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 1436
Senate Bill 8
Sponsored by Senator DERFLER; Senators CLARNO, FERRIOLI, FISHER,
HARPER, HARTUNG, MESSERLE, MINNIS, NELSON, STARR
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 as
introduced.
Modifies requirements for benefit levels and forms of basic
health benefit plans for small employers.
A BILL FOR AN ACT
Relating to health benefit coverage; creating new provisions; and
amending ORS 743.734, 743.736 and 743.745.
Be It Enacted by the People of the State of Oregon:
SECTION 1. ORS 743.736 is amended to read:
743.736. (1) In order to improve the availability and
affordability of health benefit coverage for small employers, the
Health Insurance Reform Advisory Committee { - created under
ORS 743.745 - } shall { + , pursuant to ORS 743.745, + } submit
to the Director of the Department of Consumer and Business
Services { - two - } { + a + } basic health benefit
{ - plans pursuant to ORS 743.745 - } { + plan offering the
benefits described in subsection (2)(b) of this section + }.
{ - One plan shall be in the form of insurance and the second
plan shall be consistent with the requirements of the federal
Health Maintenance Organization Act, 42 U.S.C. 300e et seq. - }
(2) { - (a) - } The director shall approve the basic health
benefit
{ - plans following - } { + plan after + } a determination
that the { - plans provide for maximum - } { + plan provides
the following:
(a) Reasonable + } accessibility { - and affordability of
needed - } { + to essential + } health care services { + at
affordable rates; + } { - and following a determination that
the basic health benefit plans substantially meet the social
values that underlie the ranking of benefits by the Health
Services Commission and that the basic health benefit plans are
substantially similar to the Medicaid reform program under
chapter 836, Oregon Laws 1989, funded by the Legislative
Assembly. - }
{ + (b) Coverage of the following standard benefits:
(A) Inpatient hospitalization services;
(B) Outpatient hospital services and surgery;
(C) Outpatient laboratory and diagnostic services; and
(D) Physician services; and
(c) Annual maximum out-of-pocket expenses for deductibles,
coinsurance or copayment not to exceed $___ for employee-only
coverage.
(3) Not later than January 1, 2006, the director shall adjust
the maximum dollar amount described in subsection (2)(c) of this
section by the compounded annual change in the Consumer Price
Index, as defined in ORS 327.006, between 2001 and 2005. The
director shall subsequently adjust the amount every five years
after January 1, 2006.
(4) The annual cost of premiums for the basic health benefit
plan described in subsection (1) of this section may be no
greater than ___ percent of the state's average annual wage as
determined by the Employment Department for the calendar year
immediately preceding the calendar year during which the premium
amounts are calculated. + }
{ - (b) The basic health benefit plans shall include benefits
mandated under ORS 743.556 until mental health, alcohol and
chemical dependency services are fully integrated into the Health
Services Commission's priority list, and as funded by the
Legislative Assembly, and chapter 836, Oregon Laws 1989, is
implemented. - }
{ - (c) The commission shall aid the director by reviewing
the basic health benefit plans and commenting on the extent to
which the plans meet these criteria. - }
{ - (3) - } { + (5) + } After the director's approval of
the basic health benefit { - plans - } { + plan + } submitted
by the committee pursuant to subsection (1) of this section, each
small employer carrier shall submit to the director the policy
{ - form or - } forms containing its basic health benefit plan.
Each policy form must be submitted as prescribed by the director
and is subject to review and approval pursuant to ORS 742.003.
{ - (4)(a) - } { + (6)(a) + } As a condition of transacting
business in the small employer health insurance market in this
state, every small employer carrier shall offer small employers
an approved basic health benefit plan and any other plans that
have been submitted by the small employer carrier for use in the
small employer market and approved by the director.
(b) Nothing in this subsection { - shall require - }
{ + requires + } a small employer carrier to resubmit small
employer health benefit plans that were approved by the director
prior to { - October 1, 1996, - } { + January 1, 2002, + }
nor shall small employer carriers be required to reinitiate new
plan selection procedures for currently enrolled small employers
prior to the small employer's next health benefit plan coverage
anniversary date.
(c) A carrier that offers a health benefit plan in the small
employer market only through one or more bona fide associations
is not required to offer that health benefit plan to small
employers that are not members of the bona fide association.
{ - (5) - } { + (7) + } A small employer carrier shall
issue to a small employer any small employer health benefit plan
offered by the carrier if the small employer applies for the plan
and agrees to make the required premium payments and to satisfy
the other provisions of the health benefit plan.
{ - (6) - } { + (8) + } A multiple employer welfare
arrangement, professional or trade association or other similar
arrangement established or maintained to provide benefits to a
particular trade, business, profession or industry or their
subsidiaries shall not issue coverage to a group or individual
that is not in the same trade, business, profession or industry
as that covered by the arrangement. The arrangement shall accept
all groups and individuals in the same trade, business,
profession or industry or their subsidiaries that apply for
coverage under the arrangement and that meet the requirements for
membership in the arrangement. For purposes of this subsection,
the requirements for membership in an arrangement shall not
include any requirements that relate to the actual or expected
health status of the prospective enrollee.
