74th OREGON LEGISLATIVE ASSEMBLY--2007 Regular Session
Enrolled
House Bill 3103
Sponsored by Representative NATHANSON
CHAPTER ................
AN ACT
Relating to public disclosure of rate filing information;
amending ORS 743.018, 743.737 and 743.760.
Be It Enacted by the People of the State of Oregon:
SECTION 1. ORS 743.018 is amended to read:
743.018. { + (1) + } Except for group life and health
insurance, and except as provided in ORS 743.015, every insurer
shall file with the Director of the Department of Consumer and
Business Services all schedules and tables of premium rates for
life and health insurance to be used on risks in this state, and
shall file any amendments to or corrections of such schedules and
tables.
{ + (2) Except as provided ORS 743.737 and 743.760 and
subsection (3) of this section, a rate filing by a carrier for
any of the following health benefit plans subject to ORS 743.730
to 743.773 shall be available for public inspection immediately
upon submission of the filing to the director:
(a) Health benefit plans for small employers.
(b) Portability health benefit plans.
(c) Individual health benefit plans.
(3) The director, upon request by a carrier, may exempt from
disclosure any part of the filing that the director determines to
contain trade secrets and that would, if disclosed, harm
competition. The part that the director determines to be exempt
from disclosure shall be considered confidential for purposes of
ORS 705.137. The director may not disclose a part of a filing
subject to a carrier's request pending the director's
determination under this subsection. + }
SECTION 2. ORS 743.737, as amended by section 6, chapter 599,
Oregon Laws 2003, 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:
Enrolled House Bill 3103 (HB 3103-INTRO) Page 1
(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
Enrolled House Bill 3103 (HB 3103-INTRO) Page 2
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
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
Enrolled House Bill 3103 (HB 3103-INTRO) Page 3
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 may 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
Enrolled House Bill 3103 (HB 3103-INTRO) Page 4
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 as provided
in ORS 743.018 and + } 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 insurance producer that would encourage
the insurance producer 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
Enrolled House Bill 3103 (HB 3103-INTRO) Page 5
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.
SECTION 3. ORS 743.760 is amended to read:
743.760. (1) As used in this section:
(a) 'Carrier' means an insurer authorized to issue a policy of
health insurance in this state. 'Carrier' does not include a
multiple employer welfare arrangement.
(b)(A) 'Eligible individual' means an individual who:
(i) Has left coverage that was continuously in effect for a
period of 180 days or more under one or more Oregon group health
benefit plans, has applied for portability coverage not later
than the 63rd day after termination of group coverage issued by
an Oregon carrier and is an Oregon resident at the time of such
application; or
(ii) On or after January 1, 1998, meets the eligibility
requirements of 42 U.S.C. 300gg-41, as amended and in effect on
January 1, 1998, has applied for portability coverage not later
than the 63rd day after termination of group coverage issued by
an Oregon carrier and is an Oregon resident at the time of such
application.
(B) Except as provided in subsection (12) of this section, '
eligible individual' does not include an individual who remains
eligible for the individual's prior group coverage or would
remain eligible for prior group coverage in a plan under the
federal Employee Retirement Income Security Act of 1974, as
amended, were it not for action by the plan sponsor relating to
the actual or expected health condition of the individual, or who
is covered under another health benefit plan at the time that
portability coverage would commence or is eligible for the
federal Medicare program.
(c) 'Portability health benefit plans' and 'portability plans'
mean health benefit plans for eligible individuals that are
required to be offered by all carriers offering group health
benefit plans and that have been approved by the Director of the
Department of Consumer and Business Services in accordance with
this section.
(2)(a) In order to improve the availability and affordability
of health benefit plans for individuals leaving coverage under
group health benefit plans, the Health Insurance Reform Advisory
Committee created under ORS 743.745 shall submit to the director
two portability health benefit plans pursuant to ORS 743.745. One
plan shall be in the form of insurance and the second plan shall
be consistent with the type of coverage provided by health
maintenance organizations. For each type of portability plan, the
committee shall design and submit to the director:
(A) A prevailing benefit plan, which shall reflect the benefit
coverages that are prevalent in the group health insurance
market; and
(B) A low cost benefit plan, which shall emphasize
affordability for eligible individuals.
(b) Except as provided in ORS 743.730 to 743.773, no law
requiring the coverage or the offer of coverage of a health care
service or benefit shall apply to portability health benefit
plans.
(3) The director shall approve the portability health benefit
plans if the director determines that the plans provide for
Enrolled House Bill 3103 (HB 3103-INTRO) Page 6
appropriate accessibility and affordability of needed health care
services and comply with all other provisions of this section.
(4) After the director's approval of the portability plans
submitted by the committee under this section, each carrier
offering group health benefit plans shall submit to the director
the policy form or forms containing at least one low cost benefit
and one prevailing benefit portability plan offered by the
carrier that meets the required standards. Each policy form must
be submitted as prescribed by the director and is subject to
review and approval pursuant to ORS 742.003.
