PRINTER'S NO. 1045
No. 924 Session of 2005
INTRODUCED BY GANNON, BALDWIN, BELFANTI, BENNINGHOFF,
CALTAGIRONE, CAPPELLI, CAWLEY, CRAHALLA, CREIGHTON, CURRY,
EACHUS, J. EVANS, GEORGE, GINGRICH, GOOD, GOODMAN, HENNESSEY,
HERSHEY, JAMES, LEDERER, MACKERETH, MANDERINO, McILHATTAN,
MILLARD, MUNDY, PISTELLA, RAPP, READSHAW, REICHLEY, SAYLOR,
SHANER, SOLOBAY, STABACK, STURLA, E. Z. TAYLOR, THOMAS,
TIGUE, TRUE, WALKO, WATSON, WHEATLEY AND YOUNGBLOOD,
MARCH 14, 2005
REFERRED TO COMMITTEE ON HEALTH AND HUMAN SERVICES,
MARCH 14, 2005
AN ACT
1 Providing for a health care program for families; imposing
2 additional powers and duties on the Insurance Department; and
3 imposing penalties.
4 TABLE OF CONTENTS
5 Section 1. Short title.
6 Section 2. Statement of purpose.
7 Section 3. Definitions.
8 Section 4. Issuance of affordable comprehensive health
9 insurance policies permitted.
10 Section 5. Qualified purchasing groups.
11 Section 6. Coverage.
12 Section 7. Refusal of certain coverage prohibited.
13 Section 8. Termination of coverage.
14 Section 9. Continuation of coverage.
15 Section 10. Certain coverage denials prohibited.
1 Section 11. Preexisting condition exclusion.
2 Section 12. Quotation of rates.
3 Section 13. Financial impact of mandated benefits.
4 Section 14. Responsibility of insured.
5 Section 15. Filing and approval.
6 Section 16. Premiums.
7 Section 17. Records and reports.
8 Section 18. Regulations.
9 Section 19. Penalties.
10 Section 20. Severability.
11 Section 21. Repeals.
12 Section 22. Nonapplicability to programs.
13 Section 23. Effective date.
14 The General Assembly of the Commonwealth of Pennsylvania
15 hereby enacts as follows:
16 Section 1. Short title.
17 This act shall be known and may be cited as the Family Health
18 Care Act.
19 Section 2. Statement of purpose.
20 The General Assembly finds and declares as follows:
21 (1) The cost of health insurance coverage is not
22 affordable for many small businesses, their employees, self-
23 employed persons, their family members and other individuals.
24 (2) As a result, almost 1,000,000 Commonwealth citizens
25 do not have any health insurance coverage.
26 (3) The cost of health insurance should be reduced for
27 these citizens by:
28 (i) authorizing the development of new classes of
29 hospital and medical insurance coverage for qualified
30 groups, families and individuals; and
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1 (ii) authorizing the department to develop means to
2 assist in limiting the marketing and administrative costs
3 of certain new classes of insurance coverage.
4 Section 3. Definitions.
5 The following words and phrases when used in this act shall
6 have the meanings given to them in this section unless the
7 context clearly indicates otherwise:
8 "Affordable comprehensive health insurance policy." A policy
9 or subscription contract which an insurer may choose to offer to
10 a qualified individual, qualified family, qualified group or a
11 qualified purchasing group.
12 "Ambulatory surgical facility." A facility or portion
13 thereof which provides specialty or multispecialty outpatient
14 surgical treatment. The term does not include individual or
15 group practice offices of private physicians or dentists, unless
16 such offices have a distinct part used solely for outpatient
17 surgical treatment on a regular and organized basis. For the
18 purposes of this definition, outpatient surgical treatment means
19 surgical treatment to patients who do not require
20 hospitalization, but who require constant medical supervision
21 following the surgical procedure performed.
22 "Case characteristics." Geographic, age, group size and
23 other similar relevant characteristics that are considered by
24 the insurer in the determination of premium rates for a small
25 business employer. Provided however, age brackets of less than
26 five years shall not be utilized, a geographic area smaller than
27 a county shall not be utilized and the highest rate factor
28 associated with group size shall not vary from the lowest rate
29 factor associated with group size by a ratio of greater than
30 1.15 to 1.0. The term excludes claims experience, health status
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1 and duration of coverage since date of issue.
