2017 -- S 0831 SUBSTITUTE A

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LC002244/SUB A

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2017

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A N   A C T

RELATING TO INSURANCE -- HEALTH INSURANCE COVERAGE -- THE MARKET

STABILITY AND CONSUMER PROTECTION ACT

     

     Introduced By: Senators Miller, Ruggerio, DiPalma, Coyne, and Goldin

     Date Introduced: April 27, 2017

     Referred To: Senate Health & Human Services

     It is enacted by the General Assembly as follows:

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

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

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

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

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

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

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the Public Health Service Act, as amended by the federal Affordable Care Act, so long as they

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remain in effect, and if struck then those in effect as of the date immediately prior to their repeal

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shall control. The forms required by this section shall be made available to the commissioner on

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

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under existing state law.

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

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shall not apply to insurance coverage providing benefits for: (1) hospital confinement indemnity;

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(2) disability income; (3) accident only; (4) long term care; (5) Medicare supplement; (6) limited

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benefit health; (7) specified disease indemnity; (8) sickness or bodily injury or death by accident

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or both; and (9) other limited benefit policies.

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

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

 

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

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

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

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

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under existing state law.

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

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     (a) Annual limits.

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

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

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

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

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

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

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

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

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

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

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essential health benefits for any individual, except:

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

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

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

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

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this subsection subsection (a)(1) of this section.

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

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

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

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

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

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

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

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     (b) Lifetime limits.

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

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

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benefits for any individual.

 

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

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

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

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

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

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grandfathered health plans.

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

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

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

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individual health insurance coverage.

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

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

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pursuant to 45 C.F.R. § 147.126(d)(3). This section also shall not apply to insurance coverage

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providing benefits for: (1) hospital confinement indemnity; (2) disability income; (3) accident

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only; (4) long term care; (5) Medicare supplement; (6) limited benefit health; (7) specified disease

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indemnity; (8) sickness or bodily injury or death by accident or both; and (9) other limited benefit

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policies.

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

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

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

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

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

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

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to regulate health insurance under existing state law.

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

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

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

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

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

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regarding medical loss ratio consistent with federal law and regulations adopted thereunder, so

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long as they remain in effect, and if struck then those in effect as of the date immediately prior to

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their repeal shall control.

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

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

 

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Services shall concurrently file such information with the commissioner.

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     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-

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

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are hereby amended to read as follows:

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     27-18.5-2. Definitions.

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

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consistent with federal law and regulations adopted thereunder, so long as they remain in effect,

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and if struck then those in effect as of the date immediately prior to their repeal unless a different

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meaning is required by the context:

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     (1) "Actuarial Value" means the level of coverage of a plan, determined on the basis that

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the essential health benefits are provided to a standard population

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     (2) "Actuarial Value Tiers" means one of the four (4) levels of coverage, such that a plan

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at each level is designed to provide benefits that are actuarially equivalent to a percent of the full

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actuarial value of the benefits provided under the plan. The actuarially equivalent levels are sixty

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percent (60%), seventy percent (70%), eighty percent (80%), and ninety percent (90%), and

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further adjusted to reflect de minimus variations from those levels.

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

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this state, an association which:

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

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

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insurance;

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

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

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

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

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eligible for coverage through a member);

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

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other than in connection with a member of the association;

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

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     (vii) Has a constitution and bylaws; and

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

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

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

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

 

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

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

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

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seq.;

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

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

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

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regulation health insurance commissioner;

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

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

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

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

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months;

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

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

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

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

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

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

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

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

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

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

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

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

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

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fraud);

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

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

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

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

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continuation coverage under the provision or program;

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     (9) "Essential health benefits" means the following general categories and the items and

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services covered within the following ten (10) categories that are consistent with the Rhode Island

 

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benchmark plan. The benchmark plan shall be periodically selected and reselected by the

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commissioner as needed through the regulatory process. The essential health benefits in the

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benchmark plan shall:

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     (i) Provide the following ten (10) categories of benefits:

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     (A) Ambulatory patient services;

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     (B) Emergency services;

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     (C) Hospitalization;

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     (D) Maternity and newborn care;

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

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treatment;

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     (F) Prescription drugs;

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     (G) Rehabilitative and habilitative services and devices;

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     (H) Laboratory services;

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     (I) Preventive services, wellness services and chronic disease management;

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

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     (6)(10) "Group health plan" means an employee welfare benefit plan as defined in section

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

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

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

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insurance, reimbursement or otherwise;

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

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

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

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

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

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

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

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dependents by such entity on the basis of a periodic premium, paid directly or through an

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association, trust, or other intermediary, and issued, renewed, or delivered within or without

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Rhode Island to cover a natural person who is a resident of this state, including a certificate issued

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

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association;

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

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

 

LC002244/SUB A - Page 6 of 71

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the costs of health care services.

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

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

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or excepted benefits:

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

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those;

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

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

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insurance;

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     (D) Workers' compensation or similar insurance;

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     (E) Automobile medical payment insurance;

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     (F) Credit-only insurance;

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     (G) Coverage for on-site medical clinics;

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

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

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other insurance benefits; and

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

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commissioner;

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

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

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the coverage:

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     (A) Limited scope dental or vision benefits;

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

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care, or any combination of these;

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

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issued pursuant to P.L. 104-191;

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     (iv) "Health insurance coverage" does not include the following benefits if the benefits

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

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

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

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

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

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federal regulations for limited or excepted benefit plans:

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

 

LC002244/SUB A - Page 7 of 71

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

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

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separate policy, certificate, or contract of insurance:

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

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

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

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

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

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following factors:

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     (i) Health status;

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

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     (iii) Claims experience;

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     (iv) Receipt of health care;

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     (v) Medical history;

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     (vi) Genetic information;

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

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violence; and

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     (viii) Disability;

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

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individuals other than in connection with a group health plan;

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

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

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

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contract with the carrier;

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

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

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

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

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

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

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

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

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

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that day. A preexisting condition exclusion includes any limitation or exclusion of benefits

 

LC002244/SUB A - Page 8 of 71

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

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

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denied, the date of the denial), such as a condition identified as a result of a pre-enrollment

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questionnaire or physical examination given to the individual, or review of medical records

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relating to the pre-enrollment period.

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     (17) "Preventive services" means those services described in 42 USC section 300gg-13

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and implementing regulations and guidance, and shall be covered without any cost-sharing for the

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enrollee when delivered by in-network providers, as those terms and obligations are therein

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described, and if repealed then the preventive services as may be described in 26 USC section

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223 relating to the Internal Revenue Service high deductible health plan safe harbor rules.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

28

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

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

30

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

31

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

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

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

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

 

LC002244/SUB A - Page 9 of 71

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

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

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

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

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

6

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

7

accordance with the actuarial value tiers. A carrier may offer plans with reduced cost sharing for

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eligible individuals, based on available federal funds as described by 42 U.S.C. §18071, or based

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on a program established with state funds.

10

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

11

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

12

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

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both of which:

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

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eligible and other individuals by the carrier; and

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

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carrier:

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

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

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

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

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

23

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

24

adjustment, risk spreading, or financial subsidization.

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

26

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

27

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

28

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

29

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

30

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

31

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

32

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

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

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

 

LC002244/SUB A - Page 10 of 71

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

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

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

4

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

5

cost factors.

6

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

7

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

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

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

10

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

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

12

and

13

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

14

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

15

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

16

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

17

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

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

19

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

20

reserves to underwrite additional coverage, whichever is later.

21

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

22

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

23

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

24

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

25

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

26

insurance coverage solely because the carrier offers a conversion policy.

27

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

28

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

29

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

30

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

31

rate for a twenty-one (21) years old.

32

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

33

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

34

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

 

LC002244/SUB A - Page 11 of 71

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

2

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

3

from establishing premium rates discounts or rebates or modifying applicable copayments or

4

deductibles in return for adherence to participation in programs of health promotion and or

5

disease prevention provided the application of these discounts, rebates and/or cost-sharing

6

modifications and the wellness programs satisfy the requirements of federal and state laws and

7

regulations, including, without limitation, nondiscrimination and mental health parity provisions

8

of federal and state laws and regulations.

9

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

10

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

11

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

12

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

13

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

14

general assembly resolution. Such authority includes to work in collaboration with the health

15

benefit exchange and any other state department to develop a waiver application under §1332 of

16

the Affordable Care Act or successor programs. The components of the high risk pool program

17

such programs, including, but not limited to, rating rules, eligibility requirements and

18

administrative processes, shall be designed in accordance with § 2745 of the Public Health

19

Service Act (42 U.S.C. § 300gg-45) also known as the State High Risk Pool Funding Extension

20

Act of 2006 and defined in regulations promulgated by the office of the health insurance

21

commissioner on or before October 1, 2007 federal and state laws and regulations.

22

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

23

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

24

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

25

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

26

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

27

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

28

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

29

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

30

enrollees; and

31

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

32

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

33

individuals.

34

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

 

LC002244/SUB A - Page 12 of 71

1

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

2

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

3

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

4

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

5

thirty (30) and sixty (60) days.

6

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

7

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

8

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

9

individual.

10

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

11

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

12

following:

13

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

14

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

15

received timely premium payments;

16

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

17

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

18

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

19

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

20

associated with the fraud or misrepresentation;

21

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

22

this section;

23

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

24

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

25

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

26

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

27

individuals; or

28

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

29

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

30

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

31

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

32

covered individuals.

33

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

34

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

 

LC002244/SUB A - Page 13 of 71

1

under that form may be discontinued only if:

2

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

3

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

4

of the coverage;

5

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

6

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

7

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

8

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

9

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

10

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

11

eligible for the coverage.

12

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

13

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

14

only if:

15

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

16

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

17

coverage; and

18

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

19

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

20

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

21

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

22

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

23

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

24

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

25

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

26

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

27

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

28

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

29

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

30

that policy form.

31

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

32

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

33

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

34

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

 

LC002244/SUB A - Page 14 of 71

1

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

2

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

3

     27-18.5-6. Rules and regulations.

4

     The director commissioner may promulgate rules and regulations necessary to effectuate

5

the purposes of this chapter. If provisions of the federal Patient Protection and Affordable Care

6

Act and implementing regulations, corresponding to the provisions of this chapter, are repealed,

7

then the commissioner may promulgate regulations reflecting relevant federal law and

8

implementing regulations in effect immediately prior to their repeal. In the event of such changes

9

to the law and related regulations, the commissioner, in conjunction with the health benefit

10

exchange or other state department, shall report to the assembly as soon as possible to describe

11

the impact of the change and to make recommendations regarding consumer protections,

12

consumer choices, and stabilization and affordability of the Rhode Island insurance market.

13

     27-18.5-10. Prohibition on preexisting condition exclusions.

14

     (a) A health insurance policy, subscriber contract, or health plan offered, issued, issued

15

for delivery, or issued to cover a resident of this state by a health insurance company licensed

16

pursuant to this title and/or chapter: shall not limit or exclude coverage for any individual by

17

imposing a preexisting condition exclusion on that individual.

18

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

19

imposing a preexisting condition exclusion on that individual.

20

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

21

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

22

individual.

23

     (b) As used in this section:

24

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

25

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

26

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

27

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

28

recommended or received before the effective date of coverage.

29

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

30

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

31

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

32

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

33

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

34

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

 

LC002244/SUB A - Page 15 of 71

1

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

2

health insurance coverage.

3

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

4

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

5

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

6

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

7

     SECTION 3. Sections 27-18.5-8 and 27-18.5-9 of the General Laws in Chapter 27-18.5

8

entitled "Individual Health Insurance Coverage" are hereby repealed.

9

     27-18.5-8. Wellness health benefit plan.

10

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

11

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

12

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

13

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

14

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

15

accordance with the following:

16

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

17

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

18

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

19

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

20

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

21

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

22

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

23

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

24

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

25

year premiums rates.

26

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

27

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

28

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

29

     (ii) Actively manage the chronically ill population;

30

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

31

     (iv) Use evidence based, quality care.

32

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

33

by regulation on or before May 1, 2007.

34

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

 

LC002244/SUB A - Page 16 of 71

1

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

2

fund for the affordable health reinsurance program.

3

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

4

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

5

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

6

state and federal income tax filings.

7

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

8

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

9

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

10

corridor of risk as determined by regulation.

11

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

12

promulgated by the commissioner.

13

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

14

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

15

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

16

reinsurance fund.

17

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

18

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

19

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

20

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

21

of the total funds available for distribution from the fund.

22

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

23

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

24

receipt of all enrollment data.

25

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

26

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

27

this health plan without the reinsurance program assistance.

28

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

29

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

30

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

31

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

32

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

33

     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

34

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

 

LC002244/SUB A - Page 17 of 71

1

amended to read as follows:

2

     27-18.6-2. Definitions.

3

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

4

consistent with federal law and regulations adopted thereunder, so long as they remain in effect,

5

and if struck then those in effect as of the date immediately prior to their repeal unless a different

6

meaning is required by the context:

7

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

8

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

9

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

10

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

11

participant or beneficiary for any coverage during the period;

12

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

13

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

14

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

15

state, an association which:

16

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

17

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

18

insurance;

19

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

20

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

21

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

22

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

23

eligible for coverage through a member);

24

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

25

other than in connection with a member of the association;

26

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

27

     (vii) Has a constitution and bylaws; and

28

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

29

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

30

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

31

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

32

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

33

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

34

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

 

LC002244/SUB A - Page 18 of 71

1

seq.;

2

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

3

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

4

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

5

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

6

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

7

the department of business regulation;

8

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

9

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

10

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

11

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

12

months

13

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

14

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

15

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

16

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

17

employers of two (2) or more employees;

18

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

19

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

20

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

21

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

22

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

23

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

24

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

25

instrumentality of government;

26

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

27

health insurance coverage offered in connection with that plan;

28

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

29

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

30

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

31

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

32

insurance, reimbursement or otherwise;

33

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

34

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

 

LC002244/SUB A - Page 19 of 71

1

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

2

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

3

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

4

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

5

services;

6

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

7

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

8

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

9

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

10

otherwise specifically exempted in this definition;.

