Chapter
164
2007 -- H 5301 AS AMENDED
Enacted 06/30/07
A N A C T
RELATING
TO INSURANCE
Introduced
By: Representatives Ginaitt, and Lewiss
Date
Introduced: February 06, 2007
It is enacted by the General Assembly as
follows:
SECTION 1. Sections
27-50-3 and 27-50-4 of the General Laws in Chapter 27-50
entitled "Small Employer Health Insurance
Availability Act" are hereby amended to read as
follows:
27-50-3.
Definitions. [Effective January 1, 2007; effective until July 1, 2007.] --
(a)
"Actuarial certification" means a
written statement signed by a member of the American
Academy of Actuaries or other individual
acceptable to the director that a small employer carrier
is in compliance with the provisions of section
27-50-5, based upon the person's examination and
including a review of the appropriate records
and the actuarial assumptions and methods used by
the small employer carrier in establishing
premium rates for applicable health benefit plans.
(b) "Adjusted
community rating" means a method used to develop a carrier's premium
which spreads financial risk across the
carrier's entire small group population in accordance with
the requirements in section 27-50-5.
(c)
"Affiliate" or "affiliated" means any entity or person who
directly or indirectly
through one or more intermediaries controls or
is controlled by, or is under common control with,
a specified entity or person.
(d)
"Affiliation period" means a period of time that must expire before
health insurance
coverage provided by a carrier becomes
effective, and during which the carrier is not required to
provide benefits.
(e) "Bona
fide association" means, with respect to health benefit plans offered in
this
state, an association which:
(1) Has been
actively in existence for at least five (5) years;
(2) Has been
formed and maintained in good faith for purposes other than obtaining
insurance;
(3) Does not
condition membership in the association on any health-status related factor
relating to an individual (including an employee
of an employer or a dependent of an employee);
(4) Makes health
insurance coverage offered through the association available to all
members regardless of any health status-related
factor relating to those members (or individuals
eligible for coverage through a member);
(5) Does not make
health insurance coverage offered through the association available
other than in connection with a member of the
association;
(6) Is composed
of persons having a common interest or calling;
(7) Has a
constitution and bylaws; and
(8) Meets any
additional requirements that the director may prescribe by regulation.
(f)
"Carrier" or "small employer carrier" means all entities
licensed, or required to be
licensed, in this state that offer health
benefit plans covering eligible employees of one or more
small employers pursuant to this chapter. For
the purposes of this chapter, carrier includes an
insurance company, a nonprofit hospital or
medical service corporation, a fraternal benefit
society, a health maintenance organization as
defined in chapter 41 of this title or as defined in
chapter 62 of title 42, or any other entity providing
a plan of health insurance or health benefits
subject to state insurance regulation that
provides medical care as defined in subsection (y) that is
paid or financed for a small employer by such
entity on the basis of a periodic premium, paid
directly or through an association, trust, or
other intermediary, and issued, renewed, or delivered
within or without Rhode Island to a small
employer pursuant to the laws of this or any other
jurisdiction, including a certificate issued to
an eligible employee which evidences coverage
under a policy or contract issued to a trust or
association.
(g) "Church
plan" has the meaning given this term under section 3(33) of the Employee
Retirement Income Security Act of 1974 [29
U.S.C. section 1002(33)_.
(h) "Control"
is defined in the same manner as in chapter 35 of this title.
(i) (1)
"Creditable coverage" means, with respect to an individual, health
benefits or
coverage provided under any of the following:
(i) A group
health plan;
(ii) A health
benefit plan;
(iii) Part A or
part B of Title XVIII of the Social Security Act, 42 U.S.C. section 1395c
et seq., or 42 U.S.C. section 1395j et seq.,
(Medicare);
(iv) Title XIX of
the Social Security Act, 42 U.S.C. section 1396 et seq., (Medicaid),
other than coverage consisting solely of
benefits under 42 U.S.C. section 1396s (the program for
distribution of pediatric vaccines);
(v) 10 U.S.C.
section 1071 et seq., (medical and dental care for members and certain
former members of the uniformed services, and
for their dependents)(Civilian Health and
Medical Program of the Uniformed
Services)(CHAMPUS). For purposes of 10 U.S.C. section
1071 et seq., "uniformed services"
means the armed forces and the commissioned corps of the
national oceanic and atmospheric administration
and of the public health service;
(vi) A medical
care program of the Indian Health Service or of a tribal organization;
(vii) A state
health benefits risk pool;
(viii) A health
plan offered under 5 U.S.C. section 8901 et seq., (Federal Employees
Health Benefits Program (FEHBP));
(ix) A public
health plan, which for purposes of this chapter, means a plan established or
maintained by a state, county, or other political
subdivision of a state that provides health
insurance coverage to individuals enrolled in
the plan; or
(x) A health
benefit plan under section 5(e) of the Peace Corps Act (22 U.S.C. section
2504(e)).
(2) A period of
creditable coverage shall not be counted, with respect to enrollment of an
individual under a group health plan, if, after
the period and before the enrollment date, the
individual experiences a significant break in
coverage.
(j)
"Dependent" means a spouse, an unmarried child under the age of
nineteen (19) years,
an unmarried child who is a student under the
age of twenty-five (25) years, and an unmarried
child of any age who is financially dependent
upon, the parent and is medically determined to
have a physical or mental impairment which can
be expected to result in death or which has
lasted or can be expected to last for a
continuous period of not less than twelve (12) months.
(k)
"Director" means the director of the department of business
regulation.
(l) [Deleted by
P.L. 2006, ch. 258, section 2, and P.L. 2006, ch. 296, section 2.]
(m)
"Eligible employee" means an employee who works on a full-time basis
with a
normal work week of thirty (30) or more hours,
except that at the employer's sole discretion, the
term shall also include an employee who works on
a full-time basis with a normal work week of
anywhere between at least seventeen and one-half
(17.5) and thirty (30) hours, so long as this
eligibility criterion is applied uniformly among
all of the employer's employees and without
regard to any health status-related factor. The
term includes a self-employed individual, a sole
proprietor, a partner of a partnership, and may
include an independent contractor, if the self-
employed individual, sole proprietor, partner,
or independent contractor is included as an
employee under a health benefit plan of a small
employer, but does not include an employee who
works on a temporary or substitute basis or who
works less than seventeen and one-half (17.5)
hours per week. Any retiree under contract with
any independently incorporated fire district is
also included in the definition of eligible
employee. Persons covered under a health benefit plan
pursuant to the Consolidated Omnibus Budget Reconciliation
Act of 1986 shall not be considered
"eligible employees" for purposes of
minimum participation requirements pursuant to section 27-
50-7(d)(9).
