2019 -- H 5916

========

LC002242

========

     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2019

____________

A N   A C T

RELATING TO INSURANCE -- HEALTH INSURANCE COVERAGE--MARKET

STABILITY AND CONSUMER PROTECTION ACT

     

     Introduced By: Representatives McNamara, Bennett, Casimiro, Kazarian, and Kislak

     Date Introduced: March 28, 2019

     Referred To: House Finance

     It is enacted by the General Assembly as follows:

1

     SECTION 1. The general assembly hereby finds and declares that:

2

     (1) Rhode Island has made significant health insurance coverage gains since the

3

implementation of the Federal Patient Protection and Affordable Care Act.

4

     (2) Recent actions by the federal government threaten the existence of the Federal Patient

5

Protection and Affordable Care Act.

6

     (3) In order to address the findings set forth in subsections (1) and (2), the purpose of this

7

act is to set a minimum health insurance standard and protect coverage gains and consumer

8

protections achieved under the Federal Patient Protection and Affordable Care Act in Rhode

9

Island.

10

     (4) Nothing in this act shall be construed so as to obligate the state to appropriate funds or

11

codify provisions within the Federal Patient Protection and Affordable Care Act and implement

12

regulations related to the Medicaid program.

13

     (5) Nothing in this act shall be construed so as to obligate the state to appropriate funds or

14

make payments to insurance carriers.

15

     SECTION 2. Sections 27-18-2.1, 27-18-73 and 27-18-75 of the General Laws in Chapter

16

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

17

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

18

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

 

1

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

2

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

3

the Public Health Service Act, as amended by the federal Federal Affordable Care Act, provided

4

they remain in effect, but if no longer in effect, the immediately prior version of such authorities

5

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

6

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

7

under existing state law.

8

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

9

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

10

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

11

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

12

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

13

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

14

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

15

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

16

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

17

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

18

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

19

under existing state law.

20

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

21

     (a) Annual limits.

22

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

23

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

24

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

25

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

26

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

27

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

28

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

29

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

30

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

31

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

32

essential health benefits for any individual, except:

33

     (A)(1) A health flexible spending arrangement, as defined in Section 106(c)(2)(i) of the

34

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

 

LC002242 - Page 2 of 79

1

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

2

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

3

this subsection this subsection.

4

     (B)(2) The provisions of this subsection shall not prevent a health insurance carrier and a

5

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

6

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

7

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

8

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

9

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

10

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

11

     (b) Lifetime limits.

12

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

13

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

14

benefits for any individual.

15

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

16

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

17

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

18

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

19

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

20

grandfathered health plans.

21

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

22

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

23

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

24

individual health insurance coverage.

25

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

26

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

27

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

28

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

29

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

30

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

31

policies.

32

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

33

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

34

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

 

LC002242 - Page 3 of 79

1

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

2

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

3

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

4

to regulate health insurance under existing state law.

5

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

6

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

7

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

8

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

9

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

10

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

11

long as they remain in effect. If any of the authorities are no longer in effect, the immediately

12

prior version of the authorities shall control.

13

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

14

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

15

Services shall concurrently file such information with the commissioner.

16

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

17

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

18

are hereby amended to read as follows:

19

     27-18.5-2. Definitions.

20

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

21

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

22

If the controlling regulations are no longer in effect, the immediately prior version of the

23

controlling regulations shall govern unless a different meaning is required by the context:

24

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

25

the essential health benefits are provided to a standard population.

26

     (2) "Actuarial value tiers" means one of the four (4) levels of coverage, such that a plan at

27

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

28

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

29

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

30

further adjusted to reflect de minimus variations from those levels.

31

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

32

in this state, an association which:

33

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

34

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

 

LC002242 - Page 4 of 79

1

insurance;

2

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

3

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

4

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

5

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

6

eligible for coverage through a member);

7

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

8

other than in connection with a member of the association;

9

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

10

     (vii) Has a constitution and bylaws; and

11

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

12

regulation;

13

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

14

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

15

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

16

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

17

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

18

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

19

seq.;

20

     (5) “Cost sharing” means copayments, deductibles, coinsurance and similar charges

21

imposed on an individual receiving benefits under a health benefit plan. Cost sharing does not

22

include monthly premium payments or charges paid by, or on behalf of, an enrollee for benefits

23

provided outside of a health benefit plan’s network.

24

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

25

regulation health insurance commissioner;

26

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

27

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

28

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

29

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

30

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

31

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

32

months;

33

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

34

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

 

LC002242 - Page 5 of 79

1

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

2

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

3

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

4

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

5

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

6

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

7

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

8

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

9

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

10

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

11

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

12

fraud);

13

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

14

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

15

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

16

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

17

continuation coverage under the provision or program;

18

     (10) "Essential health benefits" means the following general categories and services

19

covered within the following categories as defined by the commissioner including, but not be

20

limited to:

21

     (i) Ambulatory patient services;

22

     (ii) Emergency services;

23

     (iii) Hospitalization;

24

     (iv) Maternity and newborn care;

25

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

26

     treatment;

27

     (vi) Prescription drugs;

28

     (vii) Rehabilitative and habilitative services and devices;

29

     (viii) Laboratory services;

30

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

31

     (x) Pediatric services, including oral and vision care.

32

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

33

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

34

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

 

LC002242 - Page 6 of 79

1

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

2

insurance, reimbursement or otherwise;

3

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

4

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

5

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

6

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

7

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

8

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

9

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

10

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

11

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

12

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

13

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

14

association;

15

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

16

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

17

the costs of health care services.

18

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

19

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

20

or excepted benefits:

21

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

22

those;

23

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

24

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

25

insurance;

26

     (D) Workers' compensation or similar insurance;

27

     (E) Automobile medical payment insurance;

28

     (F) Credit-only insurance;

29

     (G) Coverage for on-site medical clinics;

30

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

31

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

32

other insurance benefits; and

33

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

34

commissioner;

 

LC002242 - Page 7 of 79

1

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

2

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

3

the coverage:

4

     (A) Limited scope dental or vision benefits;

5

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

6

care, or any combination of these;

7

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

8

issued pursuant to P.L. 104-191;

9

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

10

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

11

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

12

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

13

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

14

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

15

federal regulations for limited or excepted benefits:

16

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

17

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

18

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

19

separate policy, certificate, or contract of insurance:

20

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

21

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

22

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

23

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

24

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

25

following factors:

26

     (i) Health status;

27

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

28

     (iii) Claims experience;

29

     (iv) Receipt of health care;

30

     (v) Medical history;

31

     (vi) Genetic information;

32

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

33

violence; and

34

     (viii) Disability;

 

LC002242 - Page 8 of 79

1

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

2

individuals other than in connection with a group health plan;

3

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

4

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

5

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

6

contract with the carrier;

7

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

8

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

9

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

10

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

11

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

12

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

13

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

14

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

15

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

16

preexisting condition exclusion includes any limitation or exclusion of benefits (including a

17

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

18

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

19

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

20

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

21

relating to the pre-enrollment period.

22

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

23

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

24

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

25

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

26

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

27

     (18) "Preventive services" means those services described in 42 U.S.C. § 300gg-13 and

28

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

29

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

30

described, and if no longer in effect, then the preventive services as may be described in 26

31

U.S.C. § 223 relating to the Internal Revenue Service high deductible health plan safe harbor

32

rules in place as of January 1, 2019. The commissioner shall determine which federally-

33

recommended evidence-based services qualify as preventive care to the extent that federal

34

recommendations change after January 1, 2019.

 

LC002242 - Page 9 of 79

1

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

2

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

3

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

4

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

5

coverage to an eligible individual or an individual who has had health insurance coverage,

6

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

7

under 5 U.S.C. § 8901 et seq. and had that coverage continuously for at least twelve (12)

8

consecutive months and who applies for coverage in the individual market no later than sixty-

9

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

10

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

11

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

12

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

13

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

14

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

15

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

16

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

17

excludes coverage for that pre-existing condition) and. A carrier offering health insurance

18

coverage in the individual market must offer to any eligible individual in the state all health

19

insurance coverage plans of that carrier that are approved for sale in the individual market, and

20

must accept any eligible individual that applies for coverage under those plans. A carrier may not:

21

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

22

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

23

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

24

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

25

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

26

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

27

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

28

on a program established with state funds. Provided, the carrier may elect to limit the coverage

29

offered so long as it offers at least two (2) different policy forms of health insurance coverage

30

(policy forms which have different cost-sharing arrangements or different riders shall be

31

considered to be different policy forms) both of which:

32

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

33

eligible and other individuals by the carrier; and

34

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

 

LC002242 - Page 10 of 79

1

carrier:

2

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

3

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

4

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

5

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

6

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

7

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

8

adjustment, risk spreading, or financial subsidization.

9

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

10

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

11

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

12

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

13

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

14

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

15

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

16

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

17

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

18

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

19

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

20

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

21

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

22

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

23

cost factors.

24

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

25

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

26

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

27

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

28

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

29

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

30

and

31

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

32

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

33

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

34

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

 

LC002242 - Page 11 of 79

1

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

2

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

3

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

4

reserves to underwrite additional coverage, whichever is later.

5

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

6

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

7

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

8

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

9

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

10

insurance coverage solely because the carrier offers a conversion policy.

11

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

12

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

13

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

14

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

15

for a twenty-one (21) year old.

16

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

17

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

18

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

19

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

20

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

21

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

22

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

23

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

24

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

25

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

26

of federal and state laws and regulations.

27

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

28

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

29

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

30

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

31

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

32

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

33

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

34

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

 

LC002242 - Page 12 of 79

1

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

2

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

3

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

4

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

5

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

6

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

7

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

8

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

9

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

10

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

11

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

12

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

13

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

14

enrollees; and

15

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

16

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

17

individuals.

18

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

19

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

20

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

21

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

22

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

23

thirty (30) and sixty (60) days.

24

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

25

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

26

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

27

individual.

28

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

29

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

30

following:

31

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

32

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

33

relating to timely premium payments;

34

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

 

LC002242 - Page 13 of 79

1

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

2

years after the effective date of this chapter or practice. After two (2) years, the carrier may not

3

renew or discontinue under this subsection only if the eligible individual has failed to reimburse

4

the carrier for the costs associated with the fraud or misrepresentation;

5

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

6

this section;

7

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

8

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

9

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

10

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

11

individuals; or

12

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

13

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

14

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

15

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

16

covered individuals.

17

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

18

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

19

discontinued only if:

20

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

21

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

22

of the coverage;

23

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

24

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

25

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

26

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

27

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

28

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

29

eligible for the coverage.

30

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

31

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

32

only if:

33

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

34

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

 

LC002242 - Page 14 of 79

1

coverage; and

2

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

3

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

4

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

5

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

6

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

7

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

8

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

9

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

10

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

11

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

12

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

13

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

14

that policy form.

15

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

16

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

17

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

18

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

19

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

20

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

21

     27-18.5-6. Rules and regulations.

22

     The director commissioner may promulgate rules and regulations necessary to effectuate

23

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

24

Act and implementing regulations, corresponding to the provisions of this chapter are no longer

25

in effect, then the commissioner may promulgate regulations reflecting relevant federal law and

26

implementing regulations in effect immediately prior to such authorities no longer being in effect.

27

In the event of such changes to the law and related regulations, the commissioner, in conjunction

28

with the health benefit exchange or other state department, shall report to the general assembly as

29

soon as possible to describe the impact of the change and to make recommendations regarding

30

consumer protections, consumer choices, and stabilization and affordability of the Rhode Island

31

insurance market.

32

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

33

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

34

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

 

LC002242 - Page 15 of 79

1

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

2

imposing a preexisting condition exclusion on that individual.:

3

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

4

imposing a preexisting condition exclusion on that individual.

5

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

6

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

7

individual.

8

     (b) As used in this section:

9

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

10

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

11

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

12

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

13

recommended or received before the effective date of coverage.

14

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

15

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

16

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

17

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

18

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

19

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

20

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

21

health insurance coverage.

22

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

23

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

24

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

25

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

26

     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

27

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

28

amended to read as follows:

29

     27-18.6-2. Definitions.

30

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

31

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

32

If such authorities are no longer in effect, the immediately prior version of such authorities shall

33

control unless a different meaning is required by the context:

34

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

 

LC002242 - Page 16 of 79

1

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

2

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

3

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

4

participant or beneficiary for any coverage during the period;

5

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

6

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

7

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

8

state, an association which:

9

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

10

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

11

insurance;

12

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

13

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

14

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

15

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

16

eligible for coverage through a member);

17

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

18

other than in connection with a member of the association;

19

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

20

     (vii) Has a constitution and bylaws; and

21

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

22

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

23

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

24

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

25

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

26

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

27

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

28

seq.;

29

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

30

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

31

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

32

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

33

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

34

regulation health insurance commissioner;

 

LC002242 - Page 17 of 79

1

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

2

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

3

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

4

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

5

months;

6

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

7

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

8

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

9

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

10

employers of two (2) or more employees;

11

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

12

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

13

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

14

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

15

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

16

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

17

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

18

instrumentality of government;

19

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

20

health insurance coverage offered in connection with that plan;

21

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

22

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

23

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

24

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

25

insurance, reimbursement or otherwise;

26

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

27

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

28

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

29

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

30

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

31

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

32

services;

33

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

34

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

 

LC002242 - Page 18 of 79

1

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

2

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

3

otherwise specifically exempted in this definition;

4

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

5

following "excepted benefits":

6

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

7

those;

8

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

9

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

10

insurance;

11

     (D) Workers' compensation or similar insurance;

12

     (E) Automobile medical payment insurance;

13

     (F) Credit-only insurance;

14

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

15

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

16

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

17

other insurance benefits;

18

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

19

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

20

integral part of the plan:

21

     (A) Limited scope dental or vision benefits;

22

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

23

care, or any combination of those; and

24

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

25

issued pursuant to P.L. 104-191;

26

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

27

excepted benefits" if the benefits meet state and federal regulations and are provided under a

28

separate policy, certificate, or contract of insurance, there is no coordination between the

29

provision of the benefits and any exclusion of benefits under any group health plan maintained by

30

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

31

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

32

by the same plan sponsor:

33

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

34

     (B) Hospital indemnity or other fixed indemnity insurance;

 

LC002242 - Page 19 of 79

1

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

2

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

3

federal regulations:

4

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

5

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

6

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

7

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

8

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

9

organization licensed under chapter 41 of this title;

10

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

11

following factors:

12

     (i) Health status;

13

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

14

     (iii) Claims experience;

15

     (iv) Receipt of health care;

16

     (v) Medical history;

17

     (vi) Genetic information;

18

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

19

violence; and

20

     (viii) Disability;

21

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

22

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

23

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

24

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

25

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

26

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

27

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

28

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

29

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

30

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

31

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

32

employer in the large group market;

33

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

34

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

 

LC002242 - Page 20 of 79

1

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

2

     (ii) A special enrollment period;

3

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

4

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

5

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

6

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

7

in paragraph (i) of this subdivision; and

8

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

9

(ii) of this subdivision;

10

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

11

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

12

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

13

contract with the carrier;

14

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

15

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

16

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

17

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

18

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

19

the person terminates upon the termination of the legal obligation;

20

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

21

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

22

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

23

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

24

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

25

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

26

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

27

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

28

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

29

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

30

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

31

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

32

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

33

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

34

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

 

LC002242 - Page 21 of 79

1

period; and

2

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

3

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

4

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

5

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

6

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

7

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

8

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

9

condition exclusion except if:

10

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

11

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

12

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

13

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

14

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

15

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

16

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

17

enrollment date.

