SB 6-FN – AS INTRODUCED
SENATE BILL 6-FN
SPONSORS: Sen. Flanders, Dist 7; Sen. Letourneau, Dist 19; Sen. Kenney, Dist 3; Sen. Odell, Dist 8; Sen. Clegg, Dist 14; Sen. Martel, Dist 18; Sen. Bragdon, Dist 11; Sen. Johnson, Dist 2; Rep. Hunt, Ches 7
I. Establishes the small group reinsurance association and a reinsurance mechanism for small group insurance carriers who may reinsure eligible employees for cost-sharing purposes.
II. Changes the definition of small employer to employers with 2-50 employees. Current law defines small employers to have one-50 employees.
III. Deletes geographic location as a rating factor for premium rates for small group health insurance.
IV. Revises RSA 420-G.
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Explanation: Matter added to current law appears in bold italics.
Matter removed from current law appears [
in brackets and struckthrough.]
Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Five
AN ACT relative to small group insurers.
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 Portability, Availability, and Renewability of Health Coverage. RSA 420-G is repealed and reenacted to read as follows:
PORTABILITY, AVAILABILITY, AND RENEWABILITY
OF HEALTH COVERAGE
420-G:1 Purpose. The purpose of this chapter is to:
I. Facilitate the portability, availability, and renewability of health coverage for all New Hampshire residents and persons principally employed in New Hampshire who wish to obtain health coverage or maintain it as individuals or as employees of large and small employers.
II. To promote competition among health carriers on the basis of efficient claims handling, ability to manage health care services, consumer satisfaction, and low administrative costs.
III. To regulate underwriting and rating practices in the small employer and individual markets so as to promote access to affordable coverage for higher risk groups or individuals.
420-G:2 Definitions. In this chapter:
I. “Base rate” means a single rate reflecting the carrier’s average cost of actual or anticipated claims for all health coverages or health benefit plans the carrier writes and maintains in a market, including the no group individual health insurance market and the small employer group health insurance market.
II. “Commissioner” means the commissioner of insurance.
III. “Creditable coverage” means any public or private health insurance or health benefit plan, whether insured or self-insured, unless that coverage consists solely of benefits excluded from the definitions of “health coverage” in paragraph IX or “individual health coverage” in paragraph XII. Notwithstanding the exclusion in paragraph IX, short-term, nonrenewable individual policies for medical, hospital, or major medical coverage issued pursuant to RSA 415:5, III or other law shall be considered “creditable coverage.”
IV. “Department” means the department of insurance.
V. “Eligible dependents” means those persons who may be included under a covered person’s health coverage by the terms of the policy or plan and in accordance with this chapter.
VI. “Eligible employee” means an employee who meets the requirements for eligibility set forth by the employer, the health coverage plan and state law.
VII. “Exclusion period” means the length of time that must expire before a health carrier will cover medical treatment expense relating to a preexisting condition.
VIII. “Health carrier” means any entity subject to the insurance laws and rules of this state, or subject to the jurisdiction of the commissioner, that contracts or offers to provide, deliver, arrange for, pay for or reimburse any of the costs of health services; including an insurance company, a health maintenance organization, a nonprofit health services corporation, or any other entity providing health coverage.
IX. “Health coverage” means any hospital or medical expense incurred policy or certificate, nonprofit health services corporation subscriber contract, or health maintenance organization subscriber contract and any other health insurance plan or health benefit plan. For the purposes of this chapter, health coverage does not include:
(a) Accident-only or disability income insurance.
(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) Short-term, individual, nonrenewable medical, hospital, or major medical policies.
(i) Other similar insurance coverage, specified in rules, under which benefits for medical care are secondary or incidental to other insurance benefits.
(j) If offered separately:
(1) Limited scope dental or vision benefits.
(2) Long-term care, nursing home care, home health care, community-based care, or any combination thereof.
(3) Prescription drug benefits.
(4) Other similar, limited benefits as are specified in rules.
(k) If offered as independent, no coordinated benefits:
(1) Specified disease or illness benefits.
(2) Hospital or surgical indemnity benefits.
(l) If offered as a separate insurance policy, Medicare supplemental health insurance, coverage supplemental to the coverage provided under chapter 55 of Title 10, United States Code, and similar supplemental coverage as specified in regulations.
X. “Health coverage plan rate” means a rate that is uniquely determined for each of the coverages or health benefit plans a health carrier writes and that is derived from the base rate through the application of factors that reflect actuarially demonstrated differences in expected utilization or cost attributable to differences in the coverage design and/or the provider contracts that support the coverage.
XI. “Individual” means a person who is not eligible for health coverage through employment and that person’s dependents.
XII. “Individual health coverage” means health coverage issued by a health carrier directly to an individual and not on a group or group remittance basis. For the purposes of this chapter, franchise insurance, as defined in RSA 415:19, shall be considered individual health coverage.
XIII.(a) “Large employer” means an employer that employed on average at least 51 persons, on business days, during the previous calendar year.
(b) In the case of an employer which was not in existence throughout the preceding calendar year, the determination of whether such employer is a small or large employer shall be based on the average number of employees that it is reasonably expected such employer will employ on business days in the current calendar year.
XIV. “Loss information” means the aggregate claims experience and shall include, but not be limited to, the number of covered lives, the amount of premium received, the amount of total claims paid, and the claims loss ratio. “Loss information” shall not include any information or data pertaining to the medical diagnosis, treatment, or health status that identifies an individual covered under the group contract or policy. Catastrophic claim information shall be provided as long as the provision of this information would not compromise any covered individual’s privacy.
XV. “Loss ratio” means the ratio between the amount of premium received and the amount of claims paid by the health carrier under the group insurance contract or policy.
XVI. “Medical underwriting” means the use of health status related information to establish or modify health coverage premium rates.
XVII. “Modified experience rating” means a rating methodology to apply only to individual policies sold in the nongroup market, which modifies community rating to allow for limited consideration of health status, as detailed in RSA 420-G:4, I(a).
XVIII. “Preexisting condition” means a condition, whether physical or mental, for which medical advice, diagnosis, care or treatment was recommended or received during the 3 months immediately preceding the effective date of health coverage.
XIX. “Purchasing alliance” means a non-risk bearing corporation or other entity licensed pursuant to RSA 420-G:12 that provides, on a voluntary basis, health insurance coverage through multiple unaffiliated participating carriers to member small employers and their employees within a defined service area authorized by the commissioner.
XX. “Qualified association trust or other entity” means an association established trust or other entity in existence on January 1, 1995, and providing health coverage within the state of New Hampshire to at least 1,000 employees and/or the dependents of association members, which association:
(a) Was established and maintained for a primary purpose other than the provision of health coverage;
(b) Was in existence for at least 10 years prior to January 1, 1995; and
(c) Conducts regular meetings within the state of New Hampshire designed to further the interests of its members, and all members shall be given notice of such meetings at least 30 days prior to the date of any meeting.
XXI.(a) “Small employer” means a business or organization which employed on average, 2 and up to 50 employees on business days during the previous calendar year. A small employer is subject to this chapter whether or not it becomes part of an association, multi-employer plan, trust, or any other entity cited in RSA 420-G:3 provided it meets this definition.
(b) In the case of an employer which was not in existence throughout the preceding calendar year, the determination of whether such employer is a small or large employer shall be based on the average number of employees that it is reasonably expected such employer will employ on business days in the current calendar year.
XXII. “Waiting period” means a period of time, determined by the employer, which must expire before an employee is eligible for health coverage as a condition of employment.
420-G:3 Applicability and Scope of Chapter.