11

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

12

following "excepted benefits":

13

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

14

those;

15

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

16

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

17

insurance;

18

     (D) Workers' compensation or similar insurance;

19

     (E) Automobile medical payment insurance;

20

     (F) Credit-only insurance;

21

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

22

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

23

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

24

other insurance benefits;

25

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

26

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

27

integral part of the plan:

28

     (A) Limited scope dental or vision benefits;

29

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

30

care, or any combination of those; and

31

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

32

issued pursuant to P.L. 104-191;

33

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

34

excepted benefits" if the benefits meet state and federal regulations for excepted benefits and are

 

LC002244/SUB A - Page 20 of 71

1

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

2

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

3

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

4

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

5

maintained by the same plan sponsor:

6

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

7

     (B) Hospital indemnity or other fixed indemnity insurance;

8

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

9

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

10

regulations:

11

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

12

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

13

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

14

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

15

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

16

organization licensed under chapter 41 of this title;

17

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

18

following factors:

19

     (i) Health status;

20

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

21

     (iii) Claims experience;

22

     (iv) Receipt of health care;

23

     (v) Medical history;

24

     (vi) Genetic information;

25

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

26

violence; and

27

     (viii) Disability;

28

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

29

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

30

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

31

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

32

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

33

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

34

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

 

LC002244/SUB A - Page 21 of 71

1

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

2

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

3

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

4

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

5

employer in the large group market.

6

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

7

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

8

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

9

     (ii) A special enrollment period;

10

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

11

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

12

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

13

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

14

in paragraph (i) of this subdivision; and

15

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

16

(ii) of this subdivision;

17

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

18

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

19

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

20

contract with the carrier;

21

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

22

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

23

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

24

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

25

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

26

the person terminates upon the termination of the legal obligation;

27

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

28

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

29

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

30

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

31

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

32

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

33

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

34

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

 

LC002244/SUB A - Page 22 of 71

1

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

2

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

3

exclusion includes any limitation or exclusion of benefits (including a denial of coverage)

4

applicable to an individual as a result of information relating to an individual's health status

5

before the individual's effective date of coverage (or if coverage is denied, the date of the denial),

6

such as a condition identified as a result of a pre-enrollment questionnaire or physical

7

examination given to the individual, or review of medical records relating to the pre-enrollment

8

period; and

9

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

10

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

11

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

12

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

13

     (a) (1) Notwithstanding any of the provisions of this title to the contrary, a group health

14

plan and a health insurance carrier offering group health insurance coverage shall not deny,

15

exclude, or limit benefits with respect to a participant or beneficiary because of a preexisting

16

condition exclusion except if:

17

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

18

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

19

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

20

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

21

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

22

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

23

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

24

enrollment date.

25

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

26

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

27

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

28

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

29

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

30

which the individual was not covered under any creditable coverage.

31

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

32

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

33

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

34

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

 

LC002244/SUB A - Page 23 of 71

1

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

2

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

3

regard to the specific benefits covered during the period.

4

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

5

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

6

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

7

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

8

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

9

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

10

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

11

within the class or category.

12

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

13

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

14

shall:

15

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

16

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

17

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

18

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

19

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

20

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

21

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

22

and

23

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

24

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

25

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

26

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

27

creditable coverage.

28

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

29

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

30

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

31

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

32

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

33

determining creditable coverage.

34

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

 

LC002244/SUB A - Page 24 of 71

1

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

2

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

3

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

4

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

5

the date of the adoption or placement for adoption.

6

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

7

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

8

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

9

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

10

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

11

creditable coverage.

12

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

13

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

14

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

15

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

16

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

17

group health insurance coverage shall provide certifications:

18

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

19

under a COBRA continuation provision;

20

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

21

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

22

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

23

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

24

is later.

25

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

26

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

27

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

28

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

29

any) under the COBRA continuation provision; and

30

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

31

to the individual for any coverage under the plan.

32

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

33

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

34

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

 

LC002244/SUB A - Page 25 of 71

1

accordance with this subsection.

2

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

3

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

4

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

5

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

6

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

7

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

8

carrier for the reasonable cost of disclosing the information.

9

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

10

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

11

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

12

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

13

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

14

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

15

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

16

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

17

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

18

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

19

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

20

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

21

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

22

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

23

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

24

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

25

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

26

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

27

was exhausted; or

28

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

29

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

30

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

31

employer contributions towards the coverage were terminated; and

32

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

33

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

34

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

 

LC002244/SUB A - Page 26 of 71

1

subsection.

2

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

3

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

4

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

5

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

6

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

7

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

8

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

9

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

10

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

11

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

12

days and shall begin on the later of:

13

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

14

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

15

may be).

16

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

17

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

18

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

19

the date the completed request for enrollment is received;

20

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

21

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

22

adoption or placement for adoption.

23

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

24

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

25

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

26

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

27

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

28

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

29

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

30

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

31

under the plan.

32

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

33

subsection to address adverse selection.

34

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

 

LC002244/SUB A - Page 27 of 71

1

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

2

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

3

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

4

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

5

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

6

and Human Services.

7

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

8

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

9

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

10

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

11

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

12

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

13

applicable requirements of this section.

14

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

15

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

16

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

17

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

18

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

19

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

20

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

21

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

22

sponsor of the plan.

23

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

24

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

25

one or more of the following:

26

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

27

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

28

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

29

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

30

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

31

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

32

the fraud or misrepresentation;

33

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

34

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

 

LC002244/SUB A - Page 28 of 71

1

pursuant to rule or regulation;

2

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

3

this section;

4

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

5

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

6

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

7

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

8

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

9

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

10

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

11

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

12

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

13

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

14

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

15

to any covered individual.

16

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

17

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

18

discontinued by the carrier only if:

19

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

20

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

21

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

22

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

23

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

24

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

25

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

26

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

27

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

28

eligible for coverage.

29

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

30

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

31

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

32

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

33

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

34

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

 

LC002244/SUB A - Page 29 of 71

1

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

2

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

3

plan sponsors, participants, and beneficiaries; and

4

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

5

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

6

employer.

7

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

8

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

9

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

10

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

11

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

12

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

13

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

14

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

15

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

16

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

17

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

18

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

19

     27-18.6-9. Rules and regulations.

20

     The director commissioner may promulgate rules and regulations necessary to effectuate

21

the purposes of this chapter. If provisions of the federal Patient Protection and Affordable Care

22

Act and implementing regulations, corresponding to the provisions of this chapter, are repealed,

23

then the commissioner may promulgate regulations reflecting relevant federal law and

24

implementing regulations in effect immediately prior to their repeal. In the event of such changes

25

to the law and related regulations, the commissioner, in conjunction with the health benefit

26

exchange or other state department, shall report to the assembly as soon as possible to describe

27

the impact of the change and to make recommendations regarding consumer protections,

28

consumer choices, and stabilization and affordability of the Rhode Island insurance market.

29

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

30

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

31

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

32

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

33

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

34

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

 

LC002244/SUB A - Page 30 of 71

1

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

2

they remain in effect, and if struck then those in effect as of the date immediately prior to their

3

repeal shall control. The forms required by this section shall be made available to the

4

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

5

commissioner under existing state law.

6

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

7

shall not apply to insurance coverage providing benefits for: (1) Hospital confinement indemnity;

8

(2) Disability income; (3) Accident only; (4) Long-term care; (5) Medicare supplement; (6)

9

Limited benefit health; (7) Specified disease indemnity; (8) Sickness or bodily injury or death by

10

accident or both; and (9) Other limited benefit policies.

11

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

12

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

13

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

14

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

15

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

16

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

17

under existing state law.

18

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

19

     (a) Annual limits.

20

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

21

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

22

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

23

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

24

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

25

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

26

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

27

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

28

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

29

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

30

essential health benefits for any individual, except:

31

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

32

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

33

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

34

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

 

LC002244/SUB A - Page 31 of 71

1

subsection subsection (a)(1) of this section.

2

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

3

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

4

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

5

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

6

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

7

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

8

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

9

     (b) Lifetime limits.

10

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

11

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

12

benefits for any individual.

13

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

14

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

15

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

16

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

17

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

18

grandfathered health plans.

19

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

20

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

21

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

22

individual health insurance coverage.

23

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

24

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

25

pursuant to 45 C.F.R. § 147.126(d)(3). This section also shall not apply to insurance coverage

26

providing benefits for: (1) Hospital confinement indemnity; (2) Disability income; (3) Accident

27

only; (4) Long-term care; (5) Medicare supplement; (6) Limited benefit health; (7) Specified

28

disease indemnity; (8) Sickness or bodily injury or death by accident or both; and (9) Other

29

limited benefit policies.

30

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

31

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

32

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

33

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

34

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

 

LC002244/SUB A - Page 32 of 71

1

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

2

to regulate health insurance under existing state law.

3

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

4

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

5

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

6

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

7

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

8

and state regulations regarding medical loss ratio consistent with federal law and regulations

9

adopted thereunder, so long as they remain in effect, and if struck then those in effect as of the

10

date immediately prior to their repeal shall control.

11

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

12

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

13

Services shall concurrently file such information with the commissioner.

14

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

15

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

16

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

17

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

18

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

19

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

20

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

21

they remain in effect, and if struck then those in effect as of the date immediately prior to their

22

repeal shall control. The forms required by this section shall be made available to the

23

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

24

commissioner under existing state law.

25

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

26

shall not apply to insurance coverage providing benefits for: (1) Hospital confinement indemnity;

27

(2) Disability income; (3) Accident only; (4) Long-term care; (5) Medicare supplement; (6)

28

Limited benefit health; (7) Specified disease indemnity; (8) Sickness or bodily injury or death by

29

accident or both; and (9) Other limited benefit policies.

30

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

31

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

32

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

33

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

34

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

 

LC002244/SUB A - Page 33 of 71

1

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

2

under existing state law.

3

     27-20-59. Annual and lifetime limits.

4

     (a) Annual limits.

5

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

6

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

7

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

8

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

9

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

10

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

11

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

12

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

13

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

14

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

15

essential health benefits for any individual, except:

16

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

17

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

18

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

19

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

20

subsection subsection (a)(1) of this section.

21

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

22

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

23

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

24

or the laws and regulations of this state.

25

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

26

allowable limits, as provided in subdivision (1) of this subsection, a health insurance carrier shall

27

take into account only essential health benefits.

28

     (b) Lifetime limits.

29

     (1) A health insurance carrier and health benefit plan offering group or individual health

30

insurance coverage shall not establish a lifetime limit on the dollar value of essential health

31

benefits for any individual.

32

     (2) Notwithstanding subdivision (1) above, a health insurance carrier and health benefit

33

plan is not prohibited from placing lifetime dollar limits for any individual on specific covered

34

benefits that are not essential health benefits, as designated pursuant to a state determination and

 

LC002244/SUB A - Page 34 of 71

1

in accordance with federal laws and regulations.

2

     (c) (1) Except as provided in subdivision (2) of this subsection, this section applies to any

3

health insurance carrier providing coverage under an individual or group health plan.

4

     (2) (A) The prohibition on lifetime limits applies to grandfathered health plans.

5

     (B) The prohibition and limits on annual limits apply to grandfathered health plans

6

providing group health insurance coverage, but the prohibition and limits on annual limits do not

7

apply to grandfathered health plans providing individual health insurance coverage.

8

     (d) This section shall not apply to a plan or to policy years prior to January 1, 2014 for

9

which the Secretary of the U.S. Department of Health and Human Services issued a waiver

10

pursuant to 45 C.F.R. § 147.126(d)(3). This section also shall not apply to insurance coverage

11

providing benefits for: (1) Hospital confinement indemnity; (2) Disability income; (3) Accident

12

only; (4) Long-term care; (5) Medicare supplement; (6) Limited benefit health; (7) Specified

13

disease indemnity; (8) Sickness or bodily injury or death by accident or both; and (9) Other

14

limited benefit policies.

15

     (e) If the commissioner of the office of the health insurance commissioner determines

16

that the corresponding provision of the federal Patient Protection and Affordable Care Act has

17

been declared invalid by a final judgment of the federal judicial branch or has been repealed by

18

an act of Congress, on the date of the commissioner's determination this section shall have its

19

effectiveness suspended indefinitely, and the commissioner shall take no action to enforce this

20

section. Nothing in this subsection shall be construed to limit the authority of the Commissioner

21

to regulate health insurance under existing state law.

22

     27-20-61. Medical loss ratio reporting and rebates.

23

     (a) A nonprofit medical service corporation offering group or individual health insurance

24

coverage of a health benefit plan, including a grandfathered health plan, shall comply with the

25

provisions of Section 2718 of the Public Health Service Act as amended by the federal

26

Affordable Care Act [42 U.S.C. § 300gg-18] in accordance with regulations adopted thereunder;

27

and state regulations regarding medical loss ratio consistent with federal law and regulations

28

adopted thereunder, so long as they remain in effect, and if struck then those in effect as of the

29

date immediately prior to their repeal shall control.

30

     (b) Nonprofit medical service corporations required to report medical loss ratio and

31

rebate calculations and any other medical loss ratio and rebate information to the U.S.

32

Department of Health and Human Services shall concurrently file such information with the

33

commissioner.

34

     SECTION 7. Sections 27-41-29.1, 27-41-76 and 27-41-78 of the General Laws in

 

LC002244/SUB A - Page 35 of 71

1

Chapter 27-41 entitled "Health Maintenance Organizations" are hereby amended to read as

2

follows:

3

     27-41-29.1. Uniform explanation of benefits and coverage.