(n)
"Enrollment date" means the first day of coverage or, if there is a
waiting period, the
first day of the waiting period, whichever is
earlier.
(o)
"Established geographic service area" means a geographic area, as
approved by the
director and based on the carrier's certificate
of authority to transact insurance in this state, within
which the carrier is authorized to provide
coverage.
(p) "Family
composition" means:
(1) Enrollee;
(2) Enrollee,
spouse and children;
(3) Enrollee and
spouse; or
(4) Enrollee and
children.
(q) "Genetic
information" means information about genes, gene products, and inherited
characteristics that may derive from the
individual or a family member. This includes information
regarding carrier status and information derived
from laboratory tests that identify mutations in
specific genes or chromosomes, physical medical
examinations, family histories, and direct
analysis of genes or chromosomes.
(r)
"Governmental plan" has the meaning given the term under section
3(32) of the
Employee Retirement Income Security Act of 1974,
29 U.S.C. section 1002(32), and any federal
governmental plan.
(s) (1)
"Group health plan" means an employee welfare benefit plan as defined
in section
3(1) of the Employee Retirement Income Security
Act of 1974, 29 U.S.C. section 1002(1), to the
extent that the plan provides medical care, as
defined in subsection (y) of this section, and
including items and services paid for as medical
care to employees or their dependents as defined
under the terms of the plan directly or through
insurance, reimbursement, or otherwise.
(2) For purposes
of this chapter:
(i) Any plan,
fund, or program that would not be, but for PHSA Section 2721(e), 42
U.S.C. section 300gg(e), as added by P.L.
104-191, an employee welfare benefit plan and that is
established or maintained by a partnership, to
the extent that the plan, fund or program provides
medical care, including items and services paid
for as medical care, to present or former partners
in the partnership, or to their dependents, as
defined under the terms of the plan, fund or program,
directly or through insurance, reimbursement or
otherwise, shall be treated, subject to paragraph
(ii) of this subdivision, as an employee welfare
benefit plan that is a group health plan;
(ii) In the case
of a group health plan, the term "employer" also includes the
partnership
in relation to any partner; and
(iii) In the case
of a group health plan, the term "participant" also includes an
individual
who is, or may become, eligible to receive a
benefit under the plan, or the individual's beneficiary
who is, or may become, eligible to receive a
benefit under the plan, if:
(A) In connection
with a group health plan maintained by a partnership, the individual is
a partner in relation to the partnership; or
(B) In connection
with a group health plan maintained by a self-employed individual,
under which one or more employees are
participants, the individual is the self-employed
individual.
(t) (1)
"Health benefit plan" means any hospital or medical policy or
certificate, major
medical expense insurance, hospital or medical
service corporation subscriber contract, or health
maintenance organization subscriber contract.
Health benefit plan includes short-term and
catastrophic health insurance policies, and a
policy that pays on a cost-incurred basis, except as
otherwise specifically exempted in this
definition.
(2) "Health
benefit plan" does not include one or more, or any combination of, the
following:
(i) Coverage only
for accident or disability income insurance, or any combination of
those;
(ii) Coverage
issued as a supplement to liability insurance;
(iii) Liability
insurance, including general liability insurance and automobile liability
insurance;
(iv) Workers'
compensation or similar insurance;
(v) Automobile
medical payment insurance;
(vi) Credit-only
insurance;
(vii) Coverage
for on-site medical clinics; and
(viii) Other
similar insurance coverage, specified in federal regulations issued pursuant
to Pub. L. No. 104-191, under which benefits for
medical care are secondary or incidental to other
insurance benefits.
(3) "Health
benefit plan" does not include the following benefits if they are provided
under a separate policy, certificate, or
contract of insurance or are otherwise not an integral part
of the plan:
(i) Limited scope
dental or vision benefits;
(ii) Benefits for
long-term care, nursing home care, home health care, community-based
care, or any combination of those; or
(iii) Other
similar, limited benefits specified in federal regulations issued pursuant to
Pub. L. No. 104-191.
(4) "Health
benefit plan" does not include the following benefits if the benefits are
provided under a separate policy, certificate or
contract of insurance, there is no coordination
between the provision of the benefits and any
exclusion of benefits under any group health plan
maintained by the same plan sponsor, and the
benefits are paid with respect to an event without
regard to whether benefits are provided with
respect to such an event under any group health plan
maintained by the same plan sponsor:
(i) Coverage only
for a specified disease or illness; or
(ii) Hospital indemnity
or other fixed indemnity insurance.
(5) "Health
benefit plan" does not include the following if offered as a separate
policy,
certificate, or contract of insurance:
(i) Medicare
supplemental health insurance as defined under section 1882(g)(1) of the
Social Security Act, 42 U.S.C. section
1395ss(g)(1);
(ii) Coverage
supplemental to the coverage provided under 10 U.S.C. section 1071 et
seq.; or
(iii) Similar
supplemental coverage provided to coverage under a group health plan.
(6) A carrier
offering policies or certificates of specified disease, hospital confinement
indemnity, or limited benefit health insurance
shall comply with the following:
(i) The carrier
files on or before March 1 of each year a certification with the director
that contains the statement and information
described in paragraph (ii) of this subdivision;
(ii) The
certification required in paragraph (i) of this subdivision shall contain the
following:
(A) A statement from
the carrier certifying that policies or certificates described in this
paragraph are being offered and marketed as
supplemental health insurance and not as a substitute
for hospital or medical expense insurance or
major medical expense insurance; and
(B) A summary
description of each policy or certificate described in this paragraph,
including the average annual premium rates (or
range of premium rates in cases where premiums
vary by age or other factors) charged for those
policies and certificates in this state; and
(iii) In the case
of a policy or certificate that is described in this paragraph and that is
offered for the first time in this state on or
after July 13, 2000, the carrier shall file with the
director the information and statement required
in paragraph (ii) of this subdivision at least thirty
(30) days prior to the date the policy or
certificate is issued or delivered in this state.