I. This chapter shall apply to any entity licensed, controlled or regulated by RSA 415, RSA 415-E, RSA 420-A, RSA 420-B, or RSA 420-C which offers or provides health coverage for delivery in this state. This chapter shall also apply to any multi-employer plan, trust, association, claims administrator, claims paying agent or any other entity whether fully insured, partially insured, or self-funded which offers or provides health coverage for delivery in this state.
(a) This chapter shall not apply to pooled risk management programs which meet the standards established by RSA 5-B.
(b) This chapter shall not apply to short-term student insurance where the policyholder is the school, except student insurance shall be given credit and shall count as credit for previous health coverage as defined in RSA 420-G:8, III.
(c) Notwithstanding any other provision of this chapter, any multiple employer welfare arrangement which meets the requirements of RSA 415-E:2, III shall be exempt from the provisions of this chapter until January 1, 1998.
II. A qualified association trust or other entity, as defined by RSA 420-G:2, XX, shall comply with the requirements stated in RSA 420-G:11.
III. Notwithstanding any law to the contrary, the provisions of this chapter shall prevail with respect to the subject matter within this chapter.
420-G:4 Premium Rates.
I. Health carriers providing health coverage to individuals and small employers under this chapter shall be subject to the following:
(a) All premiums charged shall be guaranteed for at least 12 months, unless otherwise allowed by the commissioner.
(b) Base rate shall be established by each health carrier for all of its health coverages offered to individuals and, separately, for all of its health coverages offered to small employers.
(c) Health carriers shall calculate health coverage plan rates for each of the coverages or health benefit plans written by that carrier. Variations in health coverage plan rates shall be solely attributable to variations in expected utilization or cost due to differences in coverage design and/or the provider contracts or other provider costs associated with specific coverages and shall not reflect differences due to the nature of the groups or eligible persons assumed to select particular health coverages.
(d) In establishing the premium charged, health carriers providing coverage to individuals shall calculate a rate that is derived from the health coverage plan rate through the application of rating factors that the carrier chooses to utilize for age, health status, and tobacco use. Such factors may be utilized only in accordance with the following limitations:
(1) The maximum premium differential for age as determined by ratio shall be 4 to 1. The limitation shall not apply for determining rates for an attained age of less than 19.
(2) The maximum differential due to health status shall be 1.5 to 1 and the maximum differential rate due to tobacco use shall be 1.5 to 1. Rate limitations based on health status do not apply to rate variations based on an insured’s status as a tobacco user.
(3) Permissible rating characteristics shall not include changes in health status after issue.
(e) In establishing the premium charged, health carriers providing coverage to small employers shall calculate a rate that is derived from the health coverage plan rate through the application of rating factors that the carrier chooses to utilize for age, group size, industry classification, and health status. Such factors may be utilized only in accordance with the following limitations:
(1) Carriers may use the attained age of covered persons as a rating factor. However, the maximum premium differential for age as determined by ratio shall be 4 to 1 beginning with age 19.
(2) Carriers modifying such average premium for age may do so only by using the following age brackets:
0 - 18
19 - 24
25 - 29
30 - 34
35 - 39
40 - 44
45 - 49
50 - 54
55 - 59
60 - 64
(3) Carriers may use group size as a rating factor. However, the highest factor based on group size shall not exceed the lowest factor based on group size by more than 20 percent; provided that for groups of one, an additional 10 percent rating factor shall be allowed from the highest factor.
(4) Carriers may use the small employer group’s industry classification as a rating factor. However, the highest factor based on industry classification shall not exceed the lowest factor based on industry classification by more than 20 percent.
(5) Carriers may use the health status of the small employer group as a rating factor. However, the application of a health status factor shall be subject to the following limitations:
(A) The health status factor may reflect health status of covered persons, the small employer’s claim experience, or the duration of coverage since health statements were last provided.
(B) Variations from the arithmetic average of the highest rate charged to the lowest rate charged shall not exceed 25 percent.
(C) Upon the renewal of a small employer policy, any increase in the premium rate that is solely attributable to changes in the health status factor from the prior year shall be no more than 15 percent.
(6) Upon the renewal of a small employer policy, a carrier is prohibited from increasing the premium rate by more than 25 percent of the rate that was charged in the preceding year. Such rate increase limitation shall not include any premium rate increase that is based on a carrier’s annual cost and utilization trends or changes in the rating factor for attained age of covered persons.
(f) Each rating factor that a carrier chooses to utilize shall be reflective of claim cost variations that correlate with that factor independently of claim cost variations that correlate with any of the other allowable factors.
(g) The same rating methodology shall apply to newly covered individuals and to individuals renewing at each annual renewal date, or to new small employers and small employers renewing at each annual renewal date or anniversary date. Rating methodology shall not be construed to include health carrier incentives to individual subscribers or members to participate in wellness and fitness programs provided such incentives are approved by the insurance department.
(h) The commissioner shall not approve any filing if such filing is excessive, inadequate, or contrary to the intent of this chapter.
II.(a) Health carriers providing health coverage to large employers may not require any person, as a condition of receiving health coverage or continued health coverage, to pay a premium or contribution that is greater than that of similarly situated persons based on any health status related factor of that person or that person’s dependents.
(b) Nothing in subparagraph (a) shall be construed to restrict the amount that a health carrier may charge a large employer, nor to prevent a health carrier from establishing premium discounts or rebates or modifying copayments or deductibles in return for adherence to programs of health promotion and disease prevention.
III. A health carrier, when determining the premium charged to a large employer group that employs from 51 to 100 employees, shall calculate the rate using a weighted average calculation consisting of the group’s experience and the carrier’s large employer group pool experience. The weight used for the group’s experience shall be no more than 25 percent and the weight used for the experience of the carrier’s large employer group pool shall be a minimum of 75 percent.
420-G:5 Rating Factor for Qualified Wellness or Disease Management Programs.
I. In addition to the rating factors permitted in RSA 420-G:4, an insurer that offers a health benefit plan to individuals or small groups that includes a qualified wellness or disease management program may employ a rating factor that reflects the expected level of participation in the program and the anticipated effect the program will have on utilization or medical claim costs. The maximum differential attributed to this factor, as measured by ratio, shall not exceed 1.25 to 1.
II. Program materials shall be submitted to the commissioner for approval as a qualified program prior to the insurer’s implementation of the rating factor. A qualified wellness or disease management program shall meet the following standards, to the extent applicable:
(a) The program shall meet the requirements set forth in the federal Health Insurance Portability and Accountability Act of 1996 (HIPAA) for bona fide wellness programs.
(b) The program shall provide significant financial incentives to covered employees or individuals for participating in the program and may also include special financial incentives to providers of wellness or disease management services.
(c) The program shall provide to covered employees or individuals for whom it is unreasonably difficult to satisfy the program’s applicable standards reasonable alternative methods for achieving program participation.
III. The methodology proposed by the insurer for establishing rating factors for individuals or small groups shall be submitted to the commissioner for approval prior to implementation. The methodology shall specify how the rating factor will vary based on the anticipated efficacy of the program in reducing expected utilization or medical claim costs. The methodology may take into consideration:
(a) The anticipated average percentage of employees or individuals eligible to participate in the program.
(b) The anticipated efficacy of the financial incentives in producing high levels of program participation.
(c) The level of program participation achieved in prior coverage periods.
(d) The expected success rate for program participants.
(e) Clinical studies.
(f) The insurer’s experience in the use of the program.
420-G:6 Medical Underwriting.
I. Health carriers providing health coverage for individuals or small employer groups may perform medical underwriting, including the use of health statements or screenings or the use of prior claims history, to the extent necessary to establish or modify premium rates as provided in RSA 420-G:4. The commissioner may allow group carriers to use standardized health statements.
