home
***
CD-ROM
|
disk
|
FTP
|
other
***
search
/
HIV AIDS Resource Guide
/
HIV-AIDS Resource Guide.iso
/
STAT
/
PROP_FED
/
HSA11.ASC
< prev
next >
Wrap
Text File
|
1993-01-14
|
33KB
|
749 lines
TITLE XI - TRANSITIONAL INSURANCE REFORM
TABLE OF CONTENTS OF TITLE
Section 11001 Imposition of requirements
Section 11002 Enforcement
Section 11003 Requirements relating to preserving
current coverage
Section 11004 Restrictions on premium increases
during transition
Section 11005 Requirements relating to portability
Section 11006 Requirements limiting reduction of
benefits
Section 11007 National transitional health
insurance risk pool
Section 11008 Definitions
Section 11009 Termination
Section 11001 IMPOSITION OF REQUIREMENTS.
(a) In General. - The Secretary and the Secretary of Labor
shall apply the provisions of this title to assure, to the
extent possible, the maintenance of current health care
coverage and benefits during the period between the
enactment of this Act and the dates its provisions are
implemented in the various States.
(b) Enforcement. -
(1) Health insurance plans. - The Secretary shall
enforce the requirements of this title with respect to
health insurance plans. The Secretary shall promulgate
regulations to carry out the requirements under this title
with respect to health insurance plans. The Secretary shall
promulgate regulations with respect to section 11004 within
90 days after the date of the enactment of this Act.
(2) Self-insured plans. - The Secretary of Labor shall
enforce the requirements of this title with respect to self
insured plans. Such Secretary shall promulgate regulations
to carry out the requirements under this title as they
relate to self-funded plans.
(3) Arrangements with states. - The Secretary and the
Secretary of Labor may enter into arrangements with a State
to enforce the requirements of this title with respect to
health insurance plans and self-insured plans issued or
sold, or established and maintained, in the State.
(c) Preemption. - The requirements of this title do not
preempt
any State law unless State law directly conflicts with such
requirements. The provision of additional protections under
State law shall not be considered to directly conflict with
such requirements. The Secretary (or, in the case of a self-
insured plan, the Secretary of Labor) may issue letter
determinations with respect to whether this Act preempts a
provision of State law.
(d) Interim Final Regulations. - Section 1911 shall apply
to regulations issued to carry out this title. The
Secretary may consult with States and the National
Association of Insurance Commissioners in issuing
regulations and guidelines under this title.
(e) Construction. - The provisions of this title shall be
construed in a manner that assures, to the greatest extent
practicable, continuity of health benefits under health
benefit plans in effect on the effective date of this Act.
(f) Special Rules for Acquisitions and Transfers. - The
Secretary may issue regulations regarding the application of
this title in the case of health insurance plans (or groups
of such plans) which are transferred from one insurer to
another insurer through assumption, acquisition, or
otherwise.
Section 11002 ENFORCEMENT.
(a) In General. - Any health insurer or health benefit plan
sponsor that violates a requirement of this title shall be
subject to a civil money penalty of not more than $25,000
for each such violation. The provisions of section 1128A of
the Social Security Act (other than subsections (a) and (b))
shall apply to civil money penalties under this subsection
in the same manner as they apply to a penalty or proceeding
under section 1128A(a) of such Act.
(b) Equitable Remedies. -
(1) In general. - A civil action may be brought by the
applicable Secretary -
(A) to enjoin any act or practice which violates
any provision of this title, or
(B) to obtain other appropriate equitable relief
(i) to redress such violations, or (ii) to enforce any
provision of this title, including, in the case of a
wrongful termination of (or refusal to renew) coverage,
reinstating coverage effective as of the date of the
violation.
Section 11003 REQUIREMENTS RELATING TO PRESERVING
CURRENT COVERAGE.
(a) Prohibition of Termination. -
(1) Group health insurance plans. - Each health
insurer that provides a group health insurance plan may not
terminate (or fail to renew) coverage for any covered
employee if the employer of the employee continues the plan,
except in the case of -
(A) nonpayment of required premiums,
(B) fraud, or
(C) misrepresentation of a material fact
relating to for coverage or claim for benefits.
