SENATE BILL 97054
BY SENATORS Coffman, Johnson, Pascoe, and Schroeder;
also REPRESENTATIVES Leyba, Kreutz, Lawrence, Morrison,
Nichol, and S. Williams.
CONCERNING MEASURES NECESSARY FOR COLORADO TO MAINTAIN
REGULATORY AUTHORITY OVER CERTAIN ASPECTS OF HEALTH CARE COVERAGE
UNDER THE FEDERAL "HEALTH INSURANCE PORTABILITY AND ACCOUNTABILITY
ACT OF 1996", AND, IN CONNECTION THEREWITH, MAKING COLORADO
REQUIREMENTS RELATED TO THE RENEWABILITY OF HEALTH INSURANCE POLICIES,
PREEXISTING CONDITION LIMITATIONS, AND GUARANTEED ISSUE OF COVERAGE
CONSISTENT WITH FEDERAL LAW, REQUIRING THAT INDIVIDUAL PLANS ACCEPT
ALL ELIGIBLE INDIVIDUALS APPLYING FOR COVERAGE, PROHIBITING PREMIUM
RATE DISCRIMINATION BASED ON HEALTH STATUS, AND CLARIFYING THE
COLORADO INCOME TAX EXCLUSION OF CONTRIBUTIONS TO MEDICAL SAVINGS
ACCOUNTS AS A RESULT OF FEDERAL MEDICAL SAVINGS ACCOUNT PROVISIONS.
Be it enacted by the General Assembly of the State
of Colorado:
SECTION 1. Legislative declaration.
(1) The general assembly hereby finds, determines,
and declares that the intent of this legislation is solely to
bring Colorado statutes into compliance with the provisions of
the federal "Health Insurance Portability and Accountability
Act of 1996", where Colorado laws do not already meet or
exceed the minimum requirements of the federal act. This is being
done in order to:
(a) Retain state jurisdiction over health
insurance plans and avoid dual federal and state regulation;
(b) Reduce public confusion about the
health insurance rights and responsibilities of carriers and residents
by making Colorado law consistent with federal health insurance
law wherever the federal "Health Insurance Portability and
Accountability Act of 1996" preempts state law;
(c) Allow Coloradans covered by an insured
health plan to continue to file all their health insurance complaints
with the Colorado division of insurance rather than having to
file some of them with the federal government; and
(d) Ensure that where state law exceeds
the minimum requirements of the federal "Health Insurance
Portability and Accountability Act of 1996", consumers continue
to be afforded the same higher level of protection they have had
under Colorado law.
(2) (a) Nothing in Senate Bill 9754
shall be construed to prevent or prohibit the chief executive
officer of the state from giving the required notice to the secretary
of the federal department of health and human services and activating
the presumption under section 2744 of the federal "Health
Insurance Portability and Accountability Act of 1996" that
Colorado is implementing an acceptable alternative mechanism to
the requirement of section 2741 of the federal act. No such notice
or any other application for certification may take place without
specific statutory authorization from the general assembly acting
by bill.
(b) Nothing in Senate Bill 9754
shall be construed to authorize implementation of the national
association of insurance commissioners' model acts on either individual
portability or individual availability.
SECTION 2. 108602
(1), (1.2), (1.3), (3), (3.1), (3.2), (3.5), (5.4), (5.5), (5.6),
(6), (6.3), (6.5), (6.7), (6.8), (7.5), (7.7), (8.5), (8.7), (9.5),
(11), and (12), Colorado Revised Statutes, 1994 Repl. Vol., are
amended to read:
108602. Definitions.
As used in this part 6, unless the context otherwise requires:
(1) "Actuarial certification"
means a written statement by a member
of the American Academy of Actuaries or other individual acceptable
to the commissioner that a small employer carrier is in compliance
with the provisions of this part 6 and applicable provisions of
article 16 of this title, based upon the person's examination,
including a review of the appropriate records and of the actuarial
assumptions and methods used by the small employer carrier in
establishing premium rates for applicable health benefit plans
HAS THE SAME MEANING AS SET FORTH IN SECTION 1016102
(1).
(1.2) "Affiliate" or "affiliated"
means any entity or person that directly
or indirectly, through one or more intermediaries, controls or
is controlled by, or is under common control with, a specified
entity or person HAS THE SAME MEANING
AS SET FORTH IN SECTION 1016102 (2).
(1.3) "Base premium rate" means,
as to a rating period, the lowest premium rate charged or that
could have been charged by the small employer carrier to small
employers with similar case characteristics for health benefit
plans subject to state insurance regulation
HAS THE SAME MEANING AS SET FORTH IN SECTION 1016102
(3).
(3) "Carrier" means
any entity that provides health coverage in this state, including
a franchise insurance plan, a fraternal benefit society, a health
maintenance organization, a nonprofit hospital and health service
corporation, a sickness and accident insurance company, and any
other entity providing a plan of health insurance or health benefits
subject to the insurance laws and regulations of Colorado
HAS THE SAME MEANING AS SET FORTH IN SECTION 1016102
(8).
(3.1) "Carrier waiting period"
means a period of time not to exceed
sixty days during which no premium shall be collected and coverage
issued would not become effective
HAS THE SAME MEANING AS "AFFILIATION PERIOD" AS SET
FORTH IN SECTION 1016102 (2.5).
(3.2) (a) "Case characteristics"
means demographic characteristics
of a small employer that are considered by the carrier in the
determination of premium rates for an individual or small employer
HAS THE SAME MEANING AS SET FORTH IN SECTION 1016102
(10).
(b) Effective
January 1, 1995, "case characteristics" are limited
to the following demographic characteristics:
(I) The age of covered individuals
according to the following brackets:
(A) For children who are dependents,
a single bracket from newborn to nineteen years of age, unless
the child is a fulltime student covered as a dependent,
in which case the bracket is newborn up to twentyfour years
of age;
(B) For adults and emancipated
minors, age brackets in fiveyear intervals;
(II) Geographic location of the
policyholder, including the following location categories only:
(A) Counties in Colorado that
are part of a primary metropolitan statistical area or a metropolitan
statistical area; except that different primary metropolitan statistical
areas and metropolitan statistical areas may have different rates;
(B) Counties in Colorado with
a population of twenty thousand or fewer residents; and
(C) All other counties in Colorado;
(III) Family size, including the
following size categories only:
(A) One adult;
(B) One adult and any children;
(C) Two adults; and
(D) Two adults and any children.
(c) Effective
January 1, 1995, "case characteristics" does not include
claim experience, health status, and duration of coverage, or
any other characteristic not specifically described in paragraph
(b) of this subsection (3.2).
(3.5) (a) "Class of business"
means all or a distinct grouping of
small employers as shown on the records of a small employer carrier.
A small employer carrier may establish no more than nine separate
classes of business, and each class shall reflect substantial
differences in expected claims experience or administrative costs
related to the following: HAS THE
SAME MEANING AS SET FORTH IN SECTION 1016102 (11).
(I) The use of more than one type
of system for the marketing and sale of health benefit plans to
small employers;
(II) The acquisition of a class
of business from another small employer carrier; or
(III) The provision of coverage
to one or more association groups that meet the requirements of
section 1016214 (1).
(b) The commissioner
may approve the establishment of additional classes of business
upon application to the commissioner and a finding by the commissioner
that such action would enhance the efficiency and fairness of
the small employer health insurance marketplace.
(5.4) "Dependent" means
a spouse, an unmarried child under nineteen years of age, an unmarried
child who is a fulltime student under twentyfour years
of age and who is financially dependent upon the parent, and an
unmarried child of any age who is medically certified as disabled
and dependent upon the parent HAS
THE SAME MEANING AS SET FORTH IN SECTION 1016102 (14).
