71st OREGON LEGISLATIVE ASSEMBLY--2001 Regular Session
NOTE: Matter within { + braces and plus signs + } in an
amended section is new. Matter within { - braces and minus
signs - } is existing law to be omitted. New sections are within
{ + braces and plus signs + } .
LC 2244
A-Engrossed
House Bill 2766
Ordered by the House May 29
Including House Amendments dated May 29
Sponsored by Representative VERGER (at the request of Mike
Freeman)
SUMMARY
The following summary is not prepared by the sponsors of the
measure and is not a part of the body thereof subject to
consideration by the Legislative Assembly. It is an editor's
brief statement of the essential features of the measure.
Includes leased workers of client employer for purposes of
group health insurance coverage { + if leasing company does not
provide group health insurance. Requires leasing company that
provides coverage to leased workers to provide coverage to all
leased workers in same manner + }.
A BILL FOR AN ACT
Relating to group health insurance; creating new provisions; and
amending ORS 743.522 and 743.730.
Be It Enacted by the People of the State of Oregon:
SECTION 1. ORS 743.522 is amended to read:
743.522. 'Group health insurance' means that form of health
insurance covering groups of persons as defined in this section,
with or without one or more members of their families or one or
more of their dependents, or covering one or more members of the
families or one or more dependents of such groups of persons, and
issued upon one of the following bases:
(1) { + (a) + } Under a policy issued to an employer or
trustees of a fund established by an employer, who shall be
deemed the policyholder, insuring employees of such employer for
the benefit of persons other than the employer. { - The term
'employees' as used in this subsection shall be deemed to
include - } { + As used in this subsection, 'employee'
includes:
(A) + } The officers, managers, and employees of the employer
{ - , - } { + ;
(B) + } The individual proprietor or partners if the employer
is an individual proprietor or partnership { - , - } { + ;
(C) + } The officers, managers, and employees of subsidiary or
affiliated corporations { - , - } { + ;
(D) + } The individual proprietors, partners and employees of
individuals and firms, if the business of the employer and such
individual or firm is under common control through stock
ownership, contract, or otherwise { + ; + } { - . The term
'employees' as used in this subsection may include retired
employees. - }
{ + (E) At the election of the policyholder, the trustees or
their employees, or both, if their duties are principally
connected with such trusteeship; and
(F) The leased workers of a client employer. + }
{ + (b) + } A policy issued to insure employees of a public
body may provide that the term 'employees' shall include elected
or appointed officials. { - The policy may provide that the
term ' employees' shall include the trustees or their employees,
or both, if their duties are principally connected with such
trusteeship. - }
(2) Under a policy issued to an association, including a labor
union, { - which - } { + that + } has an active existence for
at least one year, { - which - } { + that + } has a
constitution and bylaws and { - which - } { + that + } has
been organized and is maintained in good faith primarily for
purposes other than that of obtaining insurance, { - which
shall be deemed - } { + and that is + } the policyholder,
insuring members, employees, or employees of members of the
association for the benefit of persons other than the association
or its officers or trustees.
{ - The term 'employees' as used in this subsection may include
retired employees. - }
(3) Under a policy issued to the trustees of a fund established
by two or more employers in the same or related industry or by
one or more labor unions or by one or more employers and one or
more labor unions or by an association as defined in subsection
(2) of this section, insuring employees of the employers or
members of the unions or of such association, or employees of
members of such association for the benefit of persons other than
the employers or the unions or such association. The term
'employees' as used in this subsection may include the officers,
managers and employees of the employer, and the individual
proprietor or partners if the employer is an individual
proprietor or partnership. { - The term 'employees' as used in
this subsection may include retired employees. - } The policy
may provide that the term 'employees' shall include the trustees
or their employees, or both, if their duties are principally
connected with such trusteeship.
(4) Under a policy issued to any person or organization to
which a policy of group life insurance may be issued or delivered
in this state, to insure any class or classes of individuals that
could be insured under such group life policy.
(5) Under a policy issued to cover any other substantially
similar group which, in the discretion of the Director of the
Department of Consumer and Business Services, may be subject to
the issuance of a group health insurance policy.
{ + (6) As used in this section and section 3 of this 2001
Act:
(a) 'Client employer' means an employer to whom workers are
provided under contract and for a fee on a leased basis by a
worker leasing company licensed under ORS 656.850.
(b) 'Leased worker' means a worker provided by a worker leasing
company licensed under ORS 656.850.
(c) 'Employee' may include a retired employee. + }
SECTION 2. { + Section 3 of this 2001 Act is added to and made
a part of ORS chapter 743.
+ } { + SECTION 3. + } { + (1) A leasing company may
provide group health insurance to its leased workers. If the
leasing company does not provide group health insurance to its
leased workers, the client employer may provide group health
insurance to the leased workers.