(u) "Health
maintenance organization" or "HMO" means a health maintenance
organization licensed under chapter 41 of this
title.
(v) "Health
status-related factor" means any of the following factors:
(1) Health
status;
(2) Medical
condition, including both physical and mental illnesses;
(3) Claims
experience;
(4) Receipt of
health care;
(5) Medical
history;
(6) Genetic
information;
(7) Evidence of
insurability, including conditions arising out of acts of domestic
violence; or
(8) Disability.
(w) (1)
"Late enrollee" means an eligible employee or dependent who requests
enrollment in a health benefit plan of a small
employer following the initial enrollment period
during which the individual is entitled to
enroll under the terms of the health benefit plan,
provided that the initial enrollment period is a
period of at least thirty (30) days.
(2) "Late
enrollee" does not mean an eligible employee or dependent:
(i) Who meets
each of the following provisions:
(A) The individual
was covered under creditable coverage at the time of the initial
enrollment;
(B) The
individual lost creditable coverage as a result of cessation of employer
contribution, termination of employment or
eligibility, reduction in the number of hours of
employment, involuntary termination of
creditable coverage, or death of a spouse, divorce or
legal separation, or the individual and/or
dependents are determined to be eligible for RIteCare
under chapter 5.1 of title 40 or chapter 12.3 of
title 42 or for RIteShare under chapter 8.4 of title
40; and
(C) The
individual requests enrollment within thirty (30) days after termination of the
creditable coverage or the change in conditions
that gave rise to the termination of coverage;
(ii) If, where
provided for in contract or where otherwise provided in state law, the
individual enrolls during the specified bona
fide open enrollment period;
(iii) If the
individual is employed by an employer which offers multiple health benefit
plans and the individual elects a different plan
during an open enrollment period;
(iv) If a court
has ordered coverage be provided for a spouse or minor or dependent child
under a covered employee's health benefit plan
and a request for enrollment is made within thirty
(30) days after issuance of the court order;
(v) If the
individual changes status from not being an eligible employee to becoming an
eligible employee and requests enrollment within
thirty (30) days after the change in status;
(vi) If the
individual had coverage under a COBRA continuation provision and the
coverage under that provision has been
exhausted; or
(vii) Who meets
the requirements for special enrollment pursuant to section 27-50-7 or
27-50-8.
(x) "Limited
benefit health insurance" means that form of coverage that pays stated
predetermined amounts for specific services or
treatments or pays a stated predetermined amount
per day or confinement for one or more named
conditions, named diseases or accidental injury.
(y) "Medical
care" means amounts paid for:
(1) The
diagnosis, care, mitigation, treatment, or prevention of disease, or amounts
paid
for the purpose of affecting any structure or
function of the body;
(2) Transportation
primarily for and essential to medical care referred to in subdivision
(1); and
(3) Insurance
covering medical care referred to in subdivisions (1) and (2) of this
subsection.
(z) "Network
plan" means a health benefit plan issued by a carrier under which the
financing and delivery of medical care,
including items and services paid for as medical care, are
provided, in whole or in part, through a defined
set of providers under contract with the carrier.
(aa)
"Person" means an individual, a corporation, a partnership, an
association, a joint
venture, a joint stock company, a trust, an
unincorporated organization, any similar entity, or any
combination of the foregoing.
(bb) "Plan
sponsor" has the meaning given this term under section 3(16)(B) of the
Employee Retirement Income Security Act of 1974,
29 U.S.C. section 1002(16)(B).
(cc) (1)
"Preexisting condition" means a condition, regardless of the cause of
the
condition, for which medical advice, diagnosis,
care, or treatment was recommended or received
during the six (6) months immediately preceding
the enrollment date of the coverage.
(2)
"Preexisting condition" does not mean a condition for which medical
advice,
diagnosis, care, or treatment was recommended or
received for the first time while the covered
person held creditable coverage and that was a
covered benefit under the health benefit plan,
provided that the prior creditable coverage was
continuous to a date not more than ninety (90)
days prior to the enrollment date of the new
coverage.
(3) Genetic
information shall not be treated as a condition under subdivision (1) of this
subsection for which a preexisting condition
exclusion may be imposed in the absence of a
diagnosis of the condition related to the
information.
(dd)
"Premium" means all moneys paid by a small employer and eligible
employees as a
condition of receiving coverage from a small
employer carrier, including any fees or other
contributions associated with the health benefit
plan.
(ee)
"Producer" means any insurance producer licensed under chapter 2.4 of
this title.
(ff) "Rating
period" means the calendar period for which premium rates established by a
small employer carrier are assumed to be in effect.
(gg)
"Restricted network provision" means any provision of a health
benefit plan that
conditions the payment of benefits, in whole or
in part, on the use of health care providers that
have entered into a contractual arrangement with
the carrier pursuant to provide health care
services to covered individuals.
(hh) "Risk
adjustment mechanism" means the mechanism established pursuant to section
27-50-16.
(ii)
"Self-employed individual" means an individual or sole proprietor who
derives a
substantial portion of his or her income from a
trade or business through which the individual or
sole proprietor has attempted to earn taxable
income and for which he or she has filed the
appropriate Internal Revenue Service Form 1040,
Schedule C or F, for the previous taxable year.
(jj)
"Significant break in coverage" means a period of ninety (90)
consecutive days
during all of which the individual does not have
any creditable coverage, except that neither a
waiting period nor an affiliation period is
taken into account in determining a significant break in
coverage.
(kk) "Small
employer" means, except for its use in section 27-50-7, any person, firm,
corporation, partnership, association, political
subdivision, or self-employed individual that is
actively engaged in business including, but not
limited to, a business or a corporation organized
under the Rhode Island Non-Profit Corporation
Act, chapter 6 of title 7, or a similar act of
another state that, on at least fifty percent
(50%) of its working days during the preceding
calendar quarter, employed no more than fifty
(50) eligible employees, with a normal work week
of thirty (30) or more hours, the majority of
whom were employed within this state, and is not
formed primarily for purposes of buying health
insurance and in which a bona fide employer-
employee relationship exists. In determining the
number of eligible employees, companies that
are affiliated companies, or that are eligible
to file a combined tax return for purposes of taxation
by this state, shall be considered one employer.
