71st OREGON LEGISLATIVE ASSEMBLY--2001 Regular Session
HA to HB 3145
LC 2958/HB 3145-5
HOUSE AMENDMENTS TO
HOUSE BILL 3145
By COMMITTEE ON SMART GROWTH AND COMMERCE
April 16
On page 1 of the printed bill, line 2, after 'provisions; '
delete the rest of the line and line 3 and insert 'amending ORS
652.710, 743.417, 743.420, 743.560, 743.737, 743.754 and 743.766;
and declaring an emergency.'.
In line 5, delete 'Section 2' and insert 'Sections 2 and 10'
and delete 'is' and insert 'are'.
Delete lines 6 through 26 and insert:
' { + SECTION 2. + } { + Before a health insurer selling an
individual policy or group health benefit plan, as defined in ORS
743.730, may cancel a policy for nonpayment of premium, the
insurer must mail a separate notice to the policyholder at least
10 days prior to the end of the grace period informing the
policyholder that the premium was not received and that the
policy will be terminated as of the premium due date if the
premium is not received by the end of the applicable grace period
required by ORS 743.417 and 743.560. The notice shall be in
writing and mailed by first class mail to the last-known address
of the policyholder. + }
' { + SECTION 3. + } ORS 743.417 is amended to read:
' 743.417. (1) { - A - } { + An individual + } health
insurance policy shall contain a provision as follows: 'GRACE
PERIOD: A { + minimum + } grace period of { - _ (insert a
number not less than '7' for weekly premium policies, '10' for
monthly premium policies and ' 31' for all other policies)
days - } { + 10 days after the premium due date + } will be
granted for the payment of each premium falling due after the
first premium, during which grace period the policy shall
continue in force. '
' (2) A policy { - which - } { + that + } contains a
cancellation provision may add the following clause at the end of
the provision set forth in subsection (1) of this section:
'subject to the right of the insurer to cancel in accordance with
the cancellation provision hereof. '
' (3) A policy in which the insurer reserves the right to
refuse renewal shall have the following clause at the beginning
of the provision set forth in subsection (1) of this section:
'Unless not less than 30 days prior to the premium due date the
insurer has delivered to the insured or has mailed to the last
address of the insured as shown by the records of the insurer
written notice of its intention not to renew this policy beyond
the period for which the premium has been accepted. The insurer
shall state in the notice the reason for its refusal to renew
this policy.' ' .
In line 29, delete 'time granted the insurer for payment ' and
insert 'grace period'.
In line 31, delete the boldfaced material and restore the
bracketed material.
On page 2, lines 1 through 5, restore the bracketed material.
Delete lines 17 through 19 and insert:
' { + SECTION 5. + } ORS 743.560 is amended to read:
' 743.560. { + (1) A group health insurance policy shall
contain a provision allowing a minimum grace period of 10 days
after the premium due date for payment of premium.
' (2) An insurer of a group health insurance policy providing
coverage for hospital or medical expenses, other than coverage
limited to expenses from accidents or specific diseases, that
seeks to terminate a policy for nonpayment of premium shall
notify the policyholder as described in section 2 of this 2001
Act. + }
' { - (1) - } { + (3) + } An insurer of a group health
insurance policy providing coverage for hospital or medical
expenses, other than coverage limited to expenses from accidents
or specific diseases, shall notify the group policyholder, the
Bureau of Labor and Industries and the Department of Consumer and
Business Services when the policy is terminated and the coverage
is not replaced by the group policyholder. The notice required
under this subsection:
' (a) Must be given on a form prescribed by the department;
' (b) Must explain the rights of the certificate holders
regarding continuation of coverage provided by federal and state
law and portability coverage in accordance with ORS 743.760; and
' (c) Must be given by mail and must be mailed not later than
10 working days after the date on which the group policy
terminates according to the terms of the policy.
' { - (2) - } { + (4) + } A group health insurance policy to
which subsection { - (1) - } { + (3) + } of this section
applies shall contain a provision requiring the insurer to notify
the group policyholder, the Bureau of Labor and Industries and
the Department of Consumer and Business Services when the policy
is terminated and the coverage is not replaced by the group
policyholder. Each certificate issued under the policy shall also
contain a statement of the provision required under this
subsection.