(5.5) "Eligible employee" means
an employee who has a regular work week of twentyfour or
more hours and includes a sole proprietor and a partner of a partnership,
if the sole proprietor or partner 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
HAS THE SAME MEANING AS SET FORTH IN SECTION 1016102
(15).
(5.6) "Established geographic service
area" means the entire state
of Colorado or, for plans that do not cover the entire state,
any county within which the carrier is authorized to have arrangements
established with providers to provide services
HAS THE SAME MEANING AS SET FORTH IN SECTION 1016102
(18).
(6) (a) "Health benefit plan"
means any hospital or medical expense
policy or certificate, hospital or medical service corporation
contract, or health maintenance organization subscriber contract
available for use, offered, or sold to an individual or to a small
employer HAS THE SAME MEANING AS
SET FORTH IN SECTION 1016102 (21).
(b) "Health
benefit plan" does not include accident only, credit, dental,
vision, medicare supplement, longterm care, or disability
income insurance, coverage issued as a supplement to liability
insurance, workers' compensation or similar insurance, automobile
medical payment insurance, specified diseases, hospital confinement
indemnity, or limited benefit health insurance if:
(I) The carrier files on or before
March 1 of each year a certification with the commissioner that
contains a statement by an officer of the carrier certifying that
policies or certificates described in this paragraph (b) 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 a summary description of each policy
or certificate described in this paragraph (b), including the
average annual premium rates (or range of premium rates in cases
where premiums vary by age, gender, or other factors) charged
for such policies and certificates in this state;
(II) In the case of a policy or
certificate that is described in this paragraph (b) and that is
offered for the first time in this state on or after July 1, 1994,
the carrier files with the commissioner the information and statement
required in subparagraph (I) of this paragraph (b) at least thirty
days prior to the date such a policy or certificate is issued
or delivered in this state.
(6.3) "Health status" means
the determination by a carrier of the underwriting risk of an
individual or the employer due to the past, present, or expected
health conditions of the employees and dependents of the employer
HAS THE SAME MEANING AS SET FORTH IN SECTION 1016102
(24).
(6.5) "Index rate" means,
as to a rating period for small employers with similar case characteristics,
the arithmetic average of the base premium rate and the corresponding
highest premium rate HAS THE SAME
MEANING AS SET FORTH IN SECTION 1016102 (25).
(6.7) "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 for which such individual is entitled to enroll
under the terms of the health benefit plan, if such initial enrollment
period is a period of at least thirty days. An eligible employee
or dependent shall not be considered a late enrollee if:
(a) The individual:
(I) Was covered under another
qualifying previous coverage at the time of the initial enrollment
period;
(II) Lost coverage under the other
qualifying previous coverage as a result of termination of employment
or eligibility, the involuntary termination of the qualifying
previous coverage, death of a spouse, or divorce; and
(III) Requests enrollment within
thirty days after termination of the other qualifying previous
coverage; or
(b) The individual is employed
by an employer that offers multiple health benefit plans and elects
a different plan during an open enrollment period; or
(c) A court has ordered that coverage
be provided for a dependent under a covered employee's health
benefit plan and the request for enrollment is made within thirty
days after issuance of such court order
HAS THE SAME MEANING AS SET FORTH IN SECTION 1016102
(26).
(6.8) "New business premium rate"
means, as to a rating period, the
lowest premium rate charged or offered or which could have been
charged or offered by the small employer carrier to small employers
with similar case characteristics for newly issued health benefit
plans with the same or similar coverage
HAS THE SAME MEANING AS SET FORTH IN SECTION 1016102
(28).
(7.5) "Premium" means
all moneys paid by a small employer and eligible employees or
an individual and eligible dependents as a condition of receiving
coverage from a carrier, including any fees or other contributions
associated with the health benefit plan
HAS THE SAME MEANING AS SET FORTH IN SECTION 1016102
(31).
(7.7) "Producer" means
a person who solicits, negotiates, effects, procures, delivers,
renews, continues, services, or binds health benefit plans and
is licensed to conduct these activities in Colorado
HAS THE SAME MEANING AS SET FORTH IN SECTION 1016102
(35).
(8.5) "Qualifying previous coverage"
and "qualifying existing coverage" mean
benefits or coverage provided under:
(a) Medicare or Medicaid;
(b) An employerbased or
group health insurance or health benefit plan that provides benefits
similar to or exceeding benefits provided under the basic or standard
health benefit plan; or
(c) An individual health insurance
policy issued under the provisions of sections 1016201
to 1016212, including coverage issued by a health
maintenance organization or prepaid hospital or medical care plan
that provides benefits similar to or exceeding the benefits provided
under the basic or standard health benefit plan, if such policy
has been in effect for a period of at least one year; except that
such individual policy need not cover maternity or mental health
care HAVE THE SAME MEANING AS "CREDITABLE
COVERAGE" AS SET FORTH IN SECTION 1016102 (13.7).
(8.7) "Rating period" means
the policy period for which premium rates established by a carrier
are assumed to be in effect HAS THE
SAME MEANING AS SET FORTH IN SECTION 1016102 (38).
(9.5) "Restricted network provision"
means any provision of an individual
or group 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 to
provide health care services to covered individuals
HAS THE SAME MEANING AS SET FORTH IN SECTION 1016102
(39).
(11) "Small employer" means
any person, firm, corporation, partnership, or association that
is actively engaged in business that, on at least fifty percent
of its working days during the preceding calendar quarter, employed
no more than fifty eligible employees, the majority of whom were
employed within this state and that was not formed primarily for
the purpose of purchasing insurance. On and after January 1, 1996,
"small employer" includes a business group of one. 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 state taxation, shall be considered
one employer HAS THE SAME MEANING
AS SET FORTH IN SECTION 1016102 (40).
(12) "Small employer carrier"
means a carrier that offers health
benefit plans covering eligible employees of one or more small
employers in this state HAS THE SAME
MEANING AS SET FORTH IN SECTION 1016102 (41).
SECTION 3. 1016102
(9), (21), (26), (37), and (43), Colorado Revised Statutes, 1994
Repl. Vol., are amended, and the said 1016102, as
amended, is further amended BY THE ADDITION OF THE FOLLOWING NEW
SUBSECTIONS, to read:
1016102. Definitions.
As used in this article, unless the context otherwise requires:
(2.5) "AFFILIATION PERIOD" MEANS
A PERIOD OF TIME NOT TO EXCEED TWO MONTHS (THREE MONTHS FOR LATE
ENROLLEES) DURING WHICH A HEALTH MAINTENANCE ORGANIZATION DOES
NOT COLLECT PREMIUM AND COVERAGE ISSUED WOULD NOT BECOME EFFECTIVE.