18

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

19

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

20

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

21

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

22

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

23

which the individual was not covered under any creditable coverage.

24

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

25

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

26

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

27

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

28

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

29

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

30

regard to the specific benefits covered during the period.

31

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

32

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

33

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

34

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

 

LC002242 - Page 22 of 79

1

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

2

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

3

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

4

within the class or category.

5

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

6

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

7

shall:

8

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

9

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

10

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

11

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

12

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

13

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

14

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

15

and

16

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

17

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

18

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

19

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

20

creditable coverage.

21

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

22

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

23

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

24

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

25

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

26

determining creditable coverage.

27

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

28

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

29

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

30

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

31

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

32

the date of the adoption or placement for adoption.

33

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

34

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

 

LC002242 - Page 23 of 79

1

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

2

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

3

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

4

creditable coverage.

5

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

6

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

7

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

8

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

9

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

10

group health insurance coverage shall provide certifications:

11

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

12

under a COBRA continuation provision;

13

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

14

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

15

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

16

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

17

is later.

18

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

19

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

20

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

21

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

22

any) under the COBRA continuation provision; and

23

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

24

to the individual for any coverage under the plan.

25

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

26

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

27

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

28

accordance with this subsection.

29

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

30

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

31

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

32

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

33

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

34

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

 

LC002242 - Page 24 of 79

1

carrier for the reasonable cost of disclosing the information.

2

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

3

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

4

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

5

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

6

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

7

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

8

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

9

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

10

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

11

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

12

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

13

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

14

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

15

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

16

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

17

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

18

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

19

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

20

was exhausted; or

21

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

22

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

23

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

24

employer contributions towards the coverage were terminated; and

25

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

26

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

27

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

28

subsection.

29

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

30

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

31

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

32

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

33

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

34

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

 

LC002242 - Page 25 of 79

1

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

2

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

3

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

4

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

5

days and shall begin on the later of:

6

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

7

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

8

may be).

9

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

10

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

11

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

12

the date the completed request for enrollment is received;

13

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

14

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

15

adoption or placement for adoption.

16

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

17

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

18

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

19

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

20

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

21

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

22

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

23

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

24

under the plan.

25

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

26

subsection to address adverse selection.

27

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

28

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

29

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

30

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

31

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

32

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

33

and Human Services.

34

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

 

LC002242 - Page 26 of 79

1

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

2

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

3

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

4

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

5

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

6

applicable requirements of this section.

7

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

8

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

9

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

10

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

11

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

12

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

13

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

14

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

15

sponsor of the plan.

16

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

17

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

18

one or more of the following:

19

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

20

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

21

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

22

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

23

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

24

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

25

the fraud or misrepresentation;

26

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

27

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

28

pursuant to rule or regulation;

29

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

30

this section;

31

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

32

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

33

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

34

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

 

LC002242 - Page 27 of 79

1

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

2

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

3

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

4

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

5

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

6

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

7

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

8

to any covered individual.

9

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

10

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

11

discontinued by the carrier only if:

12

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

13

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

14

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

15

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

16

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

17

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

18

option of coverage under subdivision (3) of this subsection (c)(2) of this section, the carrier acts

19

uniformly without regard to the claims experience of those plan sponsors or any health status-

20

related factor relating to any participants or beneficiaries covered or new participants or

21

beneficiaries who may become eligible for coverage.

22

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

23

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

24

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

25

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

26

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

27

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

28

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

29

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

30

plan sponsors, participants, and beneficiaries; and

31

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

32

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

33

employer.

34

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

 

LC002242 - Page 28 of 79

1

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

2

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

3

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

4

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

5

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

6

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

7

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

8

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

9

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

10

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

11

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

12

     27-18.6-9. Rules and regulations.

13

     The director commissioner may promulgate rules and regulations necessary to effectuate

14

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

15

Act and implementing regulations, corresponding to the provisions of this chapter, are no longer

16

in effect, then the commissioner may promulgate regulations reflecting relevant federal law and

17

implementing regulations in effect immediately prior to such authorities no longer being in effect.

18

In the event of such changes to the law and related regulations, the commissioner, in conjunction

19

with the health benefit exchange or other state department, shall report to the general assembly as

20

soon as possible to describe the impact of the change and to make recommendations regarding

21

consumer protections, consumer choices, and stabilization and affordability of the Rhode Island

22

insurance market.

23

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

24

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

25

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

26

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

27

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

28

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

29

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

30

they remain in effect. If such authorities are no longer in effect, the immediately prior version of

31

such authorities shall control. The forms required by this section shall be made available to the

32

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

33

commissioner under existing state law.

34

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

 

LC002242 - Page 29 of 79

1

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

2

(2) Disability income; (3) Accident only; (4) Long-term care; (5) Medicare supplement; (6)

3

Limited benefit health; (7) Specified disease indemnity; (8) Sickness or bodily injury or death by

4

accident or both; and (9) Other limited benefit policies.

5

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

6

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

7

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

8

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

9

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

10

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

11

under existing state law.

12

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

13

     (a) Annual limits.

14

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

15

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

16

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

17

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

18

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

19

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

20

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

21

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

22

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

23

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

24

essential health benefits for any individual, except:

25

     (A)(1) A health flexible spending arrangement, as defined in Section 106(c)(2) of the

26

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

27

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

28

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

29

this subsection (a) of this section.

30

     (B)(2) The provisions of this subsection shall not prevent a health insurance carrier and

31

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

32

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

33

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

34

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

 

LC002242 - Page 30 of 79

1

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

2

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

3

     (b) Lifetime limits.

4

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

5

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

6

benefits for any individual.

7

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

8

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

9

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

10

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

11

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

12

grandfathered health plans.

13

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

14

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

15

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

16

individual health insurance coverage.

17

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

18

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

19

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

20

providing benefits for: (1) Hospital confinement indemnity; (2) Disability income; (3) Accident

21

only; (4) Long-term care; (5) Medicare supplement; (6) Limited benefit health; (7) Specified

22

disease indemnity; (8) Sickness or bodily injury or death by accident or both; and (9) Other

23

limited benefit policies.

24

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

25

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

26

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

27

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

28

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

29

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

30

to regulate health insurance under existing state law.

31

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

32

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

33

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

34

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

 

LC002242 - Page 31 of 79

1

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

2

and state regulations regarding medical loss ratio consistent with federal law and regulations

3

adopted thereunder, so long as they remain in effect. If such authorities are no longer in effect, the

4

immediately prior version of such authorities shall control.

5

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

6

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

7

Services shall concurrently file such information with the commissioner.

8

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

9

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

10

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

11

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

12

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

13

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

14

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

15

they remain in effect. If such authorities are no longer in effect, the immediately prior version of

16

such authorities shall control. The forms required by this section shall be made available to the

17

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

18

commissioner under existing state law.

19

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

20

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

21

(2) Disability income; (3) Accident only; (4) Long-term care; (5) Medicare supplement; (6)

22

Limited benefit health; (7) Specified disease indemnity; (8) Sickness or bodily injury or death by

23

accident or both; and (9) Other limited benefit policies.

24

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

25

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

26

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

27

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

28

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

29

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

30

under existing state law.

31

     27-20-59. Annual and lifetime limits.

32

     (a) Annual limits.

33

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

34

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

 

LC002242 - Page 32 of 79

1

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

2

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

3

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

4

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

5

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

6

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

7

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

8

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

9

essential health benefits for any individual, except:

10

     (A)(1) A health flexible spending arrangement, as defined in section 106(c)(2)(i) of the

11

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

12

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

13

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

14

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

15

     (B)(2) The provisions of this subsection shall not prevent a health insurance carrier from

16

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

17

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

18

or the laws and regulations of this state.

19

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

20

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

21

take into account only essential health benefits.

22

     (b) Lifetime limits.

23

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

24

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

25

benefits for any individual.

26

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

27

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

28

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

29

in accordance with federal laws and regulations.

30

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

31

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

32

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

33

     (B) The prohibition and limits on annual limits apply to grandfathered health plans

34

providing group health insurance coverage, but the prohibition and limits on annual limits do not

 

LC002242 - Page 33 of 79

1

apply to grandfathered health plans providing individual health insurance coverage.

2

     (d) This section shall not apply to a plan or to policy years prior to January 1, 2014 for

3

which the Secretary of the U.S. Department of Health and Human Services issued a waiver

4

pursuant to 45 C.F.R. § 147.126(d)(3). This section also shall not apply to insurance coverage

5

providing benefits for: (1) Hospital confinement indemnity; (2) Disability income; (3) Accident

6

only; (4) Long-term care; (5) Medicare supplement; (6) Limited benefit health; (7) Specified

7

disease indemnity; (8) Sickness or bodily injury or death by accident or both; and (9) Other

8

limited benefit policies.

9

     (e) If the commissioner of the office of the health insurance commissioner determines

10

that the corresponding provision of the federal Patient Protection and Affordable Care Act has

11

been declared invalid by a final judgment of the federal judicial branch or has been repealed by

12

an act of Congress, on the date of the commissioner's determination this section shall have its

13

effectiveness suspended indefinitely, and the commissioner shall take no action to enforce this

14

section. Nothing in this subsection shall be construed to limit the authority of the Commissioner

15

to regulate health insurance under existing state law.

16

     27-20-61. Medical loss ratio reporting and rebates.

17

     (a) A nonprofit medical service corporation offering group or individual health insurance

18

coverage of a health benefit plan, including a grandfathered health plan, shall comply with the

19

provisions of Section 2718 of the Public Health Service Act as amended by the federal

20

Affordable Care Act [42 U.S.C. § 300gg-18], in accordance with regulations adopted thereunder

21

and state regulations regarding medical loss ratio consistent with federal law and regulations

22

adopted thereunder, so long as they remain in effect. If such authorities are no longer in effect, the

23

immediately prior version of such authorities shall control.

24

     (b) Nonprofit medical service corporations required to report medical loss ratio and

25

rebate calculations and any other medical loss ratio and rebate information to the U.S.

26

Department of Health and Human Services shall concurrently file such information with the

27

commissioner.

28

     SECTION 7. Sections 27-41-29.1, 27-41-76 and 27-41-78 of the General Laws in

29

Chapter 27-41 entitled "Health Maintenance Organizations" are hereby amended to read as

30

follows:

31

     27-41-29.1. Uniform explanation of benefits and coverage.

32

     (a) A health maintenance organization shall provide a summary of benefits and coverage

33

explanation and definitions to policyholders and others required by, and at the times and in the

34

format required, by the federal regulations adopted under section 2715 of the Public Health

 

LC002242 - Page 34 of 79

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. If such authorities are no longer in effect, the immediately prior version of

3

such authorities 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

     27-41-76. 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 maintenance organization subject to the jurisdiction of the commissioner under this chapter

22

may establish an annual limit on the dollar amount of benefits that are essential health benefits

23

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

29

maintenance organization shall not establish any annual limit on the dollar amount of essential

30

health benefits for any individual, except:

31

     (A)(1) A health flexible spending arrangement, as defined in section 106(c)(2)(i) of the

32

federal 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

 

LC002242 - Page 35 of 79

1

subsection subsection (a)(1) of this section.

2

     (B)(2) The provisions of this subsection shall not prevent a health maintenance

3

organization from placing annual dollar limits for any individual on specific covered benefits that

4

are not essential health benefits to the extent that such limits are otherwise permitted under

5

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 maintenance

8

organization 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 annual and lifetime limits apply to any

17

health maintenance organization or health insurance carrier providing coverage under an

18

individual or group health plan, including grandfathered health plans.

19

     (2) The provisions of this section relating to annual limits apply to any health

20

maintenance organization or health insurance carrier providing coverage under a group health

21

plan, including grandfathered health plans, but the prohibition and limits on annual limits do not

22

apply to grandfathered health plans providing 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

 

LC002242 - Page 36 of 79

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

     27-41-78. Medical loss ratio reporting and rebates.

4

     (a) A health maintenance organization 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. If such authorities are no longer in effect, the

10

immediately prior version of such authorities shall control.

11

     (b) Health maintenance organizations required to report medical loss ratio and rebate

12

calculations and any other medical loss ratio or rebate information to the U.S. Department of

13

Health and Human Services shall concurrently file such information with the commissioner.

14

     SECTION 8. Sections 27-50-3, 27-50-4, 27-50-5, 27-50-6, 27-50-7, 27-50-11, 27-50-12

15

and 27-50-15 of the General Laws in Chapter 27-50 entitled "Small Employer Health Insurance

16

Availability Act" are hereby amended to read as follows:

17

     27-50-3. Definitions.

18

     The following words and phrases as used in this chapter have the following meanings

19

consistent with federal law and regulations adopted thereunder, so long as they remain in effect.

20

If such authorities are no longer in effect, the immediately prior version of such authorities shall

21

control unless a different meaning is required by the context:

22

     (a) "Actuarial certification" means a written statement signed by a member of the

23

American Academy of Actuaries or other individual acceptable to the director commissioner that

24

a small employer carrier is in compliance with the provisions of § 27-50-5, based upon the

25

person's examination and including a review of the appropriate records and the actuarial

26

assumptions and methods used by the small employer carrier in establishing premium rates for

27

applicable health benefit plans.

28

     (b) "Actuarial value" means the level of coverage of a plan, determined on the basis that

29

the essential health benefits are provided to a standard population.

30

     (c) "Actuarial value tiers" means one of the four (4) levels of coverage, such that a plan at

31

each level is designed to provide benefits that are actuarially equivalent to a percentage of the full

32

actuarial value of the benefits provided under the plan. The actuarially equivalent levels are: sixty

33

percent (60%), seventy percent (70%), eighty percent (80%), and ninety percent (90%), and

34

further adjusted to reflect de minimus variations from those levels.