' { - (3) - } { + (5) + } If an insurer fails to give notice
as required by this section, the insurer shall continue the group
health insurance policy of the group policyholder in full force
from the date notice should have been provided until the date
that the notice is received by the policyholder, the Bureau of
Labor and Industries and the Department of Consumer and Business
Services, whichever date is the latest, and shall waive the
premiums owing for the period for which the coverage is continued
under this subsection. The time period within which the
certificate holder may exercise any right to continuation or
portability shall commence on the date that the policyholder, the
Bureau of Labor and Industries and the Department of Consumer and
Business Services receive the notice, whichever date is the
latest.
' { - (4) - } { + (6) + } The insurer shall supply the
employer holding the terminated policy with the necessary
information for the employer to be able to notify properly the
employee of the employee's right to continuation of coverage
under state and federal law and portability coverage in
accordance with ORS 743.760.
' { + SECTION 6. + } ORS 743.737 is amended to read:
' 743.737. Health benefit plans covering small employers shall
be subject to the following provisions:
' (1) A preexisting conditions provision in a small employer
health benefit plan shall apply only to a condition for which
medical advice, diagnosis, care or treatment was recommended or
received during the six-month period immediately preceding the
enrollment date of an enrollee or late enrollee. As used in this
section, the enrollment date of an enrollee shall be the earlier
of the effective date of coverage or the first day of any
required group eligibility waiting period and the enrollment date
of a late enrollee shall be the effective date of coverage.
' (2) A preexisting conditions provision in a small employer
health benefit plan shall terminate its effect as follows:
' (a) For an enrollee, not later than the first of the
following dates:
' (A) Six months following the enrollee's effective date of
coverage; or
' (B) Ten months following the start of any required group
eligibility waiting period.
' (b) For a late enrollee, not later than 12 months following
the late enrollee's effective date of coverage.
' (3) In applying a preexisting conditions provision to an
enrollee or late enrollee, except as provided in this subsection,
all small employer health benefit plans shall reduce the duration
of the provision by an amount equal to the enrollee's or late
enrollee's aggregate periods of creditable coverage if the most
recent period of creditable coverage is ongoing or ended within
63 days of the enrollment date in the new small employer health
benefit plan. The crediting of prior coverage in accordance with
this subsection shall be applied without regard to the specific
benefits covered during the prior period. This subsection does
not preclude, within a small employer health benefit plan,
application of:
' (a) An affiliation period that does not exceed two months for
an enrollee or three months for a late enrollee; or
' (b) An exclusion period for specified covered services, as
established by the Health Insurance Reform Advisory Committee,
applicable to all individuals enrolling for the first time in the
small employer health benefit plan.
' (4) Late enrollees may be excluded from coverage for up to 12
months or may be subjected to a preexisting conditions provision
for up to 12 months. If both an exclusion from coverage period
and a preexisting conditions provision are applicable to a late
enrollee, the combined period shall not exceed 12 months.
' (5) Each small employer health benefit plan shall be
renewable with respect to all eligible enrollees at the option of
the policyholder, small employer or contract holder except:
' (a) For nonpayment of the required premiums by the
policyholder, small employer or contract holder.
' (b) For fraud or misrepresentation of the policyholder, small
employer or contract holder or, with respect to coverage of
individual enrollees, the enrollees or their representatives.
' (c) When the number of enrollees covered under the plan is
less than the number or percentage of enrollees required by
participation requirements under the plan.
' (d) For noncompliance with the small employer carrier's
employer contribution requirements under the health benefit plan.
' (e) When the carrier discontinues offering or renewing, or
offering and renewing, all of its small employer health benefit
plans in this state or in a specified service area within this
state. In order to discontinue plans under this paragraph, the
carrier:
' (A) Must give notice of the decision to the Director of the
Department of Consumer and Business Services and to all
policyholders covered by the plans;
' (B) May not cancel coverage under the plans for 180 days
after the date of the notice required under subparagraph (A) of
this paragraph if coverage is discontinued in the entire state
or, except as provided in subparagraph (C) of this paragraph, in
a specified service area;
' (C) May not cancel coverage under the plans for 90 days after
the date of the notice required under subparagraph (A) of this
paragraph if coverage is discontinued in a specified service area
because of an inability to reach an agreement with the health
care providers or organization of health care providers to
provide services under the plans within the service area; and
' (D) Must discontinue offering or renewing, or offering and
renewing, all health benefit plans issued by the carrier in the
small employer market in this state or in the specified service
area.