2 "Commissioner." The Insurance Commissioner of the
3 Commonwealth.
4 "Department." The Insurance Department of the Commonwealth.
5 "Employee." An individual who works a minimum of 30 hours
6 per week for an employer in return for compensation.
7 "Employer." A self-employed individual, sole proprietorship,
8 firm, corporation, partnership or association which, during the
9 immediately preceding calendar year, employed not more than 50
10 employees who were eligible for coverage under a small business
11 health care benefit plan on at least 50% of the work days of the
12 business. Employees of such an employer are eligible either for
13 coverage under an affordable comprehensive health insurance
14 policy or a small business health care benefit plan.
15 "Genetic status." The presence of a physical condition in an
16 individual which is a result of an inherited trait.
17 "Health contract." A health insurance agreement issued by an
18 insurer to cover employees of an employer or a trust fund
19 established to cover employees of one or more employers and an
20 association of employees, including an affordable comprehensive
21 health insurance policy. The term does not include accident-
22 only, fixed indemnity, limited benefit, credit, dental, vision,
23 long-term care, long-term disability, Medicare supplement,
24 civilian health and medical program of the uniformed services
25 supplement insurance, workers' compensation or similar insurance
26 or automobile medical-payment insurance.
27 "Health insurance agreement." An accident and health
28 insurance policy, contract or group insurance certificate issued
29 by an insurer on an individual or group basis, including an
30 affordable comprehensive health insurance policy.
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1 "Hospital." An institution having an organized medical staff
2 which is engaged primarily in providing to inpatients, by or
3 under the supervision of physicians, diagnostic and therapeutic
4 services for the care of persons who are injured, disabled,
5 pregnant, diseased, sick or mentally ill.
6 "Insured." An individual or group insured under an
7 affordable comprehensive health insurance policy or a small
8 business health care benefit plan.
9 "Insurer." Any insurance company, association or reciprocal,
10 nonprofit hospital plan corporation; a nonprofit professional
11 health service plan; a health maintenance organization organized
12 and regulated under the act of December 29, 1972 (P.L.1701,
13 No.364), known as the Health Maintenance Organization Act; a
14 risk-assuming preferred provider organization organized and
15 regulated under the act of May 17, 1921 (P.L.682, No.284), known
16 as The Insurance Company Law of 1921; a preferred provider with
17 a health management gatekeeper role for primary care physicians
18 organized and regulated as a health services corporation or a
19 preferred provider organization subject to the provisions of
20 section 630 of The Insurance Company Law of 1921; a fraternal
21 benefit society subject to the provisions of the act of December
22 14, 1992 (P.L.835, No.134), known as the Fraternal Benefit
23 Societies Code.
24 "Intermediate care." Health-related care and services
25 provided on a regular basis to individuals who do not require
26 acute hospital or skilled nursing care but who, because of
27 mental or physical condition, require the services under a plan
28 of care supervised by licensed and qualified personnel. The term
29 does not include services provided by a personal care home or
30 assisted living facility.
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1 "Outpatient treatment." Services provided in a hospital or
2 ambulatory surgical facility designed to support the provision
3 of nonemergency health care treatment to patients who do not
4 remain in a facility overnight. Outpatient services include, but
5 are not limited to, surgery, anesthesia, preadmission testing,
6 diagnostic X-rays, preventative and diagnostic medical and
7 laboratory services and procedures performed in a short-term
8 procedure unit of a hospital.
9 "Partial hospitalization." A nonresidential treatment
10 modality which includes psychiatric, psychological, social and
11 vocational elements under medical supervision. It is designed
12 for patients with moderate to severe mental or emotional
13 disorders. Partial hospitalization patients require less than
14 24-hour care, but more intensive and comprehensive services than
15 are offered in outpatient treatment programs.
