10 LC 37
1017
Senate
Bill 453
By:
Senators Hill of the 32nd, Rogers of the 21st, Hudgens of the 47th, Murphy of
the 27th and Shafer of the 48th
A
BILL TO BE ENTITLED
AN ACT
AN ACT
To
amend Title 33 of the Official Code of Georgia Annotated, relating to insurance,
so as to change certain provisions concerning use of the premium taxes; to
change certain provisions of the group accident and sickness contracts,
conversion privilege, and continuation of right provisions; to provide for the
creation of the Georgia Individual High Risk Reinsurance Pool; to provide for
definitions; to provide for operation; to provide for powers and authority; to
provide for reinsurance; to provide for premium rates; to provide for
assessments; to provide for standards for agents; to provide for design of
products; to make certain funding provisions contingent upon passage of a
constitutional amendment; to provide for an effective date and applicability; to
provide for related matters; to repeal the Commission on the Georgia Health
Insurance Risk Pool; to repeal conflicting laws; and for other
purposes.
BE
IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:
SECTION
1.
Title
33 of the Official Code of Georgia Annotated, relating to insurance, is amended
by revising Code Section 33-8-4, relating to amount and method of computing tax
on insurance premiums generally, by adding a new subsection to read as
follows:
"(a.1)
One-fourth of 1 percent of premium taxes collected pursuant to this Code section
shall offset losses of the Georgia High Risk Individual Reinsurance Pool, as
provided in Code Section
33-29A-10."
SECTION
2.
Said
title is further amended by revising Code Section 33-24-21.1, relating to group
accident and health contracts conversion privilege and continuation right
provisions, by adding a new subsection to read as follows:
"(m)
Enhanced conversion option coverage for qualified eligible individuals as
defined under this Code section shall no longer be issued after eligible
individuals under Article 1 of Chapter 29A of Title 33 is offered coverage
through the Georgia high risk individual reinsurance pool as provided in that
chapter."
SECTION
3.
Said
title is further amended by striking Article 2 of Chapter 29A, relating to the
Commission on the Georgia Health Insurance Risk Pool, and inserting a new
article to read as follows:
"ARTICLE
2
33-29A-20.
(a)
It is the intention of this article together with Code Section 33-24-21.1 to
provide an acceptable alternative mechanism for the availability of individual
health insurance coverage, as contemplated by Section 2741 of the federal Public
Health Service Act, 42 U.S.C.A. Section 300gg-41. This article shall be
construed and administered so as accomplish such intention.
(b)
As provided in subsection (m) in Code Section 33-24-21.1, enhanced conversion
option coverage for qualified eligible individuals as defined under that Code
section shall no longer be issued after eligible individuals under this article
are offered coverage through the Georgia High Risk Individual Reinsurance Pool
as provided in this article.
(c)
Any reference in this article to any federal statute shall refer to that federal
statute as it existed on January 1, 1997, including its amendment by the federal
Health Insurance Portability and Accountability Act of 1996, P.L.
104-191.
33-29A-21.
(a)
As used in this article, the terms:
(1)
'Agent' means a producer as defined in Code Section 33-23-1.
(2)
'Board' means the board of directors of the Georgia High Risk Individual
Reinsurance Pool established in this article.
(3)
'Carrier' means any entity that provides, or is authorized to provide, health
insurance in this state. For purposes of this article, carrier includes an
insurance company, any other entity providing reinsurance including excess or
stop loss coverage, a hospital or professional service corporation, a fraternal
benefit society, a managed care organization, any entity providing health
insurance coverage or benefits to residents of this state as certificate holders
under a group policy issued or delivered outside of this state, and any other
entity providing a plan of health insurance or health benefits subject to state
insurance regulation.
(4)
'Commissioner' means the Commissioner of the Department of
Insurance.
(5)
'Creditable coverage' and 'eligible individual' have the same meaning as
specified in Sections 270l and 2741 of the federal Public Health Service Act, 42
U.S.C.A. Sections 300gg and 300gg-41.
(6)
'Dependent' means a spouse, an unmarried child under the age of 21 years, an
unmarried child who is a full-time student under the age of 25 years 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.