' (f) When the carrier discontinues offering and renewing a
small employer health benefit plan in a specified service area
within this state because of an inability to reach an agreement
with the health care providers or organization of health care
providers to provide services under the plan within the service
area. In order to discontinue a plan under this paragraph, the
carrier:
' (A) Must give notice to the director and to all policyholders
covered by the plan;
' (B) May not cancel coverage under the plan for 90 days after
the date of the notice required under subparagraph (A) of this
paragraph; and
' (C) Must offer in writing to each small employer covered by
the plan, all other small employer health benefit plans that the
carrier offers in the specified service area. The carrier shall
issue any such plans pursuant to the provisions of ORS 743.733 to
743.737. The carrier shall offer the plans at least 90 days prior
to discontinuation.
' (g) When the carrier discontinues offering or renewing, or
offering and renewing, a health benefit plan for all small
employers in this state or in a specified service area within
this state, other than a plan discontinued under paragraph (f) of
this subsection. With respect to plans that are being
discontinued, the carrier must:
' (A) Offer in writing to each small employer covered by the
plan, all health benefit plans that the carrier offers in the
specified service area.
' (B) Issue any such plans pursuant to the provisions of ORS
743.733 to 743.737.
' (C) Offer the plans at least { - 180 - } { + 90 + } days
prior to discontinuation.
' (D) Act uniformly without regard to the claims experience of
the affected policyholders or the health status of any current or
prospective enrollee.
' (h) When the director orders the carrier to discontinue
coverage in accordance with procedures specified or approved by
the director upon finding that the continuation of the coverage
would:
' (A) Not be in the best interests of the enrollees; or
' (B) Impair the carrier's ability to meet contractual
obligations.
' (i) When, in the case of a small employer health benefit plan
that delivers covered services through a specified network of
health care providers, there is no longer any enrollee who lives,
resides or works in the service area of the provider network.
' (j) When, in the case of a health benefit plan that is
offered in the small employer market only through one or more
bona fide associations, the membership of an employer in the
association ceases and the termination of coverage is not related
to the health status of any enrollee.
' (k) For misuse of a provider network provision. As used in
this paragraph, 'misuse of a provider network provision' means a
disruptive, unruly or abusive action taken by an enrollee that
threatens the physical health or well-being of health care staff
and seriously impairs the ability of the carrier or its
participating providers to provide services to an enrollee. An
enrollee under this paragraph retains the rights of an enrollee
under ORS 743.804.
' { + (L) A small employer may modify a small employer health
benefit plan at the time of coverage renewal. The modification is
not a discontinuation of the plan under paragraphs (e) and (g) of
this subsection. + }
' (6) Notwithstanding any provision of subsection (5) of this
section to the contrary, any small employer carrier health
benefit plan subject to the provisions of ORS 743.733 to 743.737
may be rescinded by a small employer carrier for fraud, material
misrepresentation or concealment by a small employer and the
coverage of an enrollee may be rescinded for fraud, material
misrepresentation or concealment by the enrollee.
' (7) A small employer carrier may continue to enforce
reasonable employer participation and contribution requirements
on small employers applying for coverage. However, participation
and contribution requirements shall be applied uniformly among
all small employer groups with the same number of eligible
employees applying for coverage or receiving coverage from the
small employer carrier. In determining minimum participation
requirements, a carrier shall count only those employees who are
not covered by an existing group health benefit plan, Medicaid,
Medicare, CHAMPUS, Indian Health Service or a publicly sponsored
or subsidized health plan, including but not limited to the
Oregon Health Plan.
' (8) Premium rates for small employer health benefit plans
subject to ORS 743.733 to 743.737 shall be subject to the
following provisions:
' (a) Each small employer carrier issuing health benefit plans
to small employers must file its geographic average rate for a
rating period with the director on or before March 15 of each
year.