16 "Qualified family." Individuals who are qualified
17 individuals and who are related to each other by blood or
18 marriage. The term includes children who are adopted by or
19 placed for adoption with the insured and are members of the same
20 household.
21 "Qualified group." A group in which each covered individual
22 or covered dependent within the group is a qualified individual.
23 The term excludes a qualified purchasing group.
24 "Qualified individual." An individual who is employed in or
25 is a resident of this Commonwealth and who has been without
26 health insurance coverage, other than permitted coverage. The
27 term includes a child newborn to or adopted by an insured after
28 the effective date of an affordable comprehensive health
29 insurance policy issued to the insured which covers the insured
30 and members of the insured's family.
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1 "Qualified purchasing group." A group organized under
2 section 5 (relating to qualified purchasing groups).
3 "Similar plans." Plans which do not materially differ from
4 one another in any of the following respects:
5 (1) The set of services covered.
6 (2) Utilization management provisions.
7 (3) Managed care network provisions.
8 (4) The criteria used by the insurer in underwriting
9 coverage under a plan where variations in the criteria may
10 reasonably be expected to produce substantial variation in
11 the claims costs incurred under the plan.
12 "Skilled care." Professionally supervised nursing care and
13 related medical and other health services provided for a period
14 exceeding 24 hours to an individual not in need of
15 hospitalization, but whose needs are such that they can only be
16 met in a long-term care facility on an inpatient basis and who
17 needs the care because of age, illness, disease, injury,
18 convalescence or physical or mental infirmity. The care would
19 include skilled nursing, skilled rehabilitation or a personal
20 care service which, because of a special medical complication of
21 the patient, requires that the personal care services be
22 performed by or under the direct supervision of skilled nursing
23 or rehabilitative personnel.
24 "Small business health care benefit plan."
25 (1) Except as provided in paragraph (2), any of the
26 following:
27 (i) A health, sickness or accident insurance policy
28 providing hospital, medical or surgical coverage for sole
29 proprietorships or employers.
30 (ii) A policy which is a subscriber contract or
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1 certificate issued by an insurer to provide hospital,
2 medical or surgical coverage for sole proprietorships or
3 employers.
4 (iii) A subscriber contract or certificate which is
5 issued by an entity to provide hospital, medical or
6 surgical coverage for employers and which is subject to:
7 (A) section 630 of the act of May 17, 1921
8 (P.L.682, No.284), known as The Insurance Company Law
9 of 1921;
10 (B) the act of December 29, 1972 (P.L.1701,
11 No.364), known as the Health Maintenance Organization
12 Act;
13 (C) the act of December 14, 1992 (P.L.835,
14 No.134), known as the Fraternal Benefit Societies
15 Code;
16 (D) 40 Pa.C.S. Ch. 61 (relating to hospital plan
17 corporations); or
18 (E) 40 Pa.C.S. Ch. 63 (relating to professional
19 health services plan corporations).
20 (2) The term excludes all of the following:
21 (i) Accident-only coverage.
22 (ii) Affordable comprehensive health insurance.
23 (iii) Fixed indemnity coverage.
24 (iv) Credit insurance.
25 (v) Medicare supplements.
26 (vi) Disability income insurance.
27 (vii) Coverage issued as a supplement to liability
28 insurance.
29 (viii) Workers' compensation or similar insurance.
30 (ix) Automobile medical payment insurance.
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1 "Terminate." Includes cancellation, nonrenewal and recision.
2 Section 4. Issuance of affordable comprehensive health
3 insurance policies permitted.
4 (a) General rule.--Insurers may issue affordable
5 comprehensive health insurance policies to qualified
6 individuals, qualified families, qualified groups and qualified
7 purchasing groups.
8 (b) Employer eligibility for initial coverage.--In order to
9 be eligible for an affordable comprehensive health insurance
10 policy an employer must be without health insurance coverage for
11 not less than three months and must certify to such with the
12 application for initial coverage.
13 Section 5. Qualified purchasing groups.
14 Solely for purposes of obtaining an affordable comprehensive
15 health insurance policy or a small business health care benefit
16 plan, qualified purchasing groups may be formed, composed of
17 qualified individuals, qualified families or qualified groups.