(5.5) "BONA
FIDE ASSOCIATION"
MEANS, WITH RESPECT TO HEALTH INSURANCE COVERAGE OFFERED IN COLORADO,
AN ASSOCIATION WHICH:
(a) HAS BEEN ACTIVELY IN EXISTENCE FOR
AT LEAST FIVE YEARS;
(b) HAS BEEN FORMED AND MAINTAINED IN
GOOD FAITH FOR PURPOSES OTHER THAN OBTAINING INSURANCE AND DOES
NOT CONDITION MEMBERSHIP ON THE PURCHASE OF ASSOCIATIONSPONSORED
INSURANCE;
(c) DOES NOT CONDITION MEMBERSHIP IN THE
ASSOCIATION ON ANY HEALTH STATUSRELATED FACTOR RELATING
TO AN INDIVIDUAL (INCLUDING AN EMPLOYEE OF AN EMPLOYER OR A DEPENDENT
OF AN EMPLOYEE) AND CLEARLY SO STATES IN ALL MEMBERSHIP AND APPLICATION
MATERIALS;
(d) MAKES HEALTH INSURANCE COVERAGE OFFERED
THROUGH THE ASSOCIATION AVAILABLE TO ALL MEMBERS REGARDLESS OF
ANY HEALTH STATUSRELATED FACTOR RELATING TO SUCH MEMBERS
(OR INDIVIDUALS ELIGIBLE FOR COVERAGE THROUGH A MEMBER) AND CLEARLY
SO STATES IN ALL MARKETING AND APPLICATION MATERIALS;
(e) DOES NOT MAKE HEALTH INSURANCE COVERAGE
OFFERED THROUGH THE ASSOCIATION AVAILABLE OTHER THAN IN CONNECTION
WITH A MEMBER OF THE ASSOCIATION AND CLEARLY SO STATES IN ALL
MARKETING AND APPLICATION MATERIALS; AND
(f) PROVIDES AND ANNUALLY UPDATES INFORMATION
NECESSARY FOR THE COMMISSIONER TO DETERMINE WHETHER OR NOT AN
ASSOCIATION MEETS THE DEFINITION OF A BONA FIDE ASSOCIATION BEFORE
QUALIFYING AS A BONA FIDE ASSOCIATION FOR THE PURPOSES OF THIS
ARTICLE 16.
(9) "Carrier
waiting period" means a period of time not to exceed sixty
days during which no premium shall be collected and coverage issued
would not become effective.
(13.7) "CREDITABLE COVERAGE"
MEANS BENEFITS OR COVERAGE PROVIDED UNDER:
(a) MEDICARE OR MEDICAID;
(b) AN EMPLOYEE WELFARE BENEFIT PLAN OR
GROUP HEALTH INSURANCE OR HEALTH BENEFIT PLAN;
(c) AN INDIVIDUAL HEALTH BENEFIT PLAN;
(d) A STATE HEALTH BENEFITS RISK POOL
(INCLUDING BUT NOT LIMITED TO THE COLORADO UNINSURABLE HEALTH
INSURANCE PLAN); OR
(e) CHAPTER 55 OF TITLE 10 OF THE UNITED
STATES CODE, A MEDICAL CARE PROGRAM OF THE FEDERAL INDIAN HEALTH
SERVICE OR OF A TRIBAL ORGANIZATION, A HEALTH PLAN OFFERED UNDER
CHAPTER 89 OF TITLE 5, UNITED STATES CODE, A PUBLIC HEALTH PLAN,
OR A HEALTH BENEFIT PLAN UNDER SECTION 5 (e) OF THE FEDERAL "PEACE
CORPS ACT" (22 U.S.C. SEC. 2504 (e)).
(21) (a) "Health benefit plan"
means any hospital or medical expense policy or certificate, hospital
or medical service corporation contract, or health maintenance
organization subscriber contract OR ANY OTHER SIMILAR HEALTH CONTRACT
SUBJECT TO THE JURISDICTION OF THE COMMISSIONER available for
use, offered, or sold to an individual
or to a small employer IN COLORADO.
(b) "Health benefit plan" does
not include: Accident only; credit; dental; vision; medicare supplement;
BENEFITS FOR longterm care, HOME HEALTH CARE, COMMUNITYBASED
CARE, OR ANY COMBINATION THEREOF; or
disability income insurance; LIABILITY INSURANCE INCLUDING GENERAL
LIABILITY INSURANCE AND AUTOMOBILE LIABILITY INSURANCE; COVERAGE
FOR ONSITE MEDICAL CLINICS; coverage issued as a supplement
to liability insurance, workers' compensation or similar insurance;
OR automobile medical payment insurance. THE TERM ALSO EXCLUDES
specified disease, hospital confinement indemnity, or limited
benefit health insurance if SUCH TYPES OF COVERAGE DO NOT PROVIDE
COORDINATION OF BENEFITS AND ARE PROVIDED UNDER SEPARATE POLICES
OR CERTIFICATES.
(I) The carrier files on or before
March 1 of each year a certification with the commissioner that
contains a statement by an officer of the carrier certifying that
policies or certificates described in this paragraph (b) 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 a summary description of each policy
or certificate described in this paragraph (b), including the
average annual premium rates (or range of premium rates in cases
where premiums vary by age, gender, or other factors) charged
for such policies and certificates in this state;
(II) In the case of a policy or
certificate that is described in this paragraph (b) and that is
offered for the first time in this state on or after July 1, 1994,
the carrier files with the commissioner the information and statement
required in subparagraph (I) of this paragraph (b) at least thirty
days prior to the date such a policy or certificate is issued
or delivered in this state.
(24.5) "HEALTH STATUSRELATED
FACTOR" MEANS ANY OF THE FOLLOWING FACTORS: HEALTH STATUS;
MEDICAL CONDITION, INCLUDING BOTH PHYSICAL AND MENTAL ILLNESSES;
CLAIMS EXPERIENCE; RECEIPT OF HEALTH CARE; MEDICAL HISTORY; GENETIC
INFORMATION; EVIDENCE OF INSURABILITY INCLUDING CONDITIONS ARISING
OUT OF ACTS OF DOMESTIC VIOLENCE; AND DISABILITY.
(26) "Late enrollee" means an
eligible employee or dependent who requests enrollment in a GROUP
health benefit plan of a small employer
following the initial enrollment period for which such individual
is entitled to enroll under the terms of the health benefit plan,
if such initial enrollment period is a period of at least thirty
days. An eligible employee or dependent shall not be considered
a late enrollee if:
(a) The individual:
(I) Was covered under another
qualifying previous OTHER CREDITABLE
coverage at the time of the initial enrollment period AND, IF
REQUIRED BY THE CARRIER OR ISSUER, THE EMPLOYEE STATED AT THE
TIME OF INITIAL ENROLLMENT THAT THIS WAS THE REASON FOR DECLINING
ENROLLMENT;
(II) Lost coverage under the other qualifying
previous CREDITABLE coverage as a
result of termination of employment or eligibility, REDUCTION
IN THE NUMBER OF HOURS OF EMPLOYMENT, the involuntary termination
of the qualifying previous
CREDITABLE coverage, death of a spouse, LEGAL SEPARATION or divorce,
OR EMPLOYER CONTRIBUTIONS TOWARDS SUCH COVERAGE WAS TERMINATED;
and
(III) Requests enrollment within thirty
days after termination of the other qualifying
previous CREDITABLE coverage; or
(b) The individual is employed by an employer
that offers multiple health benefit plans and elects a different
plan during an open enrollment period; or
(c) A court has ordered that coverage
be provided for a dependent under a covered employee's health
benefit plan and the request for enrollment is made within thirty
days after issuance of such court order; OR
(d) A PERSON BECOMES A DEPENDENT OF A
COVERED PERSON THROUGH MARRIAGE, BIRTH, ADOPTION, OR PLACEMENT
FOR ADOPTION AND REQUESTS ENROLLMENT NO LATER THAN THIRTY DAYS
AFTER BECOMING SUCH A DEPENDENT. IN SUCH CASE, COVERAGE SHALL
COMMENCE ON THE DATE THE PERSON BECOMES A DEPENDENT IF A REQUEST
FOR ENROLLMENT IS RECEIVED IN A TIMELY FASHION BEFORE SUCH DATE.