4

     (a) A health maintenance organization shall provide a summary of benefits and coverage

5

explanation and definitions to policyholders and others required by, and at the times and in the

6

format required, by the federal regulations adopted under section 2715 of the Public Health

7

Service Act, as amended by the federal Affordable Care Act [42 U.S.C. § 300gg-15] so long as

8

they remain in effect, and if struck then those in effect as of the date immediately prior to their

9

repeal shall control. The forms required by this section shall be made available to the

10

commissioner on request. Nothing in this section shall be construed to limit the authority of the

11

commissioner under existing state law.

12

     (b) The provisions of this section shall apply to grandfathered health plans. This section

13

shall not apply to insurance coverage providing benefits for: (1) Hospital confinement indemnity;

14

(2) Disability income; (3) Accident only; (4) Long-term care; (5) Medicare supplement; (6)

15

Limited benefit health; (7) Specified disease indemnity; (8) Sickness or bodily injury or death by

16

accident or both; and (9) Other limited benefit policies.

17

     (c) If the commissioner of the office of the health insurance commissioner determines

18

that the corresponding provision of the federal Patient Protection and Affordable Care Act has

19

been declared invalid by a final judgment of the federal judicial branch or has been repealed by

20

an act of Congress, on the date of the commissioner's determination this section shall have its

21

effectiveness suspended indefinitely, and the commissioner shall take no action to enforce this

22

section. Nothing in this section shall be construed to limit the authority of the commissioner

23

under existing state law.

24

     27-41-76. Prohibition on annual and lifetime limits.

25

     (a) Annual limits.

26

     (1) For plan or policy years beginning prior to January 1, 2014, for any individual, a

27

health maintenance organization subject to the jurisdiction of the commissioner under this chapter

28

may establish an annual limit on the dollar amount of benefits that are essential health benefits

29

provided the restricted annual limit is not less than the following:

30

     (A) For a plan or policy year beginning after September 22, 2011, but before September

31

23, 2012 -- one million two hundred fifty thousand dollars ($1,250,000); and

32

     (B) For a plan or policy year beginning after September 22, 2012, but before January 1,

33

2014 -- two million dollars ($2,000,000).

34

     (2) For plan or policy years beginning on or after January 1, 2014, a A health

 

LC002244/SUB A - Page 36 of 71

1

maintenance organization shall not establish any annual limit on the dollar amount of essential

2

health benefits for any individual, except:

3

     (A) A health flexible spending arrangement, as defined in section 106(c)(2)(i) of the

4

federal Internal Revenue Code, a medical savings account, as defined in section 220 of the federal

5

Internal Revenue Code, and a health savings account, as defined in section 223 of the federal

6

Internal Revenue Code are not subject to the requirements of subdivisions (1) and (2) of this

7

subsection subsection (a)(1) of this section.

8

     (B) The provisions of this subsection shall not prevent a health maintenance organization

9

from placing annual dollar limits for any individual on specific covered benefits that are not

10

essential health benefits to the extent that such limits are otherwise permitted under applicable

11

federal law or the laws and regulations of this state.

12

     (3) In determining whether an individual has received benefits that meet or exceed the

13

allowable limits, as provided in subdivision (1) of this subsection, a health maintenance

14

organization shall take into account only essential health benefits.

15

     (b) Lifetime limits.

16

     (1) A health insurance carrier and health benefit plan offering group or individual health

17

insurance coverage shall not establish a lifetime limit on the dollar value of essential health

18

benefits for any individual.

19

     (2) Notwithstanding subdivision (1) above, a health insurance carrier and health benefit

20

plan is not prohibited from placing lifetime dollar limits for any individual on specific covered

21

benefits that are not essential health benefits in accordance with federal laws and regulations.

22

     (c) (1) The provisions of this section relating to annual and lifetime limits apply to any

23

health maintenance organization or health insurance carrier providing coverage under an

24

individual or group health plan, including grandfathered health plans.

25

     (2) The provisions of this section relating to annual limits apply to any health

26

maintenance organization or health insurance carrier providing coverage under a group health

27

plan, including grandfathered health plans, but the prohibition and limits on annual limits do not

28

apply to grandfathered health plans providing individual health insurance coverage.

29

     (d) This section shall not apply to a plan or to policy years prior to January 1, 2014 for

30

which the Secretary of the U.S. Department of Health and Human Services issued a waiver

31

pursuant to 45 C.F.R. § 147.126(d)(3). This section also shall not apply to insurance coverage

32

providing benefits for: (1) Hospital confinement indemnity; (2) Disability income; (3) Accident

33

only; (4) Long-term care; (5) Medicare supplement; (6) Limited benefit health; (7) Specified

34

disease indemnity; (8) Sickness or bodily injury or death by accident or both; and (9) Other

 

LC002244/SUB A - Page 37 of 71

1

limited benefit policies.

2

     (e) If the commissioner of the office of the health insurance commissioner determines

3

that the corresponding provision of the federal Patient Protection and Affordable Care Act has

4

been declared invalid by a final judgment of the federal judicial branch or has been repealed by

5

an act of Congress, on the date of the commissioner's determination this section shall have its

6

effectiveness suspended indefinitely, and the commissioner shall take no action to enforce this

7

section. Nothing in this subsection shall be construed to limit the authority of the Commissioner

8

to regulate health insurance under existing state law.

9

     27-41-78. Medical loss ratio reporting and rebates.

10

     (a) A health maintenance organization offering group or individual health insurance

11

coverage of a health benefit plan, including a grandfathered health plan, shall comply with the

12

provisions of Section 2718 of the Public Health Service Act as amended by the federal

13

Affordable Care Act [42 U.S.C. § 300gg-18] in accordance with regulations adopted thereunder

14

and state regulations regarding medical loss ratio consistent with federal law and regulations

15

adopted thereunder, so long as they remain in effect, and if struck then those in effect as of the

16

date immediately prior to their repeal shall control.

17

     (b) Health maintenance organizations required to report medical loss ratio and rebate

18

calculations and any other medical loss ratio or rebate information to the U.S. Department of

19

Health and Human Services shall concurrently file such information with the commissioner.

20

     SECTION 8. Sections 27-50-3, 27-50-4, 27-50-5, 27-50-6, 27-50-7, 27-50-11, 27-50-12,

21

27-50-14, and 27-50-15 of the General Laws in Chapter 27-50 entitled "Small Employer Health

22

Insurance Availability Act" are hereby amended to read as follows:

23

     27-50-3. Definitions.

24

     The following words and phrases as used in this chapter have the following meanings

25

consistent with federal law and regulations adopted thereunder, so long as they remain in effect,

26

and if struck then those in effect as of the date immediately prior to their repeal unless a different

27

meaning is required by the context:

28

     (a) "Actuarial certification" means a written statement signed by a member of the

29

American Academy of Actuaries or other individual acceptable to the director that a small

30

employer carrier is in compliance with the provisions of § 27-50-5, based upon the person's

31

examination and including a review of the appropriate records and the actuarial assumptions and

32

methods used by the small employer carrier in establishing premium rates for applicable health

33

benefit plans.

34

     (b) "Actuarial value" means the level of coverage of a plan, determined on the basis that

 

LC002244/SUB A - Page 38 of 71

1

the essential health benefits are provided to a standard population.

2

     (c) "Actuarial value tiers" means one of the four levels of coverage, such that a plan at

3

each level is designed to provide benefits that are actuarially equivalent to a percent of the full

4

actuarial value of the benefits provided under the plan. The actuarially equivalent levels are: 60%,

5

70%, 80%, and 90%, and further adjusted to reflect de minimus variations from those levels.

6

     (b)(d) "Adjusted community rating" means a method used to develop a carrier's premium

7

which spreads financial risk across the carrier's entire small group population in accordance with

8

the requirements in § 27-50-5.

9

     (c)(e) "Affiliate" or "affiliated" means any entity or person who directly or indirectly

10

through one or more intermediaries controls or is controlled by, or is under common control with,

11

a specified entity or person.

12

     (d)(f) "Affiliation period" means a period of time that must expire before health insurance

13

coverage provided by a carrier becomes effective, and during which the carrier is not required to

14

provide benefits.

15

     (e)(g) "Bona fide association" means, with respect to health benefit plans offered in this

16

state, an association which:

17

     (1) Has been actively in existence for at least five (5) years;

18

     (2) Has been formed and maintained in good faith for purposes other than obtaining

19

insurance;

20

     (3) Does not condition membership in the association on any health-status related factor

21

relating to an individual (including an employee of an employer or a dependent of an employee);

22

     (4) Makes health insurance coverage offered through the association available to all

23

members regardless of any health status-related factor relating to those members (or individuals

24

eligible for coverage through a member);

25

     (5) Does not make health insurance coverage offered through the association available

26

other than in connection with a member of the association;

27

     (6) Is composed of persons having a common interest or calling;

28

     (7) Has a constitution and bylaws; and

29

     (8) Meets any additional requirements that the director commissioner may prescribe by

30

regulation.

31

     (f)(h) "Carrier" or "small employer carrier" means all entities licensed, or required to be

32

licensed, in this state that offer health benefit plans covering eligible employees of one or more

33

small employers pursuant to this chapter. For the purposes of this chapter, carrier includes an

34

insurance company, a nonprofit hospital or medical service corporation, a fraternal benefit

 

LC002244/SUB A - Page 39 of 71

1

society, a health maintenance organization as defined in chapter 41 of this title or as defined in

2

chapter 62 of title 42, or any other entity subject to state insurance regulation that provides

3

medical care as defined in subsection (y) that is paid or financed for a small employer by such

4

entity on the basis of a periodic premium, paid directly or through an association, trust, or other

5

intermediary, and issued, renewed, or delivered within or without Rhode Island to a small

6

employer pursuant to the laws of this or any other jurisdiction, including a certificate issued to an

7

eligible employee which evidences coverage under a policy or contract issued to a trust or

8

association.

9

     (g)(i) "Church plan" has the meaning given this term under § 3(33) of the Employee

10

Retirement Income Security Act of 1974 [29 U.S.C. § 1002(33)].

11

     (h)(j) "Control" is defined in the same manner as in chapter 35 of this title.

12

     (i)(k)(1) "Creditable coverage" means, with respect to an individual, health benefits or

13

coverage provided under any of the following:

14

     (i) A group health plan;

15

     (ii) A health benefit plan;

16

     (iii) Part A or part B of Title XVIII of the Social Security Act, 42 U.S.C. § 1395c et seq.,

17

or 42 U.S.C. § 1395j et seq., (Medicare);

18

     (iv) Title XIX of the Social Security Act, 42 U.S.C. § 1396 et seq., (Medicaid), other than

19

coverage consisting solely of benefits under 42 U.S.C. § 1396s (the program for distribution of

20

pediatric vaccines);

21

     (v) 10 U.S.C. § 1071 et seq., (medical and dental care for members and certain former

22

members of the uniformed services, and for their dependents)(Civilian Health and Medical

23

Program of the Uniformed Services)(CHAMPUS). For purposes of 10 U.S.C. § 1071 et seq.,

24

"uniformed services" means the armed forces and the commissioned corps of the National

25

Oceanic and Atmospheric Administration and of the Public Health Service;

26

     (vi) A medical care program of the Indian Health Service or of a tribal organization;

27

     (vii) A state health benefits risk pool;

28

     (viii) A health plan offered under 5 U.S.C. § 8901 et seq., (Federal Employees Health

29

Benefits Program (FEHBP));

30

     (ix) A public health plan, which for purposes of this chapter, means a plan established or

31

maintained by a state, county, or other political subdivision of a state that provides health

32

insurance coverage to individuals enrolled in the plan; or

33

     (x) A health benefit plan under § 5(e) of the Peace Corps Act (22 U.S.C. § 2504(e)).

34

     (2) A period of creditable coverage shall not be counted, with respect to enrollment of an

 

LC002244/SUB A - Page 40 of 71

1

individual under a group health plan, if, after the period and before the enrollment date, the

2

individual experiences a significant break in coverage.

3

     (j)(l) "Dependent" means a spouse, child under the age twenty-six (26) years, and an

4

unmarried child of any age who is financially dependent upon, the parent and is medically

5

determined to have a physical or mental impairment which can be expected to result in death or

6

which has lasted or can be expected to last for a continuous period of not less than twelve (12)

7

months.

8

     (k) "Director" means the director of the department of business regulation.

9

     (l)(m) [Deleted by P.L. 2006, ch. 258, § 2, and P.L. 2006, ch. 296, § 2.]

10

     (m)(n) "Eligible employee" "Employee" means an individual employed by an employer.

11

employee who works on a full-time basis with a normal work week of thirty (30) or more hours,

12

except that at the employer's sole discretion, the term shall also include an employee who works

13

on a full-time basis with a normal work week of anywhere between at least seventeen and one-

14

half (17.5) and thirty (30) hours, so long as this eligibility criterion is applied uniformly among all

15

of the employer's employees and without regard to any health status-related factor. The term

16

includes a self-employed individual, a sole proprietor, a partner of a partnership, and may include

17

an independent contractor, if the self-employed individual, sole proprietor, partner, or

18

independent contractor is included as an employee under a health benefit plan of a small

19

employer, but does not include an employee who works on a temporary or substitute basis or who

20

works less than seventeen and one-half (17.5) hours per week. Any retiree under contract with

21

any independently incorporated fire district is also included in the definition of eligible employee,

22

as well as any former employee of an employer who retired before normal retirement age, as

23

defined by 42 U.S.C. 18002(a)(2)(c) while the employer participates in the early retiree

24

reinsurance program defined by that chapter. Persons covered under a health benefit plan

25

pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1986 shall not be considered

26

"eligible employees" for purposes of minimum participation requirements pursuant to § 27-50-

27

7(d)(9).

