72nd OREGON LEGISLATIVE ASSEMBLY--2003 Regular Session
Enrolled
House Bill 3654
Sponsored by Representative MINNIS, Senators BROWN, BURDICK,
CARTER, CORCORAN, COURTNEY, DECKERT, DEVLIN, DUKES, GORDLY,
METSGER, MINNIS, MORRISETTE, RINGO, SCHRADER, SHIELDS, WALKER;
Representatives ANDERSON, AVAKIAN, BACKLUND, BARKER, BARNHART,
BATES, BERGER, BEYER, BROWN, BUTLER, CLOSE, DALTO, DINGFELDER,
DOYLE, FARR, FLORES, GALLEGOS, GARRARD, GILMAN, GREENLICK,
HASS, HUNT, JENSON, KAFOURY, KITTS, KNOPP, KRIEGER, KROPF,
KRUSE, MABREY, MACPHERSON, MARCH, MERKLEY, MILLER, MONNES
ANDERSON, MORGAN, NELSON, NOLAN, PATRIDGE, PROZANSKI,
ROSENBAUM, SCHAUFLER, SCOTT, SHETTERLY, G SMITH, P SMITH, T
SMITH, TOMEI, WILLIAMS, ZAUNER, Senator WESTLUND
CHAPTER ................
AN ACT
Relating to health insurance coverage for mastectomy-related
services; creating new provisions; and amending ORS 743.737,
743.754, 743.766, 750.055 and 750.333.
Be It Enacted by the People of the State of Oregon:
SECTION 1. { + Section 2 of this 2003 Act is added to and made
a part of ORS chapter 743. + }
SECTION 2. { + (1) All insurers offering a health benefit plan
as defined in ORS 743.730 shall provide payment, coverage or
reimbursement for the following mastectomy-related services as
determined by the attending physician and enrollee to be part of
the enrollee's course or plan of treatment:
(a) All stages of reconstruction of the breast on which a
mastectomy was performed, including but not limited to nipple
reconstruction, skin grafts and stippling of the nipple and
areola;
(b) Surgery and reconstruction of the other breast to produce a
symmetrical appearance;
(c) Prostheses;
(d) Treatment of physical complications of the mastectomy,
including lymphedemas; and
(e) Inpatient care related to the mastectomy and
post-mastectomy services.
(2) An insurer providing coverage under subsection (1) of this
section shall provide written notice describing the coverage to
the enrollee at the time of enrollment in the health benefit plan
and annually thereafter.
(3) A health benefit plan must provide a single determination
of prior authorization for all mastectomy-related services
covered under subsection (1) of this section that are part of the
enrollee's course or plan of treatment.
(4) When an enrollee requests an external review of an adverse
decision by the insurer regarding services described in
Enrolled House Bill 3654 (HB 3654-INTRO) Page 1
subsection (1) of this section, the insurer must expedite the
enrollee's case pursuant to ORS 743.857 (4).
(5) The coverage required under subsection (1) of this section
is subject to the same terms and conditions in the plan that
apply to other benefits under the plan.
(6) This section is exempt from ORS 743.700. + }
SECTION 3. ORS 750.055 is amended to read:
750.055. (1) The following provisions of the Insurance Code
shall apply to health care service contractors to the extent so
applicable and not inconsistent with the express provisions of
ORS 750.005 to 750.095:
(a) ORS 705.137, 705.139, 731.004 to 731.150, 731.162, 731.216
to 731.362, 731.382, 731.385, 731.386, 731.390, 731.398 to
731.430, 731.428, 731.450, 731.454, 731.488, 731.504, 731.508,
731.509, 731.510, 731.511, 731.512, 731.574 to 731.620, 731.592,
731.594, 731.640 to 731.652, 731.730, 731.731, 731.735, 731.737,
731.750, 731.752, 731.804 and 731.844 to 731.992.
(b) ORS 732.215, 732.220, 732.230, 732.245, 732.250, 732.320,
732.325 and 732.517 to 732.592, not including ORS 732.549 and
732.574 to 732.592.
(c)(A) ORS 733.010 to 733.050, 733.080, 733.140 to 733.170,
733.210, 733.510 to 733.620, 733.635 to 733.680 and 733.695 to
733.780 apply to not-for-profit health care service contractors.
(B) ORS chapter 733, not including ORS 733.630, applies to
for-profit health care service contractors.
(d) ORS chapter 734.
(e) ORS 742.001 to 742.009, 742.013, 742.061, 742.065, 742.150
to 742.162, 742.400, 742.520 to 742.540, 743.010, 743.013,
743.018 to 743.030, 743.050, 743.100 to 743.109, 743.402,
743.412, 743.472, 743.492, 743.495, 743.498, 743.522, 743.523,
743.524, 743.526, 743.527, 743.528, 743.529, 743.549 to 743.555,
743.556, 743.560, 743.600 to 743.610, 743.650 to 743.656,
743.693, 743.694, 743.697, 743.699, 743.701, 743.706 to 743.712,
743.721, 743.722, 743.726, 743.727, 743.728, 743.729, 743.804,
743.807, 743.808, 743.809, 743.814 to 743.839, 743.842, 743.845,
743.847, 743.854, 743.856, 743.857, 743.858, 743.859, 743.861,
743.862, 743.863, 743.864, 743.866 and 743.868 { + and section 2
of this 2003 Act + }.
(f) The provisions of ORS chapter 744 relating to the
regulation of agents.
(g) ORS 746.005 to 746.140, 746.160, 746.180, 746.220 to
746.370 and 746.600 to 746.690.