(37) "Qualifying
previous coverage" and "qualifying existing coverage"
mean benefits or coverage provided under:
(a) Medicare or medicaid;
(b) An employerbased or
group health insurance or health benefit plan that provides benefits
similar to or exceeding benefits provided under the basic or standard
health benefit plan; or
(c) An individual health insurance
policy issued under the provisions of sections 1016201
to 1016212, including coverage issued by a health
maintenance organization or prepaid hospital or medical care plan
that provides benefits similar to or exceeding the benefits provided
under the basic or standard health benefit plan, if such policy
has been in effect for a period of at least one year; except that
such individual policy need not cover maternity or mental health
care.
(43) "Small group sickness and accident
insurance", "small group plan", and "small
group policy" mean that form of group sickness and accident
insurance issued by an entity subject to part 2 of this article,
that form of group service or indemnity type contract issued by
an entity organized pursuant to the provisions of part 3 of this
article, or that form of policy issued by an entity organized
pursuant to the provisions of part 4 of this article which provides
coverage to small employers located in Colorado. THESE TERMS INCLUDE
A BONA FIDE ASSOCIATION PLAN IF SUCH PLAN PROVIDES COVERAGE TO
ONE OR MORE ELIGIBLE EMPLOYEES OF A SMALL EMPLOYER IN COLORADO.
(45) "WAITING PERIOD" MEANS,
WITH RESPECT TO A GROUP HEALTH BENEFIT PLAN AND AN INDIVIDUAL
THAT IS A POTENTIAL PARTICIPANT OR BENEFICIARY IN THE PLAN, THE
PERIOD THAT MUST PASS WITH RESPECT TO THE INDIVIDUAL, AS DETERMINED
BY THE PLAN SPONSOR, BEFORE THE INDIVIDUAL IS ELIGIBLE TO BE COVERED
FOR BENEFITS UNDER THE TERMS OF THE PLAN.
SECTION 4. 1016105
(3), (4), (5), and (7.3) (a), the introductory portion to 1016105
(7.3) (b) (I), and 1016105 (7.3) (c) (I), (7.3) (d.5),
(7.3) (e), (7.3) (h), and (7.4) (c), Colorado Revised Statutes,
1994 Repl. Vol., are amended, and the said 1016105,
as amended, is further amended BY THE ADDITION OF A NEW SUBSECTION,
to read:
1016105. Small group sickness
and accident insurance guaranteed issue mandated
provisions for basic and standard health benefit plans.
(3) A small group sickness and accident insurance plan,
small group plan, or small group policy shall be renewable to
all eligible employees and dependents at the option of the small
employer, except where there is
AS ALLOWED PURSUANT TO SECTION 1016201.5.
(a) Nonpayment of required premiums;
(b) Fraud or misrepresentation
by the small employer, or with respect to coverage of an insured
individual, fraud or misrepresentation by the insured individual
or such individual's representative;
(c) Noncompliance with plan provisions;
(d) An insufficient number of
individuals under the plan to meet the percentage requirements
of the plan; or
(e) An employer which is no longer
actively engaged in the business in which it was engaged on the
effective date of the plan.
(4) A small
group sickness and accident insurer subject to the provisions
of part 2 of this article or an entity subject to the provisions
of part 3 or 4 of this article may cease to renew all plans under
a class of business; however, the insurer or other entity shall
provide notice to all affected health insurance plans and to the
commissioner in each state in which an affected insured individual
is known to reside at least ninety days prior to termination of
coverage. An insurer or other entity which exercises its right
not to renew all plans in a class of business shall not:
(a) Establish a new class of business
for a period of five years after the nonrenewal of the plans without
prior approval of the commissioner; or
(b) Transfer or otherwise provide
coverage to any of the employers from the nonrenewed class of
business unless the insurer offers to transfer or provide coverage
to all affected employers and eligible employees and dependents
without regard to case characteristic, claim experience, health
status, or duration of coverage.
(5) Each small group sickness and accident
insurer or other entity shall make reasonable disclosure in solicitation
and sales materials provided to small employers the following
information in a form and manner prescribed by the commissioner
AND UPON REQUEST OF ANY SUCH SMALL EMPLOYER SHALL PROVIDE SUCH
INFORMATION IN DETAIL:
(a) The extent to which premium rates for a specific employer are established or adjusted due to the experience, health status, or duration of coverage of employees or dependents of the small employer;
(b) The provisions concerning the insurer's
or other entity's right to, and the frequency with which the insurer
or other entity may, change premium rates and the factors, including
case characteristics, which affect changes in premium rates;
(c) A description of the class of business
in which the small employer is or will be included, including
the applicable grouping of plans; and
(d) The provisions relating to renewability
of coverage;
(e) THE PROVISIONS OF SUCH COVERAGE RELATING
TO ANY PREEXISTING CONDITION EXCLUSION; AND
(f) THE BENEFITS AND PREMIUMS AVAILABLE
UNDER ALL HEALTH BENEFIT PLANS FOR WHICH THE EMPLOYER IS QUALIFIED.
(7.3) (a) Except as otherwise provided
in this subsection (7.3), effective January 1, 1995, every small
employer carrier shall, as a condition of transacting business
in this state with small employers, actively offer to such small
employers the choice of a basic health benefit plan or a standard
health benefit plan. EFFECTIVE JULY 1, 1997, EVERY SMALL EMPLOYER
CARRIER SHALL ALSO OFFER TO SMALL EMPLOYERS A CHOICE OF ALL THE
OTHER SMALL GROUP PLANS THE CARRIER MARKETS IN COLORADO; EXCEPT
THAT THIS REQUIREMENT SHALL NOT APPLY TO A HEALTH BENEFIT PLAN
OFFERED BY A CARRIER IF SUCH PLAN IS MADE AVAILABLE IN THE SMALL
GROUP MARKET ONLY THROUGH ONE OR MORE BONA FIDE ASSOCIATION PLANS.
(b) (I) A small employer carrier
shall not be required to approve an application FROM A BUSINESS
GROUP OF ONE for a basic health benefit plan or a standard health
benefit plan if:
(c) (I) Effective January 1, 1995,
a small employer carrier shall issue a basic health benefit plan
or a standard health benefit plan to any eligible small employer
that applies for such health benefit plan and agrees to make the
required premium payments and to satisfy the other reasonable
provisions of the health benefit plan that are not inconsistent
with this article. EFFECTIVE JULY 1, 1997, A SMALL EMPLOYER CARRIER
SHALL ALSO ISSUE ANY OF ITS OTHER SMALL EMPLOYER PLANS TO ANY
SMALL EMPLOYER THAT APPLIES FOR SUCH A PLAN; EXCEPT THAT THIS
REQUIREMENT SHALL NOT APPLY TO A BUSINESS GROUP OF ONE WHERE THE
BUSINESS GROUP OF ONE DOES NOT MEET THE CARRIER'S NORMAL AND ACTUARIALLYBASED
UNDERWRITING CRITERIA. THE REQUIREMENTS OF THIS SUBPARAGRAPH (I)
SHALL NOT APPLY TO A HEALTH BENEFIT PLAN OFFERED BY A CARRIER
IF SUCH PLAN IS MADE AVAILABLE IN THE SMALL GROUP MARKET ONLY
THROUGH ONE OR MORE BONA FIDE ASSOCIATION PLANS.