II. Health carriers providing health coverage for individuals may refuse to write or issue coverage to an individual because of his or her health status. Regardless of claim experience, health status, or medical history, health carriers providing health coverage for small employers shall not refuse to write or issue any of their available coverages or health benefit plans to any small employer group that elects to be covered under that plan and agrees to make premium payments and meet the other requirements of the plan.
III. Health carriers providing health coverage for small employer groups shall not knowingly provide health coverage to groups where the employer has discriminated based on health status or claims history against any employee or potential employee or his or her dependents with respect to participation in an employer-sponsored health benefit plan.
IV. Health carriers shall not offer riders or endorsements to exclude certain illnesses or health conditions in order to avoid the purpose of this chapter.
V. Individual health insurance carriers shall be responsible for ascertaining the eligibility of any individual applicant or insured for high risk pool coverage. If a carrier determines that an individual meets any of the eligibility criteria set forth in RSA 404-G:5-e, the carrier shall give the individual written notice, with the declination of coverage, the coverage offering or upon a rate increase at renewal. The notice shall include information about available benefits and exclusions of high risk pool coverage and the name, address, and telephone number of the pool administrator or the administrator’s designee.
VI. It shall constitute an unfair trade practice under RSA 417 for an insurer, insurance producer, or third party administrator to refer an individual employee to the pool, or arrange for an individual employee to apply to the pool, for the purpose of separating that employee from group health insurance coverage provided in connection with the employee’s employment.
VII. Health carriers and health insurance producers shall ensure that persons seeking coverage through a small employer group who are required to complete a health statement have an option to convey the required information directly to the carrier or the producer through a secure means and bypassing the employer.
420-G:7 Guaranteed Issue and Renewability.
I. Health carriers shall not establish rules of eligibility, including continued eligibility, for health coverage in relation to the following health status related factors of any employee or dependent:
(a) Health status.
(b) Medical condition, including both physical and mental illness.
(c) Claims experience.
(d) Receipt of health care.
(e) Medical history.
(f) Genetic information.
(g) Evidence of insurability, including conditions arising out of domestic violence.
II. Paragraph I shall not be construed to require health carriers to provide particular benefits under the terms of such health coverage, or to prevent health carriers from limiting or restricting the amount, level, extent or nature of the benefits for similarly situated persons under the health coverage. Paragraph I shall also not be construed to require health carriers to issue health coverage to an individual with existing health coverage, except where the individual indicates an intent to replace the existing health coverage.
III. Health carriers shall not be required to issue individual health insurance to individuals who are otherwise eligible for group health coverage. For the purposes of this section, group health coverage shall include publicly-funded health insurance programs.
IV. Health carriers shall actively market, issue, and renew all of the health coverages they sell in the small employer market to all small employers.
V. Health coverages subject to this chapter shall be renewable to all individuals, regardless of age or eligibility for medicare, or to employees and eligible dependents at the option of the small or large employer, except for the following reasons:
(a) Nonpayment of required premiums.
(b) Fraud or intentional misrepresentation on the part of an individual or an individual’s representative, or on the part of an employer, employee, dependent, or an employee’s representative.
(c) Failure to meet the minimum employee participation number or percentage requirement of the health coverage.
(d) The small employer is no longer actively engaged in the business that it was engaged in on the effective date of the health coverage.
(e) The employer medically underwrites or otherwise violates a provision of this chapter.
(f) The health carrier is ceasing to offer health coverage in such market, in accordance with paragraph VII.
VI. Where a health carrier decides to discontinue a particular type of health coverage offered in the individual, large employer or small employer market, the health carrier must:
(a) Provide at least 90-days notice of such discontinuation to each individual or employer with such health coverage and to all covered persons;
(b) Offer to each individual or employer with such health coverage, the option to purchase any other health coverage currently being offered by the health carrier in the relevant market;
(c) Act uniformly without regard to the claims experience of those employers, and without regard to any health status related factor of any covered person or any individual, employee, or eligible dependent who may become a covered person; and
(d) Make no adjustments in the health status factor applied to individuals moving from a discontinued product of that health carrier to another product of that health carrier if the individual was newly covered under the previous product within the last 5 years, or a health status factor adjustment was made with respect to that individual within the last 5 years.
VII. Where a health carrier decides to discontinue all of its health coverage in the individual market, small employer market, large employer market or any combination thereof, the health carrier must provide at least 180-days notice of such discontinuation to the commissioner, to each individual or employer with such health coverage and to all covered persons; and
(a) The health carrier may not renew any health coverages issued, or delivered for issuance, in such discontinued market or markets; and
(b) The health carrier may not provide health coverage in such discontinued market or markets during the 5-year period beginning on the date of the discontinuation of the last health coverage not so renewed except that the commissioner may waive or otherwise reduce the 5-year period in which the health carrier may not provide coverage in the discontinued market for good cause shown.
VIII. A health carrier may, at the time of coverage renewal, modify the health coverage it offers to:
(a) Large employers; and to
(b) Small employers and individuals, provided that such modification is in accordance with state law and applied uniformly among all small employers and/or individuals with such health coverage.
IX. A health carrier which has discontinued coverage in the individual market, the small employer market, or any combination thereof, in accordance with paragraph VII, shall continue to be liable for the payment of claims in accordance with the following:
(a) This paragraph shall apply only to terminating carriers of insureds who obtain creditable replacement health coverage. This paragraph shall be effective with respect to all in-force policies, certificates, or other evidences of coverage as of the effective date of this paragraph.
(b) The terminating carrier shall continue to be liable for the payment of claims if the succeeding carrier’s policy requires the satisfaction of any deductibles, individual or family stop-loss provisions limiting out-of-pocket payments, or waiting periods in its plan but only to the extent satisfaction or partial satisfaction of the same or similar provisions were included in the terminated plan providing similar benefits. In the case of deductible provisions and stop-loss provisions, the liability shall be for the same or overlapping benefit periods and shall be for expenses actually incurred and applied against the deductible and stop-loss provisions of the terminating carrier’s plan but only to the extent those expenses are recognized under the terms of the succeeding carrier’s plan and are subject to a similar stop-loss or deductible provision. The terminating company shall inform its insureds at the time of cancellation that this provision is applicable to them and that this is a requirement of New Hampshire statute. The provision should also appear in all policies or certificates where the provision about termination of the insurance company appears. Nothing in this subparagraph shall be deemed to prevent a succeeding carrier’s plan from having stop-loss levels or deductible amounts that are higher than those specified in the terminating carrier’s plan.
(c) Whenever a determination of the terminating carrier’s benefits is required by the succeeding carrier, at the succeeding carrier’s request the terminating carrier shall furnish, in a timely manner, but in no event later than 30 days, a statement of the benefits available or pertinent information, sufficient to permit verification of the terminating carrier’s liability to the succeeding carrier. Any determination of the liability of the terminating plan shall be made in accordance with all the definitions, conditions, and covered expense provisions of the terminating plan rather than those of the succeeding plan. The benefit determination shall be made as if coverage had not been replaced by the succeeding carrier. The succeeding carrier shall notify the terminating carrier as to its liabilities pursuant to paragraph IX(b) and shall indemnify the insured for the same. Upon determination of any liability of the terminating plan, the terminating plan shall pay the succeeding plan in a timely manner, in no event later than 15 days, upon receipt of said claim information.
420-G:8 Preexisting Condition Exclusion Periods.
I. A health carrier providing health coverage to large employers may impose a preexisting condition exclusion period, but only if it is at least as favorable to covered persons as the following:
(a) No preexisting condition exclusion shall extend beyond a period of 9 consecutive months after the effective date of the person’s health coverage; and
(b) Such preexisting condition exclusion period may only apply to a condition, whether physical or mental, regardless of the cause of the condition, for which medical advice, diagnosis, care or treatment was recommended or received during the 3 months immediately preceding the effective date of health coverage.