' (b)(A) The premium rates charged during a rating period for
health benefit plans issued to small employers shall not vary
from the geographic average rate by more than the following:
' (i) 50 percent on October 1, 1996; and
' (ii) 33 percent on October 1, 1999.
' (B) The variations in premium rates described in subparagraph
(A) of this paragraph shall be based solely on differences in the
ages of participating employees, except that the premium rate may
be adjusted to reflect the provision of benefits not required to
be covered by the basic health benefit plan and differences in
family composition. In addition:
' (i) A small employer carrier shall apply uniformly the
carrier's schedule of age adjustments for small employer groups
as approved by the director; and
' (ii) Except as otherwise provided in this section, the
premium rate established for a health benefit plan by a small
employer carrier shall apply uniformly to all employees of the
small employer enrolled in that plan.
' (c) The variation in premium rates between different small
employer health benefit plans offered by a small employer carrier
must be based solely on objective differences in plan design or
coverage and must not include differences based on the risk
characteristics of groups assumed to select a particular health
benefit plan.
' (d) A small employer carrier may not increase the rates of a
health benefit plan issued to a small employer more than once in
a 12-month period. Annual rate increases shall be effective on
the plan anniversary date of the health benefit plan issued to a
small employer. The percentage increase in the premium rate
charged to a small employer for a new rating period may not
exceed the sum of the following:
' (A) The percentage change in the geographic average rate
measured from the first day of the prior rating period to the
first day of the new period; and
' (B) Any adjustment attributable to changes in age, except an
additional adjustment may be made to reflect the provision of
benefits not required to be covered by the basic health benefit
plan and differences in family composition.
' (e) Premium rates for health benefit plans shall comply with
the requirements of this section.
' (9) In connection with the offering for sale of any health
benefit plan to a small employer, each small employer carrier
shall make a reasonable disclosure as part of its solicitation
and sales materials of:
' (a) The full array of health benefit plans that are offered
to small employers by the carrier;
' (b) The authority of the carrier to adjust rates, and the
extent to which the carrier will consider age, family composition
and geographic factors in establishing and adjusting rates;
' (c) Provisions relating to renewability of policies and
contracts; and
' (d) Provisions affecting any preexisting conditions
provision.
' (10)(a) Each small employer carrier shall maintain at its
principal place of business a complete and detailed description
of its rating practices and renewal underwriting practices,
including information and documentation that demonstrate that its
rating methods and practices are based upon commonly accepted
actuarial practices and are in accordance with sound actuarial
principles.
' (b) Each small employer carrier shall file with the director
annually on or before March 15 an actuarial certification that
the carrier is in compliance with ORS 743.733 to 743.737 and that
the rating methods of the small employer carrier are actuarially
sound. Each such certification shall be in a uniform form and
manner and shall contain such information as specified by the
director. A copy of such certification shall be retained by the
small employer carrier at its principal place of business.
' (c) A small employer carrier shall make the information and
documentation described in paragraph (a) of this subsection
available to the director upon request. Except in cases of
violations of ORS 743.733 to 743.737, the information shall be
considered proprietary and trade secret information and shall not
be subject to disclosure by the director to persons outside the
Department of Consumer and Business Services except as agreed to
by the small employer carrier or as ordered by a court of
competent jurisdiction.
' (11) A small employer carrier shall not provide any financial
or other incentive to any agent that would encourage such agent
to market and sell health benefit plans of the carrier to small
employer groups based on a small employer group's anticipated
claims experience.
' (12) For purposes of this section, the date a small employer
health benefit plan is continued shall be the anniversary date of
the first issuance of the health benefit plan.
' (13) A small employer carrier must include a provision that
offers coverage to all eligible employees and to all dependents
to the extent the employer chooses to offer coverage to
dependents.
' (14) All small employer health benefit plans shall contain
special enrollment periods during which eligible employees and
dependents may enroll for coverage, as provided in 42 U.S.C.
300gg as amended and in effect on July 1, 1997.
' (15) All small employer health benefit plans must include the
benefit provisions of the federal Women's Health and Cancer
Rights Act of 1998, P.L. 105-277.