18 Each qualified purchasing group shall serve as a master
19 policyholder consistent with department regulations. Members of
20 qualified groups and members of qualified purchasing groups may
21 join together solely for the purpose of obtaining health
22 insurance coverage under this act. Qualified purchasing groups
23 shall not require a health screening for membership nor require
24 any other unreasonable barriers to membership.
25 Section 6. Coverage.
26 (a) Requirements.--Affordable comprehensive health insurance
27 policies offered must provide the following:
28 (1) Thirty days of inpatient hospital surgical and
29 medical coverage and outpatient treatment per policy year.
30 Intermediate care or skilled care may be substituted for up
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1 to 30 days of inpatient hospital care on a four-days-for-
2 each-inpatient-day basis. Partial hospitalization may be
3 substituted for up to 30 days of inpatient hospital care on a
4 two-days-for-each-inpatient-day basis. Home health care may
5 be substituted on a seven-visits-for-each-inpatient-day
6 basis.
7 (2) Coverage for office visits for primary services,
8 including prenatal and postnatal maternal care and well-baby
9 care for covered services rendered by a licensed provider.
10 Total covered office visits shall be calculated on the number
11 of eligible family members multiplied by six and allocated in
12 the aggregate to the family unit on an annual basis.
13 (3) Coverage for one mammogram screening per year for
14 females 40 years of age or older and coverage for all
15 medically necessary mammograms.
16 (4) Coverage for an annual gynecological examination,
17 including a pelvic examination and clinical breast
18 examination and routine pap smears.
19 (5) Mastectomy coverage, including prosthetic devices
20 and reconstructive surgery.
21 (6) Medically necessary child immunizations.
22 (7) Medically necessary medical foods.
23 (8) Medically necessary emergency services provided in
24 an emergency room.
25 (9) Annual, lifetime or other benefit limits in amounts
26 established by the department but which initially shall be
27 not less than $100,000 as an annual benefit and $250,000 as a
28 lifetime benefit.
29 (10) A waiting period as established by the department
30 for transferring from an affordable comprehensive health
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1 insurance policy issued to a qualified individual or
2 qualified family by one insurer to an affordable
3 comprehensive health insurance policy issued to a qualified
4 individual or qualified family by another insurer.
5 (11) If the policy covers the insured or members of the
6 insured's family, coverage for newborn children of the
7 insured from the moment of birth and coverage for adopted
8 newborn children and for other adopted children, with prior
9 coverage from the date of the interlocutory decree of
10 adoption. The insurer may require that the insured give
11 notice to its insurer of any newborn child within 90 days
12 following the birth of the newborn child and of any adopted
13 child within 60 days of the date the insured has filed a
14 petition to adopt. The coverage of newborn children or
15 adopted children must not be less than coverage provided for
16 other members of the insured's family.
17 (12) Such provisions as the department may by regulation
18 require:
19 (i) for an annual, semiannual or equivalent
20 deductible;
21 (ii) patient copayments, including a differential,
22 for nonpreferred providers;
23 (iii) annual stop-loss amounts;
24 (iv) conversion;
25 (v) replacement of prior carrier's coverage; and
26 (vi) an exclusionary period for preexisting
27 conditions.
28 (b) Options.--In an affordable comprehensive health
29 insurance policy, the insurer may offer for purchase,
30 individually or in combination, all of the following:
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1 (1) Coverage for additional prenatal care, including one
2 prenatal office visit per month during the first two
3 trimesters of pregnancy, two office visits per month during
4 the seventh and eighth months of pregnancy and one office
5 visit per week during the ninth month until term. Coverage
6 for each visit may include necessary and appropriate
7 screening, including history, physical examination and
8 laboratory and diagnostic procedures deemed appropriate by
9 the physician and based upon recognized medical criteria for
10 the risk group of which the patient is a member. Coverage for
11 each office visit may also include prenatal counseling as the
12 physician deems appropriate.
13 (2) Coverage for additional obstetrical care, including
14 physicians' services, delivery room and other medically
15 necessary hospital services and services performed by
16 licensed, certified midwives.