(d.5) (I) Notwithstanding
the requirements of paragraph (c) of this subsection (7.3), a
small employer carrier may, in any calendar year with the approval
of the commissioner, suspend its duty to issue a basic health
benefit plan or a standard health benefit plan for such period
as approved by the commissioner to any eligible employer that
applies for such health benefit plan, if the employer's group
does not meet the small employer carrier's normal and actuariallybased
underwriting criteria and if the small employer carrier meets
all the following conditions:
(A) The number of capped employees
covered by the small employer carrier when divided by the total
number of employees and dependents covered by contracts, policies,
and plans of the small employer carrier in force with small employers
in Colorado is equal to or exceeds four percent;
(B) The small employer carrier
applies to the commissioner, in a form and manner determined by
the commissioner, for an immediate suspension for a specified
time period of the requirement in paragraph (c) of this subsection
(7.3) to issue a basic health benefit plan or a standard health
benefit plan to small employers that do not meet the small employer
carrier's normal and actuariallybased underwriting criteria;
(C) The small employer carrier
provides the commissioner with certified copies of the information
deemed necessary by the commissioner to make a determination of
whether or not the small employer carrier has or is about to reach
the four percent cap described in subsubparagraph (A) of
this subparagraph (I); and
(D) The commissioner approves
the request for the suspension described in this paragraph (d.5).
(II) If the commissioner determines
that the limitations on the requirements to issue basic and standard
health benefit plans under paragraph (c) of this subsection (7.3)
unreasonably restrict the access of residents of Colorado to health
insurance coverage, the commissioner shall have the authority
to increase or decrease, acting pursuant to article 4 of title
24, C.R.S., the percentage limitation specified in subsubparagraph
(A) of subparagraph (I) of this paragraph (d.5).
(III) The commissioner may promulgate
such rules and regulations as are necessary to carry out the purposes
of this paragraph (d.5).
(e) A small
employer is eligible under paragraph (a) and subparagraph (I)
of paragraph (c) of this subsection (7.3) if it employed two or
more eligible employees within this state on at least fifty percent
of its working days during the preceding calendar quarter; except
that, on and after January 1, 1996, these provisions shall also
apply to a business group of one.
(h) The requirement
that a small employer carrier actively offer small employers the
choice of a basic or a standard health benefit plan pursuant to
paragraph (a) of this subsection (7.3) shall not apply if:
(I) The small employer carrier
certifies to the commissioner, in a certification signed by an
officer of the company that:
(A) The carrier is neither marketing
to nor accepting any new applications for coverage from any small
employers in Colorado on and after July 1, 1994; and
(B) The carrier will terminate
no later than December 31, 1995, all small group business written
prior to July 1, 1994;
(II) The small employer carrier
requests and the commissioner approves a request from the carrier
to suspend its duty to guarantee the issuance of a basic and standard
health benefit plan pursuant to paragraph (a) of this subsection
(7.3).
(7.4) (c) In applying minimum participation
requirements with respect to an employer, a small employer carrier
shall not consider employees or dependents who have qualifying
existing CREDITABLE coverage when
determining whether the applicable percentage of participation
is met. However, a small employer carrier may consider employees
or dependents of such employer who have coverage under another
health benefit plan that is sponsored by such small employer.
(12) IN THE CASE OF AN EMPLOYER THAT WAS
NOT IN EXISTENCE THROUGHOUT THE PRECEDING CALENDAR QUARTER, THE
DETERMINATION OF WHETHER SUCH EMPLOYER IS A SMALL OR LARGE EMPLOYER
SHALL BE BASED ON THE AVERAGE NUMBER OF EMPLOYEES THAT IS REASONABLY
EXPECTED SUCH EMPLOYER WILL EMPLOY ON BUSINESS DAYS IN THE CURRENT
CALENDAR YEAR.
SECTION 5. Part
1 of article 16 of title 10, Colorado Revised Statutes, 1994 Repl.
Vol., as amended, is amended BY THE ADDITION OF A NEW SECTION
to read:
1016105.5. Individual health
benefit plans limited guarantee issue.
(1) EVERY CARRIER OFFERING INDIVIDUAL HEALTH BENEFIT
PLANS IN COLORADO SHALL OFFER AND ACCEPT FOR ENROLLMENT PURSUANT
TO SUBSECTION (2) OF THIS SECTION EVERY ELIGIBLE INDIVIDUAL WHO
APPLIES FOR COVERAGE WITHIN SIXTYTWO DAYS AFTER TERMINATION
OF SUCH INDIVIDUAL'S PRIOR COVERAGE AND SHALL NOT IMPOSE ANY PREEXISTING
CONDITION EXCLUSIONS OR LIMITATIONS ON THE NEW COVERAGE; EXCEPT
THAT THIS REQUIREMENT SHALL NOT APPLY TO CARRIERS OFFERING COVERAGE
ONLY THROUGH BONA FIDE ASSOCIATIONS OR TO CARRIERS OFFERING INDIVIDUAL
COVERAGE ONLY THROUGH CONVERSION POLICIES. AS USED IN THIS SECTION,
"ELIGIBLE INDIVIDUAL" MEANS AN INDIVIDUAL:
(a) FOR WHOM, AS OF THE DATE ON WHICH
THE INDIVIDUAL SEEKS COVERAGE, THE AGGREGATE OF PERIODS OF CREDITABLE
COVERAGE IS EIGHTEEN MONTHS OR MORE AND WHOSE MOST RECENT PRIOR
CREDITABLE COVERAGE WAS UNDER A GROUP PLAN. AS USED IN THIS SECTION,
"GROUP PLAN" MEANS A SMALL OR LARGE GROUP HEALTH BENEFIT
PLAN, AN EMPLOYERSPONSORED PLAN, AN EMPLOYEE WELFARE BENEFIT
PLAN, A GOVERNMENT PLAN, OR A CHURCH PLAN.
(b) WHO IS NOT ELIGIBLE FOR COVERAGE UNDER
A GROUP HEALTH BENEFIT PLAN, MEDICARE, OR MEDICAID AND DOES NOT
HAVE OTHER HEALTH BENEFIT PLAN COVERAGE;
(c) WHOSE MOST RECENT COVERAGE WAS NOT
TERMINATED AS A RESULT OF NONPAYMENT OF PREMIUMS OR FRAUD; AND
(d) WHO DID NOT TURN DOWN AN OFFER OF CONTINUATION COVERAGE IF IT WAS OFFERED AND WHO SUBSEQUENTLY EXHAUSTED SUCH COVERAGE.
(2) A CARRIER SHALL MEET THE REQUIREMENTS
OF SUBSECTION (1) OF THIS SECTION IF:
(a) THE CARRIER OFFERS AT LEAST TWO DIFFERENT
HEALTH BENEFIT POLICY FORMS, BOTH OF WHICH ARE DESIGNED FOR, ARE
MADE GENERALLY AVAILABLE AND ACTIVELY MARKETED TO, AND ENROLL
BOTH ELIGIBLE AND OTHER INDIVIDUALS; AND
(b) THE OFFERING OF POLICY FORMS INCLUDES,
AT A MINIMUM:
(I) THE POLICY FORMS FOR HEALTH BENEFIT
PLAN COVERAGE WITH THE LARGEST AND NEXT TO LARGEST PREMIUMS VOLUME
OF ALL SUCH POLICY FORMS OFFERED BY THE ISSUER IN COLORADO; OR
(II) A LOWERLEVEL COVERAGE POLICY
FORM AND A HIGHERLEVEL COVERAGE POLICY FORM WHICH INCLUDE
BENEFITS SUBSTANTIALLY SIMILAR TO OTHER INDIVIDUAL HEALTH INSURANCE
COVERAGE OFFERED BY THE ISSUER IN COLORADO AND ARE COVERED UNDER
A RISK ADJUSTMENT, RISK SPREADING, OR FINANCIAL SUBSIDIZATION
METHOD CONSISTENT WITH FEDERAL REGULATIONS. AS USED IN THIS SUBPARAGRAPH
(II):
(A) "HIGHERLEVEL COVERAGE"
MEANS A POLICY FORM FOR WHICH THE ACTUARIAL VALUE OF THE BENEFITS
UNDER THE COVERAGE IS AT LEAST FIFTEEN PERCENT GREATER THAN THE
ACTUARIAL VALUE OF LOWERLEVEL COVERAGE OFFERED BY THE CARRIER
IN COLORADO, AND THE ACTUARIAL VALUE OF THE BENEFITS UNDER THE
COVERAGE IS AT LEAST ONE HUNDRED PERCENT BUT NOT GREATER THAN
ONE HUNDRED TWENTY PERCENT OF THE POLICY FORM WEIGHTED AVERAGE.