{ - (7) - } { + (9) + } A small employer carrier shall,
pursuant to subsections { - (4) and (5) - } { + (6) and
(7) + } of this section, offer coverage to or accept applications
from a group covered under an existing small employer health
benefit plan whether or not a prospective enrollee is excluded
from coverage under the existing plan because of late enrollment.
When a small employer carrier accepts an application for such a
group, the carrier may continue to exclude the prospective
enrollee excluded from coverage by the replaced plan until the
prospective enrollee would have become eligible for coverage
under that replaced plan.
{ - (8) - } { + (10) + } { - No - } { + A + } small
employer carrier { - shall be - } { + may not be + } required
to offer coverage or accept applications pursuant to subsections
{ - (4) and (5) - } { + (6) and (7) + } of this section if the
director finds that acceptance of an application or applications
would endanger the carrier's ability to fulfill its contractual
obligations or result in financial impairment of the carrier.
{ - (9) - } { + (11) + } Every small employer carrier shall
market fairly all small employer health benefit plans offered by
the carrier to small employers in the geographical areas in which
the carrier makes coverage available or provides benefits.
{ - (10)(a) - } { + (12)(a) + } { - No - } { + A + }
small employer carrier { - shall be - } { + may not be + }
required to offer coverage or accept applications pursuant to
subsections { - (4) and (5) - } { + (6) and (7) + } of this
section in the case of any of the following:
(A) To a small employer if the small employer is not physically
located in the carrier's approved service area;
(B) To an employee if the employee does not work or reside
within the carrier's approved service areas; or
(C) Within an area where the carrier reasonably anticipates,
and demonstrates to the satisfaction of the director, that it
will not have the capacity in its network of providers to deliver
services adequately to the enrollees of those groups because of
its obligations to existing group contract holders and enrollees.
(b) A carrier that does not offer coverage pursuant to
paragraph (a)(C) of this subsection shall not offer coverage in
the applicable service area to new employer groups other than
small employers until the carrier resumes enrolling groups of new
small employers in the applicable area.
{ - (11) - } { + (13) + } For purposes of ORS 743.733 to
743.737, except as provided in this subsection, carriers that are
affiliated carriers or that are eligible to file a consolidated
tax return pursuant to ORS 317.715 shall be treated as one
carrier and any restrictions or limitations imposed by ORS
743.733 to 743.737 apply as if all health benefit plans delivered
or issued for delivery to small employers in this state by the
affiliated carriers were issued by one carrier. However, any
insurance company or health maintenance organization that is an
affiliate of a health care service contractor located in this
state, or any health maintenance organization located in this
state that is an affiliate of an insurance company or health care
service contractor, may treat the health maintenance organization
as a separate carrier and each health maintenance organization
that operates only one health maintenance organization in a
service area in this state may be considered a separate carrier.
{ - (12) - } { + (14) + } A small employer carrier that,
after September 29, 1991, elects to discontinue offering all of
its small employer health benefit plans under ORS 743.737 (5)(e),
elects to discontinue renewing all such plans or elects to
discontinue offering and renewing all such plans is prohibited
from offering health benefit plans in the small employer market
in this state for a period of five years from one of the
following dates:
(a) The date of notice to the director pursuant to ORS 743.737
(5)(e); or
(b) If notice is not provided under paragraph (a) of this
subsection, from the date on which the director provides notice
to the carrier that the director has determined that the carrier
has effectively discontinued offering small employer health
benefit plans in this state.
{ + (15) A small employer carrier may offer one or more
supplemental coverages in addition to those described in
subsection (2) of this section if:
(a) The policy forms for such coverages are submitted and
subject to review and approval pursuant to ORS 742.003;
(b) The coverages are priced separately from the benefits
described in subsection (2) of this section; and
(c) The coverages do not duplicate benefits provided for in
subsection (2) of this section. + }
SECTION 2. ORS 743.745 is amended to read:
743.745. The Director of the Department of Consumer and
Business Services shall appoint a Health Insurance Reform
Advisory Committee. This committee shall consist of at least one
insurance agent, one representative of a health maintenance
organization, one representative of a health care service
contractor, one representative of a domestic insurer, one
representative of a labor organization and one representative of
consumer interests and shall have representation from the broad
range of interests involved in the small employer and individual
market and shall include members with the technical expertise
necessary to carry out the following duties:
(1)(a) Subject to approval by the director, the committee shall
recommend the { - form and level - } { + forms + } of
coverages under the basic health benefit { - plans - }
{ + plan + } pursuant to ORS 743.736 to be made available by
small employer carriers and the portability health benefit plans
to be made available pursuant to ORS 743.760 or 743.761. The
committee shall take into consideration { - the levels of
health benefit plans provided in Oregon and - } the appropriate
medical and economic factors and shall establish
{ - benefit levels, - } cost sharing, exclusions and
limitations. The health benefit plans described in this section
may include cost containment features including, but not limited
to:
(A) Preferred provider { + network + } provisions;
(B) Utilization review of health care services including
{ - review of - } { + prior approval of and + } { +
determination of + } medical necessity of hospital and physician
services;
(C) Case management benefit alternatives;
(D) Other managed care provisions;
(E) Selective contracting with hospitals, physicians and other
health care providers; and
(F) Reasonable benefit differentials applicable to
participating and nonparticipating providers.