(2) If a leasing company provides group health insurance to its
leased workers, the leasing company shall provide group health
insurance to all its leased workers in the same manner. + }
SECTION 4. ORS 743.730 is amended to read:
743.730. As used in ORS 743.730 to 743.773:
(1) 'Actuarial certification' means a written statement by a
member of the American Academy of Actuaries or other individual
acceptable to the Director of the Department of Consumer and
Business Services that a carrier is in compliance with the
provisions of ORS 743.736, 743.760 or 743.761, based upon the
person's examination, including a review of the appropriate
records and of the actuarial assumptions and methods used by the
carrier in establishing premium rates for small employer and
portability health benefit plans.
(2) 'Affiliate' of, or person 'affiliated' with, a specified
person means any carrier who, directly or indirectly through one
or more intermediaries, controls or is controlled by or is under
common control with a specified person. For purposes of this
definition, 'control' has the meaning given that term in ORS
732.548.
(3) 'Affiliation period' means, under the terms of a group
health benefit plan issued by a health care service contractor, a
period:
(a) That is applied uniformly and without regard to any health
status related factors to an enrollee or late enrollee in lieu of
a preexisting conditions provision;
(b) That must expire before any coverage becomes effective
under the plan for the enrollee or late enrollee;
(c) During which no premium shall be charged to the enrollee or
late enrollee; and
(d) That begins on the enrollee's or late enrollee's first date
of eligibility for coverage and runs concurrently with any
eligibility waiting period under the plan.
(4) 'Basic health benefit plan' means a health benefit plan for
small employers that is required to be offered by all small
employer carriers and approved by the Director of the Department
of Consumer and Business Services in accordance with ORS 743.736.
(5) 'Bona fide association' means an association that meets the
requirements of 42 U.S.C. 300gg-11 as amended and in effect on
July 1, 1997.
(6) 'Carrier' means any person who provides health benefit
plans in this state, including a licensed insurance company, a
health care service contractor, a health maintenance
organization, an association or group of employers that provides
benefits by means of a multiple employer welfare arrangement or
any other person or corporation responsible for the payment of
benefits or provision of services.
(7) 'Committee' means the Health Insurance Reform Advisory
Committee created under ORS 743.745.
(8) 'Creditable coverage' means prior health care coverage as
defined in 42 U.S.C. 300gg as amended and in effect on July 1,
1997, and includes coverage remaining in force at the time the
enrollee obtains new coverage.
(9) 'Department' means the Department of Consumer and Business
Services.
(10) 'Dependent' means the spouse or child of an eligible
employee, subject to applicable terms of the health benefit plan
covering the employee.
(11) 'Director' means the Director of the Department of
Consumer and Business Services.
(12) 'Eligible employee' means an employee of a small employer
who works on a regularly scheduled basis, with a normal work week
of 17.5 or more hours. The employer may determine hours worked
for eligibility between 17.5 and 40 hours per week subject to
rules of the carrier. { - The term - } { + ' Eligible
employee' + } includes sole proprietors, partners of a
partnership { + , leased workers as defined in ORS 743.522 + } or
independent contractors if they are included as employees under a
health benefit plan of a small employer but does not include
employees who work on a temporary, seasonal or substitute basis.
Employees who have been employed by the small employer for fewer
than 90 days are not eligible employees unless the small employer
so allows.
(13) 'Enrollee' means an employee, dependent of the employee or
an individual otherwise eligible for a group, individual or
portability health benefit plan who has enrolled for coverage
under the terms of the plan.
(14) 'Exclusion period' means a period during which specified
treatments or services are excluded from coverage.
(15) 'Financially impaired' means a member that is not
insolvent and is:
(a) Considered by the Director of the Department of Consumer
and Business Services to be potentially unable to fulfill its
contractual obligations; or
(b) Placed under an order of rehabilitation or conservation by
a court of competent jurisdiction.
(16)(a) 'Geographic average rate' means the arithmetical
average of the lowest premium and the corresponding highest
premium to be charged by a carrier in a geographic area
established by the director for the carrier's:
(A) Small employer group health benefit plans;
(B) Individual health benefit plans; or
(C) Portability health benefit plans.
(b) 'Geographic average rate' does not include premium
differences that are due to differences in benefit design or
family composition.
(17) 'Group eligibility waiting period' means, with respect to
a group health benefit plan, the period of employment or
membership with the group that a prospective enrollee must
complete before plan coverage begins.
(18)(a) 'Health benefit plan' means any hospital expense,
medical expense or hospital or medical expense policy or
certificate, health care service contractor or health maintenance
organization subscriber contract, any plan provided by a multiple
employer welfare arrangement or by another benefit arrangement
defined in the federal Employee Retirement Income Security Act of
1974, as amended.