(2) Individual health insurance plans. - Each health
individual health insurance plan may not terminate (or fail
to renew) coverage for such individual (or a covered
dependent), except in the case of -
(A) nonpayment of required premiums,
(B) fraud, or
(C) misrepresentation of a material fact
relating to an application for coverage or claim for
benefits.
(2) Effective date of title. -
(A) In general. - This subsection shall take
effect on the effective date of this title and shall apply
to coverage on or after such date.
(B) Definition. - Except as otherwise provided, in
this title the term `effective date of this title` means the
date of the enactment of this Act.
(b) Acceptance of New Members in a Group Health Insurance
Plan.
-
(1) In general. - In the case of a health insurer that
provides a group health insurance plan that is in effect on
the effective date of this title, the insurer is required -
(A) to accept all individuals, and their eligible
dependents, who become full-time employees (as defined in
section 1901(b)(2)(C)) of an employer covered after such
effective date;
(B) to establish and apply premium rates that are
consistent with section 11004(b); and
(C) to limit the application of pre-existing
condition restrictions in accordance with section 11005.
(2) Consistent application of rules relating to
dependents and waiting periods. - In this subsection, the
term `eligible dependent`, with respect to a group health
insurance plan, has the meaning provided under the plan as
of October 27, 1993, or, in the case of a plan not
established as of such date, as of the date of establishment
of the plan.
Section 11004. RESTRICTIONS ON PREMIUM INCREASES
DURING TRANSITION.
(a) Division of Health Insurance Plans by Sector. - For
purposes of this section, each health insurer shall divide
its health insurance business into the following 3 sectors:
(1) Health insurance for groups with at least 100
covered lives (in this section referred to as the `large
group sector`)
(2) Health insurance for groups with fewer than 100
covered lives (in this section referred as the `small group
sector`).
(3) Health insurance for individuals, and not for
groups (in this section referred to as the `individual
sector`).
(b) Premium Changes to Reflect Changes in Group or
Individual
Characteristics or Terms of Coverage. -
(1) Application. - The provisions of this subsection
shall apply to changes in premiums that reflect -
(A) changes in the number of individuals covered
under a plan;
(B) changes in the group or individual
characteristics
(including age, gender, family composition or geographic
area but not including health status, claims experience or
duration of coverage under the plan) of individuals covered
under a plan;
(C) changes in the level of benefits (including
changes in cost-sharing) under the plan; and
(D) changes in any material terms and conditions
of the health insurance plan (other than factors related to
health status, claims experience, and duration of coverage
under
the plan).
(2) Specification of reference rate for each sector. -
Each health insurer shall calculate a reference rate for
each such sector. The reference rate for a sector shall be
calculated so that, if it were applied using the rate
factors specified under paragraph (3), the average premium
rate for individuals and groups in that sector would
approximate the average premium rate charged individuals and
groups in the sector as of the effective date of this title.
(3) Single set of rate factors within each sector. -
(A) In general. - Each health insurer shall
develop for each sector a single set of rate factors which
will be used to calculate any changes in premium that relate
to the reasons described in subparagraphs (B) through (D) of
paragraph (1).
(B) Standards. - Such rate factors -
(i) shall relate to reasonable and objective
differences in demographic characteristics, in the design
and in levels of coverage, and in other terms and conditions
of a contract,
(ii) shall not relate to expected health
status, claims experience, or duration of coverage of the
one or more groups or individuals, and
(iii) shall comply with regulations
established under subsection (f).
(4) Computation of Premium Changes. -
(A) In general. - Changes in premium rates that
relate to the reasons described in paragraph (1) shall be
calculated using the rate factors developed pursuant to
paragraph (3).
(B) Application to changes in number of covered
individuals. - In the case of a change in premium rates
related to the reason described in paragraph (1)(A), the
change in premium rates shall be calculated to reflect, with
respect to the enrollees who enroll or disenroll in a health
insurance plan, the sum of the products, for such
individuals, of the reference rate (determined under
paragraph (2)) and the rate factors (specified under
paragraph (3)) applicable to such enrollees.