 

LC002242 - Page 37 of 79

1

     (b)(d) "Adjusted community rating" means a method used to develop a carrier's premium

2

which spreads financial risk across the carrier's entire small group population in accordance with

3

the requirements in § 27-50-5.

4

     (c)(e) "Affiliate" or "affiliated" means any entity or person who directly or indirectly

5

through one or more intermediaries controls or is controlled by, or is under common control with,

6

a specified entity or person.

7

     (d)(f) "Affiliation period" means a period of time that must expire before health insurance

8

coverage provided by a carrier becomes effective, and during which the carrier is not required to

9

provide benefits.

10

     (e)(g) "Bona fide association" means, with respect to health benefit plans offered in this

11

state, an association which:

12

     (1) Has been actively in existence for at least five (5) years;

13

     (2) Has been formed and maintained in good faith for purposes other than obtaining

14

insurance;

15

     (3) Does not condition membership in the association on any health-status related factor

16

relating to an individual (including an employee of an employer or a dependent of an employee);

17

     (4) Makes health insurance coverage offered through the association available to all

18

members regardless of any health status-related factor relating to those members (or individuals

19

eligible for coverage through a member);

20

     (5) Does not make health insurance coverage offered through the association available

21

other than in connection with a member of the association;

22

     (6) Is composed of persons having a common interest or calling;

23

     (7) Has a constitution and bylaws; and

24

     (8) Meets any additional requirements that the director commissioner may prescribe by

25

regulation.

26

     (f)(h) "Carrier" or "small employer carrier" means all entities licensed, or required to be

27

licensed, in this state that offer health benefit plans covering eligible employees of one or more

28

small employers pursuant to this chapter. For the purposes of this chapter, carrier includes an

29

insurance company, a nonprofit hospital or medical service corporation, a fraternal benefit

30

society, a health maintenance organization as defined in chapter 41 of this title or as defined in

31

chapter 62 of title 42, or any other entity subject to state insurance regulation that provides

32

medical care as defined in subsection (y)(x) that is paid or financed for a small employer by such

33

entity on the basis of a periodic premium, paid directly or through an association, trust, or other

34

intermediary, and issued, renewed, or delivered within or without Rhode Island to a small

 

LC002242 - Page 38 of 79

1

employer pursuant to the laws of this or any other jurisdiction, including a certificate issued to an

2

eligible employee which evidences coverage under a policy or contract issued to a trust or

3

association.

4

     (g)(i) "Church plan" has the meaning given this term under § 3(33) of the Employee

5

Retirement Income Security Act of 1974 [29 U.S.C. § 1002(33)].

6

     (j) "COBRA continuation provision" means any of the following:

7

     (1) Section 4980(B) of the Internal Revenue Code of 1986, 26 U.S.C. § 4980B, other than

8

subsection (f)(1) of that section insofar as it relates to pediatric vaccines;

9

     (2) Part 6 of subtitle B of title 1 of the Employee Retirement Income Security Act of

10

1974, 29 U.S.C. § 1161 et seq., other than section 609 of that act, 29 U.S.C. § 1169; or

11

     (3) Title XXII of the United States Public Health Service Act, 42 U.S.C. § 300bb-1 et

12

seq.;

13

     (h)(k) "Control" is defined in the same manner as in chapter 35 of this title.

14

     (l) “Cost sharing” means copayments, deductibles, coinsurance and similar charges

15

imposed on an individual receiving benefits under a health benefit plan. Cost sharing shall not

16

include monthly premium payments or charges paid by, or on behalf of, an enrollee for benefits

17

provided outside of a health benefit plan’s network.

18

     (i)(m)(1) "Creditable coverage" means, with respect to an individual, health benefits or

19

coverage provided under any of the following:

20

     (i) A group health plan;

21

     (ii) A health benefit plan;

22

     (iii) Part A or part B of Title XVIII of the Social Security Act, 42 U.S.C. § 1395c et seq.,

23

or 42 U.S.C. § 1395j et seq., (Medicare);

24

     (iv) Title XIX of the Social Security Act, 42 U.S.C. § 1396 et seq., (Medicaid), other than

25

coverage consisting solely of benefits under 42 U.S.C. § 1396s (the program for distribution of

26

pediatric vaccines);

27

     (v) 10 U.S.C. § 1071 et seq., (medical and dental care for members and certain former

28

members of the uniformed services, and for their dependents) (Civilian Health and Medical

29

Program of the Uniformed Services) (CHAMPUS). For purposes of 10 U.S.C. § 1071 et seq.,

30

"uniformed services" means the armed forces and the commissioned corps of the National

31

Oceanic and Atmospheric Administration and of the Public Health Service;

32

     (vi) A medical care program of the Indian Health Service or of a tribal organization;

33

     (vii) A state health benefits risk pool;

34

     (viii) A health plan offered under 5 U.S.C. § 8901 et seq., (Federal Employees Health

 

LC002242 - Page 39 of 79

1

Benefits Program (FEHBP));

2

     (ix) A public health plan, which for purposes of this chapter, means a plan established or

3

maintained by a state, county, or other political subdivision of a state that provides health

4

insurance coverage to individuals enrolled in the plan; or

5

     (x) A health benefit plan under § 5(e) of the Peace Corps Act (22 U.S.C. § 2504(e)).

6

     (2) A period of creditable coverage shall not be counted, with respect to enrollment of an

7

individual under a group health plan, if, after the period and before the enrollment date, the

8

individual experiences a significant break in coverage.

9

     (j)(n) "Dependent" means a spouse, child under the age twenty-six (26) years, and an

10

unmarried child of any age who is financially dependent upon, the parent and is medically

11

determined to have a physical or mental impairment which can be expected to result in death or

12

which has lasted or can be expected to last for a continuous period of not less than twelve (12)

13

months.

14

     (k) "Director" means the director of the department of business regulation.

15

     (l)(o) [Deleted by P.L. 2006, ch. 258, § 2, and P.L. 2006, ch. 296, § 2.]

16

     (m)(p) "Eligible employee" means an employee who works on a full-time basis with a

17

normal work week of thirty (30) or more hours, except that at the employer's sole discretion, the

18

term shall also include an employee who works on a full-time basis with a normal work week of

19

anywhere between at least seventeen and one-half (17.5) and thirty (30) hours, so long as this

20

eligibility criterion is applied uniformly among all of the employer's employees and without

21

regard to any health status-related factor. The term includes a self-employed individual, a sole

22

proprietor, a partner of a partnership, and may include an independent contractor, if the self-

23

employed individual, sole proprietor, partner, or independent contractor is included as an

24

employee under a health benefit plan of a small employer, but does not include an employee who

25

works on a temporary or substitute basis or who works less than seventeen and one-half (17.5)

26

hours per week. Any retiree under contract with any independently incorporated fire district is

27

also included in the definition of eligible employee, as well as any former employee of an

28

employer who retired before normal retirement age, as defined by 42 U.S.C. 18002(a)(2)(c) while

29

the employer participates in the early retiree reinsurance program defined by that chapter. Persons

30

covered under a health benefit plan pursuant to the Consolidated Omnibus Budget Reconciliation

31

Act of 1986 shall not be considered "eligible employees" for purposes of minimum participation

32

requirements pursuant to § 27-50-7(d)(9). "Employee" means an individual employed by an

33

employer.

34

     (n)(q) "Enrollment date" means the first day of coverage or, if there is a waiting period,

 

LC002242 - Page 40 of 79

1

the first day of the waiting period, whichever is earlier.

2

     (r) "Essential health benefits" means the following general categories and the items and

3

services covered within the following categories, as defined by the commissioner including, but

4

not be limited to:

5

     (1) Ambulatory patient services;

6

     (2) Emergency services;

7

     (3) Hospitalization;

8

     (4) Maternity and newborn care;

9

     (5) Mental health and substance use disorder services, including behavioral health

10

treatment;

11

     (6) Prescription drugs;

12

     (7) Rehabilitative and habilitative services and devices;

13

     (8) Laboratory services;

14

     (9) Preventive services, wellness services and chronic disease management;

15

     (10) Pediatric services, including oral and vision care;

16

     (o)(s) "Established geographic service area" means a geographic area, as approved by the

17

director commissioner and based on the carrier's certificate of authority to transact insurance in

18

this state, within which the carrier is authorized to provide coverage.

19

     (p) "Family composition" means:

20

     (1) Enrollee;

21

     (2) Enrollee, spouse and children;

22

     (3) Enrollee and spouse; or

23

     (4) Enrollee and children.

24

     (q) "Genetic information" means information about genes, gene products, and inherited

25

characteristics that may derive from the individual or a family member. This includes information

26

regarding carrier status and information derived from laboratory tests that identify mutations in

27

specific genes or chromosomes, physical medical examinations, family histories, and direct

28

analysis of genes or chromosomes.

29

     (r)(t) "Governmental plan" has the meaning given the term under § 3(32) of the

30

Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1002(32), and any federal

31

governmental plan.

32

     (s)(u)(1) "Group health plan" means an employee welfare benefit plan as defined in §

33

3(1) of the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1002(1), to the extent

34

that the plan provides medical care, as defined in subsection (y)(x) of this section, and including

 

LC002242 - Page 41 of 79

1

items and services paid for as medical care to employees or their dependents as defined under the

2

terms of the plan directly or through insurance, reimbursement, or otherwise.

3

     (2) For purposes of this chapter:

4

     (i) Any plan, fund, or program that would not be, but for PHSA Section 2721(e), 42

5

U.S.C. § 300gg(e), as added by P.L. 104-191, an employee welfare benefit plan and that is

6

established or maintained by a partnership, to the extent that the plan, fund or program provides

7

medical care, including items and services paid for as medical care, to present or former partners

8

in the partnership, or to their dependents, as defined under the terms of the plan, fund or program,

9

directly or through insurance, reimbursement or otherwise, shall be treated, subject to paragraph

10

(ii) of this subdivision, as an employee welfare benefit plan that is a group health plan;

11

     (ii) In the case of a group health plan, the term "employer" also includes the partnership

12

in relation to any partner; and

13

     (iii) In the case of a group health plan, the term "participant" also includes an individual

14

who is, or may become, eligible to receive a benefit under the plan, or the individual's beneficiary

15

who is, or may become, eligible to receive a benefit under the plan, if:

16

     (A) In connection with a group health plan maintained by a partnership, the individual is

17

a partner in relation to the partnership; or

18

     (B) In connection with a group health plan maintained by a self-employed individual,

19

under which one or more employees are participants, the individual is the self-employed

20

individual.

21

     (t)(v)(1) "Health benefit plan" means any hospital or medical policy or certificate, major

22

medical expense insurance, hospital or medical service corporation subscriber contract, or health

23

maintenance organization subscriber contract. Health benefit plan includes short-term and

24

catastrophic health insurance policies, and a policy that pays on a cost-incurred basis, except as

25

otherwise specifically exempted in this definition.

26

     (2) "Health benefit plan" does not include one or more, or any combination of, the

27

following:

28

     (i) Coverage only for accident or disability income insurance, or any combination of

29

those;

30

     (ii) Coverage issued as a supplement to liability insurance;

31

     (iii) Liability insurance, including general liability insurance and automobile liability

32

insurance;

33

     (iv) Workers' compensation or similar insurance;

34

     (v) Automobile medical payment insurance;

 

LC002242 - Page 42 of 79

1

     (vi) Credit-only insurance;

2

     (vii) Coverage for on-site medical clinics; and

3

     (viii) Other similar insurance coverage, specified in federal and state regulations issued

4

pursuant to Pub. L. No. 104-191, under which benefits for medical care are secondary or

5

incidental to other insurance benefits.

6

     (3) "Health benefit plan" does not include the following benefits if they are provided

7

under a separate policy, certificate, or contract of insurance or are otherwise not an integral part

8

of the plan:

9

     (i) Limited scope dental or vision benefits;

10

     (ii) Benefits for long-term care, nursing home care, home health care, community-based

11

care, or any combination of those; or

12

     (iii) Other similar, limited benefits specified in federal and state regulations issued

13

pursuant to Pub. L. No. 104-191.

14

     (4) "Health benefit plan" does not include the following benefits if the benefits are

15

provided under a separate policy, certificate or contract of insurance, there is no coordination

16

between the provision of the benefits and any exclusion of benefits under any group health plan

17

maintained by the same plan sponsor, and the benefits are paid with respect to an event without

18

regard to whether benefits are provided with respect to such an event under any group health plan

19

maintained by the same plan sponsor if coverage complies with all other applicable state and

20

federal regulations:

21

     (i) Coverage only for a specified disease or illness; or

22

     (ii) Hospital indemnity or other fixed indemnity insurance.

23

     (5) "Health benefit plan" does not include the following if offered as a separate policy,

24

certificate, or contract of insurance:

25

     (i) Medicare supplemental health insurance as defined under § 1882(g)(1) of the Social

26

Security Act, 42 U.S.C. § 1395ss(g)(1);

27

     (ii) Coverage supplemental to the coverage provided under 10 U.S.C. § 1071 et seq.; or

28

     (iii) Similar supplemental coverage provided to coverage under a group health plan.

29

     (6) A carrier offering policies or certificates of specified disease, hospital confinement

30

indemnity, or limited benefit health insurance shall comply with the following:

31

     (i) The carrier files on or before March 1 of each year a certification with the director that

32

contains the statement and information described in paragraph (ii) of this subdivision;

33

     (ii) The certification required in paragraph (i) of this subdivision shall contain the

34

following:

 

LC002242 - Page 43 of 79

1

     (A) A statement from the carrier certifying that policies or certificates described in this

2

paragraph are being offered and marketed as supplemental health insurance and not as a substitute

3

for hospital or medical expense insurance or major medical expense insurance; and

4

     (B) A summary description of each policy or certificate described in this paragraph,

5

including the average annual premium rates (or range of premium rates in cases where premiums

6

vary by age or other factors) charged for those policies and certificates in this state; and

7

     (iii) In the case of a policy or certificate that is described in this paragraph and that is

8

offered for the first time in this state on or after July 13, 2000, the carrier shall file with the

9

director the information and statement required in paragraph (ii) of this subdivision at least thirty

10

(30) days prior to the date the policy or certificate is issued or delivered in this state.

11

     (u)(w) "Health maintenance organization" or "HMO" means a health maintenance

12

organization licensed under chapter 41 of this title.

13

     (v)(x) "Health status-related factor" means and includes, but is not limited to, any of the

14

following factors:

15

     (1) Health status;

16

     (2) Medical condition, including both physical and mental illnesses;

17

     (3) Claims experience;

18

     (4) Receipt of health care;

19

     (5) Medical history;

20

     (6) Genetic information;

21

     (7) Evidence of insurability, including conditions arising out of acts of domestic violence;

22

or

23

     (8) Disability.