II. A health carrier providing health coverage to individuals or small employers may impose a preexisting condition exclusion period, but only if it is at least as favorable to covered persons as the following:
(a) No preexisting condition exclusion period shall extend beyond a period of 9 consecutive months after the effective date of the person’s health coverage.
(b) Such preexisting condition exclusion period may only apply to a condition, whether physical or mental, regardless of the cause of the condition, for which medical advice, diagnosis, care, or treatment was received or recommended during the 3 months immediately preceding the effective date of the person’s health coverage.
III. In applying a preexisting condition exclusion period, a health carrier shall credit the time the person was covered under previous health coverage subject to the following:
(a) A period of otherwise creditable coverage shall not be counted if, after such period and before the enrollment date or application date of new health coverage, there was a 63-day period during all of which the person was not covered under any creditable coverage; except that
(b) Any length of time that a person is in an employer imposed waiting period for health coverage shall not be counted toward the 63-day period described above; and
(c) If a person did not have health coverage during a period of unemployment prior to the effective date of new employer-based group health coverage, the lack of health coverage during the period of unemployment shall be disregarded and, for the purposes of crediting coverage, coverage shall be considered to have been continuous from the date of termination of the person’s health coverage immediately prior to the period of unemployment to the effective date of the new employer-based group health coverage.
IV. Health carriers providing health coverage in the large employer market may use the alternative method of crediting coverage as specified in rules.
V. Health carriers shall provide written certification of the period of creditable coverage which accumulated while a person was under the health coverage plan, and shall also state any waiting period which was imposed prior to receiving health coverage.
(a) The written certification shall be provided at the time a person ceases to be covered under a health coverage plan, and on a request made on behalf of the person made not later than 24 months after the date of the cessation of coverage.
(b) A health carrier, which elects to credit coverage under the method set forth in rules pursuant to paragraph IV that enrolls a person with a certificate of creditable coverage, may request of the entity that issued the certificate the additional information required under the rules. The issuing entity shall promptly disclose such information to the health carrier, but may charge the reasonable costs of disclosing such information.
VI. A health carrier providing health coverage to large or small employer groups shall not:
(a) Treat genetic information as a condition subject to a preexisting condition exclusion period in the absence of a diagnosis of the condition related to such information.
(b) Impose any preexisting condition exclusion relating to pregnancy as a preexisting condition.
(c)(1) Subject to subparagraph (3), impose any preexisting condition exclusion in the case of a newborn who, as of the last day of the 30-day period beginning with the date of birth, is covered under creditable coverage.
(2) Subject to subparagraph (3), impose any preexisting condition exclusion in the case of a child who is adopted or placed for adoption before attaining 18 years of age and who, as of the last day of the 30-day period beginning on the date of the adoption or placement for adoption, is covered under creditable coverage. The previous sentence shall not apply to health coverage before the date of such adoption or placement for adoption.
(3) Subparagraphs (1) and (2) shall no longer apply to the person after the end of the first 63-day period during all of which the person was not covered under any creditable coverage.
420-G:9 Open Enrollment and Late Enrollment.
I. Each small employer group shall have an annual open enrollment period 60 days in length, occurring prior to the small employer group’s anniversary date. During open enrollment, employees or eligible dependents may apply to the small employer for health coverage or make a change in their membership status becoming effective upon the small employer group’s anniversary date, subject to providing the health carrier 30-days notice.
(a) A health carrier shall not refuse any small employer employees or eligible dependents applying for health coverage during the open enrollment period.
(b) Employees or eligible dependents coming on at the time of an open enrollment period shall have the same premiums as the rest of the small employer group shall have upon the new or renewal effective date.
II. Small employers who are self-employed individuals shall have 2 open enrollment periods that shall occur during the months of March and September of each calendar year. During these periods, health carriers shall make their plans available to these employers for effective dates beginning on the first day of the month following the open enrollment period. Self-employed individuals who seek coverage during other times of the year shall be treated as late enrollees.
III. A small employer employee who has met any employer imposed waiting period and is otherwise eligible for health coverage, who declines a small employer’s health coverage plan during the initial offering or subsequent open enrollment period, shall be a late enrollee and shall not be allowed on the plan until the next open enrollment period.
IV. A large employer employee, who has met any employer imposed waiting period and is otherwise eligible for health coverage, may enroll within 31 days of becoming eligible and shall not be required to submit evidence of insurability based on medical conditions. If a person does not enroll at this time, that person is a late enrollee.
(a) Each large employer group shall have an open enrollment period during which late enrollees may enroll and shall not be required to submit evidence of insurability based on medical conditions.
(b) For late enrollees in a large employer group only, a preexisting condition exclusion period may extend up to 18 months after the effective date of the person’s health coverage.
V. Paragraphs III and IV notwithstanding, an eligible employee or eligible dependent shall not be considered a late enrollee if:
(a) The person was covered under public or private health coverage at the time the person was able to enroll; and
(1) Has lost public or private health coverage as a result of termination of employment or eligibility, the termination of the other plan’s coverage, death of a spouse, or divorce; and
(2) Requests enrollment within 30 days after termination of such health coverage; or
(b) Is employed by an employer that offers multiple health coverages and the person elects a different plan during an open enrollment period; or
(c) Was ordered by a court to provide health coverage for an ex-spouse or a minor child under a covered employee’s plan and request for enrollment is made within 30 days after issuance of such court order.
VI.(a) If a large or small employer group’s health coverage plan offers dependent coverage and the employee is enrolled or has met any applicable waiting period and is eligible to be enrolled, but for a failure to do so during a previous open enrollment period, a person who becomes a dependent of the employee through marriage, birth, adoption or placement for adoption, and the employee if not otherwise enrolled, shall be provided with a special enrollment period.
(b) The special enrollment period shall be at least 30 days in length and shall begin on the later of:
(1) The date dependent health coverage is made available; or
(2) The date of the marriage, birth, adoption or placement for adoption, as the case may be.
(c) If the person seeks enrollment during the first 30 days of such special enrollment period, the health coverage shall become effective:
(1) In the case of marriage, on or before the first day of the first month following the completed request for enrollment;
(2) In the case of birth, as of the date of birth; or
(3) In the case of adoption or placement for adoption, the date of such adoption or placement for adoption.
420-G:10 Minimum Participation Requirements.
I. A health carrier may not require more than the minimum participation percentage of the employees eligible for health coverage in a small employer group to participate in the health carrier’s health coverage plan. The minimum participation percentage shall be 75 percent when the health carrier’s plan is the sole health coverage plan being sponsored by the employer group, and 37.5 percent when the health carrier’s plan is not the sole health coverage plan being sponsored by the employer group.
II. For the purpose of calculating whether or not a small employer group’s enrollment meets a carrier’s minimum participation requirements:
(a) Any full-time or part-time employees who are covered as a dependent on another person’s health coverage shall be excluded from the count.
(b) The total number of full-time employees and part-time employees who are otherwise eligible for health coverage shall be counted.
III. The minimum participation requirements shall be calculated on an employer-by-employer basis if the small employer is part of an association, trust, or other similar arrangement.
IV. In performing the computation to determine the actual enrollment necessary to meet the minimum participation requirement as a small employer group, the health carrier shall round any fractional number to the higher integer.
420-G:11 Qualified Association Trust.
I. A qualified association trust or other entity, as defined in RSA 420-G:2, XXI, shall:
(a) Comply with the rating restrictions outlined in RSA 420-G:4 for all small employer members with 50 or fewer employees based upon the association’s group experience, except that no rating factor shall be utilized without the express written consent of the association.