(7)
'Eligible individual' means:
(A)
A Georgia resident individual or dependent of a Georgia resident who is under
the age of 65 years, is not eligible for coverage under a group health plan,
Part A or Part B of Title XVIII of the Social Security Act (medicare), or a
state plan under Title XIX (Medicaid) or any successor program, and who does not
have other health insurance coverage;
(B)
An individual who is legally domiciled in Georgia on the date of application to
the pool and is eligible for the credit for health insurance costs under Section
35 of the Internal Revenue Code of 1986; or
(C)
A Georgia resident individual or a dependent of a Georgia resident who is a
federally eligible individual which means an individual who meets the
eligibility criteria set forth in the federal Health Insurance Portability and
Accountability Act of 1996 Public Law 104-191, subsection (b) of Section 2741
(HIPAA).
Coverage
provided under this article shall not be available to any individual who is
covered under other health insurance coverage, except as provided in Code
Section 33-29A-12. For purposes of this article, to be eligible, an individual
must also meet the requirements of Code Section 33-29A-12.
(8)
'Health insurer' means any health insurance issuer which is not a managed care
organization.
(9)
'Health insurance issuer' and 'health maintenance organization' have the same
meaning as specified in Section 2791 of the federal Public Health Service Act,
42 U.S.C.A. Section 300gg-92.
(10)
'Health benefit plan' means any hospital or medical policy or certificate, any
subscriber contract provided by a hospital or professional service corporation,
or health maintenance organization subscriber contract. Health benefit plan does
not include policies or certificates of insurance for specific disease, hospital
confinement indemnity, accident-only, credit, dental, vision, medicare
supplement, long-term care, or disability income insurance, student health
benefits only, coverage issued as a supplement to liability insurance, worker's
compensation or similar insurance, automobile medical payment insurance, or
nonrenewable short-term coverage issued for a period of 12 months or
less.
(11)
'Individual carrier' means a carrier that offers health benefit plans covering
eligible individuals and their dependents.
(12)
'Individual HSA compatible health benefit plan' means a health savings account
compatible health benefit plan accepted for use in the pool pursuant to Code
Section 33-29A-13.
(13)
'Individual health benefit plan' means a health benefit plan accepted for use in
the pool pursuant to Code Section 33-29A-13.
(14)
'Managed care organization' means a health maintenance organization or a
nonprofit health care corporation.
(15)
'Plan' or 'pool plan' means the individual or HSA compatible health benefit plan
accepted for use in the pool pursuant to Code Section 33-29A-13.
(16)
'Plan of operation' means the plan of operation of the individual high risk
reinsurance pool established pursuant to this article.
(17)
'Pool' means the Georgia Individual High Risk Reinsurance Pool created under
Code Section 33-29A-4.
(b)
Any other term which is used in this article and which is also defined in
Section 2791 of the federal Public Health Service Act, 42 U.S.C.A. Section
300gg-92, and not otherwise defined in this article shall have the same meaning
specified in said Section 2791.
33-29A-22.
Each
health insurer and managed care corporation which is licensed to and does offer
health insurance coverage in this state shall as a condition of such licensure
agree to participation in the Georgia individual high risk reinsurance pool as
provided in this article. This Code section shall not apply to an entity which
offers only excepted benefits as specified in Section 2791(c) of the federal
Public Health Service Act, 42 U.S.C.A. Section 300gg-91(c).
33-29A-23.
(a)
There is hereby created an independent public body corporate and politic to be
known as the Georgia individual high risk reinsurance pool. The pool will
perform an essential governmental function in the exercise of powers conferred
upon it in this article. The pool and any assessments imposed or collected
pursuant to the operation of the pool shall at all times be free from taxation
of every kind.
(b)
The pool created by this article, shall operate subject to the supervision and
control of the board. The board shall consist of ten members. Eight members
shall be appointed by the commissioner and serve at the pleasure of the
commissioner. The commissioner or his designated representative shall serve as
an ex officio member of the board. In selecting the members of the board the
commissioner shall appoint four members representing carriers, two agents, and
two members representing consumer interests. One member shall be a member of
the Senate appointed by the President of the Senate and one member shall be a
member of the House of Representatives appointed by the Speaker of the
House.