Subsequent to the issuance of a health benefit
plan to a small employer and for the purpose of
determining continued eligibility, the size of a
small employer shall be determined annually.
Except as otherwise specifically provided,
provisions of this chapter that apply to a small
employer shall continue to apply at least until the
plan anniversary following the date the small
employer no longer meets the requirements of this
definition. The term small employer includes a
self-employed individual.
(ll)
"Waiting period" means, with respect to a group health plan and an
individual who is
a potential enrollee in the plan, the period
that must pass with respect to the individual before the
individual is eligible to be covered for
benefits under the terms of the plan. For purposes of
calculating periods of creditable coverage
pursuant to subsection (j)(2) of this section, a waiting
period shall not be considered a gap in coverage.
(mm)
"Wellness health benefit plan" means a plan developed pursuant to
section 27-50-
10.
(nn) "Health
insurance commissioner" or "commissioner" means that individual
appointed pursuant to section 42-14.5-1 of the
general laws and afforded those powers and duties
as set forth in sections 42-14.5-2 and 42-14.5-3
of title 42.
27-50-3.
Definitions. [Effective July 1, 2007.] -- (a) "Actuarial
certification" means a
written statement signed by a member of the
American Academy of Actuaries or other individual
acceptable to the director that a small employer
carrier is in compliance with the provisions of
section 27-50-5, based upon the person's
examination and including a review of the appropriate
records and the actuarial assumptions and
methods used by the small employer carrier in
establishing premium rates for applicable health
benefit plans.
(b)
"Adjusted community rating" means a method used to develop a
carrier's premium
which spreads financial risk across the carrier's
entire small group population in accordance with
the requirements in section 27-50-5.
(c)
"Affiliate" or "affiliated" means any entity or person who
directly or indirectly
through one or more intermediaries controls or
is controlled by, or is under common control with,
a specified entity or person.
(d)
"Affiliation period" means a period of time that must expire before
health insurance
coverage provided by a carrier becomes
effective, and during which the carrier is not required to
provide benefits.
(e) "Bona
fide association" means, with respect to health benefit plans offered in
this
state, an association which:
(1) Has been
actively in existence for at least five (5) years;
(2) Has been formed
and maintained in good faith for purposes other than obtaining
insurance;
(3) Does not
condition membership in the association on any health-status related factor
relating to an individual (including an employee
of an employer or a dependent of an employee);
(4) Makes health
insurance coverage offered through the association available to all
members regardless of any health status-related
factor relating to those members (or individuals
eligible for coverage through a member);
(5) Does not make
health insurance coverage offered through the association available
other than in connection with a member of the
association;
(6) Is composed
of persons having a common interest or calling;
(7) Has a
constitution and bylaws; and
(8) Meets any
additional requirements that the director may prescribe by regulation.
(f)
"Carrier" or "small employer carrier" means all entities
licensed, or required to be
licensed, in this state that offer health
benefit plans covering eligible employees of one or more
small employers pursuant to this chapter. For
the purposes of this chapter, carrier includes an
insurance company, a nonprofit hospital or
medical service corporation, a fraternal benefit
society, a health maintenance organization as
defined in chapter 41 of this title or as defined in
chapter 62 of title 42, or any other entity providing
a plan of health insurance or health benefits
subject to state insurance regulation that
provides medical care as defined in subsection (y) that is
paid or financed for a small employer by such
entity on the basis of a periodic premium, paid
directly or through an association, trust, or
other intermediary, and issued, renewed, or delivered
within or without Rhode Island to a small employer
pursuant to the laws of this or any other
jurisdiction, including a certificate issued to
an eligible employee which evidences coverage
under a policy or contract issued to a trust or
association.
(g) "Church
plan" has the meaning given this term under section 3(33) of the Employee
Retirement Income Security Act of 1974 [29
U.S.C. section 1002(33)_.
(h)
"Control" is defined in the same manner as in chapter 35 of this
title.
(i) (1)
"Creditable coverage" means, with respect to an individual, health
benefits or
coverage provided under any of the following:
(i) A group
health plan;
(ii) A health
benefit plan;
(iii) Part A or
part B of Title XVIII of the Social Security Act, 42 U.S.C. section 1395c
et seq., or 42 U.S.C. section 1395j et seq.,
(Medicare);
(iv) Title XIX of
the Social Security Act, 42 U.S.C. section 1396 et seq., (Medicaid),
other than coverage consisting solely of
benefits under 42 U.S.C. section 1396s (the program for
distribution of pediatric vaccines);
(v) 10 U.S.C.
section 1071 et seq., (medical and dental care for members and certain
former members of the uniformed services, and
for their dependents)(Civilian Health and
Medical Program of the Uniformed Services)(CHAMPUS).
For purposes of 10 U.S.C. section
1071 et seq., "uniformed services"
means the armed forces and the commissioned corps of the
national oceanic and atmospheric administration
and of the public health service;
(vi) A medical
care program of the Indian Health Service or of a tribal organization;
(vii) A state
health benefits risk pool;
(viii) A health
plan offered under 5 U.S.C. section 8901 et seq., (Federal Employees
Health Benefits Program (FEHBP));
(ix) A public
health plan, which for purposes of this chapter, means a plan established or
maintained by a state, county, or other
political subdivision of a state that provides health
insurance coverage to individuals enrolled in
the plan; or
(x) A health benefit
plan under section 5(e) of the Peace Corps Act (22 U.S.C. section
2504(e)).
(2) A period of
creditable coverage shall not be counted, with respect to enrollment of an
individual under a group health plan, if, after
the period and before the enrollment date, the
individual experiences a significant break in
coverage.
(j)
"Dependent" means a spouse, an unmarried child under the age of
nineteen (19) years,
an unmarried child who is a student under the
age of twenty-five (25) years, and an unmarried
child of any age who is financially dependent
upon, the parent and is medically determined to
have a physical or mental impairment which can
be expected to result in death or which has
lasted or can be expected to last for a continuous
period of not less than twelve (12) months.