(b) Offer all eligible members, as defined under the applicable trust or other documents, coverage and rates on a guaranteed issue and renewable basis.
(c) Comply with the regulations concerning medical underwriting in RSA 420-G:6.
(d) Comply with the preexisting conditions provision of RSA 420-G:8.
II. Nothing in this chapter shall be interpreted to limit the size of employers who may participate in coverage with a qualified association trust.
420-G:12 Voluntary Small Employer Health Insurance Purchasing Alliances; Rulemaking.
I. The commissioner shall have the regulatory oversight authority to set standards for the licensure and conduct of purchasing alliances authorized under this section and to enforce such standards.
II. Each applicant and each duly licensed purchasing alliance shall file with the commissioner such information or documents as the commissioner shall adopt by rule as necessary to perform oversight function.
III. A purchasing alliance shall offer health benefit plans and establish conditions of participation for small employers, employees, and participating carriers that conform to the requirements of this chapter.
IV. Nothing in this section shall require 2 or more small employers to join a purchasing alliance as a condition of jointly purchasing health insurance coverage. Any such coverage jointly purchased by 2 or more small employers who do not join a purchasing alliance shall conform to the requirements of this chapter.
V. The commissioner shall adopt such rules, under RSA 541-A, and issue such orders as may be necessary to carry out the commissioner’s oversight responsibilities under this section.
I. Health carriers operating in the small employer and/or individual markets shall make reasonable disclosure in solicitation and sales materials provided to individuals and small employers of the following:
(a) The methodology by which premium rates for an individual or specific small employer are established. Each health carrier shall state that rates and practices are in full compliance with this chapter.
(b) The provisions concerning the health carrier’s right to change premium rates and the factors which affect changes in premium rates.
(c) The provisions relating to renewability of health coverage.
(d) The provisions relating to any preexisting condition exclusions.
(e) The benefits and premiums available under all health insurance coverage for which the employer is qualified.
II.(a) All health carriers shall electronically provide:
(1) Their encrypted claims data to the department and to the department of health and human services in accordance with rules approved by the commissioner of health and humans services and adopted under RSA 420-G:18.
(2) To the department of health and human services, cross-matched claims data on requested policyholders, and subscriber information necessary for third party liability for benefits provided under RSA 167, filed in accordance with rules adopted under RSA 167:3-c.
(b) Notwithstanding RSA 91-A:10, the collection storage and release of health care data and statistical information that is subject to the federal requirements of the Health Information Privacy and Accountability Act (HIPAA) shall be governed exclusively by the rules adopted thereunder in 45 C.F.R. parts 160 and 164.
III. All health carriers and other health plans that collect the Health Employer Data and Information Set (HEDIS) shall annually submit the HEDIS information to the department.
IV. All health carriers shall accept electronic claims submitted in Centers for Medicare and Medicaid Services (CMS) format for UB-92 or HCFA-1500 records, or as amended by CMS.
420-G:14 Development of a Comprehensive Health Care Information System. The department and the department of health and human services shall enter into a memorandum of understanding for collaboration in the development of a comprehensive health care information system. The memorandum of understanding shall include a description of the data sets that will be included in the comprehensive health care information system, the criteria and procedures for the development of limited use data sets, the criteria and procedures to ensure that Health Information Privacy and Accountability Act (HIPAA) compliant limited use data sets are accessible, and a proposed time frame for the creation of a comprehensive health care information system. To the extent allowed by HIPAA, the data shall be available as a resource for insurers, employers, providers, purchasers of health care, and state agencies to continuously review health care utilization, expenditures, and performance in New Hampshire and to enhance the ability of New Hampshire consumers and employers to make informed and cost-effective health care choices. In presenting data for public access, comparative considerations shall be made regarding geography, demographics, general economic factors, and institutional size. Notwithstanding HIPAA or any other provision of law, the comprehensive health care information system shall not include or disclose any data that contains direct personal identifiers. For the purposes of this section, “direct personal identifiers” include information relating to an individual that contains primary or obvious identifiers, such as the individual’s name, street address, e-mail address, telephone number, and social security number.
420-G:15 Rating Practices and Filings.
I. Each health carrier shall maintain at its principal place of business a complete and detailed description of its rating practices and renewal underwriting practices, including information and documentation which demonstrate that its rating methods and practices are based upon commonly accepted actuarial assumptions and are in accordance with sound actuarial principles.
II. Each health carrier shall file each March 1, with the commissioner, an actuarial certification stating that the health carrier is in compliance with this section and that the rating methods of the health carrier are actuarially sound.
III. A health carrier shall make the information and documentation described in paragraph I available to the commissioner upon request.
420-G:16 Health Plan Loss Information.
I. To ensure maximum competition in the purchase of group health insurance, all large employers shall be entitled to receive their specific health plan loss information upon request and without charge. No contract between any health carrier, third-party administrator, employer group, or pool of employers shall abridge this right in any manner.
II. Upon written request from any large employer, every health carrier, third-party administrator, pooled risk management program under RSA 5-B or any other type of multiple employer health plan shall provide that employer’s loss information within 30 calendar days of receipt of the request. The loss information shall include all physician, hospital, prescription drug, and other covered medical claims specific to the employer’s group plan incurred for the 12-month period paid through the 14 months which end within the 60-day period prior to the date of the request. An employer shall not be entitled by this section to more than 2 loss information requests in any 12-month period; however, nothing shall prohibit a carrier from fulfilling more frequent requests on a mutually agreed-upon basis.
III. If an employer requests loss information from an insurance agent or other authorized representative, including an administrator of a pooled risk management program or a multiple employer health plan, the agent or authorized representative shall transmit the request to the health carrier or carriers or third-party administrator within 4 working days.
420-G:17 Approval of Rate Filings. No policy or contract of insurance or any certificate under such policy or contract or other evidence of coverage shall be issued to a small employer or an individual under this chapter until the premium rates have been filed and approved by the commissioner. The commissioner shall approve or disapprove such rates within 30 days of receipt. The commissioner may disapprove rate filings if the commissioner finds such rates to be excessive, inadequate, or contrary to the intent of this chapter.
420-G:18 Rulemaking Authority.
I. The commissioner may adopt rules, under RSA 541-A, necessary to the proper administration of this chapter.
II. The commissioner, with the approval of the commissioner of the department of health and human services, shall adopt rules, under RSA 541-A, defining the content, format, and schedule for the filing of encrypted claims data and HEDIS information under RSA 420-G:13.
420-G:19 Requested Information.
I. As authorized in accordance with RSA 420-G:18, the commissioner may request the submission of such information by carriers as is necessary to better understand the coverage history and choices of participants in the nongroup market. The commissioner shall make every attempt to ensure the reasonableness of such request, both in terms of scope and timeframe, and to limit this request to information the commissioner deems necessary to better understand the dynamics of the nongroup health insurance market and to assess the appropriateness of alternative sources of funding for the nongroup subsidy.
II. The commissioner shall request and health carriers shall supply information no later than April 1 of each year sufficient to report on the distribution of rating factors being applied to small employers. The commissioner’s report shall summarize the rating factors utilized by health carriers in the preceding calendar year.
III. The commissioner shall request and health carriers shall supply information no later than April 1 of each year sufficient to report on the types of health coverage being purchased by individuals and employers by geographic area. The report shall include specific details regarding the type of coverage, including, but not limited to, co-pays, out-of-pocket maximums, network restrictions, and deductibles.
IV. The commissioner shall file the required reports by July 1 of each year with the senate president, the speaker of the house, the chairperson of the house commerce committee, and the chairperson of the senate banks and insurance committee.