' { + SECTION 7. + } ORS 743.754 is amended to read:
' 743.754. The following requirements apply to all group health
benefit plans covering two or more certificate holders:
' (1) A preexisting conditions provision in a group health
benefit plan shall apply only to a condition for which medical
advice, diagnosis, care or treatment was recommended or received
during the six-month period immediately preceding the enrollment
date of an enrollee or late enrollee. As used in this section,
the enrollment date of an enrollee shall be the earlier of the
effective date of coverage or the first day of any required group
eligibility waiting period and the enrollment date of a late
enrollee shall be the effective date of coverage.
' (2) A preexisting conditions provision in a group health
benefit plan shall terminate its effect as follows:
' (a) For an enrollee not later than the first of the following
dates:
' (A) Six months following the enrollee's effective date of
coverage; or
' (B) Twelve months following the start of any required group
eligibility waiting period.
' (b) For a late enrollee, not later than 12 months following
the late enrollee's effective date of coverage.
' (3) In applying a preexisting conditions provision to an
enrollee or late enrollee, except as provided in this subsection,
all group benefit plans shall reduce the duration of the
provision by an amount equal to the enrollee's or late enrollee's
aggregate periods of creditable coverage if the most recent
period of creditable coverage is ongoing or ended within 63 days
of the enrollment date in the new group health benefit plan. The
crediting of prior coverage in accordance with this subsection
shall be applied without regard to the specific benefits covered
during the prior period. This subsection does not preclude,
within a group health benefit plan, application of:
' (a) An affiliation period that does not exceed two months for
an enrollee or three months for a late enrollee; or
' (b) An exclusion period for specified covered services
applicable to all individuals enrolling for the first time in the
group health benefit plan.
' (4) Late enrollees may be excluded from coverage for up to 12
months or may be subjected to a preexisting conditions provision
for up to 12 months. If both an exclusion from coverage period
and a preexisting conditions provision are applicable to a late
enrollee, the combined period shall not exceed 12 months.
' (5) All group health benefit plans shall contain special
enrollment periods during which eligible employees and dependents
may enroll for coverage, as provided in 42 U.S.C. 300gg as
amended and in effect on July 1, 1997.
' (6) Each group health benefit plan shall be renewable with
respect to all eligible enrollees at the option of the
policyholder except:
' (a) For nonpayment of the required premiums by the
policyholder.
' (b) For fraud or misrepresentation of the policyholder or,
with respect to coverage of individual enrollees, the enrollees
or their representatives.
' (c) When the number of enrollees covered under the plan is
less than the number or percentage of enrollees required by
participation requirements under the plan.
' (d) For noncompliance with the carrier's employer
contribution requirements under the health benefit plan.
' (e) When the carrier discontinues offering or renewing, or
offering and renewing, all of its group health benefit plans in
this state or in a specified service area within this state. In
order to discontinue plans under this paragraph, the carrier:
' (A) Must give notice of the decision to the Director of the
Department of Consumer and Business Services and to all
policyholders covered by the plans;
' (B) May not cancel coverage under the plans for 180 days
after the date of the notice required under subparagraph (A) of
this paragraph if coverage is discontinued in the entire state
or, except as provided in subparagraph (C) of this paragraph, in
a specified service area;
' (C) May not cancel coverage under the plans for 90 days after
the date of the notice required under subparagraph (A) of this
paragraph if coverage is discontinued in a specified service area
because of an inability to reach an agreement with the health
care providers or organization of health care providers to
provide services under the plans within the service area; and
' (D) Must discontinue offering or renewing, or offering and
renewing, all health benefit plans issued by the carrier in the
group market in this state or in the specified service area.
' (f) When the carrier discontinues offering and renewing a
group health benefit plan in a specified service area within this
state because of an inability to reach an agreement with the
health care providers or organization of health care providers to
provide services under the plan within the service area. In order
to discontinue a plan under this paragraph, the carrier:
' (A) Must give notice of the decision to the director and to
all policyholders covered by the plan;
' (B) May not cancel coverage under the plan for 90 days after
the date of the notice required under subparagraph (A) of this
paragraph; and
' (C) Must offer in writing to each policyholder covered by the
plan, all other group health benefit plans that the carrier
offers in the specified service area. The carrier shall offer the
plans at least 90 days prior to discontinuation.