(h) ORS 743.714, except in the case of group practice health
maintenance organizations that are federally qualified pursuant
to Title XIII of the Public Health Service Act unless the patient
is referred by a physician associated with a group practice
health maintenance organization.
(i) ORS 735.600 to 735.650.
(j) ORS 743.680 to 743.689.
(k) ORS 744.700 to 744.740.
(L) ORS 743.730 to 743.773.
(m) ORS 731.485, except in the case of a group practice health
maintenance organization that is federally qualified pursuant to
Title XIII of the Public Health Service Act and that wholly owns
and operates an in-house drug outlet.
(2) For the purposes of this section only, health care service
contractors shall be deemed insurers.
(3) Any for-profit health care service contractor organized
under the laws of any other state which is not governed by the
Enrolled House Bill 3654 (HB 3654-INTRO) Page 2
insurance laws of such state, will be subject to all requirements
of ORS chapter 732.
(4) The Director of the Department of Consumer and Business
Services may, after notice and hearing, adopt reasonable rules
not inconsistent with this section and ORS 750.003, 750.005,
750.025 and 750.045 that are deemed necessary for the proper
administration of these provisions.
SECTION 4. ORS 750.333 is amended to read:
750.333. (1) The following provisions of the Insurance Code
apply to trusts carrying out a multiple employer welfare
arrangement:
(a) ORS 731.004 to 731.150, 731.162, 731.216 to 731.268,
731.296 to 731.316, 731.324, 731.328, 731.378, 731.386, 731.390,
731.398, 731.406, 731.410, 731.414, 731.418 to 731.434, 731.454,
731.484, 731.486, 731.488, 731.512, 731.574 to 731.620, 731.640
to 731.652, 731.804 to 731.992.
(b) ORS 733.010 to 733.050, 733.140 to 733.170, 733.210,
733.510 to 733.680 and 733.695 to 733.780.
(c) ORS chapter 734.
(d) ORS 742.001 to 742.009, 742.013, 742.061 and 742.400.
(e) ORS 743.028, 743.053, 743.524, 743.526, 743.527, 743.528,
743.529, 743.530, 743.560, 743.562, 743.600, 743.601, 743.602,
743.610, 743.693, 743.694, 743.699, 743.727, 743.728, 743.730 to
743.773 (except 743.760 to 743.773), 743.801, 743.804, 743.807,
743.808, 743.809, 743.814 to 743.839, 743.842, 743.845, 743.847,
743.854, 743.856, 743.857, 743.858, 743.859, 743.861, 743.862,
743.863 and 743.864 { + and section 2 of this 2003 Act + }.
(f) ORS 743.556, 743.701, 743.703, 743.706, 743.707, 743.709,
743.710, 743.712, 743.713, 743.714, 743.717, 743.718, 743.719,
743.721, 743.722, 743.725 and 743.726. Multiple employer welfare
arrangements to which ORS 743.730 to 743.773 apply are subject to
the sections referred to in this paragraph only as provided in
ORS 743.730 to 743.773.
(g) Provisions of ORS chapter 744 relating to the regulation of
agents and insurance consultants, and ORS 744.700 to 744.740.
(h) ORS 746.005 to 746.140, 746.160, 746.180 and 746.220 to
746.370.
(i) ORS 731.592 and 731.594.
(2) For the purposes of this section:
(a) A trust carrying out a multiple employer welfare
arrangement shall be considered an insurer.
(b) References to certificates of authority shall be considered
references to certificates of multiple employer welfare
arrangement.
(c) Contributions shall be considered premiums.
(3) The provision of health benefits under ORS 750.301 to
750.341 shall be considered to be the transaction of health
insurance.
SECTION 5. 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.
Enrolled House Bill 3654 (HB 3654-INTRO) Page 3
(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;
Enrolled House Bill 3654 (HB 3654-INTRO) Page 4
(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 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
Enrolled House Bill 3654 (HB 3654-INTRO) Page 5
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 carrier 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.
Enrolled House Bill 3654 (HB 3654-INTRO) Page 6
(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.
Enrolled House Bill 3654 (HB 3654-INTRO) Page 7
(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 6. 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.
Enrolled House Bill 3654 (HB 3654-INTRO) Page 8
(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 90 days prior to discontinuation.
Enrolled House Bill 3654 (HB 3654-INTRO) Page 9
(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) - } { + (9) + } This section applies only to group
health benefit plans that are not small employer health benefit
plans.
SECTION 7. 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
Enrolled House Bill 3654 (HB 3654-INTRO) Page 10
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
Enrolled House Bill 3654 (HB 3654-INTRO) Page 11
(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 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.
Enrolled House Bill 3654 (HB 3654-INTRO) Page 12
(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 8. { + Section 2 of this 2003 Act and the amendments
to ORS 743.737, 743.754, 743.666, 750.055 and 750.333 by sections
3 to 7 of this 2003 Act apply to health insurance policies issued
or renewed on or after the effective date of this 2003 Act. + }
----------
Passed by House August 6, 2003
...........................................................
Chief Clerk of House
...........................................................
Speaker of House
Passed by Senate August 15, 2003
...........................................................
President of Senate
Enrolled House Bill 3654 (HB 3654-INTRO) Page 13
Received by Governor:
......M.,............., 2003
Approved:
......M.,............., 2003
...........................................................
Governor
Filed in Office of Secretary of State:
......M.,............., 2003
...........................................................
Secretary of State
Enrolled House Bill 3654 (HB 3654-INTRO) Page 14