24

     (w)(1) "Late enrollee" means an eligible employee or dependent who requests enrollment

25

in a health benefit plan of a small employer following the initial enrollment period during which

26

the individual is entitled to enroll under the terms of the health benefit plan, provided that the

27

initial enrollment period is a period of at least thirty (30) days.

28

     (2) "Late enrollee" does not mean an eligible employee or dependent:

29

     (i) Who meets each of the following provisions:

30

     (A) The individual was covered under creditable coverage at the time of the initial

31

enrollment;

32

     (B) The individual lost creditable coverage as a result of cessation of employer

33

contribution, termination of employment or eligibility, reduction in the number of hours of

34

employment, involuntary termination of creditable coverage, or death of a spouse, divorce or

 

LC002242 - Page 44 of 79

1

legal separation, or the individual and/or dependents are determined to be eligible for RIteCare

2

under chapter 5.1 of title 40 or chapter 12.3 of title 42 or for RIteShare under chapter 8.4 of title

3

40; and

4

     (C) The individual requests enrollment within thirty (30) days after termination of the

5

creditable coverage or the change in conditions that gave rise to the termination of coverage;

6

     (ii) If, where provided for in contract or where otherwise provided in state law, the

7

individual enrolls during the specified bona fide open enrollment period;

8

     (iii) If the individual is employed by an employer which offers multiple health benefit

9

plans and the individual elects a different plan during an open enrollment period;

10

     (iv) If a court has ordered coverage be provided for a spouse or minor or dependent child

11

under a covered employee's health benefit plan and a request for enrollment is made within thirty

12

(30) days after issuance of the court order;

13

     (v) If the individual changes status from not being an eligible employee to becoming an

14

eligible employee and requests enrollment within thirty (30) days after the change in status;

15

     (vi) If the individual had coverage under a COBRA continuation provision and the

16

coverage under that provision has been exhausted; or

17

     (vii) Who meets the requirements for special enrollment pursuant to § 27-50-7 or 27-50-

18

8.

19

     (x) "Limited benefit health insurance" means that form of coverage that pays stated

20

predetermined amounts for specific services or treatments or pays a stated predetermined amount

21

per day or confinement for one or more named conditions, named diseases or accidental injury.

22

     (y) "Medical care" means amounts paid for:

23

     (1) The diagnosis, care, mitigation, treatment, or prevention of disease, or amounts paid

24

for the purpose of affecting any structure or function of the body;

25

     (2) Transportation primarily for and essential to medical care referred to in subdivision

26

(1); and

27

     (3) Insurance covering medical care referred to in subdivisions (1) and (2) of this

28

subsection.

29

     (z) "Network plan" means a health benefit plan issued by a carrier under which the

30

financing and delivery of medical care, including items and services paid for as medical care, are

31

provided, in whole or in part, through a defined set of providers under contract with the carrier.

32

     (aa) "Person" means an individual, a corporation, a partnership, an association, a joint

33

venture, a joint stock company, a trust, an unincorporated organization, any similar entity, or any

34

combination of the foregoing.

 

LC002242 - Page 45 of 79

1

     (bb) "Plan sponsor" has the meaning given this term under § 3(16)(B) of the Employee

2

Retirement Income Security Act of 1974, 29 U.S.C. § 1002(16)(B).

3

     (cc)(1) "Preexisting condition exclusion" means a condition, regardless of the cause of

4

the condition, for which medical advice, diagnosis, care, or treatment was recommended or

5

received during the six (6) months immediately preceding the enrollment date of the coverage. a

6

limitation or exclusion of benefits (including a denial of coverage) based on the fact that the

7

condition was present before the effective date of coverage (or if coverage is denied, the date of

8

the denial), whether or not any medical advice, diagnosis, care, or treatment was recommended or

9

received before that day. A preexisting condition exclusion includes any limitation or exclusion

10

of benefits (including a denial of coverage) applicable to an individual as a result of information

11

relating to an individual's health status before the individual's effective date of coverage (or if

12

coverage is denied, the date of the denial), such as a condition identified as a result of a pre-

13

enrollment questionnaire or physical examination given to the individual, or review of medical

14

records relating to the pre-enrollment period.

15

     (2) "Preexisting condition" does not mean a condition for which medical advice,

16

diagnosis, care, or treatment was recommended or received for the first time while the covered

17

person held creditable coverage and that was a covered benefit under the health benefit plan,

18

provided that the prior creditable coverage was continuous to a date not more than ninety (90)

19

days prior to the enrollment date of the new coverage.

20

     (3)(2) Genetic information shall not be treated as a condition under subdivision (1) of this

21

subsection for which a preexisting condition exclusion may be imposed in the absence of a

22

diagnosis of the condition related to the information.

23

     (dd) "Premium" means all moneys paid by a small employer and eligible employees as a

24

condition of receiving coverage from a small employer carrier, including any fees or other

25

contributions associated with the health benefit plan.

26

     (ee) "Preventive services" means those services described in 42 U.S.C. section 300gg-13

27

and implementing regulations and guidance, and shall be covered without any cost sharing for the

28

enrollee when delivered by in-network providers, as those terms and obligations are therein

29

described, and if no longer in effect then the preventive services as may be described in 26 U.S.C.

30

section 223 relating to the Internal Revenue Service high deductible health plan safe harbor rules

31

in place as of January 1, 2019. The commissioner shall determine which federally-recommended

32

evidence-based services qualify as preventive care to the extent that federal recommendations

33

change after January 1, 2019.

34

     (ee)(ff) "Producer" means any insurance producer licensed under chapter 2.4 of this title.

 

LC002242 - Page 46 of 79

1

     (ff)(gg) "Rating period" means the calendar period for which premium rates established

2

by a small employer carrier are assumed to be in effect.

3

     (gg)(hh) "Restricted network provision" means any provision of a health benefit plan that

4

conditions the payment of benefits, in whole or in part, on the use of health care providers that

5

have entered into a contractual arrangement with the carrier pursuant to provide health care

6

services to covered individuals.

7

     (hh) "Risk adjustment mechanism" means the mechanism established pursuant to § 27-

8

50-16.

9

     (ii) "Self-employed individual" means an individual or sole proprietor who derives a

10

substantial portion of his or her income from a trade or business through which the individual or

11

sole proprietor has attempted to earn taxable income and for which he or she has filed the

12

appropriate Internal Revenue Service Form 1040, Schedule C or F, for the previous taxable year.

13

     (jj) "Significant break in coverage" means a period of ninety (90) consecutive days during

14

all of which the individual does not have any creditable coverage, except that neither a waiting

15

period nor an affiliation period is taken into account in determining a significant break in

16

coverage.

17

     (kk)(jj)(1) "Small employer" means, except for its use in § 27-50-7, any person, firm,

18

corporation, partnership, association, political subdivision, or self-employed individual that is

19

actively engaged in business including, but not limited to, a business or a corporation organized

20

under the Rhode Island Non-Profit Corporation Act, chapter 6 of title 7, or a similar act of

21

another state that, on at least fifty percent (50%) of its working days during the preceding

22

calendar quarter, employed no more than fifty (50) eligible employees, with a normal work week

23

of thirty (30) or more hours, the majority of whom were employed within this state, and is not

24

formed primarily for purposes of buying health insurance and in which a bona fide employer-

25

employee relationship exists. In determining the number of eligible employees, companies that

26

are affiliated companies, or that are eligible to file a combined tax return for purposes of taxation

27

by this state, shall be considered one employer. Subsequent to the issuance of a health benefit

28

plan to a small employer and for the purpose of determining continued eligibility, the size of a

29

small employer shall be determined annually. Except as otherwise specifically provided,

30

provisions of this chapter that apply to a small employer shall continue to apply at least until the

31

plan anniversary following the date the small employer no longer meets the requirements of this

32

definition. The term small employer includes a self-employed individual. to the extent allowed by

33

federal law and regulation in connection with a group health plan with respect to a calendar year

34

and a plan year, an employer who is a self-employed individual or an entity who employed an

 

LC002242 - Page 47 of 79

1

average of at least one but not more than fifty (50) employees on business days during the

2

preceding calendar year, and is a self-employed individual or an entity who employs at least one

3

employee on the first day of the plan year.

4

     (2) Special rules for determining small employer status:

5

     (i) Application of aggregation rule for employers. All persons treated as a single

6

employer under subsections (b), (c), (m), or (o) of section 414 of the Internal Revenue Code of

7

1986 (26 U.S.C. §414) shall be treated as a single employer.

8

     (ii) Employer not in existence in preceding year. In the case of an employer which was

9

not in existence throughout the preceding calendar year, the determination of whether such

10

employer is a small employer shall be based on the average number of employees that it is

11

reasonably expected such employer will employ on the first day of the plan year.

12

     (iii) Predecessors. Any reference in this subsection to an employer shall include a

13

reference to any predecessor of such employer.

14

     (iv) Continuation of participation for growing small employers. If:

15

     (A) A small employer makes enrollment in qualified health plans offered in the small

16

group market available to its employees through an exchange; and

17

     (B) The employer ceases to be a small employer by reason of an increase in the number

18

of employees of such employer, then the employer shall continue to be treated as a small

19

employer for purposes of this chapter for the period beginning with the increase and ending with

20

the first day on which the employer does not make such enrollment available to its employees.

21

     (ll)(kk) "Waiting period" means, with respect to a group health plan and an individual

22

who is a potential enrollee in the plan, the period that must pass with respect to the individual

23

before the individual is eligible to be covered for benefits under the terms of the plan. For

24

purposes of calculating periods of creditable coverage pursuant to subsection (j)(2) of this section,

25

a waiting period shall not be considered a gap in coverage.

26

     (mm) "Wellness health benefit plan" means a plan developed pursuant to § 27-50-10.

27

     (nn)(ll) "Health insurance commissioner" or "commissioner" means that individual

28

appointed pursuant to § 42-14.5-1 of the general laws and afforded those powers and duties as set

29

forth in §§ 42-14.5-2 and 42-14.5-3 of title 42.

30

     (oo) "Low-wage firm" means those with average wages that fall within the bottom

31

quartile of all Rhode Island employers.

32

     (pp) "Wellness health benefit plan" means the health benefit plan offered by each small

33

employer carrier pursuant to § 27-50-7.

34

     (qq) "Commissioner" means the health insurance commissioner.

 

LC002242 - Page 48 of 79

1

     27-50-4. Applicability and scope.

2

     (a) This chapter applies to any health benefit plan that provides coverage to the

3

employees of a small employer in this state, whether issued directly by a carrier or through a

4

trust, association, or other intermediary, and regardless of issuance or delivery of the policy, if

5

any of the following conditions are met:

6

     (1) Any portion of the premium or benefits is paid by or on behalf of the small employer;

7

     (2) An eligible employee or dependent is reimbursed, whether through wage adjustments

8

or otherwise, by or on behalf of the small employer for any portion of the premium;

9

     (3) The health benefit plan is treated by the employer or any of the eligible employees or

10

dependents as part of a plan or program for the purposes of Section 162, Section 125, or Section

11

106 of the United States Internal Revenue Code, 26 U.S.C. § 162, 125, or 106; or

12

     (4) The health benefit plan is marketed to individual employees through an employer.

13

     (b)(1) Except as provided in subdivision (2) of this subsection, for the purposes of this

14

chapter, carriers that are affiliated companies or that are eligible to file a consolidated tax return

15

shall be treated as one carrier and any restrictions or limitations imposed by this chapter shall

16

apply as if all health benefit plans delivered or issued for delivery to small employers in this state

17

by the affiliated carriers were issued by one carrier.

18

     (2) An affiliated carrier that is a health maintenance organization having a license under

19

chapter 41 of this title or a health maintenance organization as defined in chapter 62 of title 42

20

may be considered to be a separate carrier for the purposes of this chapter.

21

     (3) Unless otherwise authorized by the director commissioner, a small employer carrier

22

shall not enter into one or more ceding arrangements with another carrier with respect to health

23

benefit plans delivered or issued for delivery to small employers in this state if those

24

arrangements would result in less than fifty percent (50%) of the insurance obligation or risk for

25

the health benefit plans being retained by the ceding carrier. The department of business

26

regulation's statutory provisions relating to licensing and regulation of licensed insurers under this

27

title shall apply if a small employer carrier cedes or assumes all any material portion of the

28

insurance obligation or risk with respect to one or more health benefit plans delivered or issued

29

for delivery to small employers in this state.

30

     27-50-5. Restrictions relating to premium rates.

31

     (a) Premium rates for health benefit plans subject to this chapter are subject to the

32

following provisions:

33

     (1) Subject to subdivision (2) of this subsection, a A small employer carrier shall develop

34

its rates based on an adjusted community rate and may only vary the adjusted community rate for:

 

LC002242 - Page 49 of 79

1

     (i) Age;

2

     (ii) Gender; and

3

     (iii) Family composition; age. The age of an enrollee shall be determined as of the date of

4

plan issuance or renewal.

5

     (2) The adjustment for age in paragraph (1)(i) of this subsection may not use age brackets

6

smaller than five (5) year increments and these shall begin with age thirty (30) and end with age

7

sixty-five (65). The small employer carrier shall determine premium rates for a small employer

8

by summing the premium amounts for each covered employee and dependent, in accordance with

9

federal and state laws and regulations.

10

     (3) The small employer carriers are permitted to develop separate rates for individuals

11

age sixty-five (65) or older for coverage for which Medicare is the primary payer and coverage

12

for which Medicare is not the primary payer. Both rates are subject to the requirements of this

13

subsection.

14

     (4)(3) For each health benefit plan offered by a carrier, the highest premium rate for each

15

family composition type the sixty-four (64) years of age or older bracket shall not exceed four (4)

16

three (3) times the premium rate that could be charged to a small employer with the lowest

17

premium rate for that family composition for the rate for a twenty-one (21) year old.

18

     (5)(4) Premium rates for bona fide associations except for the Rhode Island Builders'

19

Association whose membership is limited to those who are actively involved in supporting the

20

construction industry in Rhode Island shall comply with the requirements of § 27-50-5 and all

21

other requirements of state law and regulation relating to rates.

22

     (6) For a small employer group renewing its health insurance with the same small

23

employer carrier which provided it small employer health insurance in the prior year, the

24

combined adjustment factor for age and gender for that small employer group will not exceed one

25

hundred twenty percent (120%) of the combined adjustment factor for age and gender for that

26

small employer group in the prior rate year.