17 (3) Coverage for additional inpatient and outpatient
18 psychiatric treatment and rehabilitative services.
19 (4) Coverage for cancer chemotherapy and cancer hormone
20 treatments and services.
21 (5) Coverage for drug and alcohol abuse and dependency
22 services.
23 (6) Dental coverage.
24 (7) Pharmaceutical coverage.
25 (8) Coverage for podiatric services.
26 (9) Coverage for psychological services.
27 (10) Coverage for optometric services.
28 (11) Coverage for chiropractic services.
29 (12) Coverage for physical therapy services.
30 (13) Coverage for speech pathologists, audiologists and
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1 licensed teachers of the hearing impaired.
2 (14) Coverage for services of clinical laboratory
3 professionals.
4 (15) Coverage for services of certified registered
5 nurses, certified registered nurse practitioners, certified
6 enterostomal therapy nurses, certified community health
7 nurses, certified psychiatric mental health nurses and
8 certified clinical nurse specialists acting within the scope
9 of their license.
10 (16) Coverage for medical rehabilitation services.
11 (17) Coverage for additional home health care.
12 (18) Coverage for diabetic supplies and education.
13 (19) Coverage for any other benefits or services.
14 (c) Waiver.--The department shall consider the cost impact
15 and essential nature of each of the provisions in subsections
16 (a) and (b) and the competitive impact of the requirements and
17 may by regulation waive required coverage and establish
18 alternative benefit methods to encourage participation of
19 insurers, employers and employees in a manner consistent with
20 meeting the goal of providing basic health services at an
21 affordable price accessible to those eligible for coverage under
22 this act.
23 (d) Provisions not applicable.--An affordable comprehensive
24 health insurance policy may be issued without the provision of
25 the benefits or requirements mandated by Article VI-A of the act
26 of May 17, 1921 (P.L.682, No.284), known as The Insurance
27 Company Law of 1921, or by regulations promulgated thereunder.
28 (e) Discretionary managed care provisions.--The insurer may
29 include any of the following managed care provisions to control
30 the cost of an affordable comprehensive health insurance policy,
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1 subject to the approval of the Department of Health:
2 (1) An exclusion for services that are not medically
3 reasonable and necessary.
4 (2) A procedure for preauthorization by telephone, to be
5 confirmed in writing, by the insurer of any medical service
6 the cost of which is anticipated to exceed a minimum
7 threshold, except for services necessary to treat a medical
8 emergency.
9 (3) A preferred panel of providers who have entered into
10 written agreements either directly with the insurer or
11 through an intermediary-prepared provider organization to
12 provide services at specified levels of reimbursement. A
13 written agreement under this paragraph must contain a
14 provision under which the parties agree that the insured will
15 have no obligation to make payment for any medical service
16 rendered by the provider that is determined not to be
17 medically reasonable and necessary.
18 (4) A provision under which an insured who obtains
19 medical services from a nonpreferred provider shall receive
20 reimbursement only in the amount that would have been
21 received had services been rendered by a preferred provider,
22 less a differential, in an amount to be approved by the
23 department.
24 (5) Other managed care and cost-control provisions
25 which, subject to the approval of the Department of Health
26 after public notice in the Pennsylvania Bulletin, have the
27 potential to control costs.
28 (f) Disclosure.--
29 (1) Before an insurer issues an affordable comprehensive
30 health insurance policy, it must obtain from the prospective
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1 insured a signed written statement, in a form approved by the
2 department, in which the prospective insured does all of the
3 following:
4 (i) Certifies as to eligibility for coverage under
5 the affordable comprehensive health insurance policy.
6 (ii) Acknowledges the nature of the coverage
7 provided and an understanding of the managed care and
8 cost-control features of the affordable comprehensive
9 health insurance policy.
10 (iii) Acknowledges that, if misrepresentations are
11 made regarding the insured's eligibility for coverage
12 under the affordable comprehensive health insurance
13 policy, the person making the misrepresentation and any
14 person covered as a spouse or dependent shall forfeit
15 coverage provided by the affordable comprehensive health
16 insurance policy.