(k)
"Director" means the director of the department of business
regulation.
(l) [Deleted by
P.L. 2006, ch. 258, section 2, and P.L. 2006, ch. 296, section 2.]
(m)
"Eligible employee" means an employee who works on a full-time basis
with a
normal work week of thirty (30) or more hours,
except that at the employer's sole discretion, the
term shall also include an employee who works on
a full-time basis with a normal work week of
anywhere between at least seventeen and one-half
(17.5) and thirty (30) hours, so long as this
eligibility criterion is applied uniformly among
all of the employer's employees and without
regard to any health status-related factor. The
term includes a self-employed individual, a sole
proprietor, a partner of a partnership, and may
include an independent contractor, if the self-
employed individual, sole proprietor, partner,
or independent contractor is included as an
employee under a health benefit plan of a small
employer, but does not include an employee who
works on a temporary or substitute basis or who
works less than seventeen and one-half (17.5)
hours per week. Any retiree under contract with
any independently incorporated fire district is
also included in the definition of eligible
employee. Persons covered under a health benefit plan
pursuant to the Consolidated Omnibus Budget
Reconciliation Act of 1986 shall not be considered
"eligible employees" for purposes of
minimum participation requirements pursuant to section 27-
50-7(d)(9).
(n)
"Enrollment date" means the first day of coverage or, if there is a
waiting period, the
first day of the waiting period, whichever is
earlier.
(o)
"Established geographic service area" means a geographic area, as
approved by the
director and based on the carrier's certificate
of authority to transact insurance in this state, within
which the carrier is authorized to provide
coverage.
(p) "Family
composition" means:
(1) Enrollee;
(2) Enrollee,
spouse and children;
(3) Enrollee and
spouse; or
(4) Enrollee and
children.
(q) "Genetic
information" means information about genes, gene products, and inherited
characteristics that may derive from the individual
or a family member. This includes information
regarding carrier status and information derived
from laboratory tests that identify mutations in
specific genes or chromosomes, physical medical
examinations, family histories, and direct
analysis of genes or chromosomes.
(r)
"Governmental plan" has the meaning given the term under section
3(32) of the
Employee Retirement Income Security Act of 1974,
29 U.S.C. section 1002(32), and any federal
governmental plan.
(s) (1)
"Group health plan" means an employee welfare benefit plan as defined
in section
3(1) of the Employee Retirement Income Security
Act of 1974, 29 U.S.C. section 1002(1), to the
extent that the plan provides medical care, as
defined in subsection (y) of this section, and
including items and services paid for as medical
care to employees or their dependents as defined
under the terms of the plan directly or through
insurance, reimbursement, or otherwise.
(2) For purposes
of this chapter:
(i) Any plan,
fund, or program that would not be, but for PHSA Section 2721(e), 42
U.S.C. section 300gg(e), as added by P.L.
104-191, an employee welfare benefit plan and that is
established or maintained by a partnership, to
the extent that the plan, fund or program provides
medical care, including items and services paid
for as medical care, to present or former partners
in the partnership, or to their dependents, as
defined under the terms of the plan, fund or program,
directly or through insurance, reimbursement or
otherwise, shall be treated, subject to paragraph
(ii) of this subdivision, as an employee welfare
benefit plan that is a group health plan;
(ii) In the case
of a group health plan, the term "employer" also includes the
partnership
in relation to any partner; and
(iii) In the case
of a group health plan, the term "participant" also includes an
individual
who is, or may become, eligible to receive a
benefit under the plan, or the individual's beneficiary
who is, or may become, eligible to receive a
benefit under the plan, if:
(A) In connection
with a group health plan maintained by a partnership, the individual is
a partner in relation to the partnership; or
(B) In connection
with a group health plan maintained by a self-employed individual,
under which one or more employees are
participants, the individual is the self-employed
individual.
(t) (1)
"Health benefit plan" means any hospital or medical policy or
certificate, major
medical expense insurance, hospital or medical service
corporation subscriber contract, or health
maintenance organization subscriber contract.
Health benefit plan includes short-term and
catastrophic health insurance policies, and a
policy that pays on a cost-incurred basis, except as
otherwise specifically exempted in this
definition.
(2) "Health
benefit plan" does not include one or more, or any combination of, the
following:
(i) Coverage only
for accident or disability income insurance, or any combination of
those;
(ii) Coverage
issued as a supplement to liability insurance;
(iii) Liability
insurance, including general liability insurance and automobile liability
insurance;
(iv) Workers'
compensation or similar insurance;
(v) Automobile
medical payment insurance;
(vi) Credit-only
insurance;
(vii) Coverage
for on-site medical clinics; and
(viii) Other
similar insurance coverage, specified in federal regulations issued pursuant
to Pub. L. No. 104-191, under which benefits for
medical care are secondary or incidental to other
insurance benefits.
(3) "Health
benefit plan" does not include the following benefits if they are provided
under a separate policy, certificate, or
contract of insurance or are otherwise not an integral part
of the plan:
(i) Limited scope
dental or vision benefits;
(ii) Benefits for
long-term care, nursing home care, home health care, community-based
care, or any combination of those; or
(iii) Other
similar, limited benefits specified in federal regulations issued pursuant to
Pub. L. No. 104-191.
(4) "Health
benefit plan" does not include the following benefits if the benefits are
provided under a separate policy, certificate or
contract of insurance, there is no coordination
between the provision of the benefits and any
exclusion of benefits under any group health plan
maintained by the same plan sponsor, and the
benefits are paid with respect to an event without
regard to whether benefits are provided with
respect to such an event under any group health plan
maintained by the same plan sponsor:
(i) Coverage only
for a specified disease or illness; or
(ii) Hospital
indemnity or other fixed indemnity insurance.
(5) "Health
benefit plan" does not include the following if offered as a separate
policy,
certificate, or contract of insurance:
(i) Medicare
supplemental health insurance as defined under section 1882(g)(1) of the
Social Security Act, 42 U.S.C. section
1395ss(g)(1);
(ii) Coverage
supplemental to the coverage provided under 10 U.S.C. section 1071 et
seq.; or
(iii) Similar
supplemental coverage provided to coverage under a group health plan.