(c)
The initial nonlegislative board members shall be appointed as follows: two of
the members to serve a term of two years; three of the members to serve a term
of four years; and three of the members to serve a term of six years.
Subsequent nonlegislative board members shall serve for a term of three years.
Legislative members of the board shall serve for a term of two years. A vacancy
in a legislative member's position on the board shall be filled in the same
manner as the original appointment. All other vacancies on the board shall be
filled by the commissioner. A nonlegislative board member may be removed by the
commissioner for cause.
33-29A-24.
(a)
The board shall submit to the commissioner a plan of operation and thereafter
any amendments thereto necessary or suitable to assure the fair, reasonable, and
equitable administration of the pool. The commissioner may, after notice and
hearing, approve the plan of operation if the commissioner determines it to be
suitable to assure the fair, reasonable and equitable administration of the
pool, and to provide for the sharing of pool gains or losses on an equitable and
proportionate basis in accordance with the provisions of this article. The plan
of operation shall become effective upon written approval by the
commissioner.
(b)
If the board fails to submit a suitable plan of operation, the commissioner
shall, after notice and hearing, adopt and promulgate a temporary plan of
operation. The commissioner shall approve the plan of operation submitted by
the board, or adopt a temporary plan of operation if the board fails to submit a
suitable plan. The commissioner shall amend or rescind any plan adopted under
the provisions of this Code section at the time a plan of operation is submitted
by the board and approved by the commissioner.
(c)
The plan of operation shall:
(1)
Establish procedures for handling and accounting of pool assets and moneys and
for an annual fiscal reporting to the commissioner;
(2)
Establish procedures for selecting an administrator, and setting forth the
powers and duties of the administrator;
(3)
Establish procedures for reinsuring risks or entering into agreements with
private reinsurance carriers to obtain or provide reinsurance in accordance with
the provisions of this article;
(4)
Establish procedures for collecting assessments from carriers to fund claims and
administrative expenses incurred or estimated to be incurred by the pool;
and
(5)
Provide for any additional matters necessary for the implementation and
administration of the pool.
33-29A-25.
(a)
The pool shall have the general powers and authority granted under the laws of
this state to insurance companies and managed care organizations licensed to
transact business, except the power to issue health benefit plans directly to
individuals. In addition thereto, the pool shall have the specific authority
to:
(1)
Enter into contracts as are necessary or proper to carry out the provisions and
purposes of this article, including the authority, with the approval of the
commissioner, to enter into contracts with similar programs of other states for
the joint performance of common functions or with persons or other organizations
for the performance of administrative functions;
(2)
Sue or be sued, including taking any legal actions necessary or proper to
recover any assessments and penalties for, on behalf of, or against the pool or
any carrier;
(3)
Designate health benefit plans, which shall allow coordination of benefits, for
which reinsurance will be provided, and to issue or obtain reinsurance policies,
in accordance with the requirements of this article;
(4)
Establish rules, conditions and procedures for reinsuring risks or obtaining
reinsurance coverage under the pool;
(5)
Establish actuarial functions as appropriate for the operation of the
pool;
(6)
Assess carriers in accordance with the provisions of Code Section 33-29A-10, and
make advance interim assessments of carriers as may be reasonable and necessary
for organizational and interim operating expenses. Any interim assessments
shall be credited as offsets against any regular assessments due following the
close of the fiscal year. In no event shall any assessments of carriers begin
before the later of the establishment of a plan of operation for the pool or
January 1, 2011;
(7)
Appoint appropriate legal, actuarial and other committees as necessary to
provide technical assistance in the operation of the pool, policy and other
contract design, and any other function within the authority of the
pool;
(8)
Borrow money to effect the purposes of the pool. Any notes or other evidence of
indebtedness of the pool not in default shall be legal investments for carriers
and may be carried as admitted assets; and
(9)
Establish rules, policies and procedures as may be necessary or convenient for
the implementation of this article and the operation of the pool.
(b)
Neither the board nor its employees shall be liable for any obligations of the
pool. No member or employee of the board shall be liable, and no cause of
action of any nature may arise against them, for any act or omission related to
the performance of their powers and duties under this article, unless such act
or omission constitutes willful or wanton misconduct. The board may provide for
indemnification of, and legal representation for, its members and
employees.