(C) Application of other factors. -
(i) In general. - In the case of a change in
premium rates related to a reason described in subparagraph
(B), (C), or (D) of paragraph (1), the change in premium
rates with respect to each health insurance plan in each
sector shall reflect the rate factors specified under
paragraph (3) applicable to the reason as applied to the
current premium charged for the health insurance plan. Such
rate factors shall be applied in a
manner so that the resulting adjustment, to the extent
possible, reflects the premium that would have been charged
under the plan if the reason for the change in premium had
existed at the time that the current premium rate was
calculated.
(ii) No reflection of change in health status.
- In applying the rate factors under this subparagraph, the
adjustment shall not reflect any change in the health
status, claims experience or duration of coverage with
respect to any employer or individual covered under the
plan.
(5) Limitation on application. - This subsection shall
only apply -
(A) to changes in premiums occurring on or after
the date of the enactment of this Act to groups and
individuals covered as of such date, and
(B) with respect to groups and individuals
subsequently covered, to changes in premiums subsequent to
such coverage.
(6) Application to community-rated plans. - Nothing in
this subsection shall require the application of rate
factors related to individual or group characteristics with
respect to communityrated plans.
(c) Limitations on Changes in Premiums Related to Increases
in
Health Care Costs and Utilization. -
(1) Application. - The provisions of this subsection
shall apply to changes in premiums that reflect increases in
health care costs and utilization.
(2) Equal increase for all plans in all sectors. -
(A) In general. - Subject to subparagraph (B), the
annual percentage increase in premiums by a health insurer
for health insurance plans in the individual sector, small
group sector, and large group sector, to the extent such
increase reflect increases in health care costs and
utilization, shall be the same for all such plans in those
sectors.
(B) Special rule for large group sector. - The
annual percentage increase in premiums by a health insurer
for health insurance plans in the large group sector may
vary among such plans based on the claims experience of an
employer (to the extent the experience is credible), so long
as the weighted average of such increases for all such plans
in the sector complies with the requirement of subparagraph
(A).
(C) Geographic application. - Subparagraphs (A)
and (B) (i) may be applied on a national
level, or
(ii) may vary based on geographic area, but
only if (I) such areas are sufficiently
large to
provide credible data on which to calculate the variation
and
(II) the variation is due to reasonable
factors related to the objective differences among such
areas in costs and utilization of health services.
(D) Exceptions to accommodate state rate reform
efforts. - Subparagraphs (A) and (B) shall not apply, in
accordance with guidelines of the Secretary, to the extent
necessary to permit a State to narrow the variations in
premiums among health insurance plans offered by health
insurers to similarly situated groups or individuals within
a sector.
(E) Exception for rates subject to prior approval.
Subparagraphs (A) and (B) shall not apply to premiums that
are subject to prior approval by a State insurance
commissioner (or similar official) and are approved by such
official.
(F) Other reasons specified by the secretary. -
The Secretary may specify through regulations such other
exceptions to the provisions of this subsection as the
Secretary determines are required to enhance stability of
the health insurance market and continued availability of
coverage.
(3) Even application throughout a year. - In applying
the provisions of this subsection to health insurance plans
that are renewed in different months of a year, the annual
percentage increase shall be applied in a consistent, even
manner so that any variations in the rate of increase
applied in consecutive months are even and continuous during
the year.
(4) Petition for exception. - A health insurer may
petition the Secretary (or a State acting under a contract
with the Secretary under section 11001(b)(3)) for an
exception from the application of the provisions of this
subsection. The Secretary may approve such an exception if
-
(A) the health insurer demonstrates that the
application of this subsection would threaten the financial
viability of the insurer, and
(B) the health insurer offers an alternative
method for increasing premiums that is not substantially
discriminatory to any sector or to any group or individual
covered by a health insurance plan offered by the insurer.
(d) Prior Approval for Certain Rate Increases. -
(1) In general. - If the percentage increase in the
premium rate for the individual and small group sector
exceeds a percentage specified by the Secretary under
paragraph (2), annualized over any 12-month period, the
increase shall not take effect unless the Secretary (or a
State acting under a contract with the Secretary under
section 11001(b)(3)) has approved the increase.
(2) Percentage. - The Secretary shall specify, for
each 12-month period beginning after the date of the
enactment of this Act, a percentage that will apply under
paragraph (1). Such percentage shall be determined taking
into consideration the rate of increase in health care costs
and utilization, previous trends in health insurance
premiums, and the conditions in the health insurance market.