27

     (b)(5) The premium charged for a health benefit plan may not be adjusted more

28

frequently than annually except that the rates may be changed to reflect:

29

     (1) Changes to the enrollment of the small employer;

30

     (2) Changes to the family composition of the employee; or

31

     (3) Changes to the health benefit plan requested by the small employer.

32

     Changes to the health benefit plan requested by the small employer.

33

     (c)(b) Premium rates for health benefit plans shall comply with the requirements of this

34

section.

 

LC002242 - Page 50 of 79

1

     (d)(c) Small employer carriers shall apply rating factors consistently with respect to all

2

small employers. Rating factors shall produce premiums for identical groups that differ only by

3

the amounts attributable to plan design, such as different cost sharing or provider network

4

restrictions and do not reflect differences due to the nature of the groups assumed to select

5

particular health benefit plans. Two groups that are otherwise identical, but which have different

6

prior year rate factors may, however, have rating factors that produce premiums that differ

7

because of the requirements of subdivision 27-50-5(a)(6). Nothing in this section shall be

8

construed to prevent a group health plan and a health insurance carrier offering health insurance

9

coverage from establishing premium discounts or rebates or modifying otherwise applicable

10

copayments or deductibles in return for adherence to participation in programs of health

11

promotion and or disease prevention, provided the application of these discounts, rebates and cost

12

sharing modifications, and the wellness programs satisfy the requirements of federal and state

13

laws and regulations, including without limitation nondiscrimination and mental health parity

14

provisions of federal and state laws. including those included in affordable health benefit plans,

15

provided that the resulting rates comply with the other requirements of this section, including

16

subdivision (a)(5) of this section.

17

     The calculation of premium discounts, rebates, or modifications to otherwise applicable

18

copayments or deductibles for affordable health benefit plans shall be made in a manner

19

consistent with accepted actuarial standards and based on actual or reasonably anticipated small

20

employer claims experience. As used in the preceding sentence, "accepted actuarial standards"

21

includes actuarially appropriate use of relevant data from outside the claims experience of small

22

employers covered by affordable health plans, including, but not limited to, experience derived

23

from the large group market, as this term is defined in § 27-18.6-2(19).

24

     (e)(d) For the purposes of this section, a health benefit plan that contains a restricted

25

network provision shall not be considered similar coverage to a health benefit plan that does not

26

contain such a provision, provided that the restriction of benefits to network providers results in

27

substantial differences in claim costs.

28

     (f)(e) The health insurance commissioner may establish regulations to implement the

29

provisions of this section and to assure that rating practices used by small employer carriers are

30

consistent with the purposes of this chapter, including regulations that assure that differences in

31

rates charged for health benefit plans by small employer carriers are reasonable and reflect

32

objective differences in plan design or coverage (not including differences due to the nature of the

33

groups assumed to select particular health benefit plans or separate claim experience for

34

individual health benefit plans) and to ensure that small employer groups with one eligible

 

LC002242 - Page 51 of 79

1

subscriber are notified of rates for health benefit plans in the individual market.

2

     (g)(f) In connection with the offering for sale of any health benefit plan to a small

3

employer, a small employer carrier shall make a reasonable disclosure, as part of its solicitation

4

and sales materials, of all of the following:

5

     (1) The provisions of the health benefit plan concerning the small employer carrier's right

6

to change premium rates and the factors, other than claim experience, that affect changes in

7

premium rates;

8

     (2) The provisions relating to the availability and renewability of policies and contracts;

9

and

10

     (3) The provisions relating to any preexisting condition provision; and

11

     (4)(3) A listing of and descriptive information, including benefits and premiums, about

12

all benefit plans for which the small employer is qualified.

13

     (h)(1)(g) Each small employer carrier shall maintain at its principal place of business a

14

complete and detailed description of its rating practices and renewal underwriting practices,

15

including information and documentation that demonstrate that its rating methods and practices

16

are based upon commonly accepted actuarial assumptions and are in accordance with sound

17

actuarial principles. Any changes to the carrier's rating and underwriting practices shall be subject

18

to the provisions of §§ 27-18-8, 27-41-27.2, and 42-62-13.

19

     (2) Each small employer carrier shall file with the commissioner annually on or before

20

March 15 an actuarial certification certifying that the carrier is in compliance with this chapter

21

and that the rating methods of the small employer carrier are actuarially sound. The certification

22

shall be in a form and manner, and shall contain the information, specified by the commissioner.

23

A copy of the certification shall be retained by the small employer carrier at its principal place of

24

business.

25

     (3) A small employer carrier shall make the information and documentation described in

26

subdivision (1) of this subsection available to the commissioner upon request. Except in cases of

27

violations of this chapter, the information shall be considered proprietary and trade secret

28

information and shall not be subject to disclosure by the director to persons outside of the

29

department except as agreed to by the small employer carrier or as ordered by a court of

30

competent jurisdiction.

31

     (4) For the wellness health benefit plan described in § 27-50-10, the rates proposed to be

32

charged and the plan design to be offered by any carrier shall be filed by the carrier at the office

33

of the commissioner no less than thirty (30) days prior to their proposed date of use. The carrier

34

shall be required to establish that the rates proposed to be charged and the plan design to be

 

LC002242 - Page 52 of 79

1

offered are consistent with the proper conduct of its business and with the interest of the public.

2

The commissioner may approve, disapprove, or modify the rates and/or approve or disapprove

3

the plan design proposed to be offered by the carrier. Any disapproval by the commissioner of a

4

plan design proposed to be offered shall be based upon a determination that the plan design is not

5

consistent with the criteria established pursuant to subsection 27-50-10(b).

6

     (i) The requirements of this section apply to all health benefit plans issued or renewed on

7

or after October 1, 2000.

8

     27-50-6. Renewability of coverage.

9

     (a) A health benefit plan subject to this chapter is renewable with respect to all eligible

10

employees or dependents, at the option of the small employer, except in any of the following

11

cases:

12

     (1) The plan sponsor has failed to pay premiums or contributions in accordance with the

13

terms of the health benefit plan or the carrier has not received timely premium payments;

14

     (2) The plan sponsor or, with respect to coverage of individual insured under the health

15

benefit plan, the insured or the insured's representative has performed an act or practice that

16

constitutes fraud or made an intentional misrepresentation of material fact under the terms of

17

coverage and the non-renewal is made within two (2) years after the act or practice. After two (2)

18

years, the carrier may non-renew under this subsection only if the plan sponsor has failed to

19

reimburse the carrier for the costs associated with the fraud or misrepresentation;

20

     (3) Noncompliance with the carrier's minimum participation requirements;

21

     (4) Noncompliance with the carrier's employer contribution requirements;

22

     (5) The small employer carrier elects to discontinue offering all of its health benefit plans

23

delivered or issued for delivery to small employers in this state if the carrier:

24

     (i) Provides advance notice of its decision under this paragraph to the commissioner in

25

each state in which it is licensed; and

26

     (ii) Provides notice of the decision to:

27

     (A) All affected small employers and enrollees and their dependents; and

28

     (B) The insurance commissioner in each state in which an affected insured individual is

29

known to reside at least one hundred and eighty (180) days prior to the nonrenewal non-renewal

30

of any health benefit plans by the carrier, provided the notice to the commissioner under this

31

subparagraph is sent at least three (3) working days prior to the date the notice is sent to the

32

affected small employers and enrollees and their dependents;

33

     (6) The director commissioner:

34

     (i) Finds that the continuation of the coverage would not be in the best interests of the

 

LC002242 - Page 53 of 79

1

policyholders or certificate holders or would impair the carrier's ability to meet its contractual

2

obligations; and

3

     (ii) Assists affected small employers in finding replacement coverage;

4

     (7) The small employer carrier decides to discontinue offering a particular type of health

5

benefit plan in the state's small employer market if the carrier:

6

     (i) Provides notice of the decision not to renew coverage at least ninety (90) days prior to

7

the nonrenewal non-renewal of any health benefit plans to all affected small employers and

8

enrollees and their dependents;

9

     (ii) Offers to each small employer issued a particular type of health benefit plan the

10

option to purchase all other health benefit plans currently being offered by the carrier to small

11

employers in the state; and

12

     (iii) In exercising this option to discontinue a particular type of health benefit plan and in

13

offering the option of coverage pursuant to paragraph (7)(ii) of this subsection acts uniformly

14

without regard to the claims experience of those small employers or any health status-related

15

factor relating to any enrollee or dependent of an enrollee or enrollees and their dependents

16

covered or new enrollees and their dependents who may become eligible for coverage;

17

     (8) In the case of health benefit plans that are made available in the small group market

18

through a network plan, there is no longer an employee of the small employer living, working or

19

residing within the carrier's established geographic service area and the carrier would deny

20

enrollment in the plan pursuant to § 27-50-7(e)(1)(ii); or

21

     (9) In the case of a health benefit plan that is made available in the small employer

22

market only through one or more bona fide associations, the membership of an employer in the

23

bona fide association, on the basis of which the coverage is provided, ceases, but only if the

24

coverage is terminated under this paragraph uniformly without regard to any health status-related

25

factor relating to any covered individual.

26

     (b)(1) A small employer carrier that elects not to renew health benefit plan coverage

27

pursuant to subdivision (a)(2) of this section because of the small employer's fraud or intentional

28

misrepresentation of material fact under the terms of coverage may choose not to issue a health

29

benefit plan to that small employer for one year after the date of nonrenewal non-renewal.

30

     (2) This subsection shall not be construed to affect the requirements of § 27-50-7 as to the

31

obligations of other small employer carriers to issue any health benefit plan to the small

32

employer.

33

     (c)(1) A small employer carrier that elects to discontinue offering health benefit plans

34

under subdivision (a)(5) of this section is prohibited from writing new business in the small

 

LC002242 - Page 54 of 79

1

employer market in this state for a period of five (5) years beginning on the date the carrier

2

ceased offering new coverage in this state of discontinuance of the last coverage not renewed.

3

     (2) In the case of a small employer carrier that ceases offering new coverage in this state

4

pursuant to subdivision (a)(5) of this section, the small employer carrier, as determined by the

5

director, may renew its existing business in the small employer market in the state or may be

6

required to nonrenew shall discontinue and non-renew all of its existing business in the small

7

employer market in the state upon proper notice.

8

     (d) A small employer carrier offering coverage through a network plan is not required to

9

offer coverage or accept applications pursuant to subsection (a) or (b) of this section in the case of

10

the following:

11

     (1) To an eligible person who no longer resides, lives, or works in the service area, or in

12

an area for which the carrier is authorized to do business, but only if coverage is terminated under

13

this subdivision uniformly without regard to any health status-related factor of covered

14

individuals; or

15

     (2) To a small employer that no longer has any enrollee in connection with the plan who

16

lives, resides, or works in the service area of the carrier, or the area for which the carrier is

17

authorized to do business.

18

     (e) At the time of coverage renewal, a small employer carrier may modify the health

19

insurance coverage for a product offered to a group health plan if, for coverage that is available in

20

the small group market other than only through one or more bona fide associations, such

21

modification is consistent with otherwise applicable law and effective on a uniform basis among

22

group health plans with that product.

23

     27-50-7. Availability of coverage.

24

     (a) Until October 1, 2004, for purposes of this section, "small employer" includes any

25

person, firm, corporation, partnership, association, or political subdivision that is actively

26

engaged in business that on at least fifty percent (50%) of its working days during the preceding

27

calendar quarter, employed a combination of no more than fifty (50) and no less than two (2)

28

eligible employees and part-time employees, the majority of whom were employed within this

29

state, and is not formed primarily for purposes of buying health insurance and in which a bona

30

fide employer-employee relationship exists. After October 1, 2004, for the purposes of this

31

section, "small employer" has the meaning used in § 27-50-3(kk).

32

     (b)(a)(1) Every small employer carrier shall, as a condition of transacting business in this

33

state with small employers, actively offer to small employers all health benefit plans it actively

34

markets that are approved for sale to small employers in this state including a wellness health

 

LC002242 - Page 55 of 79

1

benefit plan. A small employer carrier shall be considered to be actively marketing a health

2

benefit plan if it offers that plan to any small employer not currently receiving a health benefit

3

plan from the small employer carrier, and must accept any small employer that applies for any of

4

those health benefit plans subject to the provisions of this chapter. Such plans shall offer coverage

5

of essential health benefits.

6

     (2) Subject to subdivision (1) of this subsection subsection (a)(1) of this section, a small

7

employer carrier shall issue any health benefit plan to any eligible small employer that applies for

8

that plan and agrees to make the required premium payments and to satisfy the other reasonable

9

provisions of the health benefit plan not inconsistent with this chapter. However, no carrier is

10

required to issue a health benefit plan to any self-employed individual who is covered by, or is

11

eligible for coverage under, a health benefit plan offered by an employer.

12

     (c)(1) A small employer carrier shall file with the director, in a format and manner

13

prescribed by the director, the health benefit plans to be used by the carrier. A health benefit plan

14

filed pursuant to this subdivision may be used by a small employer carrier beginning thirty (30)

15

days after it is filed unless the director disapproves its use.

16

     (2) The director may at any time may, after providing notice and an opportunity for a

17

hearing to the small employer carrier, disapprove the continued use by a small employer carrier of

18

a health benefit plan on the grounds that the plan does not meet the requirements of this chapter.

19

     (d) Health benefit plans covering small employers shall comply with the following

20

provisions:

21

     (1) A health benefit plan shall not deny, exclude, or limit benefits for a covered

22

individual for losses incurred more than six (6) months following the enrollment date of the

23

individual's coverage due to a preexisting condition, or the first date of the waiting period for

24

enrollment if that date is earlier than the enrollment date. A health benefit plan shall not define a

25

preexisting condition more restrictively than as defined in § 27-50-3.

26

     (2)(i) Except as provided in subdivision (3) of this subsection, a small employer carrier

27

shall reduce the period of any preexisting condition exclusion by the aggregate of the periods of

28

creditable coverage without regard to the specific benefits covered during the period of creditable

29

coverage, provided that the last period of creditable coverage ended on a date not more than

30

ninety (90) days prior to the enrollment date of new coverage.

31

     (ii) The aggregate period of creditable coverage does not include any waiting period or

32

affiliation period for the effective date of the new coverage applied by the employer or the carrier,

33

or for the normal application and enrollment process following employment or other triggering

34

event for eligibility.

 

LC002242 - Page 56 of 79

1

     (iii) A carrier that does not use preexisting condition limitations in any of its health

2

benefit plans may impose an affiliation period that:

3

     (A) Does not exceed sixty (60) days for new entrants and not to exceed ninety (90) days

4

for late enrollees;

5

     (B) During which the carrier charges no premiums and the coverage issued is not

6

effective; and

7

     (C) Is applied uniformly, without regard to any health status-related factor.

