following words and phrases as used in this chapter have the following meanings

LC002586 - Page 37 of 70

unless a different meaning is required by the context:

     (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 § 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) "Actuarial value" means the percentage of total average costs for covered benefits that

a plan will cover.

     (c) "Actuarial value tiers" means four (4) levels of covered benefits based on actuarial

values of sixty percent (60%), seventy percent (70%), eighty percent (80%) and ninety percent

(90%), respectively.

     (b)(d) "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 § 27-50-5.

     (c)(e) "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)(f) "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)(g) "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

other than in connection with a member of the association;

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

LC002586 - Page 38 of 70

     (7) Has a constitution and bylaws; and

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

regulation.

     (f)(h) "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)(i) "Church plan" has the meaning given this term under § 3(33) of the Employee

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

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

     (i)(k)(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. § 1395c et seq.,

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

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

coverage consisting solely of benefits under 42 U.S.C. § 1396s (the program for distribution of

pediatric vaccines);

     (v) 10 U.S.C. § 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. § 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;

     (vii) A state health benefits risk pool;

LC002586 - Page 39 of 70

     (viii) A health plan offered under 5 U.S.C. § 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 § 5(e) of the Peace Corps Act (22 U.S.C. § 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)(l) "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)(m) [Deleted by P.L. 2006, ch. 258, § 2, and P.L. 2006, ch. 296, § 2.]

     (m)(n) "Eligible employee" "Employee" means an individual employed by an employer.

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 requirements pursuant to § 27-50-

7(d)(9).

LC002586 - Page 40 of 70

     (n)(o) "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.

     (p) "Essential health benefits" means the scope of covered benefits and associated limits

of a health plan offered by an issuer that:

     (1) Provides at least the following ten (10) categories of benefits:

     (i) Ambulatory patient services;

     (ii) Emergency services;

     (iii) Hospitalization;

     (iv) Maternity and newborn care;

     (v) Mental health and substance use disorder services, including behavioral health

treatment;

     (vi) Prescription drugs;

     (vii) Rehabilitative and habilitative services and devices;

     (viii) Laboratory services;

     (ix) Preventive services without patient cost-sharing requirements, wellness services and