Within 30 days after the date of the enactment of this Act,
the Secretary shall first specify a percentage under this
paragraph.
(e) Documentation of Compliance. -
(1) Period for conformance. - Effective 1 year after
the date of the enactment of this Act, the premium for each
health insurance plan shall be conformed in a manner that
complies with the provisions of this section.
(2) Methodology. - Each health insurer shall document
the methodology used in applying subsections (b) and (c)
with respect
to each sector (and each applicable health plan). Such
documentation shall be sufficient to permit the auditing of
the application of such methodology to determine if such
application was consistent with such subsections.
(3) Certification. - For each 6-month period in which
this section is effective, each health insurer shall file a
certification with the Secretary (or with a State with which
the Secretary has entered into an arrangement under section
11001(b)(3)) that the insurer is in compliance with such
requirements.
(f) Regulations. - The Secretary shall establish
regulations to carry out this section. Such regulations may
include guidelines relating to the permissible variation
that results from the use of demographic or other
characteristics in the development of rate factors. Such
guidelines may be based on the guidelines currently used by
States in applying rate limitations under State insurance
regulations.
(g) Effective Period. - This section shall apply to
premium increases occurring during the period beginning on
the date of the enactment of this Act and ending, for a
health insurance plan provided in a State, on the first day
of the State`s first year.
Section 11005 REQUIREMENTS RELATING TO
PORTABILITY.
(a) Treatment of Preexisting Condition Exclusions. -
(1) In general. - Subject to the succeeding provisions
of this subsection, a group health benefit plan may exclude
coverage with respect to services related to treatment of a
preexisting condition, but the period of such exclusion may
not exceed 6 months. The exclusion of coverage shall not
apply to services furnished to newborns or in the case of a
plan that did not apply such exclusions as of the effective
date of this title.
(2) Crediting of previous coverage. -
(A) In general. - A group health benefit plan
shall provide that if an individual covered under such plan
is in a period of continuous coverage (as defined in
subparagraph (B)(i)) with respect to particular services as
of the date of initial coverage under such plan, any period
of exclusion of coverage with respect to a preexisting
condition for such services or type of services shall be
reduced by 1 month for each month in the period of
continuous coverage.
(B) Definitions. - As used in this paragraph:
(i) Period of continuous coverage. - The term
`period of continuous coverage` means, with respect to
particular services, the period beginning on the date an
individual is enrolled under a group or individual health
benefit plan, self-insured plan, the medicare program, a
State medicaid plan, or other health benefit arrangement which
provides benefits with respect to such services and ends on the
date the individual is not so enrolled for a continuous period
of more than 3 months.
(ii) Preexisting condition. - The term
`preexisting condition` means, with respect to coverage under a
health benefits plan, a condition which has been diagnosed or
treated during the 6-month period ending on the day before the
first date of such coverage (without regard to any waiting
period).
(b) Waiting Periods. - A self-insured plan, and an employer
with respect to a group health insurance plan, may not
discriminate among employees in the establishment of a waiting
period before making health insurance coverage available based
on the health status, claims experience, receipt of health
care, medical history, or lack of evidence of insurability, of
the employee or the employee`s dependents.
Section 11006. REQUIREMENTS LIMITING REDUCTION OF
BENEFITS.
(a) In General. - A self-insured sponsor may not make a
modification of benefits described in subsection (b).
(b) Modification of Benefits Described. -
(1) In general. - A modification of benefits described in
this subsection is any reduction or limitation in coverage,
effected on or after the effective date of this title, with
respect to any medical condition or course of treatment for
which the anticipated cost is likely to exceed $5,000 in any 12-
month period.
(2) Treatment of termination. - A modification of
benefits includes the termination of a plan if the sponsor,
within a period (specified by the Secretary of Labor)
establishes a substitute plan that reflects the reduction or
limitation described in paragraph (1).
(c) Remedy. - Any modification made in violation of this
section shall not be effective and the self-insured sponsor
shall continue to provide benefits as though the modification
(described in subsection (b)) had not occurred.
Section 11007. NATIONAL TRANSITIONAL HEALTH INSURANCE RISK
POOL.
(a) Establishment. - In order to assure access to health
insurance during the transition, the Secretary is authorized to
establish a National Transitional Health Insurance Risk Pool
(in this section referred to as the `national risk pool`) in
accordance with this section.