28

     (n)(o) "Enrollment date" means the first day of coverage or, if there is a waiting period,

29

the first day of the waiting period, whichever is earlier.

30

     (p) "Essential health benefits" means the following general categories and the items and

31

services covered within the following ten (10) categories that are consistent with the Rhode Island

32

benchmark plan. The benchmark plan shall be periodically selected and reselected by the

33

commissioner as needed through the regulatory process. The essential health benefits in the

34

benchmark plan shall:

 

LC002244/SUB A - Page 41 of 71

1

     (1) Provide the following ten (10) categories of benefits:

2

     (i) Ambulatory patient services;

3

     (ii) Emergency services;

4

     (iii) Hospitalization;

5

     (iv) Maternity and newborn care;

6

     (v) Mental health and substance use disorder services, including behavioral health

7

treatment;

8

     (vi) Prescription drugs;

9

     (vii) Rehabilitative and habilitative services and devices;

10

     (viii) Laboratory services;

11

     (ix) Preventive services, wellness services and chronic disease management;

12

     (x) Pediatric services, including oral and vision care;

13

     (o)(q) "Established geographic service area" means a geographic area, as approved by the

14

director and based on the carrier's certificate of authority to transact insurance in this state, within

15

which the carrier is authorized to provide coverage.

16

     (p) "Family composition" means:

17

     (1) Enrollee;

18

     (2) Enrollee, spouse and children;

19

     (3) Enrollee and spouse; or

20

     (4) Enrollee and children.

21

     (q) "Genetic information" means information about genes, gene products, and inherited

22

characteristics that may derive from the individual or a family member. This includes information

23

regarding carrier status and information derived from laboratory tests that identify mutations in

24

specific genes or chromosomes, physical medical examinations, family histories, and direct

25

analysis of genes or chromosomes.

26

     (r) "Governmental plan" has the meaning given the term under § 3(32) of the Employee

27

Retirement Income Security Act of 1974, 29 U.S.C. § 1002(32), and any federal governmental

28

plan.

29

     (s) (1) "Group health plan" means an employee welfare benefit plan as defined in § 3(1)

30

of the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1002(1), to the extent that

31

the plan provides medical care, as defined in subsection (y)(w) of this section, and including

32

items and services paid for as medical care to employees or their dependents as defined under the

33

terms of the plan directly or through insurance, reimbursement, or otherwise.

34

     (2) For purposes of this chapter:

 

LC002244/SUB A - Page 42 of 71

1

     (i) Any plan, fund, or program that would not be, but for PHSA Section 2721(e), 42

2

U.S.C. § 300gg(e), as added by P.L. 104-191, an employee welfare benefit plan and that is

3

established or maintained by a partnership, to the extent that the plan, fund or program provides

4

medical care, including items and services paid for as medical care, to present or former partners

5

in the partnership, or to their dependents, as defined under the terms of the plan, fund or program,

6

directly or through insurance, reimbursement or otherwise, shall be treated, subject to paragraph

7

(ii) of this subdivision, as an employee welfare benefit plan that is a group health plan;

8

     (ii) In the case of a group health plan, the term "employer" also includes the partnership

9

in relation to any partner; and

10

     (iii) In the case of a group health plan, the term "participant" also includes an individual

11

who is, or may become, eligible to receive a benefit under the plan, or the individual's beneficiary

12

who is, or may become, eligible to receive a benefit under the plan, if:

13

     (A) In connection with a group health plan maintained by a partnership, the individual is

14

a partner in relation to the partnership; or

15

     (B) In connection with a group health plan maintained by a self-employed individual,

16

under which one or more employees are participants, the individual is the self-employed

17

individual.

18

     (t) (1) "Health benefit plan" means any hospital or medical policy or certificate, major

19

medical expense insurance, hospital or medical service corporation subscriber contract, or health

20

maintenance organization subscriber contract. Health benefit plan includes short-term and

21

catastrophic health insurance policies, and a policy that pays on a cost-incurred basis, except as

22

otherwise specifically exempted in this definition.

23

     (2) "Health benefit plan" does not include one or more, or any combination of, the

24

following:

25

     (i) Coverage only for accident or disability income insurance, or any combination of

26

those;

27

     (ii) Coverage issued as a supplement to liability insurance;

28

     (iii) Liability insurance, including general liability insurance and automobile liability

29

insurance;

30

     (iv) Workers' compensation or similar insurance;

31

     (v) Automobile medical payment insurance;

32

     (vi) Credit-only insurance;

33

     (vii) Coverage for on-site medical clinics; and

34

     (viii) Other similar insurance coverage, specified in federal and state regulations issued

 

LC002244/SUB A - Page 43 of 71

1

pursuant to Pub. L. No. 104-191, under which benefits for medical care are secondary or

2

incidental to other insurance benefits.

3

     (3) "Health benefit plan" does not include the following benefits if they are provided

4

under a separate policy, certificate, or contract of insurance or are otherwise not an integral part

5

of the plan:

6

     (i) Limited scope dental or vision benefits;

7

     (ii) Benefits for long-term care, nursing home care, home health care, community-based

8

care, or any combination of those; or

9

     (iii) Other similar, limited benefits specified in federal and state regulations issued

10

pursuant to Pub. L. No. 104-191.

11

     (4) "Health benefit plan" does not include the following benefits if the benefits are

12

provided under a separate policy, certificate or contract of insurance, there is no coordination

13

between the provision of the benefits and any exclusion of benefits under any group health plan

14

maintained by the same plan sponsor, and the benefits are paid with respect to an event without

15

regard to whether benefits are provided with respect to such an event under any group health plan

16

maintained by the same plan sponsor if coverage complies with all other applicable state and

17

federal regulations:

18

     (i) Coverage only for a specified disease or illness; or

19

     (ii) Hospital indemnity or other fixed indemnity insurance.

20

     (5) "Health benefit plan" does not include the following if offered as a separate policy,

21

certificate, or contract of insurance:

22

     (i) Medicare supplemental health insurance as defined under § 1882(g)(1) of the Social

23

Security Act, 42 U.S.C. § 1395ss(g)(1);

24

     (ii) Coverage supplemental to the coverage provided under 10 U.S.C. § 1071 et seq.; or

25

     (iii) Similar supplemental coverage provided to coverage under a group health plan.

26

     (6) A carrier offering policies or certificates of specified disease, hospital confinement

27

indemnity, or limited benefit health insurance shall comply with the following:

28

     (i) The carrier files on or before March 1 of each year a certification with the director that

29

contains the statement and information described in paragraph (ii) of this subdivision;

30

     (ii) The certification required in paragraph (i) of this subdivision shall contain the

31

following:

32

     (A) A statement from the carrier certifying that policies or certificates described in this

33

paragraph are being offered and marketed as supplemental health insurance and not as a substitute

34

for hospital or medical expense insurance or major medical expense insurance; and

 

LC002244/SUB A - Page 44 of 71

1

     (B) A summary description of each policy or certificate described in this paragraph,

2

including the average annual premium rates (or range of premium rates in cases where premiums

3

vary by age or other factors) charged for those policies and certificates in this state; and

4

     (iii) In the case of a policy or certificate that is described in this paragraph and that is

5

offered for the first time in this state on or after July 13, 2000, the carrier shall file with the

6

director the information and statement required in paragraph (ii) of this subdivision at least thirty

7

(30) days prior to the date the policy or certificate is issued or delivered in this state.

8

     (u) "Health maintenance organization" or "HMO" means a health maintenance

9

organization licensed under chapter 41 of this title.

10

     (v) "Health status-related factor" means and includes, but is not limited to, any of the

11

following factors:

12

     (1) Health status;

13

     (2) Medical condition, including both physical and mental illnesses;

14

     (3) Claims experience;

15

     (4) Receipt of health care;

16

     (5) Medical history;

17

     (6) Genetic information;

18

     (7) Evidence of insurability, including conditions arising out of acts of domestic violence;

19

or

20

     (8) Disability.

21

     (w) (1) "Late enrollee" means an eligible employee or dependent who requests

22

enrollment in a health benefit plan of a small employer following the initial enrollment period

23

during which the individual is entitled to enroll under the terms of the health benefit plan,

24

provided that the initial enrollment period is a period of at least thirty (30) days.

25

     (2) "Late enrollee" does not mean an eligible employee or dependent:

26

     (i) Who meets each of the following provisions:

27

     (A) The individual was covered under creditable coverage at the time of the initial

28

enrollment;

29

     (B) The individual lost creditable coverage as a result of cessation of employer

30

contribution, termination of employment or eligibility, reduction in the number of hours of

31

employment, involuntary termination of creditable coverage, or death of a spouse, divorce or

32

legal separation, or the individual and/or dependents are determined to be eligible for RIteCare

33

under chapter 5.1 of title 40 or chapter 12.3 of title 42 or for RIteShare under chapter 8.4 of title

34

40; and

 

LC002244/SUB A - Page 45 of 71

1

     (C) The individual requests enrollment within thirty (30) days after termination of the

2

creditable coverage or the change in conditions that gave rise to the termination of coverage;

3

     (ii) If, where provided for in contract or where otherwise provided in state law, the

4

individual enrolls during the specified bona fide open enrollment period;

5

     (iii) If the individual is employed by an employer which offers multiple health benefit

6

plans and the individual elects a different plan during an open enrollment period;

7

     (iv) If a court has ordered coverage be provided for a spouse or minor or dependent child

8

under a covered employee's health benefit plan and a request for enrollment is made within thirty

9

(30) days after issuance of the court order;

10

     (v) If the individual changes status from not being an eligible employee to becoming an

11

eligible employee and requests enrollment within thirty (30) days after the change in status;

12

     (vi) If the individual had coverage under a COBRA continuation provision and the

13

coverage under that provision has been exhausted; or

14

     (vii) Who meets the requirements for special enrollment pursuant to § 27-50-7 or 27-50-

15

8.

16

     (x) "Limited benefit health insurance" means that form of coverage that pays stated

17

predetermined amounts for specific services or treatments or pays a stated predetermined amount

18

per day or confinement for one or more named conditions, named diseases or accidental injury.

19

     (y)(w) "Medical care" means amounts paid for:

20

     (1) The diagnosis, care, mitigation, treatment, or prevention of disease, or amounts paid

21

for the purpose of affecting any structure or function of the body;

22

     (2) Transportation primarily for and essential to medical care referred to in subdivision

23

(1); and

24

     (3) Insurance covering medical care referred to in subdivisions (1) and (2) of this

25

subsection.

26

     (z)(x) "Network plan" means a health benefit plan issued by a carrier under which the

27

financing and delivery of medical care, including items and services paid for as medical care, are

28

provided, in whole or in part, through a defined set of providers under contract with the carrier.

29

     (aa)(y) "Person" means an individual, a corporation, a partnership, an association, a joint

30

venture, a joint stock company, a trust, an unincorporated organization, any similar entity, or any

31

combination of the foregoing.

32

     (bb)(z) "Plan sponsor" has the meaning given this term under § 3(16)(B) of the Employee

33

Retirement Income Security Act of 1974, 29 U.S.C. § 1002(16)(B).

34

     (cc) (1) (aa)(1) "Preexisting condition exclusion" means a condition, regardless of the

 

LC002244/SUB A - Page 46 of 71

1

cause of the condition, for which medical advice, diagnosis, care, or treatment was recommended

2

or received during the six (6) months immediately preceding the enrollment date of the coverage

3

a limitation or exclusion of benefits (including a denial of coverage) based on the fact that the

4

condition was present before the effective date of coverage (or if coverage is denied, the date of

5

the denial), whether or not any medical advice, diagnosis, care, or treatment was recommended or

6

received before that day. A preexisting condition exclusion includes any limitation or exclusion

7

of benefits (including a denial of coverage) applicable to an individual as a result of information

8

relating to an individual's health status before the individual's effective date of coverage (or if

9

coverage is denied, the date of the denial), such as a condition identified as a result of a pre-

10

enrollment questionnaire or physical examination given to the individual, or review of medical

11

records relating to the pre-enrollment period.

12

     (2) "Preexisting condition" does not mean a condition for which medical advice,

13

diagnosis, care, or treatment was recommended or received for the first time while the covered

14

person held creditable coverage and that was a covered benefit under the health benefit plan,

15

provided that the prior creditable coverage was continuous to a date not more than ninety (90)

16

days prior to the enrollment date of the new coverage.

17

     (3)(2) Genetic information shall not be treated as a condition under subdivision (1) of this

18

subsection for which a preexisting condition exclusion may be imposed in the absence of a

19

diagnosis of the condition related to the information.

20

     (dd)(bb) "Premium" means all moneys paid by a small employer and eligible employees

21

as a condition of receiving coverage from a small employer carrier, including any fees or other

22

contributions associated with the health benefit plan.

23

     (cc) "Preventive services" means those services described in 42 USC section 300gg-13

24

and implementing regulations and guidance, and shall be covered without any cost-sharing for the

25

enrollee when delivered by in-network providers, as those terms and obligations are therein

26

described, and if repealed then the preventive services as may be described in 26 USC section

27

223 relating to the Internal Revenue Service high deductible health plan safe harbor rules.

28

     (ee)(dd) "Producer" means any insurance producer licensed under chapter 2.4 of this title.

29

     (ff)(ee) "Rating period" means the calendar period for which premium rates established

30

by a small employer carrier are assumed to be in effect.

31

     (gg)(ff) "Restricted network provision" means any provision of a health benefit plan that

32

conditions the payment of benefits, in whole or in part, on the use of health care providers that

33

have entered into a contractual arrangement with the carrier pursuant to provide health care

34

services to covered individuals.