8

     (iv)(b) This section does not preclude application of any waiting period applicable to all

9

new enrollees under the health benefit plan, provided that any carrier-imposed waiting period is

10

no longer than sixty (60) days.

11

     (3)(i) Instead of as provided in paragraph (2)(i) of this subsection, a small employer

12

carrier may elect to reduce the period of any preexisting condition exclusion based on coverage of

13

benefits within each of several classes or categories of benefits specified in federal regulations.

14

     (ii) A small employer electing to reduce the period of any preexisting condition exclusion

15

using the alternative method described in paragraph (i) of this subdivision shall:

16

     (A) Make the election on a uniform basis for all enrollees; and

17

     (B) Count a period of creditable coverage with respect to any class or category of benefits

18

if any level of benefits is covered within the class or category.

19

     (iii) A small employer carrier electing to reduce the period of any preexisting condition

20

exclusion using the alternative method described under paragraph (i) of this subdivision shall:

21

     (A) Prominently state that the election has been made in any disclosure statements

22

concerning coverage under the health benefit plan to each enrollee at the time of enrollment under

23

the plan and to each small employer at the time of the offer or sale of the coverage; and

24

     (B) Include in the disclosure statements the effect of the election.

25

     (4)(i) A health benefit plan shall accept late enrollees, but may exclude coverage for late

26

enrollees for preexisting conditions for a period not to exceed twelve (12) months.

27

     (ii) A small employer carrier shall reduce the period of any preexisting condition

28

exclusion pursuant to subdivision (2) or (3) of this subsection.

29

     (5) A small employer carrier shall not impose a preexisting condition exclusion:

30

     (i) Relating to pregnancy as a preexisting condition; or

31

     (ii) With regard to a child who is covered under any creditable coverage within thirty (30)

32

days of birth, adoption, or placement for adoption, provided that the child does not experience a

33

significant break in coverage, and provided that the child was adopted or placed for adoption

34

before attaining eighteen (18) years of age.

 

LC002242 - Page 57 of 79

1

     (6) A small employer carrier shall not impose a preexisting condition exclusion in the

2

case of a condition for which medical advice, diagnosis, care or treatment was recommended or

3

received for the first time while the covered person held creditable coverage, and the medical

4

advice, diagnosis, care or treatment was a covered benefit under the plan, provided that the

5

creditable coverage was continuous to a date not more than ninety (90) days prior to the

6

enrollment date of the new coverage.

7

     (7)(i)(c) A small employer carrier shall permit an employee or a dependent of the

8

employee, who is eligible, but not enrolled, to enroll for coverage under the terms of the group

9

health plan of the small employer during a special enrollment period if, as defined by federal and

10

state laws and regulations, including, but not limited to, the following situations:

11

     (A)(1) The employee or dependent was covered under a group health plan or had

12

coverage under a health benefit plan at the time coverage was previously offered to the employee

13

or dependent;

14

     (B)(2) The employee stated in writing at the time coverage was previously offered that

15

coverage under a group health plan or other health benefit plan was the reason for declining

16

enrollment, but only if the plan sponsor or carrier, if applicable, required that statement at the

17

time coverage was previously offered and provided notice to the employee of the requirement and

18

the consequences of the requirement at that time;

19

     (C)(3) The employee's or dependent's coverage described under subparagraph (A) of this

20

paragraph subsection (c)(2) of this section:

21

     (I)(i) Was under a COBRA continuation provision and the coverage under this provision

22

has been exhausted; or

23

     (II)(ii) Was not under a COBRA continuation provision and that other coverage has been

24

terminated as a result of loss of eligibility for coverage, including as a result of a legal separation,

25

divorce, death, termination of employment, or reduction in the number of hours of employment or

26

employer contributions towards that other coverage have been terminated; and

27

     (D)(4) Under terms of the group health plan, the employee requests enrollment not later

28

than thirty (30) days after the date of exhaustion of coverage described in item (C)(I) of this

29

paragraph subsection (c)(3)(i) of this section or termination of coverage or employer contribution

30

described in item (C)(II) of this paragraph subsection (c)(3)(ii) of this section.

31

     (ii)(5) If an employee requests enrollment pursuant to subparagraph (i)(D) of this

32

subdivision this subsection, the enrollment is effective not later than the first day of the first

33

calendar month beginning after the date the completed request for enrollment is received.

34

     (8)(i)(d)(1) A small employer carrier that makes coverage available under a group health

 

LC002242 - Page 58 of 79

1

plan with respect to a dependent of an individual shall provide for a dependent special enrollment

2

period described in paragraph (ii) of this subdivision this section during which the person or, if

3

not enrolled, the individual may be enrolled under the group health plan as a dependent of the

4

individual and, in the case of the birth or adoption of a child, the spouse of the individual may be

5

enrolled as a dependent of the individual if the spouse is eligible for coverage if:

6

     (A)(i) The individual is a participant under the health benefit plan or has met any waiting

7

period applicable to becoming a participant under the plan and is eligible to be enrolled under the

8

plan, but for a failure to enroll during a previous enrollment period; and

9

     (B)(ii) A person becomes a dependent of the individual through marriage, birth, or

10

adoption or placement for adoption.

11

     (ii)(2) The special enrollment period for individuals that meet the provisions of paragraph

12

(i) of this subdivision subsection (d)(1) of this section is a period of not less than thirty (30) days

13

and begins on the later of:

14

     (A)(i) The date dependent coverage is made available; or

15

     (B)(ii) The date of the marriage, birth, or adoption or placement for adoption described in

16

subparagraph (i)(B) of this subdivision subsection (d)(1)(ii) of this section.

17

     (iii)(3) If an individual seeks to enroll a dependent during the first thirty (30) days of the

18

dependent special enrollment period described under paragraph (ii) of this subdivision subsection

19

(d)(2) of this section, the coverage of the dependent is effective:

20

     (A)(i) In the case of marriage, not later than the first day of the first month beginning

21

after the date the completed request for enrollment is received;

22

     (B)(ii) In the case of a dependent's birth, as of the date of birth; and

23

     (C)(iii) In the case of a dependent's adoption or placement for adoption, the date of the

24

adoption or placement for adoption.

25

     (9)(i)(e)(1) Except as provided in this subdivision, requirements used by a small

26

employer carrier in determining whether to provide coverage to a small employer, including

27

requirements for minimum participation of eligible employees and minimum employer

28

contributions, shall be applied uniformly among all small employers applying for coverage or

29

receiving coverage from the small employer carrier.

30

     (ii)(2) For health benefit plans issued or renewed on or after October 1, 2000, a small

31

employer carrier shall not require a minimum participation level greater than seventy-five percent

32

(75%) of eligible employees.

33

     (iii)(3) In applying minimum participation requirements with respect to a small employer,

34

a small employer carrier shall not consider employees or dependents who have creditable

 

LC002242 - Page 59 of 79

1

coverage in determining whether the applicable percentage of participation is met.

2

     (iv)(4) A small employer carrier shall not increase any requirement for minimum

3

employee participation or modify any requirement for minimum employer contribution applicable

4

to a small employer at any time after the small employer has been accepted for coverage.

5

     (10)(i)(f)(1) If a small employer carrier offers coverage to a small employer, the small

6

employer carrier shall offer coverage to all of the eligible employees of a small employer and

7

their dependents who apply for enrollment during the period in which the employee first becomes

8

eligible to enroll under the terms of the plan. A small employer carrier shall not offer coverage to

9

only certain individuals or dependents in a small employer group or to only part of the group.

10

     (ii)(2) A small employer carrier shall not place any restriction in regard to any health

11

status-related factor on an eligible employee or dependent with respect to enrollment or plan

12

participation.

13

     (iii)(3) Except as permitted under subdivisions (1) and (4) of this subsection by this

14

section, a small employer carrier shall not modify a health benefit plan with respect to a small

15

employer or any eligible employee or dependent, through riders, endorsements, or otherwise, to

16

restrict or exclude coverage or benefits for specific diseases, medical conditions, or services

17

covered by the plan.

18

     (e)(g)(1) Subject to subdivision (3) of this subsection, a A small employer carrier is not

19

required to offer coverage or accept applications pursuant to subsection (b)(a) of this section in

20

the case of the following:

21

     (i) To a small employer, where the small employer does not have eligible individuals who

22

live, work, or reside in the established geographic service area for the network plan;

23

     (ii) To an employee, when the employee does not live, work, or reside within the carrier's

24

established geographic service area; or

25

     (iii) Within With the approval of the commissioner, within an area where the small

26

employer carrier reasonably anticipates, and demonstrates to the satisfaction of the director

27

commissioner, that it will not have the capacity within its established geographic service area to

28

deliver services adequately to enrollees of any additional groups because of its obligations to

29

existing group policyholders and enrollees.

30

     (2) A small employer carrier that cannot offer coverage pursuant to paragraph (1)(iii) of

31

this subsection subsection (g)(1)(iii) of this section may not offer coverage in the applicable area

32

to new cases of employer groups until the later of one hundred and eighty (180) days following

33

each refusal or the date on which the carrier notifies the director commissioner that it has

34

regained capacity to deliver services to new employer groups.

 

LC002242 - Page 60 of 79

1

     (3) A small employer carrier shall apply the provisions of this subsection uniformly to all

2

small employers without regard to the claims experience of a small employer and its employees

3

and their dependents or any health status-related factor relating to the employees and their

4

dependents.

5

     (f)(h)(1) A small employer carrier is not required to provide coverage to small employers

6

pursuant to subsection (b)(a) of this section if:

7

     (i) For any period of time the director commissioner determines the small employer

8

carrier does not have the financial reserves necessary to underwrite additional coverage; and

9

     (ii) The small employer carrier is applying this subsection uniformly to all small

10

employers in the small group market in this state consistent with applicable state law and without

11

regard to the claims experience of a small employer and its employees and their dependents or

12

any health status-related factor relating to the employees and their dependents.

13

     (2) A small employer carrier that denies coverage in accordance with subdivision (1) of

14

this subsection may not offer coverage in the small group market for the later of:

15

     (i) A period of one hundred and eighty (180) days after the date the coverage is denied; or

16

     (ii) Until the small employer has demonstrated to the director commissioner that it has

17

sufficient financial reserves to underwrite additional coverage.

18

     (g)(i)(1) A small employer carrier is not required to provide coverage to small employers

19

pursuant to subsection (b)(a) of this section if the small employer carrier, in accordance with a

20

plan approved by the commissioner, elects not to offer new coverage to small employers in this

21

state.

22

     (2) A small employer carrier that elects not to offer new coverage to small employers

23

under this subsection may be allowed, as determined by the director commissioner, to maintain its

24

existing policies in this state.

25

     (3) A small employer carrier that elects not to offer new coverage to small employers

26

under subdivision (g)(1) subsection (i)(1) of this section shall provide at least one hundred and

27

twenty (120) days notice of its election to the director commissioner and is prohibited from

28

writing new business in the small employer market in this state for a period of five (5) years

29

beginning on the date the carrier ceased offering new coverage in this state.

30

     (h) No small group carrier may impose a pre-existing condition exclusion pursuant to the

31

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-

32

7(d)(5) and 27-50-7(d)(6) with regard to an individual that is less than nineteen (19) years of age.

33

With respect to health benefit plans issued on and after January 1, 2014 a small employer carrier

34

shall offer and issue coverage to small employers and eligible individuals notwithstanding any

 

LC002242 - Page 61 of 79

1

pre-existing condition of an employee, member, or individual, or their dependents.

2

     (j) A small employer carrier shall not deny, exclude or limit benefits or coverage with

3

respect to an enrollee because of a preexisting condition exclusion.

4

     27-50-11. Administrative procedures.

5

     The director commissioner shall issue regulations in accordance with chapter 35 of this

6

title 42 for the implementation and administration of the Small Employer Health Insurance

7

Availability Act. If provisions of the federal Patient Protection and Affordable Care Act and

8

implementing regulations, corresponding to the provisions of this chapter, are no longer in effect,

9

then the commissioner may promulgate regulations reflecting relevant federal law and

10

implementing regulations in effect immediately prior to such authorities no longer being in effect.

11

In the event of such changes to the law and related regulations, the commissioner, in conjunction

12

with the health benefit exchange or other state department, shall report to the general assembly as

13

soon as possible to describe the impact of the change and to make recommendations regarding

14

consumer protections, consumer choices, and stabilization and affordability of the Rhode Island

15

insurance market.

16

     27-50-12. Standards to assure fair marketing.

17

     (a) Each Unless permitted by the commissioner for a limited period of time, each small

18

employer carrier shall actively market and offer all health benefit plans sold by the carrier to

19

eligible small employers in the state.

20

     (b)(1) Except as provided in subdivision (2) of this subsection, no small employer carrier

21

or producer shall, directly or indirectly, engage in the following activities:

22

     (i) Encouraging or directing small employers to refrain from filing an application for

23

coverage with the small employer carrier because of any health status-related factor, age, gender,

24

industry, occupation, or geographic location of the small employer; or

25

     (ii) Encouraging or directing small employers to seek coverage from another carrier

26

because of any health status-related factor, age, gender, industry, occupation, or geographic

27

location of the small employer.

28

     (2) The provisions of subdivision (1) of this subsection do not apply with respect to

29

information provided by a small employer carrier or producer to a small employer regarding the

30

established geographic service area or a restricted network provision of a small employer carrier.

31

     (c)(1) Except as provided in subdivision (2) of this subsection, no small employer carrier

32

shall, directly or indirectly, enter into any contract, agreement or arrangement with a producer

33

that provides for or results in the compensation paid to a producer for the sale of a health benefit

34

plan to be varied because of any initial or renewal, industry, occupation, or geographic location of

 

LC002242 - Page 62 of 79

1

the small employer.

2

     (2) Subdivision (1) of this subsection does not apply with respect to a compensation

3

arrangement that provides compensation to a producer on the basis of percentage of premium,

4

provided that the percentage shall not vary because of any health status-related factor, industry,

5

occupation, or geographic area of the small employer.

6

     (d) A small employer carrier shall provide reasonable compensation, as provided under

7

the plan of operation of the program, to a producer, if any, for the sale of any health benefit plan

8

subject to § 27-50-10.

9

     (e)(d) No small employer carrier may terminate, fail to renew, or limit its contract or

10

agreement of representation with a producer for any reason related to health status-related factor,

11

occupation, or geographic location of the small employers placed by the producer with the small

12

employer carrier.