(b) Administration. -
(1) In general. - The Secretary may administer the
national risk pool through contracts with -
(A) one or more existing State health insurance risk
pools,
(B) one or more private health insurers, or
(C) such other contracts as the Secretary deems
appropriate.
(2) Coordination with state risk pools. - The Secretary
may enter into such arrangements with existing State health
insurance risk pools to coordinate the coverage under such
pools with the coverage under the national risk pool. Such
coordination may address eligibility and funding of coverage
for individuals currently covered under State risk pools.
(c) Eligibility for Coverage. - The national risk pool shall
provide health insurance coverage to individuals who are unable
to secure health insurance coverage from private health
insurers
because of their health status or condition (as determined in
accordance with rules and procedures specified by the
Secretary).
(d) Benefits. -
(1) In general. - Benefits and terms of coverage provided
through the national risk pool shall include items and
services, conditions of coverage, and cost sharing (subject to
out-ofpocket limits on cost sharing) comparable to the benefits
and terms of coverage available in State health insurance risk
pools.
(2) Payment rates. - Payments under the national risk
pool for covered items and services shall be made at rates
(specified by the Secretary) based on payment rates for
comparable items and services under the medicare program.
Providers who accept payment from the national risk pool shall
accept such payment as payment in full for the service, other
than for cost sharing provided under the national risk pool.
(e) Premiums. -
(1) In general. - Premiums for coverage in the national
risk pool shall be set in a manner specified by the Secretary.
(2) Variation. - Such premiums shall vary based upon age,
place of residence, and other traditional underwriting factors
other than on the basis of health status or claims experience.
(3) Limitation. - The premiums charged individuals shall
be set at a level that is no less than 150 percent of the
premiums that the Secretary estimates would be charged to a
population of average risk for the covered benefits.
(f) Treatment of Shortfalls. -
(1) Estimates. - The Secretary shall estimate each year
the extent to which the total premiums collected under
subsection (e) in the year are insufficient to cover the
expenses of the national risk pool with respect to the year.
(2) Temporary borrowing authority. - The Secretary of the
Treasury is authorized to advance to the Secretary amounts
sufficient to cover the amount estimated under paragraph (1)
during the year before assessments are collected under
paragraph (3), except that the total balance of such Treasury
advances at any time shall not exceed $1,500,000,000. The
Secretary shall repay such amounts, with interest at a rate
specified by the Secretary of the Treasury, from the
assessments under paragraph (3).
(3) Assessments. -
(A) In general. - Each health benefit plan sponsor
shall be liable for an assessment in the amount specified in
subparagraph (C).
(B) Amount. - For each year for which amounts are
advanced under paragraph (2), the Secretary shall -
(i) estimate the total amount of premiums (and
premium equivalents) for health benefits under health benefit
plans for the succeeding year, and
(ii) calculate a percentage equal to (I) the
total amounts repayable by the Secretary to the Secretary of
the Treasury under paragraph (2) for the year, divided by the
amount
determined under clause (i).
(C) Assessment amount. - The amount of an assessment
for a sponsor of a health benefit plan for a year shall be
equal to the percentage calculated under subparagraph (B)(ii)
(or, if less, 1/2 of 1 percent) of the total amount of premiums
(and premium equivalents) for health benefits under the plan
for the previous year.
(D) Self-insured plans. - The amount of premiums (and
premium equivalents) under this paragraph shall be estimated -
(i) by the Secretary for health insurance plans,
and
(ii) by the Secretary of Labor for self-insured
plans.
Such estimates may be based on a methodology that
requires plans liable for assessment to file information with
the applicable Secretary.
Section 11008. DEFINITIONS.
In this title:
(1) Applicable secretary. - The term `applicable
Secretary` means -
(A) the Secretary with respect to health insurance
plans
and insurers, or
(B) the Secretary of Labor with respect to self-
insured plans and self-insured plan sponsors.
(2) Covered employee. - The term `covered employee` means
an employee (or dependent of such an employee) covered under a
group health benefits plan.
(3) Covered individual. - The `covered individual` means,
with respect to a health benefit plan, an individual insured,
enrolled, eligible for benefits, or otherwise covered under the
plan.