' (g) When the carrier discontinues offering or renewing, or
offering and renewing, a health benefit plan for all groups in
this state or in a specified service area within this state,
other than a plan discontinued under paragraph (f) of this
subsection. With respect to plans that are being discontinued,
the carrier must:
' (A) Offer in writing to each policyholder covered by the
plan, one or more health benefit plans that the carrier offers in
the specified service area.
' (B) Offer the plans at least { - 180 - } { + 90 + } days
prior to discontinuation.
' (C) Act uniformly without regard to the claims experience of
the affected policyholders or the health status of any current or
prospective enrollee.
' (h) When the director orders the carrier to discontinue
coverage in accordance with procedures specified or approved by
the director upon finding that the continuation of the coverage
would:
' (A) Not be in the best interests of the enrollees; or
' (B) Impair the carrier's ability to meet contractual
obligations.
' (i) When, in the case of a group health benefit plan that
delivers covered services through a specified network of health
care providers, there is no longer any enrollee who lives,
resides or works in the service area of the provider network.
' (j) When, in the case of a health benefit plan that is
offered in the group market only through one or more bona fide
associations, the membership of an employer in the association
ceases and the termination of coverage is not related to the
health status of any enrollee.
' (k) For misuse of a provider network provision. As used in
this paragraph, 'misuse of a provider network provision' means a
disruptive, unruly or abusive action taken by an enrollee that
threatens the physical health or well-being of health care staff
and seriously impairs the ability of the carrier or its
participating providers to provide services to an enrollee. An
enrollee under this paragraph retains the rights of an enrollee
under ORS 743.804.
' { + (L) A carrier may modify a group health benefit plan at
the time of coverage renewal. The modification is not a
discontinuation of the plan under paragraphs (e) and (g) of this
subsection. + }
' (7) Notwithstanding any provision of subsection (6) of this
section to the contrary, a group health benefit plan may be
rescinded by a carrier for fraud, material misrepresentation or
concealment by a policyholder and the coverage of an enrollee may
be rescinded for fraud, material misrepresentation or concealment
by the enrollee.
' (8) A carrier that continues to offer coverage in the group
market in this state is not required to offer coverage in all of
the carrier's group health benefit plans. If a carrier, however,
elects to continue a plan that is closed to new policyholders
instead of offering alternative coverage in its other group
health benefit plans, the coverage for all existing policyholders
in the closed plan is renewable in accordance with subsection (6)
of this section.
' (9) All group health benefit plans must include the benefit
provisions of the federal Women's Health and Cancer Rights Act of
1998, P.L. 105-277.
' (10) This section applies only to group health benefit plans
that are not small employer health benefit plans.
' { + SECTION 8. + } ORS 743.766 is amended to read:
' 743.766. (1) All carriers who offer individual health benefit
plans and evaluate the health status of individuals for purposes
of eligibility shall use the standard health statement
established by the Health Insurance Reform Advisory Committee and
may not use any other method to determine the health status of an
individual. Nothing in this subsection shall prevent a carrier
from using health information after enrollment for the purpose of
providing services or arranging for the provision of services
under a health benefit plan.
' (2)(a) If an individual is accepted for coverage under an
individual health benefit plan, the carrier shall not impose
exclusions or limitations on coverage greater than:
' (A) A preexisting conditions provision that complies with the
following requirements:
' (i) The provision shall apply only to a condition for which
medical advice, diagnosis, care or treatment was recommended or
received during the six-month period immediately preceding the
individual's effective date of coverage; and
' (ii) The provision shall terminate its effect no later than
six months following the individual's effective date of coverage;
' (B) An individual coverage waiting period of 90 days; or
' (C) An exclusion period for specified covered services
applicable to all individuals enrolling for the first time in the
individual health benefit plan.
' (b) Pregnancy may constitute a preexisting condition for
purposes of this section.
' (3) If the carrier elects to restrict coverage through the
application of a preexisting conditions provision or an
individual coverage waiting period provision, the carrier shall
reduce the duration of the provision by an amount equal to the
individual's aggregate periods of creditable coverage if the most
recent period of creditable coverage is ongoing or ended within
63 days of the effective date of coverage in the new individual
health benefit plan. The crediting of prior coverage in
accordance with this subsection shall be applied without regard
to the specific benefits covered during the prior period.