(5) Within 180 days after approval by the director of the
portability plans submitted by the committee, as a condition of
transacting group health insurance in this state, each carrier
offering group health benefit plans shall make available to
eligible individuals the prevailing benefit and low cost benefit
portability plans that have been submitted by the carrier and
approved by the director under subsection (4) of this section.
(6) A carrier offering group health benefit plans shall issue
to an eligible individual who is leaving or has left group
coverage provided by that carrier any portability plan offered by
the carrier if the eligible individual applies for the plan
within 63 days of termination of prior coverage and agrees to
make the required premium payments and to satisfy the other
provisions of the portability plan.
(7) Premium rates for portability plans shall be subject to the
following provisions:
(a) Each carrier must file the geographic average rate for each
of its portability health benefit plans for a rating period with
the director on or before March 15 of each year.
(b) The premium rates charged during the rating period for each
portability health benefit plan shall not vary from the
geographic average rate, except that the premium rate may be
adjusted to reflect differences in benefit design, family
composition and age. Adjustments for age shall comply with the
following:
(A) For each plan, the variation between the lowest premium
rate and the highest premium rate shall not exceed 100 percent of
the lowest premium rate.
(B) Premium variations shall be determined by applying
uniformly the carrier's schedule of age adjustments for
portability plans as approved by the director.
(c) Premium variations between the portability plans and the
rest of the carrier's group plans must be based solely on
objective differences in plan design or coverage and must not
include differences based on the actual or expected health status
of individuals who select portability health benefit plans. For
purposes of determining the premium variations under this
paragraph, a carrier may:
(A) Pool all portability plans with all group health benefit
plans; or
(B) Pool all portability plans for eligible individuals leaving
small employer group health benefit plan coverage with all plans
offered to small employers and pool all portability plans for
eligible individuals leaving other group health benefit plan
coverage with all health benefit plans offered to such other
groups.
(d) A carrier may not increase the rates of a portability plan
issued to an enrollee more than once in any 12-month period.
Annual rate increases shall be effective on the anniversary date
of the plan issued to the enrollee. The percentage increase in
Enrolled House Bill 3103 (HB 3103-INTRO) Page 7
the premium rate charged to an enrollee for a new rating period
may not exceed the average increase in the rest of the carrier's
applicable group health benefit plans plus an adjustment for age.
(8) No portability plans under this section may contain
preexisting conditions provisions, exclusion periods, waiting
periods or other similar limitations on coverage.
(9) Portability health benefit plans shall be renewable with
respect to all enrollees at the option of the enrollee, except:
(a) For nonpayment of the required premiums by the
policyholder;
(b) For fraud or misrepresentation by the policyholder;
(c) When the carrier elects to discontinue offering all of its
group health benefit plans in accordance with ORS 743.737 and
743.754; or
(d) 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 its contractual
obligations.
(10)(a) Each carrier offering group health benefit plans shall
maintain at its principal place of business a complete and
detailed description of its rating practices and renewal
underwriting practices relating to its portability plans,
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 such carrier shall file with the director annually on
or before March 15 an actuarial certification that the carrier is
in compliance with this section and that its rating methods are
actuarially sound. Each such certification shall be in a form and
manner and shall contain such information as specified by the
director. A copy of such certification shall be retained by the
carrier at its principal place of business.
(c) Each such carrier shall make the information and
documentation described in paragraph (a) of this subsection
available to the director upon request. { + Except as provided
in ORS 743.018 and + } except in cases of violations of the
Insurance Code, the information is 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 carrier or as
ordered by a court of competent jurisdiction.
(11) A carrier offering group health benefit plans shall not
provide any financial or other incentive to any insurance
producer that would encourage the insurance producer to market
and sell portability plans of the carrier on the basis of an
eligible individual's anticipated claims experience.
(12) An individual who is eligible to obtain a portability plan
in accordance with this section may obtain such a plan regardless
of whether the eligible individual qualifies for a period of
continuation coverage under federal law or under ORS 743.600 or
743.610. However, an individual who has elected such continuation
coverage is not eligible to obtain a portability plan until the
continuation coverage has been discontinued by the individual or
has been exhausted.
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Enrolled House Bill 3103 (HB 3103-INTRO) Page 8
Passed by House April 24, 2007
...........................................................
Chief Clerk of House
...........................................................
Speaker of House
Passed by Senate May 29, 2007
...........................................................
President of Senate
Enrolled House Bill 3103 (HB 3103-INTRO) Page 9
Received by Governor:
......M.,............., 2007
Approved:
......M.,............., 2007
...........................................................
Governor
Filed in Office of Secretary of State:
......M.,............., 2007
...........................................................
Secretary of State
Enrolled House Bill 3103 (HB 3103-INTRO) Page 10