 

LC002244/SUB A - Page 47 of 71

1

     (hh) "Risk adjustment mechanism" means the mechanism established pursuant to § 27-

2

50-16.

3

     (ii)(gg) "Self-employed individual" means an individual or sole proprietor who derives a

4

substantial portion of his or her income from a trade or business through which the individual or

5

sole proprietor has attempted to earn taxable income and for which he or she has filed the

6

appropriate Internal Revenue Service Form 1040, Schedule C or F, for the previous taxable year.

7

     (jj) "Significant break in coverage" means a period of ninety (90) consecutive days during

8

all of which the individual does not have any creditable coverage, except that neither a waiting

9

period nor an affiliation period is taken into account in determining a significant break in

10

coverage.

11

     (kk)(hh)(1) "Small employer" means, except for its use in § 27-50-7, any person, firm,

12

corporation, partnership, association, political subdivision, or self-employed individual that is

13

actively engaged in business including, but not limited to, a business or a corporation organized

14

under the Rhode Island Non-Profit Corporation Act, chapter 6 of title 7, or a similar act of

15

another state that, on at least fifty percent (50%) of its working days during the preceding

16

calendar quarter, employed no more than fifty (50) eligible employees, with a normal work week

17

of thirty (30) or more hours, the majority of whom were employed within this state, and is not

18

formed primarily for purposes of buying health insurance and in which a bona fide employer-

19

employee relationship exists. In determining the number of eligible employees, companies that

20

are affiliated companies, or that are eligible to file a combined tax return for purposes of taxation

21

by this state, shall be considered one employer. Subsequent to the issuance of a health benefit

22

plan to a small employer and for the purpose of determining continued eligibility, the size of a

23

small employer shall be determined annually. Except as otherwise specifically provided,

24

provisions of this chapter that apply to a small employer shall continue to apply at least until the

25

plan anniversary following the date the small employer no longer meets the requirements of this

26

definition. The term small employer includes a self-employed individual. to the extent allowed by

27

federal law and regulation in connection with a group health plan with respect to a calendar year

28

and a plan year, an employer who is a self-employed individual or an entity who employed an

29

average of at least one but not more than fifty (50) employees on business days during the

30

preceding calendar year, and is a self-employed individual or an entity who employs at least one

31

employee on the first day of the plan year.

32

     (2) Special rules for determining small employer status:

33

     (i) Application of aggregation rule for employers. All persons treated as a single

34

employer under subsections (b), (c), (m), or (o) of section 414 of the Internal Revenue Code of

 

LC002244/SUB A - Page 48 of 71

1

1986 (26 U.S.C. §414) shall be treated as a single employer.

2

     (ii) Employer not in existence in preceding year. In the case of an employer which was

3

not in existence throughout the preceding calendar year, the determination of whether such

4

employer is a small employer shall be based on the average number of employees that it is

5

reasonably expected such employer will employ on business days in the current calendar year.

6

     (iii) Predecessors. Any reference in this subsection to an employer shall include a

7

reference to any predecessor of such employer.

8

     (iv) Continuation of participation for growing small employers. If:

9

     (A) A small employer makes enrollment in qualified health plans offered in the small

10

group market available to its employees through an exchange; and

11

     (B) The employer ceases to be a small employer by reason of an increase in the number

12

of employees of such employer, then the employer shall continue to be treated as a small

13

employer for purposes of this chapter for the period beginning with the increase and ending with

14

the first day on which the employer does not make such enrollment available to its employees.

15

     (ll)(ii) "Waiting period" means, with respect to a group health plan and an individual who

16

is a potential enrollee in the plan, the period that must pass with respect to the individual before

17

the individual is eligible to be covered for benefits under the terms of the plan. For purposes of

18

calculating periods of creditable coverage pursuant to subsection (j)(2) of this section, a waiting

19

period shall not be considered a gap in coverage.

20

     (mm) "Wellness health benefit plan" means a plan developed pursuant to § 27-50-10.

21

     (nn)(jj) "Health insurance commissioner" or "commissioner" means that individual

22

appointed pursuant to § 42-14.5-1 of the general laws and afforded those powers and duties as set

23

forth in §§ 42-14.5-2 and 42-14.5-3 of title 42.

24

     (oo) "Low-wage firm" means those with average wages that fall within the bottom

25

quartile of all Rhode Island employers.

26

     (pp) "Wellness health benefit plan" means the health benefit plan offered by each small

27

employer carrier pursuant to § 27-50-7.

28

     (qq) "Commissioner" means the health insurance commissioner.

29

     27-50-4. Applicability and scope.

30

     (a) This chapter applies to any health benefit plan that provides coverage to the

31

employees of a small employer in this state, whether issued directly by a carrier or through a

32

trust, association, or other intermediary, and regardless of issuance or delivery of the policy, if

33

any of the following conditions are met:

34

     (1) Any portion of the premium or benefits is paid by or on behalf of the small employer;

 

LC002244/SUB A - Page 49 of 71

1

     (2) An eligible employee or dependent is reimbursed, whether through wage adjustments

2

or otherwise, by or on behalf of the small employer for any portion of the premium;

3

     (3) The health benefit plan is treated by the employer or any of the eligible employees or

4

dependents as part of a plan or program for the purposes of Section 162, Section 125, or Section

5

106 of the United States Internal Revenue Code, 26 U.S.C. § 162, 125, or 106; or

6

     (4) The health benefit plan is marketed to individual employees through an employer.

7

     (b) (1) Except as provided in subdivision (2) of this subsection, for the purposes of this

8

chapter, carriers that are affiliated companies or that are eligible to file a consolidated tax return

9

shall be treated as one carrier and any restrictions or limitations imposed by this chapter shall

10

apply as if all health benefit plans delivered or issued for delivery to small employers in this state

11

by the affiliated carriers were issued by one carrier.

12

     (2) An affiliated carrier that is a health maintenance organization having a license under

13

chapter 41 of this title or a health maintenance organization as defined in chapter 62 of title 42

14

may be considered to be a separate carrier for the purposes of this chapter.

15

     (3) Unless otherwise authorized by the director commissioner, a small employer carrier

16

shall not enter into one or more ceding arrangements with another carrier with respect to health

17

benefit plans delivered or issued for delivery to small employers in this state if those

18

arrangements would result in less than fifty percent (50%) of the insurance obligation or risk for

19

the health benefit plans being retained by the ceding carrier. The department of business

20

regulation's statutory provisions relating to licensing and the regulation of licensed insurers under

21

this title shall apply if a small employer carrier cedes or assumes all any material portion of the

22

insurance obligation or risk with respect to one or more health benefit plans delivered or issued

23

for delivery to small employers in this state.

24

     27-50-5. Restrictions relating to premium rates.

25

     (a) Premium rates for health benefit plans subject to this chapter are subject to the

26

following provisions:

27

     (1) Subject to subdivision (2) of this subsection, a A small employer carrier shall develop

28

its rates based on an adjusted community rate and may only vary the adjusted community rate for:

29

age. The age of an enrollee shall be determined as of the date of plan issuance or renewal.

30

     (i) Age;

31

     (ii) Gender; and

32

     (iii) Family composition;

33

     (2) The adjustment for age in paragraph (1)(i) of this subsection may not use age brackets

34

smaller than five (5) year increments and these shall begin with age thirty (30) and end with age

 

LC002244/SUB A - Page 50 of 71

1

sixty-five (65). The small employer carrier shall determine premium rates for a small employer

2

by summing the premium amounts for each covered employee and dependent, in accordance with

3

federal and state laws and regulations.

4

     (3) The small employer carriers are permitted to develop separate rates for individuals

5

age sixty-five (65) or older for coverage for which Medicare is the primary payer and coverage

6

for which Medicare is not the primary payer. Both rates are subject to the requirements of this

7

subsection.

8

     (4) For each health benefit plan offered by a carrier, the highest premium rate for each

9

family composition type the age sixty-four (64) years of age or older bracket shall not exceed four

10

(4) three (3) times the premium rate that could be charged to a small employer with the lowest

11

premium rate for that family composition for the rate for a twenty-one (21) year old.

12

     (5)(4) Premium rates for bona fide associations except for the Rhode Island Builders'

13

Association whose membership is limited to those who are actively involved in supporting the

14

construction industry in Rhode Island shall comply with the requirements of § 27-50-5 and all

15

other requirements of state law and regulation relating to rates.

16

     (6) For a small employer group renewing its health insurance with the same small

17

employer carrier which provided it small employer health insurance in the prior year, the

18

combined adjustment factor for age and gender for that small employer group will not exceed one

19

hundred twenty percent (120%) of the combined adjustment factor for age and gender for that

20

small employer group in the prior rate year.

21

     (b)(5) The premium charged for a health benefit plan may not be adjusted more

22

frequently than annually except that the rates may be changed to reflect: changes to the health

23

benefit plan requested by the small employer.

24

     (1) Changes to the enrollment of the small employer;

25

     (2) Changes to the family composition of the employee; or

26

     (3) Changes to the health benefit plan requested by the small employer.

27

     (c)(b) Premium rates for health benefit plans shall comply with the requirements of this

28

section.

29

     (d)(c) Small employer carriers shall apply rating factors consistently with respect to all

30

small employers. Rating factors shall produce premiums for identical groups that differ only by

31

the amounts attributable to plan design, such as different cost sharing or provider network

32

restrictions, and do not reflect differences due to the nature of the groups or individuals assumed

33

to select particular health benefit plans. Two groups that are otherwise identical, but which have

34

different prior year rate factors may, however, have rating factors that produce premiums that

 

LC002244/SUB A - Page 51 of 71

1

differ because of the requirements of subdivision 27-50-5(a)(6). Nothing in this section shall be

2

construed to prevent a group health plan and a health insurance carrier offering health insurance

3

coverage from establishing premium discounts or rebates or modifying otherwise applicable

4

copayments or deductibles in return for adherence to participation in programs of health

5

promotion and or disease prevention, provided the application of these discounts, rebates and

6

cost-sharing modifications, and the wellness programs satisfy the requirements of federal and

7

state laws and regulations, including without limitation nondiscrimination and mental health

8

parity provisions of federal and state laws. including those included in affordable health benefit

9

plans, provided that the resulting rates comply with the other requirements of this section,

10

including subdivision (a)(5) of this section.

11

     The calculation of premium discounts, rebates, or modifications to otherwise applicable

12

copayments or deductibles for affordable health benefit plans shall be made in a manner

13

consistent with accepted actuarial standards and based on actual or reasonably anticipated small

14

employer claims experience. As used in the preceding sentence, "accepted actuarial standards"

15

includes actuarially appropriate use of relevant data from outside the claims experience of small

16

employers covered by affordable health plans, including, but not limited to, experience derived

17

from the large group market, as this term is defined in § 27-18.6-2(19).

18

     (e)(d) For the purposes of this section, a health benefit plan that contains a restricted

19

network provision shall not be considered similar coverage to a health benefit plan that does not

20

contain such a provision, provided that the restriction of benefits to network providers results in

21

substantial differences in claim costs.

22

     (f)(e) The health insurance commissioner may establish regulations to implement the

23

provisions of this section and to assure that rating practices used by small employer carriers are

24

consistent with the purposes of this chapter, including regulations that assure that differences in

25

rates charged for health benefit plans by small employer carriers are reasonable and reflect

26

objective differences in plan design or coverage (not including differences due to the nature of the

27

groups assumed to select particular health benefit plans or separate claim experience for

28

individual health benefit plans) and to ensure that small employer groups with one eligible

29

subscriber are notified of rates for health benefit plans in the individual market.

30

     (g)(f) In connection with the offering for sale of any health benefit plan to a small

31

employer, a small employer carrier shall make a reasonable disclosure, as part of its solicitation

32

and sales materials, of all of the following:

33

     (1) The provisions of the health benefit plan concerning the small employer carrier's right

34

to change premium rates and the factors, other than claim experience, that affect changes in

 

LC002244/SUB A - Page 52 of 71

1

premium rates;

2

     (2) The provisions relating to the availability and renewability of policies and contracts;

3

and

4

     (3) The provisions relating to any preexisting condition provision; and

5

     (4)(3) A listing of and descriptive information, including benefits and premiums, about

6

all benefit plans for which the small employer is qualified.

7

     (h) (1)(g) Each small employer carrier shall maintain at its principal place of business a

8

complete and detailed description of its rating practices and renewal underwriting practices,

9

including information and documentation that demonstrate that its rating methods and practices

10

are based upon commonly accepted actuarial assumptions and are in accordance with sound

11

actuarial principles. Any changes to the carrier's rating and underwriting practices shall be subject

12

to the provisions of §§27-18-8, 27-41-27.2, and 42-62-13.

13

     (2) Each small employer carrier shall file with the commissioner annually on or before

14

March 15 an actuarial certification certifying that the carrier is in compliance with this chapter

15

and that the rating methods of the small employer carrier are actuarially sound. The certification

16

shall be in a form and manner, and shall contain the information, specified by the commissioner.

17

A copy of the certification shall be retained by the small employer carrier at its principal place of

18

business.

19

     (3) A small employer carrier shall make the information and documentation described in

20

subdivision (1) of this subsection available to the commissioner upon request. Except in cases of

21

violations of this chapter, the information shall be considered proprietary and trade secret

22

information and shall not be subject to disclosure by the director to persons outside of the

23

department except as agreed to by the small employer carrier or as ordered by a court of

24

competent jurisdiction.

25

     (4) For the wellness health benefit plan described in § 27-50-10, the rates proposed to be

26

charged and the plan design to be offered by any carrier shall be filed by the carrier at the office

27

of the commissioner no less than thirty (30) days prior to their proposed date of use. The carrier

28

shall be required to establish that the rates proposed to be charged and the plan design to be

29

offered are consistent with the proper conduct of its business and with the interest of the public.