(4) Group health benefits plan. - The term `group health
benefits plan` means a group health insurance plan and a self-
insured plan.
(5) Group health insurance plan. -
(A) In general. - The term `group health insurance
plan` means a health insurance plan offered primarily to
employers for the purpose of providing health insurance to the
employees (and dependents) of the employer.
(B) Inclusion of association plans and mewas. - Such
term includes -
(i) any arrangement in which coverage for health
benefits is offered to employers through an association, trust,
or other arrangement, and
(ii) a multiple employer welfare arrangement (as
defined in section 3(40) of the Employee Retirement Income
Security Act of 1974), whether funded through insurance or
otherwise.
(6) Health benefits plan. - The term `health benefits
plan` means health insurance plan and a self-insured health
benefit plan.
(7) Health benefit plan sponsor. - The term `health
benefit plan sponsor` means, with respect to a health insurance
plan or self-insured plan, the insurer offering the plan or the
self-insured sponsor for the plan, respectively.
(8) Health insurance plan. -
(A) In general. - Except as provided in subparagraph
(B), the term `health insurance plan` means any contract of
health insurance, including any hospital or medical service
policy or certificate, any major medical policy or certificate,
any hospital or medical service plan contract, or health
maintenance organization subscriber contract offered by an
insurer.
(B) Exception. - Such term does not include any of
the following -
(i) coverage only for accident, dental, vision,
disability income, or long-term care insurance, or any
combination thereof,
(ii) medicare supplemental health insurance,
(iii) coverage issued as a supplement to
liability insurance,
(iv) worker`s compensation or similar insurance,
or
(v) automobile medical payment insurance,
or any combination thereof.
(C) Stop loss insurance not covered. - Such term does
not include any aggregate or specific stop-loss insurance or
similar coverage applicable to a self-insured plan. The
Secretary may develop rules determining the applicability of
this subparagraph with respect to minimum premium plans or
other partially insured plans.
(9) Health insurer. - The term `health insurer` means a
licensed insurance company, a prepaid hospital or medical
service plan, a health maintenance organization, or other
entity providing a plan of health insurance or health benefits
with respect to which the State insurance laws are not
preempted under section 514 of the Employee Retirement Income
Security Act of 1974.
(10) Individual health insurance plan. -
(A) In general. - The term `individual health
insurance plan` means any health insurance plan directly
purchased by an or offered primarily to individuals (including
families) for the purpose of permitting individuals (without
regard to an employer contribution) to purchase health
insurance coverage.
(B) Inclusion of association plans. - Such term
includes any arrangement in which coverage for health benefits
is offered to individuals through an association, trust, list
billing arrangement, or other arrangement in which the
individual purchaser is primarily responsible for the payment
of any premium
associated with the contract.
(C) Treatment of certain association plans. - In the
case of a health insurance plan sponsored by an association,
trust, or other arrangement that provides health insurance
coverage both to employers and to individuals, the plan shall
be treated as -
(i) a group health insurance plan with respect to
such employers, and
(ii) an individual health insurance plan with
respect to such individuals.
(11) Self-insured plan. - The term `self-insured plan`
means an employee welfare benefit plan or other arrangement
insofar as the plan or arrangement provides benefits with
respect to some or all of the items and services included in
the comprehensive benefit package (as in effect as of January
1, 1996) that is funded in a manner other than through the
purchase of one or more health insurance plans. Such term
shall not include a group health insurance plan described in
paragraph (5)(B)(ii).
(12) Self-insured sponsor. - The term `self-insured
sponsor` includes, with respect to a self-insured plan, any
entity which establishes or maintains the plan.
(13) State commissioner of insurance. - The term `State
commissioner of insurance` includes a State superintendent of
insurance.
Section 11009. TERMINATION.
(a) Health Insurance Plans. - The provisions of this title
shall not apply to a health insurance plan provided in a State
on and after the first day of the first year for the State.
(b) Self-Insured Plans. - The provisions of this title shall
not apply to a self-insured plan that -
(1) is sponsored by a sponsor that is an eligible sponsor
of a corporate alliance (described in section 1311(b)(1)), as
of the effective date of the election under section 1312(c);
and
(2) is sponsored by a sponsor that is not such an
eligible sponsor, with respect to individuals or groups in a
State on and after the first day of the first year for the
State.