13

     (f)(e) No small employer carrier or producer shall induce or encourage a small employer

14

to separate or exclude an employee or dependent from health coverage or benefits provided in

15

connection with the employee's employment.

16

     (g)(f) Denial by a small employer carrier of an application for coverage from a small

17

employer shall be in writing and shall state the reason or reasons for the denial.

18

     (h)(g) The director commissioner may establish regulations setting forth additional

19

standards to provide for the fair marketing and broad availability of health benefit plans to small

20

employers in this state.

21

     (i)(h)(1) A violation of this section by a small employer carrier or a producer is an unfair

22

trade practice under chapter 13 of title 6.

23

     (2) If a small employer carrier enters into a contract, agreement, or other arrangement

24

with a third-party administrator to provide administrative, marketing, or other services related to

25

the offering of health benefit plans to small employers in this state, the third-party administrator is

26

subject to this section as if it were a small employer carrier.

27

     27-50-15. Restoration of terminated coverage.

28

     The director commissioner may promulgate regulations to require small employer

29

carriers, as a condition of transacting business with small employers in this state after July 13,

30

2000, to reissue a health benefit plan to any small employer whose health benefit plan has been

31

terminated or not renewed by the carrier on or after July 1, 2000. The director commissioner may

32

prescribe any terms for the reissue of coverage that the director commissioner finds are

33

reasonable and necessary to provide continuity of coverage to small employers.

34

     SECTION 9. Section 27-69-2 of the General Laws in Chapter 27-69 entitled "Mandated

 

LC002242 - Page 63 of 79

1

Benefits" is hereby amended to read as follows:

2

     27-69-2. Definitions.

3

     (a) "Commissioner" shall mean the director of the department of business regulation or

4

the health insurance commissioner, as appropriate.

5

     (b) "Health plan" shall mean "health insurance coverage" as defined in subsections 27-

6

18.5-2(8)(i) §§ 27-18.5-2(12)(i) and 27-18.6-2(16)(i) 27-18.6-2(15) or "health benefit plan" as

7

defined in § 27-50-3.

8

     (c) "High deductible health plan" shall have the same meaning as defined in 26 U.S.C.

9

223.

10

     (d) "Mandated benefit law" shall mean any law of this state that requires provision of

11

health insurance coverage for a specified service or payment to a specified type of health care

12

provider, including, but not limited to, the benefits or services mandated in §§ 27-18-48.1, 27-18-

13

60, 27-18-62, 27-18-64, similar provisions in title 27, chapters 19, 20 and 41, and §§ 27-18-3(c),

14

27-38.2-1 et seq., and all mandated benefit laws passed subsequent to the effective date of this

15

chapter unless applicability of this chapter is specifically excluded in such law.

16

     SECTION 10. Section 42-14.5-3 of the General Laws in Chapter 42-14.5 entitled "The

17

Rhode Island Health Care Reform Act of 2004 - Health Insurance Oversight" is hereby amended

18

to read as follows:

19

     42-14.5-3. Powers and duties.

20

     The health insurance commissioner shall have the following powers and duties:

21

     (a) To conduct quarterly public meetings throughout the state, separate and distinct from

22

rate hearings pursuant to § 42-62-13, regarding the rates, services, and operations of insurers

23

licensed to provide health insurance in the state; the effects of such rates, services, and operations

24

on consumers, medical care providers, patients, and the market environment in which the insurers

25

operate; and efforts to bring new health insurers into the Rhode Island market. Notice of not less

26

than ten (10) days of the hearing(s) shall go to the general assembly, the governor, the Rhode

27

Island Medical Society, the Hospital Association of Rhode Island, the director of health, the

28

attorney general, and the chambers of commerce. Public notice shall be posted on the

29

department's website and given in the newspaper of general circulation, and to any entity in

30

writing requesting notice.

31

     (b) To make recommendations to the governor and the house of representatives and

32

senate finance committees regarding health-care insurance and the regulations, rates, services,

33

administrative expenses, reserve requirements, and operations of insurers providing health

34

insurance in the state, and to prepare or comment on, upon the request of the governor or

 

LC002242 - Page 64 of 79

1

chairpersons of the house or senate finance committees, draft legislation to improve the regulation

2

of health insurance. In making the recommendations, the commissioner shall recognize that it is

3

the intent of the legislature that the maximum disclosure be provided regarding the

4

reasonableness of individual administrative expenditures as well as total administrative costs. The

5

commissioner shall make recommendations on the levels of reserves, including consideration of:

6

targeted reserve levels; trends in the increase or decrease of reserve levels; and insurer plans for

7

distributing excess reserves.

8

     (c) To establish a consumer/business/labor/medical advisory council to obtain

9

information and present concerns of consumers, business, and medical providers affected by

10

health-insurance decisions. The council shall develop proposals to allow the market for small

11

business health insurance to be affordable and fairer. The council shall be involved in the

12

planning and conduct of the quarterly public meetings in accordance with subsection (a). The

13

advisory council shall develop measures to inform small businesses of an insurance complaint

14

process to ensure that small businesses that experience rate increases in a given year may request

15

and receive a formal review by the department. The advisory council shall assess views of the

16

health-provider community relative to insurance rates of reimbursement, billing, and

17

reimbursement procedures, and the insurers' role in promoting efficient and high-quality health

18

care. The advisory council shall issue an annual report of findings and recommendations to the

19

governor and the general assembly and present its findings at hearings before the house and

20

senate finance committees. The advisory council is to be diverse in interests and shall include

21

representatives of community consumer organizations; small businesses, other than those

22

involved in the sale of insurance products; and hospital, medical, and other health-provider

23

organizations. Such representatives shall be nominated by their respective organizations. The

24

advisory council shall be co-chaired by the health insurance commissioner and a community

25

consumer organization or small business member to be elected by the full advisory council.

26

     (d) To establish and provide guidance and assistance to a subcommittee ("the

27

professional-provider-health-plan work group") of the advisory council created pursuant to

28

subsection (c), composed of health-care providers and Rhode Island licensed health plans. This

29

subcommittee shall include in its annual report and presentation before the house and senate

30

finance committees the following information:

31

     (1) A method whereby health plans shall disclose to contracted providers the fee

32

schedules used to provide payment to those providers for services rendered to covered patients;

33

     (2) A standardized provider application and credentials-verification process, for the

34

purpose of verifying professional qualifications of participating health-care providers;

 

LC002242 - Page 65 of 79

1

     (3) The uniform health plan claim form utilized by participating providers;

2

     (4) Methods for health maintenance organizations, as defined by § 27-41-2, and nonprofit

3

hospital or medical-service corporations, as defined by chapters 19 and 20 of title 27, to make

4

facility-specific data and other medical service-specific data available in reasonably consistent

5

formats to patients regarding quality and costs. This information would help consumers make

6

informed choices regarding the facilities and clinicians or physician practices at which to seek

7

care. Among the items considered would be the unique health services and other public goods

8

provided by facilities and clinicians or physician practices in establishing the most appropriate

9

cost comparisons;

10

     (5) All activities related to contractual disclosure to participating providers of the

11

mechanisms for resolving health plan/provider disputes;

12

     (6) The uniform process being utilized for confirming, in real time, patient insurance

13

enrollment status, benefits coverage, including co-pays and deductibles;

14

     (7) Information related to temporary credentialing of providers seeking to participate in

15

the plan's network and the impact of the activity on health-plan accreditation;

16

     (8) The feasibility of regular contract renegotiations between plans and the providers in

17

their networks; and

18

     (9) Efforts conducted related to reviewing impact of silent PPOs on physician practices.

19

     (e) To enforce the provisions of Title 27 and Title 42 as set forth in § 42-14-5(d).

20

     (f) To provide analysis of the Rhode Island affordable health plan reinsurance fund. The

21

fund shall be used to effectuate the provisions of §§ 27-18.5-9 and 27-50-17.

22

     (g) To analyze the impact of changing the rating guidelines and/or merging the individual

23

health-insurance market, as defined in chapter 18.5 of title 27, and the small-employer-health-

24

insurance market, as defined in chapter 50 of title 27, in accordance with the following:

25

     (1) The analysis shall forecast the likely rate increases required to effect the changes

26

recommended pursuant to the preceding subsection (g) in the direct-pay market and small-

27

employer-health-insurance market over the next five (5) years, based on the current rating

28

structure and current products.

29

     (2) The analysis shall include examining the impact of merging the individual and small-

30

employer markets on premiums charged to individuals and small-employer groups.

31

     (3) The analysis shall include examining the impact on rates in each of the individual and

32

small-employer health-insurance markets and the number of insureds in the context of possible

33

changes to the rating guidelines used for small-employer groups, including: community rating

34

principles; expanding small-employer rate bonds beyond the current range; increasing the

 

LC002242 - Page 66 of 79

1

employer group size in the small-group market; and/or adding rating factors for broker and/or

2

tobacco use.

3

     (4) The analysis shall include examining the adequacy of current statutory and regulatory

4

oversight of the rating process and factors employed by the participants in the proposed, new

5

merged market.

6

     (5) The analysis shall include assessment of possible reinsurance mechanisms and/or

7

federal high-risk pool structures and funding to support the health-insurance market in Rhode

8

Island by reducing the risk of adverse selection and the incremental insurance premiums charged

9

for this risk, and/or by making health insurance affordable for a selected at-risk population.

10

     (6) The health insurance commissioner shall work with an insurance market merger task

11

force to assist with the analysis. The task force shall be chaired by the health insurance

12

commissioner and shall include, but not be limited to, representatives of the general assembly, the

13

business community, small-employer carriers as defined in § 27-50-3, carriers offering coverage

14

in the individual market in Rhode Island, health-insurance brokers, and members of the general

15

public.

16

     (7) For the purposes of conducting this analysis, the commissioner may contract with an

17

outside organization with expertise in fiscal analysis of the private-insurance market. In

18

conducting its study, the organization shall, to the extent possible, obtain and use actual health-

19

plan data. Said data shall be subject to state and federal laws and regulations governing

20

confidentiality of health care and proprietary information.

21

     (8) The task force shall meet as necessary and include its findings in the annual report,

22

and the commissioner shall include the information in the annual presentation before the house

23

and senate finance committees.

24

     (h) To establish and convene a workgroup representing health-care providers and health

25

insurers for the purpose of coordinating the development of processes, guidelines, and standards

26

to streamline health-care administration that are to be adopted by payors and providers of health-

27

care services operating in the state. This workgroup shall include representatives with expertise

28

who would contribute to the streamlining of health-care administration and who are selected from

29

hospitals, physician practices, community behavioral-health organizations, each health insurer,

30

and other affected entities. The workgroup shall also include at least one designee each from the

31

Rhode Island Medical Society, Rhode Island Council of Community Mental Health

32

Organizations, the Rhode Island Health Center Association, and the Hospital Association of

33

Rhode Island. The workgroup shall consider and make recommendations for:

34

     (1) Establishing a consistent standard for electronic eligibility and coverage verification.

 

LC002242 - Page 67 of 79

1

Such standard shall:

2

     (i) Include standards for eligibility inquiry and response and, wherever possible, be

3

consistent with the standards adopted by nationally recognized organizations, such as the Centers

4

for Medicare and Medicaid Services;

5

     (ii) Enable providers and payors to exchange eligibility requests and responses on a

6

system-to-system basis or using a payor-supported web browser;

7

     (iii) Provide reasonably detailed information on a consumer's eligibility for health-care

8

coverage; scope of benefits; limitations and exclusions provided under that coverage; cost-sharing

9

requirements for specific services at the specific time of the inquiry; current deductible amounts;

10

accumulated or limited benefits; out-of-pocket maximums; any maximum policy amounts; and

11

other information required for the provider to collect the patient's portion of the bill;

12

     (iv) Reflect the necessary limitations imposed on payors by the originator of the

13

eligibility and benefits information;

14

     (v) Recommend a standard or common process to protect all providers from the costs of

15

services to patients who are ineligible for insurance coverage in circumstances where a payor

16

provides eligibility verification based on best information available to the payor at the date of the

17

request of eligibility.

18

     (2) Developing implementation guidelines and promoting adoption of the guidelines for:

19

     (i) The use of the National Correct Coding Initiative code-edit policy by payors and

20

providers in the state;

21

     (ii) Publishing any variations from codes and mutually exclusive codes by payors in a

22

manner that makes for simple retrieval and implementation by providers;

23

     (iii) Use of Health Insurance Portability and Accountability Act standard group codes,

24

reason codes, and remark codes by payors in electronic remittances sent to providers;

25

     (iv) The processing of corrections to claims by providers and payors.

26

     (v) A standard payor-denial review process for providers when they request a

27

reconsideration of a denial of a claim that results from differences in clinical edits where no

28

single, common-standards body or process exists and multiple conflicting sources are in use by

29

payors and providers.

30

     (vi) Nothing in this section, nor in the guidelines developed, shall inhibit an individual

31

payor's ability to employ, and not disclose to providers, temporary code edits for the purpose of

32

detecting and deterring fraudulent billing activities. The guidelines shall require that each payor

33

disclose to the provider its adjudication decision on a claim that was denied or adjusted based on

34

the application of such edits and that the provider have access to the payor's review and appeal

 

LC002242 - Page 68 of 79

1

process to challenge the payor's adjudication decision.

2

     (vii) Nothing in this subsection shall be construed to modify the rights or obligations of

3

payors or providers with respect to procedures relating to the investigation, reporting, appeal, or

4

prosecution under applicable law of potentially fraudulent billing activities.

5

     (3) Developing and promoting widespread adoption by payors and providers of

6

guidelines to:

7

     (i) Ensure payors do not automatically deny claims for services when extenuating

8

circumstances make it impossible for the provider to obtain a preauthorization before services are

9

performed or notify a payor within an appropriate standardized timeline of a patient's admission;

10

     (ii) Require payors to use common and consistent processes and time frames when

11

responding to provider requests for medical management approvals. Whenever possible, such

12

time frames shall be consistent with those established by leading national organizations and be

13

based upon the acuity of the patient's need for care or treatment. For the purposes of this section,

14

medical management includes prior authorization of services, preauthorization of services,

15

precertification of services, post-service review, medical-necessity review, and benefits advisory;

16

     (iii) Develop, maintain, and promote widespread adoption of a single, common website

17

where providers can obtain payors' preauthorization, benefits advisory, and preadmission

18

requirements;

19

     (iv) Establish guidelines for payors to develop and maintain a website that providers can

20

use to request a preauthorization, including a prospective clinical necessity review; receive an

21

authorization number; and transmit an admission notification.