30

The commissioner may approve, disapprove, or modify the rates and/or approve or disapprove

31

the plan design proposed to be offered by the carrier. Any disapproval by the commissioner of a

32

plan design proposed to be offered shall be based upon a determination that the plan design is not

33

consistent with the criteria established pursuant to subsection 27-50-10(b).

34

     (i) The requirements of this section apply to all health benefit plans issued or renewed on

 

LC002244/SUB A - Page 53 of 71

1

or after October 1, 2000.

2

     27-50-6. Renewability of coverage.

3

     (a) A health benefit plan subject to this chapter is renewable with respect to all eligible

4

employees or dependents, at the option of the small employer, except in any of the following

5

cases:

6

     (1) The plan sponsor has failed to pay premiums or contributions in accordance with the

7

terms of the health benefit plan or the carrier has not received timely premium payments;

8

     (2) The plan sponsor or, with respect to coverage of individual insured under the health

9

benefit plan, the insured or the insured's representative has performed an act or practice that

10

constitutes fraud or made an intentional misrepresentation of material fact under the terms of

11

coverage and the non-renewal is made within two (2) years after the act or practice. After two (2)

12

years, the carrier may non-renew under this subsection only if the plan sponsor has failed to

13

reimburse the carrier for the costs associated with the fraud or misrepresentation;

14

     (3) Noncompliance with the carrier's minimum participation requirements;

15

     (4) Noncompliance with the carrier's employer contribution requirements;

16

     (5) The small employer carrier elects to discontinue offering all of its health benefit plans

17

delivered or issued for delivery to small employers in this state if the carrier:

18

     (i) Provides advance notice of its decision under this paragraph to the commissioner in

19

each state in which it is licensed; and

20

     (ii) Provides notice of the decision to:

21

     (A) All affected small employers and enrollees and their dependents; and

22

     (B) The insurance commissioner in each state in which an affected insured individual is

23

known to reside at least one hundred and eighty (180) days prior to the nonrenewal non-renewal

24

of any health benefit plans by the carrier, provided the notice to the commissioner under this

25

subparagraph is sent at least three (3) working days prior to the date the notice is sent to the

26

affected small employers and enrollees and their dependents;

27

     (6) The director commissioner:

28

     (i) Finds that the continuation of the coverage would not be in the best interests of the

29

policyholders or certificate holders or would impair the carrier's ability to meet its contractual

30

obligations; and

31

     (ii) Assists affected small employers in finding replacement coverage;

32

     (7) The small employer carrier decides to discontinue offering a particular type of health

33

benefit plan in the state's small employer market if the carrier:

34

     (i) Provides notice of the decision not to renew coverage at least ninety (90) days prior to

 

LC002244/SUB A - Page 54 of 71

1

the nonrenewal non-renewal of any health benefit plans to all affected small employers and

2

enrollees and their dependents;

3

     (ii) Offers to each small employer issued a particular type of health benefit plan the

4

option to purchase all other health benefit plans currently being offered by the carrier to small

5

employers in the state; and

6

     (iii) In exercising this option to discontinue a particular type of health benefit plan and in

7

offering the option of coverage pursuant to paragraph (7)(ii) of this subsection acts uniformly

8

without regard to the claims experience of those small employers or any health status-related

9

factor relating to any enrollee or dependent of an enrollee or enrollees and their dependents

10

covered or new enrollees and their dependents who may become eligible for coverage;

11

     (8) In the case of health benefit plans that are made available in the small group market

12

through a network plan, there is no longer an employee of the small employer living, working or

13

residing within the carrier's established geographic service area and the carrier would deny

14

enrollment in the plan pursuant to § 27-50-7(e)(1)(ii); or

15

     (9) In the case of a health benefit plan that is made available in the small employer

16

market only through one or more bona fide associations, the membership of an employer in the

17

bona fide association, on the basis of which the coverage is provided, ceases, but only if the

18

coverage is terminated under this paragraph uniformly without regard to any health status-related

19

factor relating to any covered individual.

20

     (b) (1) A small employer carrier that elects not to renew health benefit plan coverage

21

pursuant to subdivision (a)(2) of this section because of the small employer's fraud or intentional

22

misrepresentation of material fact under the terms of coverage may choose not to issue a health

23

benefit plan to that small employer for one year after the date of nonrenewal non-renewal.

24

     (2) This subsection shall not be construed to affect the requirements of § 27-50-7 as to the

25

obligations of other small employer carriers to issue any health benefit plan to the small

26

employer.

27

     (c) (1) A small employer carrier that elects to discontinue offering health benefit plans

28

under subdivision (a)(5) of this section is prohibited from writing new business in the small

29

employer market in this state for a period of five (5) years beginning on the date the carrier

30

ceased offering new coverage in this state of discontinuance of the last coverage not renewed.

31

     (2) In the case of a small employer carrier that ceases offering new coverage in this state

32

pursuant to subdivision (a)(5) of this section, the small employer carrier shall, as determined by

33

the director, may renew its existing business in the small employer market in the state or may be

34

required to nonrenew discontinue and non-renew all of its existing business in the small employer

 

LC002244/SUB A - Page 55 of 71

1

market in the state upon proper notice.

2

     (d) A small employer carrier offering coverage through a network plan is not required to

3

offer coverage or accept applications pursuant to subsection (a) or (b) of this section in the case of

4

the following:

5

     (1) To an eligible person who no longer resides, lives, or works in the service area, or in

6

an area for which the carrier is authorized to do business, but only if coverage is terminated under

7

this subdivision uniformly without regard to any health status-related factor of covered

8

individuals; or

9

     (2) To a small employer that no longer has any enrollee in connection with the plan who

10

lives, resides, or works in the service area of the carrier, or the area for which the carrier is

11

authorized to do business.

12

     (e) At the time of coverage renewal, a small employer carrier may modify the health

13

insurance coverage for a product offered to a group health plan if, for coverage that is available in

14

the small group market other than only through one or more bona fide associations, such

15

modification is consistent with otherwise applicable law and effective on a uniform basis among

16

group health plans with that product.

17

     27-50-7. Availability of coverage.

18

     (a) Until October 1, 2004, for purposes of this section, "small employer" includes any

19

person, firm, corporation, partnership, association, or political subdivision that is actively

20

engaged in business that on at least fifty percent (50%) of its working days during the preceding

21

calendar quarter, employed a combination of no more than fifty (50) and no less than two (2)

22

eligible employees and part-time employees, the majority of whom were employed within this

23

state, and is not formed primarily for purposes of buying health insurance and in which a bona

24

fide employer-employee relationship exists. After October 1, 2004, for the purposes of this

25

section, "small employer" has the meaning used in § 27-50-3(kk).

26

     (b)(a) (1) Every small employer carrier shall, as a condition of transacting business in this

27

state with small employers, actively offer to small employers all health benefit plans it actively

28

that are approved for sale markets to small employers in this state, and must accept any small

29

employer that applies for any of those health benefit plans subject to the provisions of this

30

chapter. including a wellness health benefit plan. A small employer carrier shall be considered to

31

be actively marketing a health benefit plan if it offers that plan to any small employer not

32

currently receiving a health benefit plan from the small employer carrier. Such plans shall offer

33

coverage of essential health benefits.

34

     (2) Subject to subdivision subsection (a) (1) of this subsection section, a small employer

 

LC002244/SUB A - Page 56 of 71

1

carrier shall issue any health benefit plan to any eligible small employer that applies for that plan

2

and agrees to make the required premium payments and to satisfy the other reasonable provisions

3

of the health benefit plan not inconsistent with this chapter. However, no carrier is required to

4

issue a health benefit plan to any self-employed individual who is covered by, or is eligible for

5

coverage under, a health benefit plan offered by an employer.

6

     (c) (1) A small employer carrier shall file with the director, in a format and manner

7

prescribed by the director, the health benefit plans to be used by the carrier. A health benefit plan

8

filed pursuant to this subdivision may be used by a small employer carrier beginning thirty (30)

9

days after it is filed unless the director disapproves its use.

10

     (2) The director may at any time may, after providing notice and an opportunity for a

11

hearing to the small employer carrier, disapprove the continued use by a small employer carrier of

12

a health benefit plan on the grounds that the plan does not meet the requirements of this chapter.

13

     (d) Health benefit plans covering small employers shall comply with the following

14

provisions:

15

     (1) A health benefit plan shall not deny, exclude, or limit benefits for a covered

16

individual for losses incurred more than six (6) months following the enrollment date of the

17

individual's coverage due to a preexisting condition, or the first date of the waiting period for

18

enrollment if that date is earlier than the enrollment date. A health benefit plan shall not define a

19

preexisting condition more restrictively than as defined in § 27-50-3.

20

     (2) (i) Except as provided in subdivision (3) of this subsection, a small employer carrier

21

shall reduce the period of any preexisting condition exclusion by the aggregate of the periods of

22

creditable coverage without regard to the specific benefits covered during the period of creditable

23

coverage, provided that the last period of creditable coverage ended on a date not more than

24

ninety (90) days prior to the enrollment date of new coverage.

25

     (ii) The aggregate period of creditable coverage does not include any waiting period or

26

affiliation period for the effective date of the new coverage applied by the employer or the carrier,

27

or for the normal application and enrollment process following employment or other triggering

28

event for eligibility.

29

     (iii) A carrier that does not use preexisting condition limitations in any of its health

30

benefit plans may impose an affiliation period that:

31

     (A) Does not exceed sixty (60) days for new entrants and not to exceed ninety (90) days

32

for late enrollees;

33

     (B) During which the carrier charges no premiums and the coverage issued is not

34

effective; and

 

LC002244/SUB A - Page 57 of 71

1

     (C) Is applied uniformly, without regard to any health status-related factor.

2

     (iv)(b) This section does not preclude application of any waiting period applicable to all

3

new enrollees under the health benefit plan, provided that any carrier-imposed waiting period is

4

no longer than sixty (60) days.

5

     (3) (i) Instead of as provided in paragraph (2)(i) of this subsection, a small employer

6

carrier may elect to reduce the period of any preexisting condition exclusion based on coverage of

7

benefits within each of several classes or categories of benefits specified in federal regulations.

8

     (ii) A small employer electing to reduce the period of any preexisting condition exclusion

9

using the alternative method described in paragraph (i) of this subdivision shall:

10

     (A) Make the election on a uniform basis for all enrollees; and

11

     (B) Count a period of creditable coverage with respect to any class or category of benefits

12

if any level of benefits is covered within the class or category.

13

     (iii) A small employer carrier electing to reduce the period of any preexisting condition

14

exclusion using the alternative method described under paragraph (i) of this subdivision shall:

15

     (A) Prominently state that the election has been made in any disclosure statements

16

concerning coverage under the health benefit plan to each enrollee at the time of enrollment under

17

the plan and to each small employer at the time of the offer or sale of the coverage; and

18

     (B) Include in the disclosure statements the effect of the election.

19

     (4) (i) A health benefit plan shall accept late enrollees, but may exclude coverage for late

20

enrollees for preexisting conditions for a period not to exceed twelve (12) months.

21

     (ii) A small employer carrier shall reduce the period of any preexisting condition

22

exclusion pursuant to subdivision (2) or (3) of this subsection.

23

     (5) A small employer carrier shall not impose a preexisting condition exclusion:

24

     (i) Relating to pregnancy as a preexisting condition; or

25

     (ii) With regard to a child who is covered under any creditable coverage within thirty (30)

26

days of birth, adoption, or placement for adoption, provided that the child does not experience a

27

significant break in coverage, and provided that the child was adopted or placed for adoption

28

before attaining eighteen (18) years of age.

29

     (6) A small employer carrier shall not impose a preexisting condition exclusion in the

30

case of a condition for which medical advice, diagnosis, care or treatment was recommended or

31

received for the first time while the covered person held creditable coverage, and the medical

32

advice, diagnosis, care or treatment was a covered benefit under the plan, provided that the

33

creditable coverage was continuous to a date not more than ninety (90) days prior to the

34

enrollment date of the new coverage.

 

LC002244/SUB A - Page 58 of 71

1

     (7) (i)(c) A small employer carrier shall permit an employee or a dependent of the

2

employee, who is eligible, but not enrolled, to enroll for coverage under the terms of the group

3

health plan of the small employer during a special enrollment period, as defined by federal and

4

state laws and regulations, including, but not limited to, the following situations if:

5

     (A)(1) The employee or dependent was covered under a group health plan or had

6

coverage under a health benefit plan at the time coverage was previously offered to the employee

7

or dependent;

8

     (B)(2) The employee stated in writing at the time coverage was previously offered that

9

coverage under a group health plan or other health benefit plan was the reason for declining

10

enrollment, but only if the plan sponsor or carrier, if applicable, required that statement at the

11

time coverage was previously offered and provided notice to the employee of the requirement and

12

the consequences of the requirement at that time;

13

     (C)(3) The employee's or dependent's coverage described under subparagraph (A) of this

14

paragraph subsection (c)(2):

15

     (I)(i) Was under a COBRA continuation provision and the coverage under this provision

16

has been exhausted; or

17

     (II)(ii) Was not under a COBRA continuation provision and that other coverage has been

18

terminated as a result of loss of eligibility for coverage, including as a result of a legal separation,

19

divorce, death, termination of employment, or reduction in the number of hours of employment or

20

employer contributions towards that other coverage have been terminated; and

21

     (D)(4) Under terms of the group health plan, the employee requests enrollment not later

22

than thirty (30) days after the date of exhaustion of coverage described in item (C)(I) subsection

23

(c)(3)(i) of this paragraph section or termination of coverage or employer contribution described

24

in item (C)(II) subsection (c)(3)(ii) of this paragraph section.