(6) A carrier
offering policies or certificates of specified disease, hospital confinement
indemnity, or limited benefit health insurance
shall comply with the following:
(i) The carrier
files on or before March 1 of each year a certification with the director
that contains the statement and information
described in paragraph (ii) of this subdivision;
(ii) The
certification required in paragraph (i) of this subdivision shall contain the
following:
(A) A statement
from the carrier certifying that policies or certificates described in this
paragraph are being offered and marketed as
supplemental health insurance and not as a substitute
for hospital or medical expense insurance or
major medical expense insurance; and
(B) A summary
description of each policy or certificate described in this paragraph,
including the average annual premium rates (or
range of premium rates in cases where premiums
vary by age or other factors) charged for those
policies and certificates in this state; and
(iii) In the case
of a policy or certificate that is described in this paragraph and that is
offered for the first time in this state on or
after July 13, 2000, the carrier shall file with the
director the information and statement required
in paragraph (ii) of this subdivision at least thirty
(30) days prior to the date the policy or
certificate is issued or delivered in this state.
(u) "Health
maintenance organization" or "HMO" means a health maintenance
organization licensed under chapter 41 of this
title.
(v) "Health
status-related factor" means any of the following factors:
(1) Health
status;
(2) Medical
condition, including both physical and mental illnesses;
(3) Claims
experience;
(4) Receipt of
health care;
(5) Medical
history;
(6) Genetic information;
(7) Evidence of
insurability, including conditions arising out of acts of domestic
violence; or
(8) Disability.
(w) (1)
"Late enrollee" means an eligible employee or dependent who requests
enrollment in a health benefit plan of a small
employer following the initial enrollment period
during which the individual is entitled to
enroll under the terms of the health benefit plan,
provided that the initial enrollment period is a
period of at least thirty (30) days.
(2) "Late
enrollee" does not mean an eligible employee or dependent:
(i) Who meets
each of the following provisions:
(A) The
individual was covered under creditable coverage at the time of the initial
enrollment;
(B) The
individual lost creditable coverage as a result of cessation of employer
contribution, termination of employment or
eligibility, reduction in the number of hours of
employment, involuntary termination of
creditable coverage, or death of a spouse, divorce or
legal separation, or the individual and/or
dependents are determined to be eligible for RIteCare
under chapter 5.1 of title 40 or chapter 12.3 of
title 42 or for RIteShare under chapter 8.4 of title
40; and
(C) The
individual requests enrollment within thirty (30) days after termination of the
creditable coverage or the change in conditions
that gave rise to the termination of coverage;
(ii) If, where
provided for in contract or where otherwise provided in state law, the
individual enrolls during the specified bona
fide open enrollment period;
(iii) If the
individual is employed by an employer which offers multiple health benefit
plans and the individual elects a different plan
during an open enrollment period;
(iv) If a court
has ordered coverage be provided for a spouse or minor or dependent child
under a covered employee's health benefit plan
and a request for enrollment is made within thirty
(30) days after issuance of the court order;
(v) If the individual
changes status from not being an eligible employee to becoming an
eligible employee and requests enrollment within
thirty (30) days after the change in status;
(vi) If the
individual had coverage under a COBRA continuation provision and the
coverage under that provision has been
exhausted; or
(vii) Who meets
the requirements for special enrollment pursuant to section 27-50-7 or
27-50-8.
(x) "Limited
benefit health insurance" means that form of coverage that pays stated
predetermined amounts for specific services or
treatments or pays a stated predetermined amount
per day or confinement for one or more named
conditions, named diseases or accidental injury.
(y) "Medical
care" means amounts paid for:
(1) The diagnosis,
care, mitigation, treatment, or prevention of disease, or amounts paid
for the purpose of affecting any structure or
function of the body;
(2)
Transportation primarily for and essential to medical care referred to in
subdivision
(1); and
(3) Insurance
covering medical care referred to in subdivisions (1) and (2) of this
subsection.
(z) "Network
plan" means a health benefit plan issued by a carrier under which the
financing and delivery of medical care,
including items and services paid for as medical care, are
provided, in whole or in part, through a defined
set of providers under contract with the carrier.
(aa)
"Person" means an individual, a corporation, a partnership, an
association, a joint
venture, a joint stock company, a trust, an
unincorporated organization, any similar entity, or any
combination of the foregoing.
(bb) "Plan
sponsor" has the meaning given this term under section 3(16)(B) of the
Employee Retirement Income Security Act of 1974,
29 U.S.C. section 1002(16)(B).
(cc) (1)
"Preexisting condition" means a condition, regardless of the cause of
the
condition, for which medical advice, diagnosis,
care, or treatment was recommended or received
during the six (6) months immediately preceding
the enrollment date of the coverage.
(2)
"Preexisting condition" does not mean a condition for which medical
advice,
diagnosis, care, or treatment was recommended or
received for the first time while the covered
person held creditable coverage and that was a
covered benefit under the health benefit plan,
provided that the prior creditable coverage was
continuous to a date not more than ninety (90)
days prior to the enrollment date of the new
coverage.
(3) Genetic
information shall not be treated as a condition under subdivision (1) of this
subsection for which a preexisting condition
exclusion may be imposed in the absence of a
diagnosis of the condition related to the
information.
(dd)
"Premium" means all moneys paid by a small employer and eligible
employees as a
condition of receiving coverage from a small
employer carrier, including any fees or other
contributions associated with the health benefit
plan.
(ee)
"Producer" means any insurance producer licensed under chapter 2.4 of
this title.
(ff) "Rating
period" means the calendar period for which premium rates established by a
small employer carrier are assumed to be in
effect.
(gg)
"Restricted network provision" means any provision of a health
benefit plan that
conditions the payment of benefits, in whole or
in part, on the use of health care providers that
have entered into a contractual arrangement with
the carrier pursuant to provide health care
services to covered individuals.
(hh) "Risk
adjustment mechanism" means the mechanism established pursuant to section
27-50-16.