(c)
No participation of a reinsuring carrier in the pool, no establishment of rates,
forms or procedures, and no other joint or collective action required under the
provisions of this article shall be grounds for any legal action, criminal or
civil liability, or penalty against the pool or any of its reinsuring carriers
either jointly or separately.
33-29A-26.
(a)
Any individual carrier issuing an individual health benefit plan as provided in
this article shall be reinsured by the pool to the level of coverage provided in
the plan and shall be liable to the pool for the reinsurance
premium.
(b)(1)
The pool shall not reimburse a reinsuring carrier with respect to the claims of
a reinsured individual or dependent until the carrier has incurred an initial
level of claims for such individual or dependent of $5,000.00 in a calendar year
for benefits covered by the pool. In addition, the reinsuring carrier shall be
responsible for 10 percent of the next $25,000.00 of benefit payments during a
calendar year and the pool shall reinsure the remainder.
(2)
The board annually may adjust the initial level of claims and the maximum limit
to be retained by the carrier to reflect increases in costs and utilization
within the standard market for health benefit plans within the state. The
adjustment shall not be less than the annual change in the medical component of
the 'Consumer Price Index for All Urban Consumers' of the department of labor,
bureau of labor statistics, unless the board proposes and the commissioner
approves a lower adjustment factor.
(c)
A reinsuring carrier shall apply all managed care and claims handling
techniques, including utilization review, individual case management, preferred
provider provisions, wellness programs and other managed care provisions or
methods of operation consistently with respect to reinsured and nonreinsured
business.
(d)
Each carrier shall make a filing with the commissioner containing the carrier's
earned health insurance premium derived from health benefit plans delivered or
issued for delivery in this state in the previous calendar year.
(e)
Each carrier shall file with the commissioner, in a form and manner to be
prescribed by the commissioner, an annual report. The report shall state the
number of resident persons insured under the carrier's health benefit plan, or
through excess or stop loss coverage.
33-29A-27.
(a)
The board, as part of the plan of operation, shall establish a methodology for
determining premium rates to be charged reinsuring carriers to reinsure
individuals under this article. The methodology shall include a system for
classification of individuals that reflects the types of case characteristics
commonly used by individual carriers in the state. The methodology shall
provide for the development of base reinsurance premium rates, subject to the
approval of the commissioner, which shall be set at levels which reasonably
approximate gross premiums charged to individuals by individual carriers for
health benefit plans with benefits similar to the standard health benefit plan,
adjusted to reflect retention levels required under the provisions of this
article. Reinsuring carriers desiring to use their own methodologies and
methods for determining reinsurance premium rates for use as provided under this
article shall submit such proposal to the board for approval before using their
own methodologies.
(b)
The board periodically shall review the methodology established under the
provisions of this Code section, including the system of classification and any
rating factors, to assure that it reasonably reflects the claims experience of
the pool. The board may propose changes to the methodology which shall be
subject to the approval of the commissioner.
(c)
The board may consider adjustments to the premium rates charged by the pool to
reflect the use of effective cost containment and managed care
arrangements.
33-29A-28.
(a)
The board shall establish premium rates for coverage under the individual and
HSA compatible health benefit plans for eligible individuals only. Such rates
shall be required to be established according to acceptable standards according
to Section 2741 of the federal Public Health Service Act, 42 U.S.C.A. Section
300gg-41.
(b)
Separate schedules of premium rates based on age, individual tobacco use,
geography as defined by rule of the commissioner, gender and benefit plan design
shall apply for individual risks.
(c)
The board, with the assistance of the commissioner and in accordance with
appropriate actuarial principles, shall determine a standard risk rate by using
the average rates that individual standard risks in this state are charged by at
least five of the largest health insurance carriers providing individual health
insurance coverage to residents of Georgia that is substantially similar to the
coverage offered by each pool plan. In determining the average rate or charges
of those health insurance carriers, the rates charged by those carriers shall be
actuarially adjusted to determine the rate that would have been charged for
benefits similar to those provided by each plan. The standard risk rates shall
be established using reasonable actuarial techniques and shall reflect
anticipated claims experience, expenses, and other appropriate risk factors for
such coverage.