(b) The committee shall submit the basic and portability health
benefit plans and other recommendations to the director within
the time period established by the director. The health benefit
plans and other recommendations shall be deemed approved unless
expressly disapproved by the director within 30 days after the
date the director receives the plans.
(2) In order to ensure the broadest availability of small
employer and individual health benefit plans, the committee shall
recommend for approval by the director market conduct and other
requirements for carriers and agents, including requirements
developed as a result of a request by the director, relating to
the following:
(a) Registration by each carrier with the Department of
Consumer and Business Services of its intention to be a small
employer carrier under ORS 743.733 to 743.737 or a carrier
offering individual health benefit plans, or both.
(b) Publication by the Department of Consumer and Business
Services or the committee of a list of all small employer
carriers and carriers offering individual health benefit plans,
including a potential requirement applicable to agents and
carriers that no health benefit plan be sold to a small employer
or individual by a carrier not so identified as a small employer
carrier or carrier offering individual health benefit plans.
(c) To the extent deemed necessary by the committee to ensure
the fair distribution of high-risk individuals and groups among
carriers, periodic reports by carriers and agents concerning
small employer, portability and individual health benefit plans
issued, provided that reporting requirements shall be limited to
information concerning case characteristics and numbers of health
benefit plans in various categories marketed or issued, or both,
to small employers and individuals.
(d) Methods concerning periodic demonstration by small employer
carriers, carriers offering individual health benefit plans and
agents that the small employer and individual carriers are
marketing or issuing, or both, health benefit plans to small
employers or individuals in fulfillment of the purposes of ORS
743.730 to 743.773.
(3) Subject to the approval of the Director of the Department
of Consumer and Business Services, the committee shall develop a
standard health statement to be used for all late enrollees and
by all carriers offering individual policies of health insurance.
(4) Subject to the approval of the director, the committee
shall develop a list of the specified services for small employer
and portability plans for which carriers may impose an exclusion
period, the duration of the allowable exclusion period for each
specified service and the manner in which credit will be given
for exclusion periods imposed pursuant to prior health insurance
coverage.
SECTION 3. ORS 743.734 is amended to read:
743.734. (1) Every group health benefit plan shall be subject
to the provisions of ORS 743.733 to 743.737, if the plan provides
health benefits covering one or more employees of a small
employer and if any one of the following conditions is met:
(a) Any portion of the premium or benefits is paid by a small
employer or any eligible employee is reimbursed, whether through
wage adjustments or otherwise, by a small employer for any
portion of the health benefit plan premium; or
(b) The health benefit plan is treated by the employer or any
of the eligible employees as part of a plan or program for the
purposes of section 106, section 125 or section 162 of the
Internal Revenue Code of 1986, as amended.
(2) Except as provided in ORS 743.733 to 743.737, no law
requiring the coverage or the offer of coverage of a health care
service or benefit applies to the basic health benefit
{ - plans - } { + plan + } offered or delivered to a small
employer.
(3) Except as otherwise provided by law or ORS 743.733 to
743.737, no health benefit plan offered to a small employer
shall:
(a) Inhibit a small employer carrier from contracting with
providers or groups of providers with respect to health care
services or benefits; or
(b) Impose any restriction on the ability of a small employer
carrier to negotiate with providers regarding the level or method
of reimbursing care or services provided under health benefit
plans.
(4) Except to determine the application of a preexisting
conditions provision for a late enrollee, a small employer
carrier shall not use health statements when offering small
employer health benefit plans and shall not use any other method
to determine the actual or expected health status of eligible
enrollees. Nothing in this subsection shall prevent a carrier
from using health statements or other information after
enrollment for the purpose of providing services or arranging for
the provision of services under a health benefit plan.
(5) Except in the case of a late enrollee and as otherwise
provided in this section, a small employer carrier shall not
impose different terms or conditions on the coverage, premiums or
contributions of any eligible employee in a small employer group
that are based on the actual or expected health status of any
eligible employee.
(6) A small employer carrier may provide different health
benefit plans to different categories of employees of a small
employer when the employer has chosen to establish different
categories of employees in a manner that does not relate to the
actual or expected health status of such employees or their
dependents. Except as provided in ORS 743.736 { - (10) - }
{ + (12) + }:
(a) When a small employer carrier offers coverage to a small
employer, the small employer carrier shall offer coverage to all
eligible employees of the small employer, without regard to the
actual or expected health status of any eligible employee.
(b) If the small employer elects to offer coverage to
dependents of eligible employees, the small employer carrier
shall offer coverage to all dependents of eligible employees,
without regard to the actual or expected health status of any
eligible dependent.
SECTION 4. { + The amendments to ORS 743.734, 743.736 and
743.745 by sections 1, 2 and 3 of this 2001 Act apply to basic
health benefit plans issued or renewed on or after the effective
date of this 2001 Act. + }
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