25

     (ii)(5) If an employee requests enrollment pursuant to subparagraph (i)(D) of this

26

subdivision this subsection, the enrollment is effective not later than the first day of the first

27

calendar month beginning after the date the completed request for enrollment is received.

28

     (8) (i)(d)(1) A small employer carrier that makes coverage available under a group health

29

plan with respect to a dependent of an individual shall provide for a dependent special enrollment

30

period described in paragraph (ii) of this subdivision section during which the person or, if not

31

enrolled, the individual may be enrolled under the group health plan as a dependent of the

32

individual and, in the case of the birth or adoption of a child, the spouse of the individual may be

33

enrolled as a dependent of the individual if the spouse is eligible for coverage if:

34

     (A)(i) The individual is a participant under the health benefit plan or has met any waiting

 

LC002244/SUB A - Page 59 of 71

1

period applicable to becoming a participant under the plan and is eligible to be enrolled under the

2

plan, but for a failure to enroll during a previous enrollment period; and

3

     (B)(ii) A person becomes a dependent of the individual through marriage, birth, or

4

adoption or placement for adoption.

5

     (ii)(2) The special enrollment period for individuals that meet the provisions of paragraph

6

(i) of this subdivision subsection (d)(1) is a period of not less than thirty (30) days and begins on

7

the later of:

8

     (A)(i) The date dependent coverage is made available; or

9

     (B)(ii) The date of the marriage, birth, or adoption or placement for adoption described in

10

subparagraph (i)(B) subsection (d)(1)(ii) of this subdivision section.

11

     (iii)(3) If an individual seeks to enroll a dependent during the first thirty (30) days of the

12

dependent special enrollment period described under paragraph (ii)(d)(2) of this subdivision, the

13

coverage of the dependent is effective:

14

     (A)(i) In the case of marriage, not later than the first day of the first month beginning

15

after the date the completed request for enrollment is received;

16

     (B)(ii) In the case of a dependent's birth, as of the date of birth; and

17

     (C)(iii) In the case of a dependent's adoption or placement for adoption, the date of the

18

adoption or placement for adoption.

19

     (9) (i)(e)(1) Except as provided in this subdivision, requirements used by a small

20

employer carrier in determining whether to provide coverage to a small employer, including

21

requirements for minimum participation of eligible employees and minimum employer

22

contributions, shall be applied uniformly among all small employers applying for coverage or

23

receiving coverage from the small employer carrier.

24

     (ii)(2) For health benefit plans issued or renewed on or after October 1, 2000, a small

25

employer carrier shall not require a minimum participation level greater than seventy-five percent

26

(75%) of eligible employees.

27

     (iii)(3) In applying minimum participation requirements with respect to a small employer,

28

a small employer carrier shall not consider employees or dependents who have creditable

29

coverage in determining whether the applicable percentage of participation is met.

30

     (iv)(4) A small employer carrier shall not increase any requirement for minimum

31

employee participation or modify any requirement for minimum employer contribution applicable

32

to a small employer at any time after the small employer has been accepted for coverage.

33

     (10) (i)(f)(1) If a small employer carrier offers coverage to a small employer, the small

34

employer carrier shall offer coverage to all of the eligible employees of a small employer and

 

LC002244/SUB A - Page 60 of 71

1

their dependents who apply for enrollment during the period in which the employee first becomes

2

eligible to enroll under the terms of the plan. A small employer carrier shall not offer coverage to

3

only certain individuals or dependents in a small employer group or to only part of the group.

4

     (ii)(2) A small employer carrier shall not place any restriction in regard to any health

5

status-related factor on an eligible employee or dependent with respect to enrollment or plan

6

participation.

7

     (iii)(3) Except as permitted under subdivisions (1) and (4) by this section, of this

8

subsection, a small employer carrier shall not modify a health benefit plan with respect to a small

9

employer or any eligible employee or dependent, through riders, endorsements, or otherwise, to

10

restrict or exclude coverage or benefits for specific diseases, medical conditions, or services

11

covered by the plan.

12

     (e)(g) (1) Subject to subdivision (3) of this subsection, a A small employer carrier is not

13

required to offer coverage or accept applications pursuant to subsection (b)(a) of this section in

14

the case of the following:

15

     (i) To a small employer, where the small employer does not have eligible individuals who

16

live, work, or reside in the established geographic service area for the network plan;

17

     (ii) To an employee, when the employee does not live, work, or reside within the carrier's

18

established geographic service area; or

19

     (iii) Within With the approval of the commissioner, within an area where the small

20

employer carrier reasonably anticipates, and demonstrates to the satisfaction of the director

21

commissioner, that it will not have the capacity within its established geographic service area to

22

deliver services adequately to enrollees of any additional groups because of its obligations to

23

existing group policyholders and enrollees.

24

     (2) A small employer carrier that cannot offer coverage pursuant to paragraph (1)(iii) of

25

this subsection subsection (g)(1)(iii) of this section may not offer coverage in the applicable area

26

to new cases of employer groups until the later of one hundred and eighty (180) days following

27

each refusal or the date on which the carrier notifies the director that it has regained capacity to

28

deliver services to new employer groups.

29

     (3) A small employer carrier shall apply the provisions of this subsection uniformly to all

30

small employers without regard to the claims experience of a small employer and its employees

31

and their dependents or any health status-related factor relating to the employees and their

32

dependents.

33

     (f)(h)(1) A small employer carrier is not required to provide coverage to small employers

34

pursuant to subsection (b) (a) of this section if:

 

LC002244/SUB A - Page 61 of 71

1

     (i) For any period of time the director commissioner determines the small employer

2

carrier does not have the financial reserves necessary to underwrite additional coverage; and

3

     (ii) The small employer carrier is applying this subsection uniformly to all small

4

employers in the small group market in this state consistent with applicable state law and without

5

regard to the claims experience of a small employer and its employees and their dependents or

6

any health status-related factor relating to the employees and their dependents.

7

     (2) A small employer carrier that denies coverage in accordance with subdivision (1) of

8

this subsection may not offer coverage in the small group market for the later of:

9

     (i) A period of one hundred and eighty (180) days after the date the coverage is denied; or

10

     (ii) Until the small employer has demonstrated to the director commissioner that it has

11

sufficient financial reserves to underwrite additional coverage.

12

     (g)(i) (1) A small employer carrier is not required to provide coverage to small employers

13

pursuant to subsection (b)(a) of this section if the small employer carrier, in accordance with a

14

plan approved by the commissioner, elects not to offer new coverage to small employers in this

15

state.

16

     (2) A small employer carrier that elects not to offer new coverage to small employers

17

under this subsection may be allowed, as determined by the director commissioner, to maintain its

18

existing policies in this state.

19

     (3) A small employer carrier that elects not to offer new coverage to small employers

20

under subdivision subsection (g)(i)(1) shall provide at least one hundred and twenty (120) days

21

notice of its election to the director commissioner and is prohibited from writing new business in

22

the small employer market in this state for a period of five (5) years beginning on the date the

23

carrier ceased offering new coverage in this state.

24

     (h)(j) No small group carrier may impose a pre-existing condition exclusion pursuant to

25

the provisions of subdivisions 27-50-7(d)(1), 27-50-7(d)(2), 27-50-7(d)(3), 27-50-7(d)(4), 27-50-

26

7(d)(5) and 27-50-7(d)(6) with regard to an individual that is less than nineteen (19) years of age.

27

With respect to health benefit plans issued on and after January 1, 2014 a small employer carrier

28

shall offer and issue coverage to small employers and eligible individuals notwithstanding any

29

pre-existing condition of an employee, member, or individual, or their dependents. A small

30

employer carrier shall not deny, exclude or limit benefits or coverage with respect to an enrollee

31

because of a preexisting condition exclusion.

32

     27-50-11. Administrative procedures.

33

     The director commissioner shall issue regulations in accordance with chapter 35 of this

34

title 42 for the implementation and administration of the Small Employer Health Insurance

 

LC002244/SUB A - Page 62 of 71

1

Availability Act. If provisions of the federal Patient Protection and Affordable Care Act and

2

implementing regulations, corresponding to the provisions of this chapter, are repealed, then the

3

commissioner may promulgate regulations reflecting relevant federal law and implementing

4

regulations in effect immediately prior to their repeal. In the event of such changes to the law and

5

related regulations, the commissioner, in conjunction with the health benefit exchange or other

6

state department, shall report to the assembly as soon as possible to describe the impact of the

7

change and to make recommendations regarding consumer protections, consumer choices, and

8

stabilization and affordability of the Rhode Island insurance market.

9

     27-50-12. Standards to assure fair marketing.

10

     (a) Each Unless permitted by the commissioner for a limited period of time, each small

11

employer carrier shall actively market and offer all health benefit plans sold by the carrier to

12

eligible small employers in the state.

13

     (b) (1) Except as provided in subdivision (2) of this subsection, no small employer carrier

14

or producer shall, directly or indirectly, engage in the following activities:

15

     (i) Encouraging or directing small employers to refrain from filing an application for

16

coverage with the small employer carrier because of any health status-related factor, age, gender,

17

industry, occupation, or geographic location of the small employer; or

18

     (ii) Encouraging or directing small employers to seek coverage from another carrier

19

because of any health status-related factor, age, gender, industry, occupation, or geographic

20

location of the small employer.

21

     (2) The provisions of subdivision (1) of this subsection do not apply with respect to

22

information provided by a small employer carrier or producer to a small employer regarding the

23

established geographic service area or a restricted network provision of a small employer carrier.

24

     (c) (1) Except as provided in subdivision (2) of this subsection, no small employer carrier

25

shall, directly or indirectly, enter into any contract, agreement or arrangement with a producer

26

that provides for or results in the compensation paid to a producer for the sale of a health benefit

27

plan to be varied because of any initial or renewal, industry, occupation, or geographic location of

28

the small employer.

29

     (2) Subdivision (1) of this subsection does not apply with respect to a compensation

30

arrangement that provides compensation to a producer on the basis of percentage of premium,

31

provided that the percentage shall not vary because of any health status-related factor, industry,

32

occupation, or geographic area of the small employer.

33

     (d) A small employer carrier shall provide reasonable compensation, as provided under

34

the plan of operation of the program, to a producer, if any, for the sale of any health benefit plan

 

LC002244/SUB A - Page 63 of 71

1

subject to § 27-50-10.

2

     (e) No small employer carrier may terminate, fail to renew, or limit its contract or

3

agreement of representation with a producer for any reason related to health status-related factor,

4

occupation, or geographic location of the small employers placed by the producer with the small

5

employer carrier.

6

     (f) No small employer carrier or producer shall induce or encourage a small employer to

7

separate or exclude an employee or dependent from health coverage or benefits provided in

8

connection with the employee's employment.

9

     (g) Denial by a small employer carrier of an application for coverage from a small

10

employer shall be in writing and shall state the reason or reasons for the denial.

11

     (h) The director commissioner may establish regulations setting forth additional standards

12

to provide for the fair marketing and broad availability of health benefit plans to small employers

13

in this state.

14

     (i) (1) A violation of this section by a small employer carrier or a producer is an unfair

15

trade practice under chapter 13 of title 6.

16

     (2) If a small employer carrier enters into a contract, agreement, or other arrangement

17

with a third-party administrator to provide administrative, marketing, or other services related to

18

the offering of health benefit plans to small employers in this state, the third-party administrator is

19

subject to this section as if it were a small employer carrier.

20

     27-50-15. Restoration of terminated coverage.

21

     The director commissioner may promulgate regulations to require small employer

22

carriers, as a condition of transacting business with small employers in this state after July 13,

23

2000, to reissue a health benefit plan to any small employer whose health benefit plan has been

24

terminated or not renewed by the carrier on or after July 1, 2000. The director commissioner may

25

prescribe any terms for the reissue of coverage that the director commissioner finds are

26

reasonable and necessary to provide continuity of coverage to small employers.

27

     SECTION 9. Chapter 27-50 of the General Laws entitled "Small Employer Health

28

Insurance Availability Act" is hereby amended by adding thereto the following section:

29

     27-50-18. Small business health options program (SHOP) innovation waiver.

30

     The director of the department of administration, with assistance from the commissioner

31

of health insurance, shall analyze allowing businesses classified as self-employed and sole

32

proprietors to purchase insurance in the small group market and not be forced to the individual

33

market. If the director and commissioner determine such an option would likely lead to decreased

34

rates in both markets and increased choices for those businesses, then they may apply for a

 

LC002244/SUB A - Page 64 of 71

1

waiver, under 42 USC §18052 (commonly known as a 1332 Waiver) or otherwise, from any

2

federal law or regulation that prevents such an option.

3

     SECTION 10. Chapter 27-18.6 of the General Laws entitled "Large Group Health

4

Insurance Coverage" is hereby amended by adding thereto the following section:

5

     27-18.6-13. Compliance with federal law.

6

     A carrier shall comply with all federal laws and regulations relating to health insurance

7

coverage in the large group market. In its construction and enforcement of the provisions of this

8

section, and in the interests of promoting uniform national rules for health insurance carriers

9

while protecting the interests of Rhode Island consumers and businesses, the office of the health

10

insurance commissioner shall give due deference to the construction, enforcement policies, and

11

guidance of the federal government with respect to federal laws substantially similar to the

12

provisions of this chapter.

13

     SECTION 11. Sections 27-50-9, 27-50-10, 27-50-16 and 27-50-17 of the General Laws

14

in Chapter 27-50 entitled "Small Employer Health Insurance Availability Act" are hereby

15

repealed.

16

     27-50-9. Periodic market evaluation.