(d)
Rates for plan coverage shall not be less than 125 percent nor more than 150
percent of rates established as applicable for individual standard risks
pursuant to paragraph (3) of this Code section.
33-29A-29.
(a)
Prior to March 1 of each year, the board shall determine and report to the
commissioner the pool's net loss for the previous calendar year, including
administrative expenses and incurred losses for the year, taking into account
investment income and other appropriate gains and losses, and any premium tax
funds appropriated to the pool pursuant to Code Section 33-8-4.
(b)
After accounting for factors listed in subsection (a), any net loss for the year
shall be recouped by assessments of carriers.
(c)(1)
For the assessment of March 1, 2012, and prior to March 1 of each succeeding
year, the board shall determine and file with the commissioner an estimate of
the assessments needed to fund the losses incurred by the pool in the previous
calendar year.
(2)
The individual assessments shall be determined by multiplying net losses, if net
earnings are negative, as defined by subsection (a) of this Code section, by a
fraction, the numerator of which shall be the carrier's total premiums earned in
the preceding calendar year from all health benefit plans and policies or
certificates of insurance for specific disease, and hospital confinement
indemnity in this state as reported in the carrier's reports filed pursuant to
Code Section 33-29A-7 paragraphs (4) and (5) including reinsurance by way of
excess or stop loss coverage, and the denominator of which shall be the total
premiums earned in the preceding calendar year from all health benefit plans and
policies or certificates of insurance for specific disease and hospital
confinement indemnity in this state, including reinsurance by way of excess or
stop loss coverage.
(d)
If assessments exceed net losses of the pool, the excess shall be held at
interest and used by the board to offset future losses or to reduce pool
premiums. As used in this paragraph, 'future losses' includes reserves for
incurred but not reported claims.
(e)
Each carrier's proportion of the assessment shall be determined annually by the
board based on annual statements and other reports deemed necessary by the board
and filed by the carriers with the commissioner.
(f)
The plan of operation shall provide for the imposition of an interest penalty
for late payment of assessments.
(g)
A carrier may seek from the commissioner a deferment from all or part of an
assessment imposed by the board. The commissioner may defer all or part of the
assessment if the commissioner determines that the payment of the assessment
would place the carrier in a financially impaired condition. If all or part of
an assessment against a carrier is deferred the amount deferred shall be
assessed against the other carriers in a manner consistent with the basis for
assessment set forth in this Code section. The carrier receiving the deferment
shall remain liable to the pool for the amount deferred and shall be prohibited
from reinsuring any individuals with the pool until such time as it pays the
assessments.
33-29A-30.
The
board, as part of the plan of operation, shall develop standards setting forth
the manner and levels of compensation to be paid to agents for the sale of
individual and HSA compatible health benefit plans for eligible individuals and
their dependents only. In establishing such standards, the board shall take
into consideration the need to assure broad availability of coverages, the
objectives of the pool, the time and effort expended in placing the coverage,
the need to provide ongoing service to the individual, the levels of
compensation currently used in the industry and the overall costs of coverage to
individuals selecting these plans.
33-29A-31.
(a)
Any eligible individual person, who is and continues to be a resident shall be
eligible for coverage under an individual and HSA compatible health benefit plan
if evidence is provided that:
(1)
Such person has been rejected by one individual carrier on the basis of health
status or claims experience or an individual carrier reports to the pool that
such person as an applicant for coverage would be declined were it not for
availability of reinsurance;
(2)
An individual carrier refuses to issue a health benefit plan providing coverage
substantially similar to coverage offered under an equivalent pool plan except
at a rate exceeding the rate for the pool plan;
(3)
Such person is a federally eligible individual; or
(4)
Such person is legally domiciled in Georgia on the date of application to the
pool and is eligible for the credit for health insurance costs under Section 35
of the Internal Revenue Code of 1986. In addition, if such person maintained
creditable health insurance coverage for an aggregate period of three months as
of the date on which the individual seeks to enroll in pool coverage, not
counting any period prior to a sixty-three (63) day break in
coverage:
(A)
The preexisting condition limitations set forth in Section 35 of the Internal
Revenue Code of 1986, shall apply; and
(B)
The requirement for exhaustion of any available coverage under Title X of the
Consolidated Omnibus Budget Reconciliation Act of 1986, Public Law 99-272
(COBRA) or state continuation benefits is waived.