(B) "LOWERLEVEL COVERAGE"
MEANS A POLICY FORM FOR WHICH THE ACTUARIAL VALUE OF THE BENEFITS
UNDER THE COVERAGE IS AT LEAST EIGHTYFIVE PERCENT BUT NOT
GREATER THAN ONE HUNDRED PERCENT OF THE POLICY FORM WEIGHTED AVERAGE.
(C) "POLICY FORM WEIGHTED AVERAGE" MEANS THE AVERAGE ACTUARIAL VALUE OF THE BENEFITS PROVIDED BY ALL THE HEALTH INSURANCE COVERAGE ISSUED (AS ELECTED BY THE CARRIER) EITHER BY THAT CARRIER OR, IF SUCH DATA ARE AVAILABLE, BY ALL CARRIERS IN COLORADO IN THE INDIVIDUAL HEALTH BENEFIT PLAN MARKET DURING THE PREVIOUS YEAR (NOT INCLUDING COVERAGE ISSUED UNDER THIS SECTION), WEIGHTED BY ENROLLMENT FOR THE DIFFERENT COVERAGE.
(3) WITH RESPECT TO THE PROVISIONS OF
SUBSECTION (2) OF THIS SECTION, A CARRIER THAT OFFERS COVERAGE
IN THE INDIVIDUAL MARKET THROUGH A MANAGED CARE PLAN MAY LIMIT
THE INDIVIDUALS WHO MAY BE ENROLLED TO THOSE THAT LIVE, RESIDE,
OR WORK WITHIN THE SERVICE AREA OF THE PLAN. SUCH A CARRIER MAY
DENY COVERAGE TO ELIGIBLE INDIVIDUALS IF IT DEMONSTRATES TO THE
COMMISSIONER THAT IT WILL NOT HAVE THE CAPACITY TO DELIVER SERVICES
ADEQUATELY TO ADDITIONAL ENROLLEES AND IT IS APPLYING THIS SUBSECTION
(3) UNIFORMLY TO INDIVIDUALS WITHOUT REGARD TO ANY HEALTH STATUSRELATED
FACTOR OF SUCH INDIVIDUALS AND WITHOUT REGARD TO WHETHER THE INDIVIDUALS
ARE ELIGIBLE INDIVIDUALS.
(4) A CARRIER MAY APPLY TO THE COMMISSIONER
TO SUSPEND FOR A PERIOD OF TIME ITS DUTY TO ISSUE COVERAGE PURSUANT
TO SUBSECTION (2) OF THIS SECTION WHERE CONTINUED COMPLIANCE WOULD
ADVERSELY AFFECT THE FINANCIAL CONDITION OF THE COMPANY. WHERE
SUCH A SUSPENSION IS GRANTED, THE CARRIER MAY NOT OFFER COVERAGE
IN THE INDIVIDUAL MARKET FOR A PERIOD OF AT LEAST ONE HUNDRED
EIGHTY DAYS AFTER THE SUSPENSION IS GRANTED.
(5) FOR THE PURPOSES OF THIS SECTION,
THE TERM "HEALTH BENEFIT PLAN", AS DEFINED IN SECTION
1016102 (21), DOES NOT INCLUDE NONRENEWABLE INDIVIDUAL
HEALTH BENEFIT PLANS WITH A DURATION OF SIX MONTHS OR LESS.
SECTION 6. 1016107,
Colorado Revised Statutes, 1994 Repl. Vol., as amended, is amended
BY THE ADDITION OF A NEW SUBSECTION to read:
1016107. Rate regulation
approval of policy forms benefit certificates
evidences of coverage loss ratio guarantees.
(6) A CARRIER OFFERING A GROUP HEALTH BENEFIT PLAN
MAY NOT REQUIRE ANY INDIVIDUAL (AS A CONDITION OF ENROLLMENT OR
CONTINUED ENROLLMENT UNDER THE PLAN) TO PAY A PREMIUM OR CONTRIBUTION
THAT IS GREATER THAN SUCH PREMIUM OR CONTRIBUTION FOR A SIMILARLY
SITUATED INDIVIDUAL ENROLLED IN THE PLAN ON THE BASIS OF ANY HEALTH
STATUSRELATED FACTOR IN RELATION TO THE INDIVIDUAL OR TO
AN INDIVIDUAL ENROLLED UNDER THE PLAN AS A DEPENDENT OF THE INDIVIDUAL.
THIS PROHIBITION SHALL NOT BE CONSTRUED TO RESTRICT THE AMOUNT
THAT AN EMPLOYER MAY BE CHARGED FOR COVERAGE UNDER A GROUP HEALTH
BENEFIT PLAN OR TO PREVENT A CARRIER FROM ESTABLISHING PREMIUM
DISCOUNTS OR REBATES OR MODIFYING OTHERWISE APPLICABLE COPAYMENTS
OR DEDUCTIBLES IN RETURN FOR ADHERENCE TO PROGRAMS OF HEALTH PROMOTION
AND DISEASE PREVENTION, IF OTHERWISE ALLOWED BY LAW.
SECTION 7. 1016118,
Colorado Revised Statutes, 1994 Repl. Vol., is amended to read:
1016118. Limitations on
preexisting condition limitations. (1) A
health benefit
COVERAGE plan that covers residents of this state: shall:
(a) (I) IF IT IS A GROUP HEALTH BENEFIT
PLAN, SHALL not deny, exclude, or limit benefits for a covered
individual because of a preexisting condition for losses incurred
more than six months following the effective
date of such individual's coverage
DATE OF ENROLLMENT OF THE INDIVIDUAL IN SUCH PLAN OR, IF EARLIER,
THE FIRST DAY OF THE WAITING PERIOD FOR SUCH ENROLLMENT. A
health benefit plan shall not define a preexisting condition more
restrictively than an injury, sickness, or pregnancy
A GROUP HEALTH BENEFIT PLAN MAY IMPOSE A PREEXISTING CONDITION
EXCLUSION OR LIMITATION ONLY IF SUCH EXCLUSION RELATES TO A CONDITION
(WHETHER PHYSICAL OR MENTAL), REGARDLESS OF THE CAUSE OF THE CONDITION,
for which a person incurred charges,
received medical treatment, consulted a health care professional,
or took prescription drugs MEDICAL
ADVICE, DIAGNOSIS, CARE, OR TREATMENT WAS RECOMMENDED OR RECEIVED
within six months immediately preceding the effective
date of coverage DATE OF ENROLLMENT
OF THE INDIVIDUAL IN SUCH PLAN OR, IF EARLIER, THE FIRST DAY OF
THE WAITING PERIOD FOR SUCH ENROLLMENT; except that A GROUP HEALTH
BENEFIT PLAN SHALL NOT IMPOSE ANY PREEXISTING CONDITION EXCLUSION
IN THE CASE OF A CHILD THAT IS ADOPTED OR PLACED FOR ADOPTION
BEFORE ATTAINING EIGHTEEN YEARS OF AGE, OR RELATING TO PREGNANCY.