17

     Within three (3) months after March 31, 2002, and every thirty-six (36) months after this,

18

the director shall obtain an independent actuarial study and report. The director shall assess a fee

19

to the health plans to commission the report. The report shall analyze the effectiveness of the

20

chapter in promoting rate stability, product availability, and coverage affordability. The report

21

may contain recommendations for actions to improve the overall effectiveness, efficiency, and

22

fairness of the small group health insurance marketplace. The report shall address whether

23

carriers and producers are fairly actively marketing or issuing health benefit plans to small

24

employers in fulfillment of the purposes of the chapter. The report may contain recommendations

25

for market conduct or other regulatory standards or action.

26

     27-50-10. Wellness health benefit plan.

27

     (a) No provision contained in this chapter prohibits the sale of health benefit plans which

28

differ from the wellness health benefit plans provided for in this section.

29

     (b) The wellness health benefit plan shall be determined by regulations promulgated by

30

the office of health insurance commissioner (OHIC). The OHIC shall develop the criteria for the

31

wellness health benefit plan, including, but not limited to, benefit levels, cost-sharing levels,

32

exclusions, and limitations, in accordance with the following:

33

     (1) (i) The OHIC shall form an advisory committee to include representatives of

34

employers, health insurance brokers, local chambers of commerce, and consumers who pay

 

LC002244/SUB A - Page 65 of 71

1

directly for individual health insurance coverage.

2

     (ii) The advisory committee shall make recommendations to the OHIC concerning the

3

following:

4

     (A) The wellness health benefit plan requirements document. This document shall be

5

disseminated to all Rhode Island small group and individual market health plans for responses,

6

and shall include, at a minimum, the benefit limitations and maximum cost sharing levels for the

7

wellness health benefit plan. If the wellness health benefit product requirements document is not

8

created by November 1, 2006, it will be determined by regulations promulgated by the OHIC.

9

     (B) The wellness health benefit plan design. The health plans shall bring proposed

10

wellness health plan designs to the advisory committee for review on or before January 1, 2007.

11

The advisory committee shall review these proposed designs and provide recommendations to the

12

health plans and the commissioner regarding the final wellness plan design to be approved by the

13

commissioner in accordance with subsection 27-50-5(h)(4), and as specified in regulations

14

promulgated by the commissioner on or before March 1, 2007.

15

     (2) Set a target for the average annualized individual premium rate for the wellness health

16

benefit plan to be less than ten percent (10%) of the average annual statewide wage, as reported

17

by the Rhode Island department of labor and training, in their report entitled "Quarterly Census of

18

Rhode Island Employment and Wages." In the event that this report is no longer available, or the

19

OHIC determines that it is no longer appropriate for the determination of maximum annualized

20

premium, an alternative method shall be adopted in regulation by the OHIC. The maximum

21

annualized individual premium rate shall be determined no later than August 1st of each year, to

22

be applied to the subsequent calendar year premium rates.

23

     (3) Ensure that the wellness health benefit plan creates appropriate incentives for

24

employers, providers, health plans and consumers to, among other things:

25

     (i) Focus on primary care, prevention and wellness;

26

     (ii) Actively manage the chronically ill population;

27

     (iii) Use the least cost, most appropriate setting; and

28

     (iv) Use evidence based, quality care.

29

     (4) To the extent possible, the health plans may be permitted to utilize existing products

30

to meet the objectives of this section.

31

     (5) The plan shall be made available in accordance with title 27, chapter 50 as required

32

by regulation on or before May 1, 2007.

33

     27-50-16. Risk adjustment mechanism.

34

     The director may establish a payment mechanism to adjust for the amount of risk covered

 

LC002244/SUB A - Page 66 of 71

1

by each small employer carrier. The director may appoint an advisory committee composed of

2

individuals that have risk adjustment and actuarial expertise to help establish the risk adjusters.

3

     27-50-17. Affordable health plan reinsurance program for small businesses.

4

     (a) The commissioner shall allocate funds from the affordable health plan reinsurance

5

fund for the affordable health reinsurance program.

6

     (b) The affordable health reinsurance program for small businesses shall only be

7

available to low wage firms, as defined in § 27-50-3, who pay a minimum of fifty percent (50%),

8

as defined in § 27-50-3, of single coverage premiums for their eligible employees, and who

9

purchase the wellness health benefit plan pursuant to § 27-50-10. Eligibility shall be determined

10

based on state and federal corporate tax filings. All eligible employees, as defined in § 27-50-3,

11

employed by low wage firms as defined in § 27-50-3-(oo) shall be eligible for the reinsurance

12

program if at least one low wage eligible employee as defined in regulation is enrolled in the

13

employer's wellness health benefit plan.

14

     (c) The affordable health plan reinsurance shall be in the firms of a carrier cost-sharing

15

arrangement, which encourages carriers to offer a discounted premium rate to participating

16

individuals, and whereby the reinsurance fund subsidizes the carriers' losses within a prescribed

17

corridor of risk as determined by regulation.

18

     (d) The specific structure of the reinsurance arrangement shall be defined by regulations

19

promulgated by the commissioner.

20

     (e) All carriers who participate in the Rhode Island RIte Care program as defined in § 42-

21

12.3-4 and the procurement process for the Rhode Island state employee account, as described in

22

chapter 36-12, must participate in the affordable health plan reinsurance program.

23

     (f) The commissioner shall determine total eligible enrollment under qualifying small

24

group health insurance contracts by dividing the funds available for distribution from the

25

reinsurance fund by the estimated per member annual cost of claims reimbursement from the

26

reinsurance fund.

27

     (g) The commissioner shall suspend the enrollment of new employers under qualifying

28

small group health insurance contracts if the director determines that the total enrollment reported

29

under such contracts is projected to exceed the total eligible enrollment, thereby resulting in

30

anticipated annual expenditures from the reinsurance fund in excess of ninety-five percent (95%)

31

of the total funds available for distribution from the fund.

32

     (h) In the event the available funds in the affordable health reinsurance fund as created in

33

§ 42-14.5-3 are insufficient to satisfy all claims submitted to the fund in any calendar year, those

34

claims in excess of the available funds shall be due and payable in the succeeding calendar year,

 

LC002244/SUB A - Page 67 of 71

1

or when sufficient funds become available whichever shall first occur. Unpaid claims from any

2

prior year shall take precedence over new claims submitted in any one year.

3

     (i) The commissioner shall provide the health maintenance organization, health insurers

4

and health plans with notification of any enrollment suspensions as soon as practicable after

5

receipt of all enrollment data. However, the suspension of issuance of qualifying small group

6

health insurance contracts shall not preclude the addition of new employees of an employer

7

already covered under such a contract or new dependents of employees already covered under

8

such contracts.

9

     (j) The premiums of qualifying small group health insurance contracts must be no more

10

than ninety percent (90%) of the actuarially-determined and commissioner approved premium for

11

this health plan without the reinsurance program assistance.

12

     (k) The commissioner shall prepare periodic public reports in order to facilitate

13

evaluation and ensure orderly operation of the funds, including, but not limited to, an annual

14

report of the affairs and operations of the fund, containing an accounting of the administrative

15

expenses charged to the fund. Such reports shall be delivered to the co-chairs of the joint

16

legislative committee on health care oversight by March 1st of each year.

17

     SECTION 12. Section 23-81-4 of the General Laws in Chapter 23-81 entitled "Rhode

18

Island Coordinated Health Planning Act of 2006" is hereby amended to read as follows:

19

     23-81-4. Powers of the health care planning and accountability advisory council.

20

     Powers of the council shall include, but not be limited to the following:

21

     (a) The authority to develop and promote studies, advisory opinions and to recommend a

22

unified health plan on the state's health care delivery and financing system, including but not

23

limited to:

24

     (1) Ongoing assessments of the state's health care needs and health care system capacity

25

that are used to determine the most appropriate capacity of and allocation of health care

26

providers, services, including transportation services, and equipment and other resources, to meet

27

Rhode Island's health care needs efficiently and affordably. These assessments shall be used to

28

advise the "determination of need for new health care equipment and new institutional health

29

services" or "certificate of need" process through the health services council;

30

     (2) The establishment of Rhode Island's long range health care goals and values, and the

31

recommendation of innovative models of health care delivery, that should be encouraged in

32

Rhode Island;

33

     (3) Health care payment models that reward improved health outcomes;

34

     (4) Measurements of quality and appropriate use of health care services that are designed

 

LC002244/SUB A - Page 68 of 71

1

to evaluate the impact of the health planning process;

2

     (5) Plans for promoting the appropriate role of technology in improving the availability

3

of health information across the health care system, while promoting practices that ensure the

4

confidentiality and security of health records; and

5

     (6) Recommendations of legislation and other actions that achieve accountability and

6

adherence in the health care community to the council's plans and recommendations.

7

     (b) Convene meetings of the council no less than every sixty (60) days, which shall be

8

subject to the open meetings laws and public records laws of the state, and shall include a process

9

for the public to place items on the council's agenda.

10

     (c) Appoint advisory committees as needed for technical assistance throughout the

11

process.

12

     (d) Modify recommendations in order to reflect changing health care systems needs.

13

     (e) Promote responsiveness to recommendations among all state agencies that provide

14

health service programs, not limited to the five (5) state agencies coordinated by the executive

15

office of the health and human services.

16

     (f) Coordinate the review of existing data sources from state agencies and the private

17

sector that are useful to developing a unified health plan.

18

     (g) Formulating, testing, and selecting policies and standards that will achieve desired

19

objectives.

20

     (h) In consultation with the office of the health insurance commissioner, the council shall

21

review health system total cost drivers and provide findings, and, if appropriate related

22

recommendations to the governor and general assembly on or before July 1, 2014.

23

     (i) Coordinate a comprehensive review of mental health and substance abuse incidence

24

rates, service use rates, capacity and potentially high and rising spending.

25

     (j) Examine the volume and spending trends for pediatric inpatient and outpatient

26

services, including the evolving role of intensive care units (ICUs).

27

     (k) Subject to available resources and time, in consultation with the department of health,

28

provide periodic assessments beginning on or before October 1, 2014, to the general assembly on

29

the appropriate mix of Rhode Island's primary care workforce. The assessments shall include

30

analyses of current and future primary care professional supply and demand, recruitment, scope

31

of practice and licensure, workforce training issues, and potential incentives with

32

recommendations to enhance the supply and diversity of the primary care workforce.

33

     (l) Provide an annual report each July, after the convening of the council, to the governor

34

and general assembly on implementation of the plan adopted by the council. This annual report

 

LC002244/SUB A - Page 69 of 71

1

shall:

2

     (1) Present the strategic recommendations, updated annually;

3

     (2) Assess the implementation of strategic recommendations in the health care market;

4

     (3) Compare and analyze the difference between the guidance and the reality;

5

     (4) Recommend to the governor and general assembly legislative or regulatory revisions

6

necessary to achieve the long-term goals and values adopted by the council as part of its strategic

7

recommendations, and assess the powers needed by the council or governmental entities of the

8

state deemed necessary and appropriate to carry out the responsibilities of the council.

9

     (5) Include the request for a hearing before the appropriate committees of the general

10

assembly.

11

     (6) Include a response letter from each state agency that is affected by the state health

12

plan describing the actions taken and planned to implement the plans recommendations.

13

     (m) The council shall convene within thirty (30) days of passage of this act to create a

14

working group on affordable health insurance consisting of at least ten (10) members and no

15

more than (20) members, including two (2) members of consumer organizations. The working

16

group shall make recommendations on health insurance issues relating to consumer protection

17

and choice, coverage affordability and quality, and market stability, considering such elements as:

18

     (1) Minimum standard coverage requirements for individuals and enforcement

19

provisions;

20

     (2) Essential health care benefits;

21

     (3) Rating rules;

22

     (4) Medicaid eligibility/expansion;

23

     (5) The offering of a public health insurance option;

24

     (6) Financial requirements and financing options including federal funding and/or

25

waivers to stabilize individual market premiums, including:

26

     (i) Making recommendations on the best use of federal dollars, including funds

27

earmarked for high-risk pools;

28

     (ii) Making recommendations on a maximum ceiling for out-of-pocket expenses and

29

using available state and federal dollars to subsidize amounts exceeding the ceiling;

30

     (iii) Setting levels of premium subsidy assistance using available federal and state funds;

31

     (iv) Assessing options under the federal 1332 state innovation waiver and making

32

recommendations on any waiver applications, including the possibility of a waiver for regional

33

purchasing, efficiencies, and innovation; and

34

     (7) Assessing the impact of health insurance carriers offering plans as permitted by

 

LC002244/SUB A - Page 70 of 71

1

federal law that do not meet the requirements of state law;

2

     (8) The working group may hold informational briefings and listening sessions to gather

3

input from the public on issues related to the potential repeal of the Affordable Care Act.

4

     (9) The working group shall provide periodic updates to the legislature and issue a final

5

report to the Senate President and the Speaker of the House no later than February 15, 2018.

6

     SECTION 13. This act shall take effect upon passage and shall apply to health benefit

7

plans issued or renewed on and after January 1, 2018.

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LC002244/SUB A - Page 71 of 71

EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO INSURANCE -- HEALTH INSURANCE COVERAGE -- THE MARKET

STABILITY AND CONSUMER PROTECTION ACT

***

1

     This act would adopt the Health Insurance Market Stabilization and Consumer Protection

2

Act of 2017. It updates state law to reflect current insurance standards, practice and regulation to

3

maintain market stability, including using current rating factors, continuing the use of a medical

4

loss ratio standard, and providing coverage for benefits consistent with all applicable federal and

5

state laws and regulations. Consumer protections contained in the act include current

6

requirements to: ban pre-existing condition exclusions; limit annual insurance coverage caps; and

7

provide summaries of benefits for consumers.

8

     This act would take effect upon passage and would apply to health benefit plans issued or

9

renewed on and after January 1, 2018.

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LC002244/SUB A

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LC002244/SUB A - Page 72 of 71