17 (iv) Acknowledges that the prospective insured, at
18 the time of application for the affordable comprehensive
19 health insurance policy, was offered the opportunity to
20 purchase health insurance coverage which would have
21 included all mandated benefits or mandated optional
22 benefits required by the laws of this Commonwealth and
23 that the prospective insured rejected such coverage.
24 (2) A copy of the statement under paragraph (1) shall be
25 provided to the prospective insured at the time of affordable
26 comprehensive health insurance policy delivery and the
27 original of such written statement shall be retained by the
28 insurer for the longer of the period of time in which the
29 affordable comprehensive health insurance policy remains in
30 effect or five years.
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1 (3) Before an insurer issues an affordable comprehensive
2 health insurance policy, the insurer shall provide the
3 insured with a written disclosure statement containing
4 information the department requires, in a form approved by
5 the department. The disclosure statement shall be separate
6 from the insurance policy or evidence of coverage provided to
7 the insured. The disclosure statement shall contain at least
8 the following information:
9 (i) An explanation of those mandated benefits or
10 mandated optional benefits not covered by the affordable
11 comprehensive health insurance policy but which would
12 otherwise be required to be provided under the laws of
13 this Commonwealth.
14 (ii) An explanation of the managed care and cost-
15 control features of the affordable comprehensive health
16 insurance policy, appropriate mailing addresses and
17 telephone numbers to be utilized by the insured in
18 seeking information or authorization, a list of any
19 preferred providers then contracting with the insurer and
20 an explanation of the obligations of the providers and
21 the insured with regard to services determined not to be
22 medically reasonable and necessary.
23 (iii) An explanation of the primary and preventive
24 care features of the affordable comprehensive health
25 insurance policy.
26 (g) Insurers required to provide certain information.--The
27 department may require that, as to each affordable comprehensive
28 health insurance policy approved, the insurer provide a
29 statement of the portion of the rate or premium applicable to
30 the affordable comprehensive health insurance policy coverage
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1 and such other information as the department may require so that
2 prospective purchasers of policies may have an ability to make a
3 direct comparison of the cost of the benefits within policies of
4 the same class issued by different insurers. The department may
5 include rate comparison or other cost information in the form of
6 a notice which may be provided by the department to employers or
7 individuals upon request.
8 (h) Annual report.--An insurer providing an affordable
9 comprehensive health insurance policy shall furnish an annual
10 report to the department in a form prescribed by the department.
11 The report shall contain information the department requires to
12 analyze the effect of insurance coverage issued under this act
13 and assure compliance with this act. The annual report shall be
14 in a form consistent with the forms adopted by the National
15 Association of Insurance Commissioners.
16 (i) Notice and payroll deduction.--
17 (1) An employer that does not provide a portion of the
18 cost of health insurance for employees shall provide notice
19 to employees of the existence of affordable comprehensive
20 health insurance. Notice shall be in a form prepared by the
21 department and may be provided to employees by posting at the
22 place of employment or in any other reasonable manner.
23 (2) An insured may provide a written request to the
24 insured's employer to withhold the amount of premium on an
25 affordable comprehensive health insurance policy from the
26 insured's pay, along with written instructions for remittance
27 of the premium. Upon request under this subsection, the
28 employer may withhold the premiums and remit the premium
29 payments to the insurer. This subsection shall not apply if
30 the employer would be required to make remittances to more
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1 than two different insurers. An employer required to make a
2 remittance of a premium under this subsection is not required
3 to make remittances more often than once per month. The
4 Department of Labor and Industry, in cooperation with the
5 Insurance Department, shall provide a copy of the form of
6 notice under this subsection.
7 (j) Effect of false statement.--A material statement made by
8 an applicant for coverage under an affordable comprehensive
9 health insurance policy which falsely certifies as to the
10 applicant's eligibility for coverage under the affordable
11 comprehensive health insurance policy shall serve as the basis
12 for termination of coverage under the policy.