22

     (4) To provide a report to the house and senate, on or before January 1, 2017, with

23

recommendations for establishing guidelines and regulations for systems that give patients

24

electronic access to their claims information, particularly to information regarding their

25

obligations to pay for received medical services, pursuant to 45 C.F.R. 164.524.

26

     (i) To issue an anti-cancer medication report. Not later than June 30, 2014 and annually

27

thereafter, the office of the health insurance commissioner (OHIC) shall provide the senate

28

committee on health and human services, and the house committee on corporations, with: (1)

29

Information on the availability in the commercial market of coverage for anti-cancer medication

30

options; (2) For the state employee's health benefit plan, the costs of various cancer-treatment

31

options; (3) The changes in drug prices over the prior thirty-six (36) months; and (4) Member

32

utilization and cost-sharing expense.

33

     (j) To monitor the adequacy of each health plan's compliance with the provisions of the

34

federal Mental Health Parity Act, including a review of related claims processing and

 

LC002242 - Page 69 of 79

1

reimbursement procedures. Findings, recommendations, and assessments shall be made available

2

to the public.

3

     (k) To monitor the transition from fee-for-service and toward global and other alternative

4

payment methodologies for the payment for health-care services. Alternative payment

5

methodologies should be assessed for their likelihood to promote access to affordable health

6

insurance, health outcomes, and performance.

7

     (l) To report annually, no later than July 1, 2014, then biannually thereafter, on hospital

8

payment variation, including findings and recommendations, subject to available resources.

9

     (m) Notwithstanding any provision of the general or public laws or regulation to the

10

contrary, provide a report with findings and recommendations to the president of the senate and

11

the speaker of the house, on or before April 1, 2014, including, but not limited to, the following

12

information:

13

     (1) The impact of the current, mandated health-care benefits as defined in §§ 27-18-48.1,

14

27-18-60, 27-18-62, 27-18-64, similar provisions in chapters 19, 20 and 41, of title 27, and §§ 27-

15

18-3(c), 27-38.2-1 et seq., or others as determined by the commissioner, on the cost of health

16

insurance for fully insured employers, subject to available resources;

17

     (2) Current provider and insurer mandates that are unnecessary and/or duplicative due to

18

the existing standards of care and/or delivery of services in the health-care system;

19

     (3) A state-by-state comparison of health-insurance mandates and the extent to which

20

Rhode Island mandates exceed other states benefits; and

21

     (4) Recommendations for amendments to existing mandated benefits based on the

22

findings in (m)(1), (m)(2), and (m)(3) above.

23

     (n) On or before July 1, 2014, the office of the health insurance commissioner, in

24

collaboration with the director of health and lieutenant governor's office, shall submit a report to

25

the general assembly and the governor to inform the design of accountable care organizations

26

(ACOs) in Rhode Island as unique structures for comprehensive health-care delivery and value-

27

based payment arrangements, that shall include, but not be limited to:

28

     (1) Utilization review;

29

     (2) Contracting; and

30

     (3) Licensing and regulation.

31

     (o) On or before February 3, 2015, the office of the health insurance commissioner shall

32

submit a report to the general assembly and the governor that describes, analyzes, and proposes

33

recommendations to improve compliance of insurers with the provisions of § 27-18-76 with

34

regard to patients with mental-health and substance-use disorders.

 

LC002242 - Page 70 of 79

1

     (p) To work to ensure the health insurance coverage of behavioral health care under the

2

same terms and conditions as other health care, and to integrate behavioral health parity

3

requirements into the office of the health insurance commissioner insurance oversight and health

4

care transformation efforts.

5

     (q) To work with other state agencies to seek delivery system improvements that enhance

6

access to a continuum of mental-health and substance-use disorder treatment in the state; and

7

integrate that treatment with primary and other medical care to the fullest extent possible.

8

     (r) To direct insurers toward policies and practices that address the behavioral health

9

needs of the public and greater integration of physical and behavioral health care delivery.

10

     (s) The office of the health insurance commissioner shall conduct an analysis of the

11

impact of the provisions of § 27-38.2-1(i) on health insurance premiums and access in Rhode

12

Island and submit a report of its findings to the general assembly on or before June 1, 2023.

13

     SECTION 11. Chapter 27-18.5 of the General Laws entitled "Individual Health Insurance

14

Coverage" is hereby amended by adding thereto the following section:

15

     27-18.5-11. Cost sharing requirements.

16

     (a) Annual limitation on cost sharing.

17

     (1) For a health benefit plan year beginning in a calendar year after 2020, cost sharing in

18

a health benefit plan may not exceed the following:

19

     (i) For self-only coverage - the dollar limit for calendar year 2019 defined by the Internal

20

Revenue Service as in place as of January 1, 2019, increased by an amount equal to the product of

21

that amount and the premium adjustment percentage, as defined in subsection (d) of this section.

22

     (ii) For other than self-only coverage - twice the dollar limit for self-only coverage

23

described in subsection (a)(1)(i) of this section.

24

     (b) Increase annual dollar limits in multiples of fifty (50). For a health benefit plan year

25

beginning in a calendar year after 2020, any increase in the annual dollar limits described in

26

subsection (a) of this section that does not result in a multiple of fifty dollars ($50.00) shall be

27

rounded down, to the next lowest multiple of fifty dollars ($50.00).

28

     (c) Premium adjustment percentage. The premium adjustment percentage is the

29

percentage (if any) by which the average per capita premium for commercial health insurance

30

coverage in Rhode Island for the preceding calendar year exceeds the average per capita premium

31

for commercial health insurance for 2019. The office of the health insurance commissioner shall

32

publicly publish the annual premium adjustment percentage.

33

     (d) Coordination with preventive limits. Nothing in this section is in derogation of the

34

requirements of preventive services coverage as defined in §§ 27-18.5-2 and 27-50-3.

 

LC002242 - Page 71 of 79

1

     (e) Coverage of emergency department services. Emergency department services must be

2

provided as follows:

3

     (1) Without imposing any requirement under the health benefit plan for prior

4

authorization of services or any limitation on coverage where the provider of services is out-of-

5

network that is more restrictive than the requirements or limitations that apply to emergency

6

department services received in network; and

7

     (2) If the services are provided out-of-network, cost sharing must be limited as provided

8

in federal regulation 45 CFR §147.138(b)(3) so long as they remain in effect, and if struck then

9

those in effect as of the date immediately prior shall control.

10

     (f) Authority. The health insurance commissioner shall have the authority to promulgate

11

regulations consistent with this chapter.

12

     SECTION 12. Chapter 27-18.6 of the General Laws entitled "Large Group Health

13

Insurance Coverage" is hereby amended by adding thereto the following section:

14

     27-18.6-13. Compliance with federal law.

15

     A carrier shall comply with all federal laws and regulations relating to health insurance

16

coverage in the large group market. In its construction and enforcement of the provisions of this

17

section, and in the interests of promoting uniform national rules for health insurance carriers

18

while protecting the interests of Rhode Island consumers and businesses, the office of the health

19

insurance commissioner shall give due deference to the construction, enforcement policies, and

20

guidance of the federal government with respect to federal laws substantially similar to the

21

provisions of this chapter.

22

     SECTION 13. Chapter 27-50 of the General Laws entitled "Small Employer Health

23

Insurance Availability Act" is hereby amended by adding thereto the following section:

24

     27-50-18. Cost sharing requirements.

25

     (a) Annual limitation on cost sharing.

26

     (1) For a health benefit plan year beginning in a calendar year after 2020, cost sharing in

27

a health benefit plan may not exceed the following:

28

     (i) For self-only coverage - the dollar limit for calendar year 2019 defined by the Internal

29

Revenue Service as in place as of January 1, 2019, increased by an amount equal to the product of

30

that amount and the premium adjustment percentage, as defined in subsection (d) of this section.

31

     (ii) For other than self-only coverage - twice the dollar limit for self-only coverage

32

described in subsection (a)(1)(i) of this section.

33

     (b) Increase annual dollar limits in multiples of fifty (50). For a health benefit plan year

34

beginning in a calendar year after 2020, any increase in the annual dollar limits described in

 

LC002242 - Page 72 of 79

1

subsection (a) of this section that does not result in a multiple of fifty dollars ($50.00) shall be

2

rounded down, to the next lowest multiple of fifty dollars ($50.00).

3

     (c) Premium adjustment percentage. The premium adjustment percentage is the

4

percentage (if any) by which the average per capita premium for commercial health insurance

5

coverage in Rhode Island for the preceding calendar year exceeds the average per capita premium

6

for commercial health insurance for 2019. The office of the health insurance commissioner shall

7

publicly publish the annual premium adjustment percentage.

8

     (d) Coordination with preventive limits. Nothing in this section is in derogation of the

9

requirements of preventive services coverage as defined in §§ 27-18.5-2 and 27-50-3.

10

     (e) Coverage of emergency department services. Emergency department services must be

11

provided as follows:

12

     (1) Without imposing any requirement under the health benefit plan for prior

13

authorization of services or any limitation on coverage where the provider of services is out-of-

14

network that is more restrictive than the requirements or limitations that apply to emergency

15

department services received in network; and

16

     (2) If the services are provided out-of-network, cost sharing must be limited as provided

17

in federal regulation 45 CFR §147.138(b)(3) so long as they remain in effect, and if struck then

18

those in effect as of the date immediately prior shall control.

19

     (f) Authority. The health insurance commissioner shall have the authority to promulgate

20

regulations consistent with this chapter.

21

     SECTION 14. Sections 27-18.5-8 and 27-18.5-9 of the General Laws in Chapter 27-18.5

22

entitled "Individual Health Insurance Coverage" are hereby repealed.

23

     27-18.5-8. Wellness health benefit plan.

24

     All carriers that offer health insurance in the individual market shall actively market and

25

offer the wellness health direct benefit plan to eligible individuals. The wellness health direct

26

benefit plan shall be determined by regulation promulgated by the office of the health insurance

27

commissioner (OHIC). The OHIC shall develop the criteria for the direct wellness health benefit

28

plan, including, but not limited to, benefit levels, cost sharing levels, exclusions and limitations in

29

accordance with the following:

30

     (1) Form and utilize an advisory committee in accordance with subsection 27-50-10(5).

31

     (2) Set a target for the average annualized individual premium rate for the direct wellness

32

health benefit plan to be less than ten percent (10%) of the average annual statewide wage,

33

dependent upon the availability of reinsurance funds, as reported by the Rhode Island department

34

of labor and training, in their report entitled "Quarterly Census of Rhode Island Employment and

 

LC002242 - Page 73 of 79

1

Wages." In the event that this report is no longer available, or the OHIC determines that it is no

2

longer appropriate for the determination of maximum annualized premium, an alternative method

3

shall be adopted in regulation by the OHIC. The maximum annualized individual premium rate

4

shall be determined no later than August 1st of each year, to be applied to the subsequent calendar

5

year premiums rates.

6

     (3) Ensure that the direct wellness health benefit plan creates appropriate incentives for

7

employers, providers, health plans and consumers to, among other things:

8

     (i) Focus on primary care, prevention and wellness;

9

     (ii) Actively manage the chronically ill population;

10

     (iii) Use the least cost, most appropriate setting; and

11

     (iv) Use evidence based, quality care.

12

     (4) The plan shall be made available in accordance with title 27, chapter 18.5 as required

13

by regulation on or before May 1, 2007.

14

     27-18.5-9. Affordable health plan reinsurance program for individuals.

15

     (a) The commissioner shall allocate funds from the affordable health plan reinsurance

16

fund for the affordable health reinsurance program.

17

     (b) The affordable health reinsurance program for individuals shall only be available to

18

high-risk individuals as defined in § 27-18.5-2, and who purchase the direct wellness health

19

benefit plan pursuant to the provisions of this section. Eligibility shall be determined based on

20

state and federal income tax filings.

21

     (c) The affordable health plan reinsurance shall be in the form of a carrier cost-sharing

22

arrangement, which encourages carriers to offer a discounted premium rate to participating

23

individuals, and whereby the reinsurance fund subsidizes the carriers' losses within a prescribed

24

corridor of risk as determined by regulation.

25

     (d) The specific structure of the reinsurance arrangement shall be defined by regulations

26

promulgated by the commissioner.

27

     (e) The commissioner shall determine total eligible enrollment under qualifying

28

individual health insurance contracts by dividing the funds available for distribution from the

29

reinsurance fund by the estimated per member annual cost of claims reimbursement from the

30

reinsurance fund.

31

     (f) The commissioner shall suspend the enrollment of new individuals under qualifying

32

individual health insurance contracts if the director determines that the total enrollment reported

33

under such contracts is projected to exceed the total eligible enrollment, thereby resulting in

34

anticipated annual expenditures from the reinsurance fund in excess of ninety-five percent (95%)

 

LC002242 - Page 74 of 79

1

of the total funds available for distribution from the fund.

2

     (g) The commissioner shall provide the health maintenance organization, health insurers

3

and health plans with notification of any enrollment suspensions as soon as practicable after

4

receipt of all enrollment data.

5

     (h) The premiums of qualifying individual health insurance contracts must be no more

6

than ninety percent (90%) of the actuarially-determined and commissioner approved premium for

7

this health plan without the reinsurance program assistance.

8

     (i) The commissioner shall prepare periodic public reports in order to facilitate evaluation

9

and ensure orderly operation of the funds, including, but not limited to, an annual report of the

10

affairs and operations of the fund, containing an accounting of the administrative expenses

11

charged to the fund. Such reports shall be delivered to the co-chairs of the joint legislative

12

committee on health care oversight by March 1st of each year.

13

     SECTION 15. 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

 

LC002242 - Page 75 of 79

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

 

LC002242 - Page 76 of 79

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,

 

LC002242 - Page 77 of 79

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 16. This act shall take effect upon passage and shall apply to health benefit

18

plans issued or renewed on and after January 1, 2020.

========

LC002242

========

 

LC002242 - Page 78 of 79

EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO INSURANCE -- HEALTH INSURANCE COVERAGE--MARKET

STABILITY AND CONSUMER PROTECTION ACT

***

1

     This act would establish the Rhode Island health insurance market stability and consumer

2

protection act in order to update state law to reflect current insurance standards, practice and

3

regulation to maintain market stability, including using current rating factors, continuing the use

4

of a medical loss ratio standard, and providing coverage for benefits consistent with all applicable

5

federal and state laws and regulations. Consumer protections contained in the act would include

6

current requirements to: ban pre-existing condition exclusions; limit annual insurance coverage

7

caps; coverage of preventive services without patient cost sharing, coverage of essential health

8

benefits and provide summaries of benefits for consumers.

9

     This act would take effect upon passage.

========

LC002242

========

 

LC002242 - Page 79 of 79