(ii)
"Self-employed individual" means an individual or sole proprietor who
derives a
substantial portion of his or her income from a
trade or business through which the individual or
sole proprietor has attempted to earn taxable
income and for which he or she has filed the
appropriate Internal Revenue Service Form 1040,
Schedule C or F, for the previous taxable year.
(jj)
"Significant break in coverage" means a period of ninety (90)
consecutive days
during all of which the individual does not have
any creditable coverage, except that neither a
waiting period nor an affiliation period is
taken into account in determining a significant break in
coverage.
(kk) "Small
employer" means, except for its use in section 27-50-7, any person, firm,
corporation, partnership, association, political
subdivision, or self-employed individual that is
actively engaged in business including, but not
limited to, a business or a corporation organized
under the Rhode Island Non-Profit Corporation
Act, chapter 6 of title 7, or a similar act of
another state that, on at least fifty percent
(50%) of its working days during the preceding
calendar quarter, employed no more than fifty
(50) eligible employees, with a normal work week
of thirty (30) or more hours, the majority of
whom were employed within this state, and is not
formed primarily for purposes of buying health
insurance and in which a bona fide employer-
employee relationship exists. In determining the
number of eligible employees, companies that
are affiliated companies, or that are eligible
to file a combined tax return for purposes of taxation
by this state, shall be considered one employer.
Subsequent to the issuance of a health benefit
plan to a small employer and for the purpose of
determining continued eligibility, the size of a
small employer shall be determined annually.
Except as otherwise specifically provided,
provisions of this chapter that apply to a small
employer shall continue to apply at least until the
plan anniversary following the date the small
employer no longer meets the requirements of this
definition. The term small employer includes a
self-employed individual.
( ll ) "Waiting
period" means, with respect to a group health plan and an individual who
is a potential enrollee in the plan, the period
that must pass with respect to the individual before
the individual is eligible to be covered for
benefits under the terms of the plan. For purposes of
calculating periods of creditable coverage
pursuant to subsection (j)(2) of this section, a waiting
period shall not be considered a gap in
coverage.
(mm)
"Wellness health benefit plan" means a plan developed pursuant to
section 27-50-
10.
(nn) "Health
insurance commissioner" or "commissioner" means that individual
appointed pursuant to section 42-14.5-1 of the
general laws and afforded those powers and duties
as set forth in sections 42-14.5-2 and 42-14.5-3
of title 42.
(oo)
"Low-wage firm" means those with average wages that fall within the
bottom
quartile of all Rhode Island employers.
(pp)
"Wellness health benefit plan" means the health benefit plan offered
by each small
employer carrier pursuant to section 27-50-7.
(qq)
"Commissioner" means the health insurance commissioner.
27-50-4.
Applicability and scope. -- (a) This chapter applies to any health
benefit plan
that provides coverage to the employees
of a small employer in this state, whether issued directly
by a carrier or through a trust,
association, or other intermediary, and regardless of issuance or
delivery of the policy, if any of the following conditions
are met:
(1) Any portion
of the premium or benefits is paid by or on behalf of the small employer;
(2) An eligible
employee or dependent is reimbursed, whether through wage adjustments
or otherwise, by or on behalf of the small
employer for any portion of the premium;
(3) The health
benefit plan is treated by the employer or any of the eligible employees or
dependents as part of a plan or program for the
purposes of Section 162, Section 125, or Section
106 of the United States Internal Revenue Code,
26 U.S.C. section 162, 125, or 106; or
(4) The health
benefit plan is marketed to individual employees through an employer.
(b) (1) Except as
provided in subdivision (2) of this subsection, for the purposes of this
chapter, carriers that are affiliated companies
or that are eligible to file a consolidated tax return
shall be treated as one carrier and any
restrictions or limitations imposed by this chapter shall
apply as if all health benefit plans delivered
or issued for delivery to small employers in this state
by the affiliated carriers were issued by one
carrier.
(2) An affiliated
carrier that is a health maintenance organization having a license under
chapter 41 of this title or a health maintenance
organization as defined in chapter 62 of title 42
may be considered to be a separate carrier for
the purposes of this chapter.
(3) Unless
otherwise authorized by the director, a small employer carrier shall not enter
into one or more ceding arrangements with respect
to health benefit plans delivered or issued for
delivery to small employers in this state if
those arrangements would result in less than fifty
percent (50%) of the insurance obligation or
risk for the health benefit plans being retained by the
ceding carrier. The department of business
regulation's statutory provisions under this title shall
apply if a small employer carrier cedes or
assumes all of the insurance obligation or risk with
respect to one or more health benefit plans
delivered or issued for delivery to small employers in
this state.
SECTION 2. Section
27-18.5-2 of the General Laws in Chapter 27-18.5 entitled
"Individual Health Insurance Coverage"
is hereby amended to read as follows:
27-18.5-2.
Definitions. -- The following words and phrases as used in this chapter
have
the following meanings unless a different
meaning is required by the context:
(1) "Bona
fide association" means, with respect to health insurance coverage offered
in
this state, an association which:
(i) Has been
actively in existence for at least five (5) years;
(ii) Has been
formed and maintained in good faith for purposes other than obtaining
insurance;
(iii) Does not
condition membership in the association on any health status-related factor
relating to an individual (including an employee
of an employer or a dependent of an employee);
(iv) Makes health
insurance coverage offered through the association available to all
members regardless of any health status-related factor
relating to the members (or individuals
eligible for coverage through a member);
(v) Does not make
health insurance coverage offered through the association available
other than in connection with a member of the
association;
(vi) Is composed
of persons having a common interest or calling;
(vii) Has a
constitution and bylaws; and
(viii) Meets any
additional requirements that the director may prescribe by regulation;
(2) "COBRA
continuation provision" means any of the following:
(i) Section
4980(B) of the Internal Revenue Code of 1986, 26 U.S.C. section 4980B,
other than subsection (f)(1) of that section
insofar as it relates to pediatric vaccines;
(ii) Part 6 of
subtitle B of Title I of the Employee Retirement Income Security Act of
1974, 29 U.S.C. section 1161 et seq., other than
Section 609 of that act, 29 U.S.C. section 1169;
or
(iii) Title XXII
of the United States Public Health Service Act, 42 U.S.C. section 300bb-
1 et seq.;
(3)
"Creditable coverage" has the same meaning as defined in the United
States Public
Health Service Act, Section 2701(c), 42 U.S.C.