13 Section 7. Refusal of certain coverage prohibited.
14 Under small business health care benefit plans and affordable
15 comprehensive health insurance policies an insurer may not
16 refuse to offer coverage solely because of the nature of the
17 employer's business.
18 Section 8. Termination of coverage.
19 (a) Reasons for terminations.--An insurer may not terminate
20 a health insurance agreement for any reason, except as permitted
21 under this section for any of the following reasons:
22 (1) Nonpayment of required premium.
23 (2) Fraud or material misrepresentation related to
24 coverage of an individual covered by a health insurance
25 agreement. In case of a group or purchasing group, the
26 termination shall apply only to the individual and any person
27 covered as a spouse or dependent of the individual.
28 (3) Noncompliance with the minimum participation
29 requirements as established by the commissioner.
30 (4) Termination by complete withdrawal from the accident
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1 and health insurance market by amendment to its certificate
2 of authority within this Commonwealth upon 120 days written
3 notice to all affected insureds and the department. Any
4 termination under this provision shall not occur sooner than
5 the renewal.
6 (b) Effect upon carrier.--An insurer that exercises its
7 right of termination as provided in subsection (a)(4) may not
8 accept any new health business of the type it terminated for a
9 period of five years, after it provides notices of such
10 termination.
11 (c) Construction.--This section shall not be construed to
12 prohibit the sale of a specific block of business by one insurer
13 to another insurer licensed in this Commonwealth.
14 Section 9. Continuation of coverage.
15 The continuation of coverage standards shall be as provided
16 in the Consolidated Omnibus Budget Reconciliation Act of 1985
17 (Public Law 99-272, 100 Stat. 82). Notwithstanding any provision
18 of that act, these standards shall apply to groups of any size.
19 Section 10. Certain coverage denials prohibited.
20 (a) General rule.--No person shall be denied coverage under
21 a group health insurance agreement who is otherwise eligible for
22 coverage as a group member but for such person's health history,
23 health status, genetic status or specific preexisting condition,
24 except for a preexisting condition permitted under section 11
25 (relating to preexisting condition exclusion).
26 (b) Applicability.--This section shall not apply to group
27 long-term care policies.
28 Section 11. Preexisting condition exclusion.
29 A preexisting condition exclusion shall not exclude, limit or
30 reduce coverage or benefits in a group health insurance
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1 agreement or a group health contract beyond six months from the
2 effective date of coverage.
3 Section 12. Quotation of rates.
4 All insurers are required to quote rates in writing within 30
5 days of receiving a small business employer application for
6 coverage by an affordable comprehensive health insurance policy
7 or a small business health care benefit plan, except where the
8 insurer has declined to write the particular class of business
9 requesting the quote.
10 Section 13. Financial impact of mandated benefits.
11 The Health Care Cost Containment Council shall review all
12 legislation mandating new health benefits and submit to the
13 chairman of the Appropriations Committee of the Senate and to
14 the chairman of the Appropriations Committee of the House of
15 Representatives evidence of the financial impact of any proposed
16 mandated benefit to this act. No mandated benefit may be added
17 to this act unless there is proof from the report submitted by
18 the Health Care Cost Containment Council that the mandated
19 benefit will produce a cost savings.
20 Section 14. Responsibility of insured.
21 Except as provided in section 6(e)(3) (relating to coverage),
22 nothing in this act shall affect the obligation of an insurer to
23 pay for medical services rendered to the insured which are not
24 covered by an affordable comprehensive health insurance policy
25 or a small business health care benefit plan.
26 Section 15. Filing and approval.
27 All forms, including applications, enrollment forms,
28 policies, certificates, evidences of coverage, riders,
29 amendments, endorsements, disclosure forms and marketing
30 communications, used in connection with the sale or
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1 advertisement of an affordable comprehensive health insurance
2 policy or a small business health care benefit plan must be
3 submitted to the department for approval in accordance with
4 applicable statutes and regulations.
5 Section 16. Premiums.
6 (a) General rule.--Except as provided in subsection (b), the
7 premiums charged for small business health care benefit plans or
8 for affordable comprehensive health insurance policies shall be
9 the same for all insured with similar case characteristics.