420-G:20 Prohibited Transactions. No health care provider shall submit a claim for reimbursement, or otherwise accept payment, for health care services provided to a patient covered by individual health insurance if the provider has paid the premium for such individual health insurance.
420-G:21 Legislative Oversight Committee.
I. There is hereby established a joint legislative oversight committee on small group health insurance reform. The committee shall review the reports filed by the commissioner pursuant to RSA 420-G:19, monitor the small group health insurance market in the state, and monitor the effect of SB 110 of the 2003 legislative session. The committee shall make recommendations for any legislative changes the committee deems necessary. The committee shall include 3 members of the house, appointed by the speaker of the house and 2 senators, appointed by the president of the senate.
II. The committee shall submit a written report of its findings and recommendations to the president of the senate, the speaker of the house of representatives, and the chairpersons of the house commerce committee and senate insurance committee on November 1 of each year.
420-G:22 Severability. If any provision of this chapter or the application thereof to any person or circumstance is held invalid, the invalidity does not affect other provisions or applications of the chapter which can be given effect without the invalid provisions or applications, and to this end the provisions of this chapter are severable.
420-G:23 Penalties for Violations. Any health carrier who proposes, advertises, solicits, issues or delivers to any person or entity in this state any form which does not comply with this chapter or who shall in any way violate this chapter may:
I. Be prohibited from marketing, selling, or otherwise administering to the individual or small employer market if the commissioner finds a health carrier to be in violation of RSA 420-G.
II. Be subject to an administrative fine not to exceed $2,500 for each violation. Repeated violations of the same chapter shall constitute separate fineable offenses.
III. Have its certificate of authority indefinitely suspended or revoked at the discretion of the commissioner.
420:G:24 Purpose of Provisions. The purpose of this subdivision is to:
I. Protect the citizens of this state who participate in the small group health insurance market by providing a mechanism to equitably distribute the excessive risk sometimes associated with this market and to enable insurers to better protect against the costs of covering high risk groups and individuals.
II. Create a nonprofit organization to facilitate the availability of affordable small group health insurance by establishing a mandatory assessment and reinsurance mechanism to distribute the risks within the small group market.
III. Establish a reinsurance mechanism that will provide access to affordable small group health insurance for high risk small groups. It is the intent of the general court that the small group reinsurance mechanism shall be adequately funded through an annual, and if necessary, a special assessment mechanism, and that the reinsurance mechanism shall utilize cost containment measures.
420-G:25 Definitions. In this subdivision:
I. “Assessment” means the liability of the member insurer to the reinsurance association.
II. “Association” means the reinsurance association.
III. “Board” means the board of directors of the reinsurance association.
IV. “Commissioner” means the insurance commissioner.
V. “Covered lives” shall include all persons who are covered under a small group health insurance policy or certificate issued or delivered in New Hampshire.
VI. “Eligible employee” means an employee who works a full-time work week of 30 or more hours. Eligible employee includes an employee who works on a full time basis with a normal work week of 17.5 to 30 hours, if the employer chooses to provide health coverage to those employees and applies this criteria uniformly to all employees.
VII. “Health insurance” means health insurance coverage issued in accordance with RSA 415, 420-A, or 420-B. For the purposes of this chapter, health insurance shall not include accident only, credit, dental, vision, Medicare supplement, Medicare Risk, Medicare+Choice, Managed Medicaid, long-term care, disability income, coverage issued as a supplement to a liability insurance, workers’ compensation or similar insurance, automobile medical payment insurance, policies or certificates of specified disease, hospital confinement indemnity, limited benefit health insurance or short-term, nonrenewable individual health insurance, coverage provided through the New Hampshire healthy kids corporation, and coverage provided through the Federal Employees’ Program. Nonprofit health service corporations shall exclude coverage provided through national account policies originating outside of New Hampshire to the extent the nonprofit health service corporation assumes no risk for the provision of such insurance. Health insurance does include group excess loss insurance.
VIII. “Mechanism” means the New Hampshire small group reinsurance mechanism.
IX. “Member insurer” means a small group health insurance carrier that is licensed in New Hampshire pursuant to RSA 402, RSA 420-A, or RSA 420-B.
X. “Plan of operation” means the plan of operation of the small group reinsurance mechanism, including articles, bylaws and operating rules, procedures and policies adopted by the association.
XI. “Reinsurance association” means the entity created within this subdivision.
XII. “Small group health insurance carrier” means any entity licensed pursuant to RSA 402, RSA 420-A, or RSA 420-B that issues and maintains in force policies of small group health insurance in New Hampshire.
XIII. “Writer” means an insurance carrier that is actively marketing and issuing policies of small group health insurance in New Hampshire.
420-G:26 Reinsurance Association’s Powers and Duties.
I. The association shall be a not-for-profit corporation under RSA 292 and shall possess all general powers as derive from that status and such additional powers and duties as are approved by the commissioner or as specified below.
II. The board of directors of the association shall have the following powers:
(a) Enter into contracts as necessary or proper to administer the plan of operation.
(b) Sue or be sued, including taking any legal action necessary or proper for the recovery of any assessments for, on behalf of, or against members of the association or other participating person.
(c) Take legal action as necessary to avoid the payment of improper claims against the plan.
(d) Retain appropriate legal, actuarial, and other persons as necessary to provide technical assistance in the operation of the plan, and in any other function within the authority of the plan.
(e) Borrow money to carry out the plan of operation.
(f) Issue policies of reinsurance.
(g) Perform any other function within the authority of the association as may be necessary or proper to carry out the plan of operation.
(h) Assess small group health insurance carriers.
(i) Apply for and accept funds from any third party.
III. The board of directors of the association shall have the following duties.
(a) Fulfill the plan of operation as approved by the commissioner.
(b) Develop and issue policies of reinsurance.
(c) Determine and collect assessments for the reinsurance mechanism.
(d) Administer reinsurance policies, including premium collection and claims payments.
(e) Establish appropriate rates, rate schedules, rate adjustments, expense allowances, claim reserve formulas and any other actuarial functions appropriate to the plan of operation for the reinsurance mechanism.
(f) Provide for and employ cost-containment measures and requirements, which shall include but not be limited to, conducting medical audits on reinsurance submissions, and making payment for claims for which the reinsurance mechanism bears full financial responsibility, the Medicare rate or the lowest rate provided to a third party payer, whichever is less.
IV. Neither the association nor its employees shall be liable for any obligations of the mechanism. No member or employee of the association shall be liable, and no cause of action of any nature may arise against them, for any act or omission related to the performance of their powers and duties under this chapter unless such act or omission constitutes willful or wanton misconduct. The association may provide in its bylaws or rules for indemnification of, and legal representation for, its members and employees.
420-G:27 Reinsurance Association Membership and Governance.
I. The association shall be composed of all small group health insurance carriers licensed in the state of New Hampshire.
II. The initial board of directors of the association shall be appointed by the commissioner, and shall include 10 members, including the commissioner or his or her designated representative who shall serve as an ex officio member of the board. In the initial and in each successor board, 5 directors shall be representative of small group health writers, one director shall be representative of the health care provider community and shall be appointed by the commissioner, one director shall be representative of consumers covered through the reinsurance mechanism and shall be appointed by the commissioner, one director shall be a representative of insurance brokers and shall be appointed by the commissioner, and one director shall be a representative of small employers and shall be appointed by the commissioner. One director shall represent the commissioner and serve in an ex officio capacity.
III. There shall be no more than one director representing any one writer or its affiliate. For purposes of this section, the insurance activities of any elected director’s affiliate shall be deemed to be insurance activities of the elected director.