' (4) If an eligible prospective enrollee is rejected for
coverage under an individual health benefit plan, the prospective
enrollee shall be eligible to apply for coverage under the Oregon
Medical Insurance Pool.
' (5) If a carrier accepts an individual for coverage under an
individual health benefit plan, the carrier shall renew the
policy except:
' (a) For nonpayment of the required premiums by the
policyholder.
' (b) For fraud or misrepresentation by the policyholder.
' (c) When the carrier discontinues offering or renewing, or
offering and renewing, all of its individual health benefit plans
in this state or in a specified service area within this state.
In order to discontinue the plans under this paragraph, the
carrier:
' (A) Must give notice of the decision to the Director of the
Department of Consumer and Business Services and to all
policyholders covered by the plans;
' (B) May not cancel coverage under the plans for 180 days
after the date of the notice required under subparagraph (A) of
this paragraph if coverage is discontinued in the entire state
or, except as provided in subparagraph (C) of this paragraph, in
a specified service area;
' (C) May not cancel coverage under the plans for 90 days after
the date of the notice required under subparagraph (A) of this
paragraph if coverage is discontinued in a specified service area
because of an inability to reach an agreement with the health
care providers or organization of health care providers to
provide services under the plans within the service area; and
' (D) Must discontinue offering or renewing, or offering and
renewing, all health benefit plans issued by the carrier in the
individual market in this state or in the specified service area.
' (d) When the carrier discontinues offering and renewing an
individual health benefit plan in a specified service area within
this state because of an inability to reach an agreement with the
health care providers or organization of health care providers to
provide services under the plan within the service area. In order
to discontinue a plan under this paragraph, the carrier:
' (A) Must give notice of the decision to the director and to
all policyholders covered by the plan;
' (B) May not cancel coverage under the plan for 90 days after
the date of the notice required under subparagraph (A) of this
paragraph; and
' (C) Must offer in writing to each policyholder covered by the
plan, all other individual health benefit plans that the carrier
offers in the specified service area. The carrier shall offer the
plans at least 90 days prior to discontinuation.
' (e) When the carrier discontinues offering or renewing, or
offering and renewing, an individual health benefit plan for all
individuals in this state or in a specified service area within
this state, other than a plan discontinued under paragraph (d) of
this subsection. With respect to plans that are being
discontinued, the carrier must:
' (A) Offer in writing to each policyholder covered by the
plan, one or more individual health benefit plans that the
carrier offers in the specified service area.
' (B) Offer the plans at least { - 180 - } { + 90 + } days
prior to discontinuation.
' (C) Act uniformly without regard to the claims experience of
the affected policyholders or the health status of any current or
prospective enrollee.
' (f) When the director orders the carrier to discontinue
coverage in accordance with procedures specified or approved by
the director upon finding that the continuation of the coverage
would:
' (A) Not be in the best interests of the enrollee; or
' (B) Impair the carrier's ability to meet its contractual
obligations.
' (g) When, in the case of an individual health benefit plan
that delivers covered services through a specified network of
health care providers, the enrollee no longer lives, resides or
works in the service area of the provider network and the
termination of coverage is not related to the health status of
any enrollee.
' (h) When, in the case of a health benefit plan that is
offered in the individual market only through one or more bona
fide associations, the membership of an individual in the
association ceases and the termination of coverage is not related
to the health status of any enrollee.
' (i) For misuse of a provider network provision. As used in
this paragraph, 'misuse of a provider network provision' means a
disruptive, unruly or abusive action taken by an enrollee that
threatens the physical health or well-being of health care staff
and seriously impairs the ability of the carrier or its
participating providers to provide service to an enrollee. An
enrollee under this paragraph retains the rights of an enrollee
under ORS 743.804.
' { + (j) A carrier may modify an individual health benefit
plan at the time of coverage renewal. The modification is not a
discontinuation of the plan under paragraphs (c) and (e) of this
subsection. + }
' (6) Notwithstanding any other provision of this section, a
carrier may rescind an individual health benefit plan for fraud,
material misrepresentation or concealment by an enrollee.