section 300gg(c), as added by P.L. 104-191;
(4)
"Director" means the director of the department of business regulation;
(5)
"Eligible individual" means an individual:
(i) For whom, as
of the date on which the individual seeks coverage under this chapter,
the aggregate of the periods of creditable
coverage is eighteen (18) or more months and whose
most recent prior creditable coverage was under
a group health plan, a governmental plan
established or maintained for its employees by
the government of the United States or by any of
its agencies or instrumentalities, or church
plan (as defined by the Employee Retirement Income
Security Act of 1974, 29 U.S.C. section 1001 et
seq.);
(ii) Who is not
eligible for coverage under a group health plan, part A or part B of title
XVIII of the Social Security Act, 42 U.S.C.
section 1395c et seq. or 42 U.S.C. section 1395j et
seq., or any state plan under title XIX of the
Social Security Act, 42 U.S.C. section 1396 et seq.
(or any successor program), and does not have
other health insurance coverage;
(iii) With
respect to whom the most recent coverage within the coverage period was not
terminated based on a factor described in
section 27-18.5-4(b)(relating to nonpayment of
premiums or fraud);
(iv) If the
individual had been offered the option of continuation coverage under a
COBRA continuation provision, or under chapter
19.1 of this title or under a similar state
program of this state or any other state, who
elected the coverage; and
(v) Who, if the
individual elected COBRA continuation coverage, has exhausted the
continuation coverage under the provision or
program;
(6) "Group
health plan" means an employee welfare benefit plan as defined in section
3(1) of the Employee Retirement Income Security
Act of 1974, 29 U.S.C. section 1002(1), to the
extent that the plan provides medical care and
including items and services paid for as medical
care to employees or their dependents as defined
under the terms of the plan directly or through
insurance, reimbursement or otherwise;
(7) "Health
insurance carrier" or "carrier" means any entity subject to the
insurance laws
and regulations of this state, or subject to the
jurisdiction of the director, that contracts or offers to
contract to provide, deliver, arrange for, pay
for, or reimburse any of the costs of health care
services, including, without limitation, an
insurance company offering accident and sickness
insurance, a health maintenance organization, a
nonprofit hospital, medical or dental service
corporation, or any other entity providing a
plan of health insurance or health benefits by which
health care services are paid or financed for an
eligible individual or his or her dependents by
such entity on the basis of a periodic premium,
paid directly or through an association, trust, or
other intermediary, and issued, renewed, or
delivered within or without Rhode Island to cover a
natural person who is a resident of this state,
including a certificate issued to a natural person
which evidences coverage under a policy or
contract issued to a trust or association;
(8) (i)
"Health insurance coverage" means a policy, contract, certificate, or
agreement
offered by a health insurance carrier to
provide, deliver, arrange for, pay for or reimburse any of
the costs of health care services.
(ii) "Health
insurance coverage" does not include one or more, or any combination of,
the following:
(A) Coverage only
for accident, or disability income insurance, or any combination of
those;
(B) Coverage
issued as a supplement to liability insurance;
(C) Liability
insurance, including general liability insurance and automobile liability
insurance;
(D) Workers'
compensation or similar insurance;
(E) Automobile
medical payment insurance;
(F) Credit-only
insurance;
(G) Coverage for
on-site medical clinics;
(H) Other similar
insurance coverage, specified in federal regulations issued pursuant to
P.L. 104-191, under which benefits for medical
care are secondary or incidental to other
insurance benefits; and
(I) Short term
limited duration insurance;
(iii)
"Health insurance coverage" does not include the following benefits
if they are
provided under a separate policy, certificate,
or contract of insurance or are not an integral part of
the coverage:
(A) Limited scope
dental or vision benefits;
(B) Benefits for
long-term care, nursing home care, home health care, community-based
care, or any combination of these;
(C) Any other
similar, limited benefits that are specified in federal regulation issued
pursuant to P.L. 104-191;
(iv) "Health
insurance coverage" does not include the following benefits if the
benefits
are provided under a separate policy,
certificate, or contract of insurance, there is no coordination
between the provision of the benefits and any
exclusion of benefits under any group health plan
maintained by the same plan sponsor, and the
benefits are paid with respect to an event without
regard to whether benefits are provided with
respect to the event under any group health plan
maintained by the same plan sponsor:
(A) Coverage only
for a specified disease or illness; or
(B) Hospital
indemnity or other fixed indemnity insurance; and
(v) "Health
insurance coverage" does not include the following if it is offered as a
separate policy, certificate, or contract of
insurance:
(A) Medicare
supplemental health insurance as defined under section 1882(g)(1) of the
Social Security Act, 42 U.S.C. section
1395ss(g)(1);
(B) Coverage
supplemental to the coverage provided under 10 U.S.C. section 1071 et
seq.; and
(C) Similar
supplemental coverage provided to coverage under a group health plan;
(9) "Health
status-related factor" means any of the following factors:
(i) Health status;
(ii) Medical
condition, including both physical and mental illnesses;
(iii) Claims
experience;
(iv) Receipt of
health care;
(v) Medical
history;
(vi) Genetic
information;
(vii) Evidence of
insurability, including conditions arising out of acts of domestic
violence; and
(viii)
Disability;
(10)
"Individual market" means the market for health insurance coverage
offered to
individuals other than in connection with a
group health plan;
(11)
"Network plan" means health insurance coverage offered by a health
insurance
carrier under which the financing and delivery
of medical care including items and services paid
for as medical care are provided, in whole or in
part, through a defined set of providers under
contract with the carrier; and
(12)
"Preexisting condition" means, with respect to health insurance
coverage, a
condition (whether physical or mental),
regardless of the cause of the condition, that was present
before the date of enrollment for the coverage,
for which medical advice, diagnosis, care, or
treatment was recommended or received within the
six (6) month period ending on the enrollment
date. Genetic information shall not be treated
as a preexisting condition in the absence of a
diagnosis of the condition related to that
information.
SECTION 3. This
act shall take effect upon passage.
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LC00285
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