10 (b) Additional premium.--
11 (1) An insurer may charge an additional premium for a
12 small business health care benefit plan or for an affordable
13 comprehensive health insurance policy based upon the claim
14 experience of the insured, the health of individuals covered
15 under the plan or policy and the duration of coverage. If an
16 additional premium is charged under this paragraph, the total
17 premium for the plan or policy may not exceed 150% of the
18 lowest premium charged by the insurer to insureds with
19 similar case characteristics but without the same claim
20 experience, health of covered individuals and duration of
21 coverage.
22 (2) An insurer may charge an additional premium based on
23 the nature of the employer's business, but the total premium
24 may not exceed 150% of the lowest premium which would be
25 charged to that employer under paragraph (1) without regard
26 to the nature of the employer's business. This paragraph
27 applies only where the insurer is exposed to additional risk
28 under the affordable comprehensive health insurance policy or
29 small business health care benefit plan due to the nature of
30 the employers business.
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1 (c) Adjustments.--Subject to the limitations set forth in
2 subsections (a) and (b), the percentage increase in the premium
3 rate charged to an employer may not exceed the sum of:
4 (1) The percentage change in the new business premium
5 rate for employers with similar case characteristics as
6 measured between the first day of the calendar year in which
7 the new rates take effect and the first day of the prior
8 calendar year.
9 (2) An adjustment not to exceed 15% annually based on
10 claims experience, health status or duration of coverage.
11 (3) Any adjustment due to changes in the coverage
12 provided or changes in the case characteristics of the
13 employer.
14 (d) Premium discount.--Nothing in this section shall prevent
15 an insurer from offering a premium discount to an employer based
16 on claims experience or lifestyles of the lives in the employer
17 group.
18 Section 17. Records and reports.
19 An insurer issuing or renewing an affordable comprehensive
20 health insurance policy or a small business health care benefit
21 plan in this Commonwealth shall maintain separate records of
22 enrollment, claim costs, premium income, utilization and other
23 information as required by the department.
24 Section 18. Regulations.
25 The department shall promulgate regulations to administer
26 this act.
27 Section 19. Penalties.
28 (a) Suspension or revocation of certificate of authority.--
29 Whenever the commissioner believes, from evidence satisfactory
30 to him or her, that any insurance company, association or
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1 exchange is doing an insurance business within this Commonwealth
2 in violation of any provision of this act or any order or
3 requirement of the commissioner issued or promulgated pursuant
4 to authority expressly granted the commissioner by any provision
5 of this or any other act, the commissioner may, in his
6 discretion, take against the offending party or parties any one
7 or more of the following courses of action:
8 (1) Suspend or revoke the certificate of authority or
9 license of the offending company, association or exchange.
10 (2) Refuse to renew the certificate of authority or
11 license of the offending company, association or exchange.
12 This remedy is in addition to any other remedy provided by
13 this act or any other act.
14 (b) Notice and hearing.--Before the commissioner shall take
15 any action under this section, the commissioner shall give
16 written notice to the person, company, association or exchange
17 accused of a violation, stating specifically the nature of the
18 alleged violation and fixing a time and place, at least ten days
19 thereafter, when a hearing before the commissioner regarding the
20 matter shall be held.
21 Section 20. Severability.
22 The provisions of this act are severable. If any provision of
23 this act or its application to any person or circumstance is
24 held invalid, the invalidity shall not affect other provisions
25 or applications of this act which can be given effect without
26 the invalid provision or application.
27 Section 21. Repeals.
28 All acts and parts of acts are repealed insofar as they are
29 inconsistent with this act.
30 Section 22. Nonapplicability to programs.
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1 (a) General rule.--This act shall not apply to health
2 insurance programs established by the General Assembly and
3 funded all or in part from public funds.
4 (b) Regulatory exemption.--This act shall not apply to
5 existing special health insurance programs established under a
6 regulatory exemption.
7 Section 23. Effective date.
8 This act shall take effect as follows:
9 (1) Sections 18, 20 and 22 and this section shall take
10 effect immediately.
11 (2) The remainder of this act shall take effect in 180
12 days.
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