IV. In the successor board, the 5 directors representing small group health writers shall be elected annually. Writers of small group health insurance shall be entitled to vote. A writer’s votes for small group market representatives shall be proportional to the writer’s assessment in that market, and shall be based on that member’s covered lives.
V. Members of the board of directors shall be elected to terms of one year.
VI. The board of directors shall take action by affirmative vote representing a simple majority of the entire board.
VII. The board shall elect officers in accordance with the bylaws of the association. The bylaws of the association shall also govern the place and frequency of meetings of directors and their reimbursement for expenses incurred.
420-G:28 Plan of Operation for the Reinsurance Mechanism.
I. The board of directors for the reinsurance association shall adopt a plan of operation for the reinsurance mechanism. The reinsurance mechanism shall be funded in part through an assessment mechanism whereby small group health insurance carriers contribute an amount sufficient to cover the expenses and losses of the mechanism.
II. The plan of operation for the reinsurance mechanism shall establish:
(a) Procedures for selecting a third-party administrator and setting forth the powers and duties of the third-party administrator;
(b) Procedures for selecting and retaining an administrator;
(c) Procedures to create a fund, under management of the board, for administrative expenses;
(d) Procedures for small group health insurance carriers to submit their claims for reinsurance;
(e) Guidelines for conducting audits of carrier’s administration of claims for individuals ceded to the reinsurance mechanism;
(f) Procedures for collecting assessments from member carriers;
(g) Procedures for handling, accounting and auditing of assets, moneys and claims of the mechanism;
(h) Requirements for keeping financial and other records;
(i) Guidelines for termination of reinsurance coverage at the option of the ceding carrier;
(j) Regular times and places for meetings of the board;
(k) A methodology for applying the reinsurance provisions in the case of carriers that pay or reimburse health care providers through capitation or salary; and
(l) Such other administrative provisions as are necessary or proper for the execution of the powers and duties of the association.
I. The assessment for the reinsurance mechanism shall be based on the number of covered lives in the small employer group market times a specified assessment rate. The association shall specify the basis used to set the assessment rate.
II. The association shall establish a regular assessment rate which shall be;
(a) Calculated on a calendar year basis;
(b) Established no later than November 1 in the year preceding the calendar year for which the carrier’s experience shall be used to calculate the assessment; and
(c) Anticipated to be sufficient to meet the reinsurance mechanism’s funding needs.
III. In addition to the regular assessment rate, the association may establish a special assessment rate. Notwithstanding RSA 420-G:4, a writer of small group health insurance may increase the premiums charged by the amount of the special assessment. Any assessment may appear as a separate line item on a policyholder’s bill.
(a) The association shall only establish a special assessment if the association determines that its funds are or will become insufficient to pay the reinsurance mechanism’s expenses in a timely manner.
(b) The association shall only assess, through the special assessment, at a rate necessary to fund the deficiency ascertained in subparagraph (a).
IV. The regular assessment rate, and any special assessment rate, shall be subject to the approval of the commissioner. The commissioner shall approve the rate if he or she finds that the amount is required to fulfill the purposes of the reinsurance mechanism. For the purpose of making this determination, the commissioner may, at the expense of the association, seek independent actuarial certification of the need for the proposed rate.
V. The association shall impose and collect assessments from its members.
VI. If the assessment exceeds the amount actually needed, the excess shall be held and invested and, with the earnings and interest thereon, be used to offset future net losses.
VII. Each covered life shall be included in the assessment only once. The association shall adopt procedures by which affiliated carriers calculate their assessment on an aggregate basis and procedures to ensure that no covered life is counted more than once.
VIII. The initial assessment rate to fund the reinsurance mechanism shall be $1 per covered life per month, and shall take effect on all small employer group policies in force as of July 1, 2005.
420-G:30 Reinsurance Mechanism.
I. There is hereby created the New Hampshire reinsurance mechanism. This reinsurance mechanism shall be operated by and subject to the control of the association and shall provide reimbursement on an as-incurred basis for risks ceded to the reinsurance mechanism on or after January 1, 2006.
II. The reinsurance mechanism shall be funded by premiums charged for reinsurance and by assessments which the association shall calculate based on the number of covered lives times a specified amount. The reinsurance mechanism shall not be funded with state general fund revenue. The reinsurance mechanism shall never cease providing reinsurance for claims incurred by ceded risks.
420-G:31 Reinsurance Mechanism Administrator.
I. The board shall select an administrator through a competitive bidding process to administer the mechanism. The board shall evaluate bids submitted based on criteria established by the board which shall include:
(a) The efficiency and timeliness of the administrative procedures;
(b) An estimate of total charges for administering the mechanism;
(c) The reinsurance mechanism administrator’s ability to apply effective cost containment programs and procedures and to administer the mechanism in a cost efficient manner; and
(d) The financial condition and stability of the reinsurance mechanism administrator.
II.(a) The reinsurance mechanism administrator shall serve for a period of at least 3 years and shall be subject to removal for cause; and
(b) At least one year prior to the expiration of each period of service by a reinsurance mechanism administrator, the association shall invite eligible entities, including the current reinsurance mechanism administrator to submit bids to serve as the reinsurance mechanism administrator. Selection of the reinsurance mechanism administrator for the succeeding period shall be made at least 6 months prior to the end of the current period.
III. The reinsurance mechanism administrator shall perform such functions relating to the plan as may be as assigned to the administrator.
IV. The reinsurance mechanism administrator shall submit regular reports to the association and the commissioner regarding the operation of the reinsurance mechanism. The frequency, content, and form of the report shall be specified in the contract between the association and the reinsurance mechanism administrator.
V. Following the close of each calendar year, the reinsurance mechanism administrator shall determine the expense of administration and the paid and incurred losses for the year, and shall report this information to the association and the commissioner on a form prescribed by the commissioner.
VI. The reinsurance mechanism administrator shall be paid as provided in the contract between the association and the reinsurance mechanism administrator.
VII. The association shall submit the contract between itself and the reinsurance mechanism administrator to the commissioner for approval.
VIII. The association may select more than one administrator for the reinsurance mechanism.
420-G:32 Eligibility. A small group health insurance carrier may reinsure with the reinsurance mechanism as provided for in this section:
(a) A small group health insurance carrier may reinsure an eligible employee or dependent of a small employer group consisting of 2 to 15 eligible employees within a period of 90 days following the small employer group’s policy issue date. A new eligible employee or dependent of a small employer group consisting of 2 to 15 eligible employees may be reinsured within 90 days of the individual’s effective date of coverage.
(b) The mechanism shall reimburse a small group health insurance carrier with respect to the claims of a reinsured employee or dependent. The mechanism and the small group health insurance carrier shall participate in a cost-sharing arrangement whereby the carrier shall pay all of the first $10,000 and then 10 percent of the claims of the reinsured employee up to a threshold of $100,000, at which point the reinsurance mechanism shall pay 100 percent of the claims until a maximum of $1,000,000 is reached.
(c) On an annual basis, the board shall review and adjust the initial level of claims and the maximum limit to be retained by the carrier to reflect increases in costs and utilization within the small group market in New Hampshire. The adjustment shall not be less than the annual change in the medical component of the “Consumer Price Index for All Urban Consumers” of the Department of Labor, Bureau of Labor Statistics, unless the board proposes and the commissioner approves a lower adjustment factor.
(d) A small group health insurance carrier may terminate reinsurance with the mechanism for one or more of the reinsured employees or dependents of a small employer on the anniversary date of the health benefit plan.
(e) Premium rates charged for reinsurance by the mechanism to a health maintenance organization that is federally qualified under 42 U.S.C. Section 300c(c)(2)(A), and as such is subject to requirements that limit the amount of risk that may be ceded to the mechanism that is more restrictive than those specified in subparagraphs (b) and (c), shall be reduced to reflect that portion of the risk above the amount set forth in subparagraphs (b) and (c) that may not be ceded to the mechanism, if any.