(b) 'Health benefit plan' does not include coverage for
accident only, specific disease or condition only, credit,
disability income, coverage of Medicare services pursuant to
contracts with the federal government, Medicare supplement
insurance policies, coverage of CHAMPUS services pursuant to
contracts with the federal government, benefits delivered through
a flexible spending arrangement established pursuant to section
125 of the Internal Revenue Code of 1986, as amended, when the
benefits are provided in addition to a group health benefit plan,
long term care insurance, hospital indemnity only, short term
health insurance policies (the duration of which does not exceed
six months including renewals), student accident and health
insurance policies, dental only, vision only, a policy of
stop-loss coverage that meets the requirements of ORS 742.065,
coverage issued as a supplement to liability insurance, insurance
arising out of a workers' compensation or similar law, automobile
medical payment insurance or insurance under which benefits are
payable with or without regard to fault and that is statutorily
required to be contained in any liability insurance policy or
equivalent self-insurance.
(c) Nothing in this subsection shall be construed to regulate
any employee welfare benefit plan that is exempt from state
regulation because of the federal Employee Retirement Income
Security Act of 1974, as amended.
(19) 'Health statement' means any information that is intended
to inform the carrier or agent of the health status of an
enrollee or prospective enrollee in a health benefit plan. '
Health statement' includes the standard health statement
developed by the Health Insurance Reform Advisory Committee.
(20) 'Implementation of chapter 836, Oregon Laws 1989 ' means
that the Health Services Commission has prepared a priority list,
the Legislative Assembly has enacted funding of the list and all
necessary federal approval, including waivers, has been obtained.
(21) 'Individual coverage waiting period' means a period in an
individual health benefit plan during which no premiums may be
collected and health benefit plan coverage issued is not
effective.
(22) 'Initial enrollment period' means a period of at least 30
days following commencement of the first eligibility period for
an individual.
(23) 'Insurance Pool Governing Board' means the Insurance Pool
Governing Board established by ORS 653.725.
(24) 'Late enrollee' means an individual who enrolls in a group
health benefit plan subsequent to the initial enrollment period
during which the individual was eligible for coverage but
declined to enroll. However, an eligible individual shall not be
considered a late enrollee if:
(a) The individual qualifies for a special enrollment period in
accordance with 42 U.S.C. 300gg as amended and in effect on July
1, 1997;
(b) The individual applies for coverage during an open
enrollment period;
(c) A court has ordered that coverage be provided for a spouse
or minor child under a covered employee's health benefit plan and
request for enrollment is made within 30 days after issuance of
the court order;
(d) The individual is employed by an employer who offers
multiple health benefit plans and the individual elects a
different health benefit plan during an open enrollment period;
or
(e) The individual's coverage under Medicaid, Medicare,
CHAMPUS, Indian Health Service or a publicly sponsored or
subsidized health plan, including but not limited to the Oregon
Health Plan, has been involuntarily terminated within 63 days of
applying for coverage in a group health benefit plan.
(25) 'Multiple employer welfare arrangement' means a multiple
employer welfare arrangement as defined in section 3 of the
federal Employee Retirement Income Security Act of 1974, as
amended, 29 U.S.C. 1002, that is subject to ORS 750.301 to
750.341.
(26) 'Oregon Medical Insurance Pool' means the pool created
under ORS 735.610.
(27) 'Preexisting conditions provision' means a health benefit
plan provision applicable to an enrollee or late enrollee that
excludes coverage for services, charges or expenses incurred
during a specified period immediately following enrollment for a
condition for which medical advice, diagnosis, care or treatment
was recommended or received during a specified period immediately
preceding enrollment. For purposes of ORS 743.730 to 743.773:
(a) Pregnancy does not constitute a preexisting condition
except as provided in ORS 743.766;
(b) Genetic information does not constitute a preexisting
condition in the absence of a diagnosis of the condition related
to such information; and
(c) A preexisting conditions provision shall not be applied to
a newborn child or adopted child who obtains coverage in
accordance with ORS 743.707.
(28) 'Premium' includes insurance premiums or other fees
charged for a health benefit plan, including the costs of
benefits paid or reimbursements made to or on behalf of enrollees
covered by the plan.
(29) 'Rating period' means the 12-month calendar period for
which premium rates established by a carrier are in effect, as
determined by the carrier.
(30) 'Small employer' means any person, firm, corporation,
partnership or association actively engaged in business that, on
at least 50 percent of its working days during the preceding
year, employed no more than 25 eligible employees and no fewer
than two eligible employees, the majority of whom are employed
within this state, and in which a bona fide partnership,
independent contractor or employer-employee relationship exists.
'Small employer' includes companies that are eligible to file a
consolidated tax return pursuant to ORS 317.715.
(31) 'Small employer carrier' means any carrier that offers
health benefit plans covering eligible employees of one or more
small employers. A fully insured multiple employer welfare
arrangement otherwise exempt under ORS 750.303 (4) may elect to
be a small employer carrier governed by the provisions of ORS
743.733 to 743.737.
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