(b)
A rejection or refusal by a carrier offering only stop loss, excess of loss or
reinsurance coverage with respect to an applicant under subsection (a) of this
Code section shall not constitute sufficient evidence for purposes of subsection
(a) of this Code section.
(c)
Each resident dependent of a person who is eligible for coverage under the pool
shall also be eligible for coverage under the pool.
(d)
Any eligible individual person meeting the eligibility requirements of
subsection (a), (b), or (c) of this Code section shall be eligible for coverage
under a pool plan even though the person has existing coverage under other
health insurance or under a group health plan provided: (1) there is a
reasonable probability that the lifetime benefit maximum of the existing
coverage will be exceeded within 90 days; and (2) the lifetime benefit maximum
under the existing coverage is at least $500,000.00. In all cases, coverage
under a pool plan is secondary to the existing coverage and all other
insurance.
(e)
A person shall not be eligible for coverage under a pool plan if:
(1)
The person is not a federally eligible individual and, except as provided
otherwise in subsection (d) of this Code section, has or obtains health
insurance coverage substantially similar to or more comprehensive than a pool
plan, or would be eligible to have such coverage at a rate not exceeding the
rate for the pool plan if the person elected to obtain it;
(2)
The person is determined to be eligible for health care benefits under
Medicaid;
(3)
The person has previously terminated pool plan coverage unless 12 months have
lapsed since such termination; provided however, that this provision shall not
apply with respect to an applicant who is a federally eligible individual;
or
(4)
The person is an inmate or resident of a state or other public institution, or a
state, local or private correctional facility; provided however, that this
provision shall not apply with respect to an applicant who is a federally
eligible individual.
(f)
Notwithstanding any other provision of this article, eligibility for
continuation of coverage under COBRA shall not render a person ineligible for
coverage under a pool plan.
(g)
Coverage shall cease:
(1)
On the first day of the month following the date a person is no longer a
resident of this state;
(2)
On the first day of the month following the date a person requests coverage to
end;
(3)
Upon the death of the covered person; or
(4)
At the option of the board, 30 days after the plan makes any inquiry concerning
the person's eligibility or place of residence to which the person does not
reply.
(h)
A person who ceases to meet the eligibility requirements of this Code section
may be terminated on the first day of the month following the date when the
individual becomes ineligible.
33-29A-32.
(a)
The board shall review and approve or disapprove individual and HSA compatible
health benefit plans submitted by individual health insurance carriers, with an
emphasis on making coverage available for preventive care and wellness programs
as provided under general law.
(b)
The board shall also review and approve or disapprove individual and HSA
compatible health benefit plans which each contain benefit and cost-sharing
arrangements that are consistent with the basic method of operation and the
benefit plans of managed care organizations, including any restrictions imposed
by federal law, which may include cost containment features such as the
following:
(1)
Utilization review of health care services, including review of medical
necessity of hospital and physician services;
(2)
Case management;
(3)
Selective contracting with hospitals, physicians and other health care
providers;
(4)
Reasonable benefit differentials applicable to providers that participate or do
not participate in arrangements using restricted network provisions;
and
(5)
Other managed care provisions.
(c)
Individual and HSA compatible health benefit plans submitted by individual
health insurance carriers and approved for use in the pool shall meet minimum
specifications required by Section 2741 of the federal Public Health Service
Act, 42 U.S.C.A. Section 300gg-41.
(d)
The board may appoint an advisory committee to assist in reviewing and approving
or disapproving the health benefit plans prescribed by this Code
section."
SECTION
4.
This
Act shall become effective on January 1, 2011, only if an amendment to the
Constitution authorizing the General Assembly to provide for allocation of 1/4
of 1 percent of premium taxes collected to offset the losses of the Georgia High
Risk Individual Reinsurance Pool is ratified by the voters of the November,
2010, general election. If such an amendment is not so ratified, this Act shall
not become effective and shall stand repealed on January 1, 2011.
SECTION
5.
All
laws and parts of laws in conflict with this Act are repealed.