' (7) A carrier that withdraws from the market for individual
health benefit plans must continue to renew its portability
health benefit plans that have been approved pursuant to ORS
743.761.
' (8) A carrier that continues to offer coverage in the
individual market in this state is not required to offer coverage
in all of the carrier's individual health benefit plans. However,
if a carrier elects to continue a plan that is closed to new
individual policyholders instead of offering alternative coverage
in its other individual health benefit plans, the coverage for
all existing policyholders in the closed plan is renewable in
accordance with subsection (5) of this section.
' (9) All individual health benefit plans must include the
benefit provisions of the federal Women's Health and Cancer
Rights Act of 1998, P.L. 105-277.
' { + SECTION 9. + } ORS 652.710 is amended to read:
' 652.710. (1) All moneys collected by an employer from
employees or retained from their wages for the purpose of
providing for or furnishing to such employees medical and
surgical attention, hospital care, X-rays, ambulance, nursing or
any related service or care contingent upon sickness or injury
pursuant to a contract are trust funds and shall be placed and
kept in separate accounts by the employer and shall promptly be
paid over to the contractor. Such funds shall in no event become
a part of the assets of the employer.
' (2) If the employer fails to place and keep such funds in
separate accounts and pay them over to the contractor or if the
funds become commingled with the funds of the employer and the
employer becomes bankrupt, insolvent or goes through voluntary or
involuntary liquidation, or if a receiver is appointed to operate
or liquidate the affairs of the employer, the funds not paid to
the contractor shall be entitled to the same preference as given
to claims of the State Accident Insurance Fund Corporation, as
provided in ORS 656.562.
' (3) On and after July 1, 1992, when an employer that is a
group health insurance policyholder subject to the provisions of
ORS 743.560 receives notice that the group health insurance
policy is terminated by the insurer and the employer does not
replace coverage with any other group health insurance policy,
the employer shall notify all employees who were covered under
the terminated group policy. The employer's notification to the
employees shall:
' (a) Explain the employee's rights regarding continuation or
conversion of coverage under state and federal law; and
' (b) Be delivered to each employee in person or to the
employee's home address as recorded in the employer's records not
later than 10 working days after the receipt of notice from the
insurer pursuant to ORS 743.560 { - (1) to - } (3) { + to
(5) + }.
' (4) In addition to any other penalty provided by law, the
Commissioner of the Bureau of Labor and Industries may assess a
civil penalty not to exceed $1,000 for each violation of
subsection (1) or (3) of this section.
' (5) Civil penalties under this section shall be imposed as
provided in ORS 183.090.
' (6) All sums collected as penalties pursuant to this section
shall be first applied toward reimbursement of the costs incurred
in determining the violations, conducting hearings under this
section and assessing and collecting such penalties. The
remainder, if any, of the sums collected as penalties pursuant to
this section shall be paid over by the commissioner to the
Division of State Lands for the benefit of the Common School Fund
of this state. The division shall issue a receipt for the money
to the commissioner.
' (7) The Commissioner of the Bureau of Labor and Industries
may adopt rules reasonably necessary for the administration of
this section.
' { + SECTION 10. + } { + The Director of the Department of
Consumer and Business Services shall adopt rules necessary for
the implementation and administration of section 2 of this 2001
Act and the amendments to ORS 743.417, 743.420, 743.560, 743.737,
743.754 and 743.766 by sections 3 to 8 of this 2001 Act. + }
' { + SECTION 11. + } { + Section 2 of this 2001 Act and the
amendments to ORS 743.417, 743.420, 743.560, 743.737, 743.754 and
743.766 by sections 3 to 8 of this 2001 Act apply to individual
or group health insurance policies issued or renewed on or after
the operative date of this 2001 Act. + }
' { + SECTION 12. + } { + Section 2 of this 2001 Act and the
amendments to ORS 652.710, 743.417, 743.420, 743.560, 743.737,
743.754 and 743.766 by sections 3 to 9 of this 2001 Act become
operative January 1, 2002. + }
' { + SECTION 13. + } { + This 2001 Act being necessary for
the immediate preservation of the public peace, health and
safety, an emergency is declared to exist, and this 2001 Act
takes effect July 1, 2001. + } ' .
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