(II) IF IT IS an individual health benefit
plan, may extend the exclusion of
a preexisting condition for a period not to exceed
OR A GROUP HEALTH COVERAGE PLAN TO WHICH SUBPARAGRAPH (I) OF THIS
PARAGRAPH (a) DOES NOT APPLY, SHALL NOT DENY, EXCLUDE, OR LIMIT
BENEFITS FOR A COVERED INDIVIDUAL BECAUSE OF A PREEXISTING CONDITION
FOR LOSSES INCURRED MORE THAN twelve months FOLLOWING THE EFFECTIVE
DATE OF COVERAGE and may not define the
A preexisting condition more restrictively than an injury, sickness,
or pregnancy for which a person incurred charges, received medical
treatment, consulted a health care professional, or took prescription
drugs within twelve months.
(II) (III) A
carrier IF IT IS A HEALTH MAINTENANCE
ORGANIZATION that does not utilize preexisting condition limitations
in any health benefit plan, may impose a
carrier waiting AN AFFILIATION period.
AN AFFILIATION PERIOD SHALL RUN CONCURRENTLY WITH ANY WAITING
PERIOD. SUCH A HEALTH MAINTENANCE ORGANIZATION MAY, IN LIEU OF
AN AFFILIATION PERIOD, USE AN ALTERNATIVE METHOD TO ADDRESS ADVERSE
SELECTION WITH THE PRIOR APPROVAL OF THE COMMISSIONER.
(b) SHALL waive any carrier
waiting AFFILIATION period or time
period applicable to a preexisting condition exclusion or limitation
period with respect to particular
services for the period of time an
individual was previously covered by qualifying
previous CREDITABLE coverage that
provided benefits with respect to such services,
if such qualifying previous
CREDITABLE coverage was continuous to a date not more than ninety
days prior to the effective date of the new coverage. The period
of continuous coverage shall not include any waiting period for
the effective date of the new coverage. applied
by the employer or the carrier. This
paragraph (b) shall not preclude application of any waiting period
applicable to all new enrollees under the plan. THE METHOD OF
CREDITING AND CERTIFYING COVERAGE SHALL BE DETERMINED BY THE COMMISSIONER
BY RULE.
(c) SHALL exclude coverage for late enrollees
for the greater of twelve months or for NO MORE THAN an eighteenmonthpreexisting
condition exclusion; except that, if both a period of exclusion
from coverage and a preexisting condition exclusion are applicable
to a late enrollee, the combined period shall not exceed eighteen
months from the date the individual enrolls for coverage under
the health benefit plan. HEALTH MAINTENANCE ORGANIZATIONS THAT
DO NOT USE PREEXISTING CONDITION EXCLUSION PERIODS IN ANY OF THEIR
PLANS MAY IMPOSE UP TO A THREEMONTH AFFILIATION PERIOD IN
LIEU OF THE EIGHTEENMONTH PREEXISTING CONDITION PERIOD.
SECTION 8. 1016201.5,
Colorado Revised Statutes, 1994 Repl. Vol., as amended, is amended
to read:
1016201.5. Renewability
of health benefit plans. (1) An
insurer subject to this part 2, a nonprofit subject to part 3
of this article, and a health maintenance organization subject
to part 4 of this article A CARRIER
providing coverage under an individual
A health benefit plan shall not refuse to renew such plan except
for the following reasons:
(a) Nonpayment of the required premium;
(b) Fraud or INTENTIONAL misrepresentation
OF MATERIAL FACT on the part of the insured
individual PLAN SPONSOR WITH RESPECT
TO GROUP HEALTH BENEFIT PLAN COVERAGE AND THE INDIVIDUAL WITH
RESPECT TO INDIVIDUAL COVERAGE;
(c) Noncompliance
by the insured individual with plan provisions;
(d) The individual
carrier elects to DISCONTINUE OFFERING AND nonrenew all of its
individual, SMALL GROUP, OR LARGE GROUP health benefit plans delivered
or issued for delivery to individuals
in this state. In such case the carrier shall provide notice of
the decision not to renew coverage to all affected
individuals POLICYHOLDERS AND COVERED
PERSONS and to the insurance commissioner in each state in which
an affected individual is known to reside at least ninety
ONE HUNDRED EIGHTY days prior to the nonrenewal of the health
benefit plan by the carrier. THE CARRIER SHALL ALSO DISCONTINUE
AND NONRENEW ALL OF ITS INDIVIDUAL OR SMALL OR LARGE GROUP HEALTH
BENEFIT PLANS IN COLORADO. Notice to the insurance commissioner
under this paragraph (d) shall be provided at least three working
days prior to the notice to the affected individuals.
(e) Attainment
of eligibility for medicare due to the insured individual's reaching
the age for medicare eligibility set by the federal government.
In the case of eligibility for medicare prior to that age, an
individual health care benefit plan shall be renewable; except
that the plan may be modified so that benefits that would otherwise
be payable may be reduced by an amount no more than that paid
by medicare.
(f) WITH RESPECT TO INDIVIDUAL HEALTH
BENEFIT PLANS, the commissioner finds that the continuation
of the coverage would not be in the best interest of the policyholders
or certificate holders, THE PLAN IS OBSOLETE, or would impair
the carrier's ability to meet its contractual obligations. In
such instance, the commissioner shall assist affected individuals
in finding replacement coverage ONCE
THE COMMISSIONER HAS MADE SUCH A FINDING, THE CARRIER SHALL PROVIDE
NOTICE TO EACH COVERED INDIVIDUAL PROVIDED COVERAGE OF THIS TYPE
OF SUCH DISCONTINUATION AT LEAST NINETY DAYS PRIOR TO THE DATE
OF DISCONTINUATION AND SHALL PROVIDE EACH AFFECTED COVERED INDIVIDUAL
THE OPPORTUNITY TO PURCHASE ANY OTHER INDIVIDUAL HEALTH INSURANCE
COVERAGE BEING OFFERED BY THE CARRIER. IN EXERCISING THIS OPTION,
A CARRIER SHALL ACT UNIFORMLY WITHOUT REGARD TO ANY HEALTH STATUSRELATED
FACTOR OF ENROLLED INDIVIDUALS OR INDIVIDUALS WHO MAY BECOME ELIGIBLE
FOR SUCH COVERAGE.
(g) The commissioner
finds that the product form is obsolete and is being replaced
with comparable coverage. WITH RESPECT
TO GROUP HEALTH BENEFIT PLANS, THE POLICYHOLDER FAILS TO COMPLY
WITH PARTICIPATION OR CONTRIBUTION RULES;
(h) WITH RESPECT TO A CARRIER THAT OFFERS
GROUP HEALTH BENEFIT PLANS IN THE MARKET THROUGH A MANAGED CARE
PLAN, THERE IS NO LONGER ANY ENROLLEE IN CONNECTION WITH SUCH
PLAN THAT LIVES, RESIDES, OR WORKS IN THE SERVICE AREA OF THE
CARRIER;
(i) WITH RESPECT TO SMALL GROUP HEALTH
BENEFIT PLANS, AN EMPLOYER IS NO LONGER ACTIVELY ENGAGED IN THE
BUSINESS IN WHICH IT WAS ENGAGED ON THE EFFECTIVE DATE OF THE
PLAN; OR
(j) WITH RESPECT TO COVERAGE OF AN EMPLOYER
THAT IS MADE AVAILABLE ONLY THROUGH ONE OR MORE BONA FIDE ASSOCIATIONS,
THE MEMBERSHIP OF AN EMPLOYER CEASES.