420-G:33 Reinsurance Premiums.
I. The board, as part of the plan of operation, shall establish a methodology for determining premium rates to be charged by the mechanism for reinsuring eligible employees or dependents of small employer groups having 2 to 15 employees pursuant to this section.
(a) The methodology shall include a system for classification of small employers that reflects the types of case characteristics commonly used by small group health insurance carriers in the state. The methodology shall provide for the development of reinsurance premium rates that shall be multiplied by the allowable rating factors to determine the premium rates for the mechanism. The reinsurance premium rates shall be established by the board, subject to the approval of the commissioner, and shall be set at levels that reasonably approximate gross premiums charged to small employers by small group health insurance carriers.
(b) The premium for the reinsurance mechanism shall allow a carrier to cede an eligible employee or dependent at a rate that is 2 times the reinsurance premium rate for the individual established pursuant to this paragraph.
(c) The board periodically shall review the methodology established under subparagraph (a), including the system of classification and any rating factors, to assure that it reasonably fulfills the purposes of this chapter. The board may propose changes to the methodology that shall be subject to the approval of the commissioner.
(d) The board may consider adjustments to the premium rates charged by the mechanism to reflect the use of effective cost containment and managed care arrangements.
II. A small group health insurance carrier that cedes a risk shall apply all managed care and claims handling techniques, including utilization review, individual case management, preferred provider provisions, and other managed care provisions or other methods of operation consistently with respect to reinsured and nonreinsured business.
III. Any small group health insurance carrier that cedes a risk to the reinsurance mechanism shall make its books and records available for audit at the request of the reinsurance mechanism.
420-G:34 Application of Provisions of the Insurance Code. The reinsurance mechanism shall be subject to examination and regulation by the insurance department.
420-G:35 Commissioner’s Powers and Duties. In addition to duties and powers enumerated elsewhere in this subdivision:
I. The commissioner shall, upon request of the board of directors, serve a demand upon the member insurer to pay an assessment within a reasonable time; the failure of the member insurer to promptly comply with such demand shall not excuse the association from the performance of its powers and duties under this subdivision.
II. The commissioner may suspend or revoke, after notice and hearing, the certificate of authority to transact insurance in this state of any member insurer that fails to pay an assessment when due or fails to comply with the plan of operation. As an alternative, the commissioner may levy a forfeiture on any member insurer which fails to pay an assessment when due. Such forfeiture shall not exceed 5 percent of the unpaid assessment per month, but no forfeiture shall be less than $100 per month. Any amounts so collected shall be credited to the assessment fund administered by the association.
III. Any action of the board of directors or the association may be appealed to the commissioner by any member insurer if the appeal is taken within 30 days of the final action being appealed. If a member company is appealing an assessment, the amount assessed shall be paid to the association and available to meet association obligations during the pendency of an appeal. If the appeal on the assessment is upheld, the amount paid in error or excess shall be returned to the member company from available funds of the association. Any final action or order of the commissioner shall be subject to judicial review, pursuant to RSA 541.
IV. The commissioner may adopt rules as necessary to carry out the purposes of this subdivision.
V. The powers of the commissioner enumerated in this subdivision shall be in addition to those established under RSA 404-C.
420-G:36 Examination and Annual Report. The reinsurance mechanism may be subject to examination by the commissioner. The board of directors shall submit to the commissioner each year, not later than 120 days after the association’s fiscal year, a financial report in a form approved by the commissioner and a report of its activities during the preceding fiscal year. The report shall summarize the activities of the reinsurance mechanism in the preceding calendar year, including the net written and earned premiums, enrollment, the expense of administration, and the paid and incurred losses. The association’s fiscal year shall be the calendar year.
420-G:37 Tax Exemption. The reinsurance mechanism shall be exempt from payment of all fees and all taxes levied by this state or any of its subdivisions.
420-G:38 Immunity for Members and Employees. There shall be no liability on the part of and no cause of action of any nature shall arise against any member insurer or its agents or employees, the association or its agents or employees, members of the board of directors, or the commissioner or the commissioner’s representatives, for any action or omission by them in the performance of their powers and duties under this subdivision.
420-G:39 Severability. If any provisions of this subdivision or the application thereof to any person or circumstance is held invalid, the invalidity does not affect other provisions or applications of the subdivision which can be given effect without the invalid provisions or applications, and to this end the provisions of this subdivision are severable.
2 New Paragraph; Managed Care Law Provider Contract Standards. Amend RSA 420-J:8 by inserting after paragraph XII the following new paragraph:
XIII. Every contract or renewal of an existing contract entered into after July 1, 2005 between a health carrier and any physician or facility shall contain a provision that provides that the physician or facility shall accept as full payment for services provided to any person ceded to the reinsurance mechanism, established in RSA 420-G:24 – RSA 420-G:39, for whom the reinsurance mechanism, has full financial responsibility or receiving insurance coverage through the high risk pool, the lesser of the Medicare rate or the lowest contract rate for those services paid to that physician or facility by any third party insurance carrier.
3 Reference Change. Amend RSA 126:27, VII to read as follows:
VII. The types of data which shall be reported under RSA 420-G:4[
4 Reference Change. Amend RSA 167:3-c, XI to read as follows:
XI. The types of data, frequency, and method of reporting which each health carrier shall be required to cross-match with the department under RSA 167:4-b and RSA 420-G:[
11] 13, II.
5 Reference Change. Amend RSA 404-G:5-e, I(f) to read as follows:
(f) The individual has received an offer of coverage from a carrier of individual health insurance that contains a rider or endorsement excluding coverage for a specified condition pursuant to RSA 420-G:[
5] 6, II.
6 Reference Change. Amend RSA 404-G:5-f, II to read as follows:
II. The following provisions of title 37 shall apply to the pool to the extent applicable and not inconsistent with the express provisions of this chapter: RSA 415:5, 415:6, 415:6-a, 415:6-b, 415:6-c, 415:6-f, 415:6-g, 415: 6-h, 415:7, 415:9--415:13, 415:22, 415:22-a, 415:22-b, 415:23, RSA 415-A, RSA 417, RSA 420-B:8, 420-B:8-b, 420-B:8-d, 420-B:8-e, 420-B:8-ee, 420-B:8-f, 420-B:8-ff, 420-B:8-g, 420-B:8-gg, 420-B:8-h, 420-B:8-i, 420-B:8-j, 420-B:8-k, 420-B:8-m, 420-B:11-12, RSA 420-C, RSA 420 E:4, [
RSA 420-G:7] 420-G:8, [ 420-G:8] 420-G:9, [ 420-G: 11] 420-G:13, RSA 420-H, RSA 420-I, and RSA 420-J:3. For the purposes of this chapter, the pool shall be deemed an insurer, pool coverage shall be deemed individual health insurance, and pool coverage contracts shall be deemed policies.
7 Effective Date. This act shall take effect 60 days after its passage.
SB 6 FISCAL NOTE
AN ACT relative to small group insurers.
The Insurance Department has determined this bill may have an indeterminable impact on county and local expenditures in FY 2005 and each year thereafter. There will be no fiscal impact on state expenditures or state, county, and local revenue.
The Department states this bill affects how insurance carriers price small employer group health insurance. The Department states this bill sets up a mechanism that involves assessing only small group health insurance writers. The state is not a small group health insurance purchaser, and therefore, the cost of any purchased state coverage would not be affected. The Department states local and county governments that meet the definition of small employer groups, and that purchase fully insured products, would be affected by the new rating rules. The Department states some small groups will see their rates go up, while others will see their rates go down.