(2) A carrier that elects not
to renew
NONRENEW AND TO DISCONTINUE OFFERING all of its individual, SMALL
GROUP, OR LARGE GROUP health benefit plans in this state pursuant
to paragraph (d) of subsection (1) of this section shall be prohibited
from writing new individual
health benefit plans OF THE SAME TYPE (INDIVIDUAL, SMALL GROUP,
OR LARGE GROUP) AS WAS NONRENEWED in this state for a period of
five years from the date of the notice to the insurance commissioner.
(3) For the purposes of this section,
the term "health benefit plan" in section 1016102
(21) does not include nonrenewable INDIVIDUAL HEALTH BENEFIT plans
with a duration of six months or less.
(4) An individual health benefit plan must clearly disclose in its contracts and marketing materials the conditions of renewability which conform with the requirements of this section.
(5) A LARGE GROUP HEALTH BENEFIT PLAN
CARRIER MAY MODIFY A LARGE GROUP HEALTH BENEFIT PLAN AT RENEWAL
PURSUANT TO SECTION 1016214 (3) (a) (IV) IF ALL THOSE
LARGE GROUPS COVERED BY THE SAME PLAN ARE UNIFORMLY MODIFIED.
(6) A LARGE GROUP HEALTH BENEFIT PLAN
CARRIER MAY DISCONTINUE OFFERING A PARTICULAR TYPE OF LARGE GROUP
HEALTH COVERAGE ONLY IF:
(a) THE LARGE GROUP HEALTH CARRIER PROVIDES
NOTICE OF SUCH DISCONTINUATION AT LEAST NINETY DAYS PRIOR TO THE
DATE OF THE DISCONTINUATION OF SUCH COVERAGE TO EACH POLICYHOLDER
PROVIDED THIS TYPE OF COVERAGE AND EACH CERTIFICATE HOLDER, PARTICIPANT,
AND BENEFICIARY COVERED BY SUCH A POLICY;
(b) THE LARGE GROUP HEALTH CARRIER OFFERS
TO EACH POLICYHOLDER PROVIDED COVERAGE OF THIS TYPE THE OPTION
TO PURCHASE ANY OTHER HEALTH INSURANCE COVERAGE CURRENTLY BEING
OFFERED BY THE CARRIER TO A GROUP IN SUCH MARKET; AND
(c) IN EXERCISING THE OPTION TO DISCONTINUE
COVERAGE OF THIS TYPE AND IN OFFERING THE OPTION OF COVERAGE UNDER
PARAGRAPH (b) OF THIS SUBSECTION (6), THE CARRIER ACTS UNIFORMLY
WITHOUT REGARD TO THE CLAIMS EXPERIENCE OF THOSE POLICYHOLDERS
OR ANY HEALTH STATUSRELATED FACTOR RELATING TO ANY CERTIFICATE
HOLDERS, PARTICIPANTS, OR BENEFICIARIES COVERED OR NEW PARTICIPANTS
OR BENEFICIARIES THAT MAY BECOME ELIGIBLE FOR SUCH COVERAGE.
(7) (a) THE PROVISIONS OF THIS SECTION
THAT APPLY TO GROUP HEALTH BENEFIT PLANS SHALL APPLY TO GROUP
HEALTH BENEFIT PLANS SOLD, ISSUED, RENEWED, OR EXTENDED ON OR
AFTER JULY 1, 1997.
(b) THE PROVISIONS OF THIS SECTION THAT
APPLY TO INDIVIDUAL HEALTH BENEFIT PLANS SHALL APPLY TO INDIVIDUAL
HEALTH BENEFIT PLANS SOLD, ISSUED, RENEWED, IN EFFECT, OR OPERATED
ON OR AFTER JULY 1, 1997.
SECTION 9. 1016214 (2) (a) and (3) (a) (V) (A), Colorado Revised Statutes, 1994 Repl. Vol., are amended, and the said 1016214, as amended, is further amended BY THE ADDITION OF A NEW SUBSECTION, to read:
1016214. Group sickness
and accident insurance. (2) (a) The
provisions of this section shall not apply to transactions in
this state involving group sickness and accident insurance policies
for policies which were lawfully issued and delivered in another
jurisdiction in which the company was authorized to do insurance
business and any such policy was issued to a valid multistate
association located in the state of issue, if the policy is not
designed, administered, or marketed as a plan for employers to
provide coverage to one or more employees AND IS NOT A BONA FIDE
ASSOCIATION PLAN.
(3) (a) Except as provided for in
subsection (2) of this section, all policies of group sickness
and accident insurance providing coverage to persons residing
in the state shall contain in substance the following provisions
or provisions which, in the opinion of the commissioner, are more
favorable to the persons insured or at least as favorable to the
persons insured and more favorable to the policyholder:
(V) (A) A provision specifying the
additional exclusions or limitations, if any, applicable under
the policy with respect to a disease or physical condition of
a person, not otherwise excluded from the person's coverage by
name or specific description effective on the date of the person's
loss, which existed prior to the effective date of the person's
coverage under the policy. A health
benefit plan shall not define a preexisting condition more restrictively
than an injury, sickness, or pregnancy for which a person incurred
charges, received medical treatment, consulted a health professional,
or took prescription drugs within six months immediately preceding
the effective date of coverage. WITH
RESPECT TO A GROUP HEALTH COVERAGE PLAN, SUCH PROVISION SHALL
COMPLY WITH THE PROVISIONS OF SECTION 1016118; EXCEPT
THAT, WITH RESPECT TO A GROUP DISABILITY INCOME INSURANCE POLICY,
SUCH PROVISION SHALL COMPLY WITH THE PROVISIONS OF SUBSUBPARAGRAPH
(C) OF THIS SUBPARAGRAPH (V).
(4) A CARRIER OFFERING A GROUP HEALTH
BENEFIT PLAN SHALL NOT ESTABLISH RULES FOR ELIGIBILITY FOR ANY
INDIVIDUAL TO ENROLL UNDER THE PLAN BASED ON ANY HEALTH STATUSRELATED
FACTORS IN RELATION TO THE INDIVIDUAL OR A DEPENDENT OF THE INDIVIDUAL.
SECTION 10. 3922104.6,
Colorado Revised Statutes, 1994 Repl. Vol., is amended to read:
3922104.6. Pretax payments
medical savings accounts. TO THE
EXTENT A TAXPAYER IS NOT OTHERWISE CLAIMING DEDUCTIONS ON FEDERAL
INCOME TAX RETURNS FOR CONTRIBUTIONS TO MEDICAL SAVINGS ACCOUNTS,
amounts withheld from an individual's wages which are contributed
to such individual's medical savings account, pursuant to section
3922504.7, are excluded from an individual's federal
taxable income for purposes of the state income tax imposed by
section 3922104.
SECTION 11. Effective
date applicability. This act shall take effect
upon passage. Sections 1 through 7, and 9 of this act shall apply
to health benefit plans issued, renewed, extended, or modified
on or after July 1, 1997.
SECTION 12. Safety
clause. The general assembly hereby finds, determines, and
declares that this act is necessary for the immediate preservation
of the public peace, health, and safety.
____________________________ ____________________________
Tom Norton Charles E. Berry
PRESIDENT OF SPEAKER OF THE HOUSE
THE SENATE OF REPRESENTATIVES
____________________________ ____________________________
Joan M. Albi Judith M. Rodrigue
SECRETARY OF CHIEF CLERK OF THE HOUSE
THE SENATE OF REPRESENTATIVES
APPROVED________________________________________
_________________________________________
Roy Romer
GOVERNOR OF THE STATE OF COLORADO