75th OREGON LEGISLATIVE ASSEMBLY--2009 Regular Session
Enrolled
House Bill 2194
Ordered printed by the Speaker pursuant to House Rule 12.00A (5).
Presession filed (at the request of Governor Theodore R.
Kulongoski for Department of Consumer and Business Services)
CHAPTER ................
AN ACT
Relating to Oregon Medical Insurance Pool; amending ORS 735.605,
735.610, 735.614, 735.615 and 735.616.
Be It Enacted by the People of the State of Oregon:
SECTION 1. ORS 735.605 is amended to read:
735.605. As used in ORS 735.600 to 735.650:
(1) 'Benefits plan' means the coverages to be offered by the
pool to eligible persons pursuant to ORS 735.600 to 735.650.
(2) 'Board' means the Oregon Medical Insurance Pool Board.
(3) 'Insured' means any individual resident of this state who
is eligible to receive benefits from any insurer.
(4) 'Insurer' means:
(a) Any insurer as defined in ORS 731.106 or fraternal benefit
society as defined in ORS 748.106 required to have a certificate
of authority to transact health insurance business in this state,
and any health care service contractor as defined in ORS 750.005
{ - , issuing medical insurance in this state on or after
September 27, 1987 - } .
(b) Any reinsurer reinsuring medical insurance in this state
{ - on or after September 27, 1987 - } .
(c) To the extent consistent with federal law, any
self-insurance arrangement covered by the Employee Retirement
Income Security Act of 1974, as amended, that provides health
care benefits in this state { - on or after September 27,
1987 - } .
(d) All self-insurance arrangements not covered by the Employee
Retirement Income Security Act of 1974, as amended, that provides
health care benefits in this state { - on or after September
27, 1987 - } .
(5) 'Medical insurance' means { - any health insurance
benefits payable on the basis of hospital, surgical or medical
expenses incurred and any health care service contractor
subscriber contract. Medical insurance does not include accident
only, disability income, hospital confinement indemnity, dental
or credit insurance, coverage issued as a supplement to liability
insurance, coverage issued as a supplement to Medicare, insurance
arising out of a workers' compensation or similar law, automobile
medical-payment insurance or insurance under which benefits are
payable with or without regard to fault and which is statutorily
required to be contained in any liability insurance policy or
equivalent self-insurance. - } { + insurance of humans against
Enrolled House Bill 2194 (HB 2194-B) Page 1
bodily injury, disablement or death by accident or accidental
means, or the expense thereof, or against disablement or expense
resulting from sickness or childbirth, or against expense
incurred in prevention of sickness, in dental care or
optometrical service, and every insurance appertaining thereto,
including insurance against the risk of economic loss assumed
under a less than fully insured employee health benefit plan.
'Medical insurance' does not include workers' compensation
coverages. + }
(6) 'Medicare' means coverage under Part A, Part B and Part D
of Title XVIII of the Social Security Act, 42 U.S.C.
{ - 1395 - } { + 1395c + } et seq., as amended.
(7) 'Plan of operation' means the plan of operation of the
pool, including articles, bylaws and operating rules, adopted by
the board pursuant to ORS 735.600 to 735.650.
(8) 'Pool' means the Oregon Medical Insurance Pool as created
by ORS 735.610.
(9) 'Reinsurer' means any insurer as defined in ORS 731.106
from whom any person providing medical insurance to Oregon
insureds procures insurance for itself in the insurer, with
respect to all or part of the medical insurance risk of the
person.
(10) 'Self-insurance arrangement' means any plan, program,
contract or any other arrangement under which one or more
employers, unions or other organizations provide health care
services or benefits to their employees or members in this state,
either directly or indirectly through a trust or third party
administrator, unless the health care services or benefits are
provided by an insurance policy issued by an insurer other than a
self-insurance arrangement.
SECTION 2. ORS 735.610 is amended to read:
735.610. (1) There is created in the Department of Consumer and
Business Services the Oregon Medical Insurance Pool Board. The
board shall establish the Oregon Medical Insurance Pool and
otherwise carry out the responsibilities of the board under ORS
735.600 to 735.650.
(2) The board shall consist of nine individuals, eight of whom
shall be appointed by the Director of the Department of Consumer
and Business Services. The director { - of the Department of
Consumer and Business Services - } or the director's designee
shall be { - a - } { + the ninth + } member of the board. The
chair of the board shall be elected from among the members of the
board. The board shall at all times, to the extent possible,
include at least one representative of a domestic insurance
company licensed to transact health insurance, one representative
of a domestic not-for-profit health care service contractor, one
representative of a health maintenance organization, one
representative of reinsurers and two members of the general
public who are not associated with the medical profession, a
hospital or an insurer. { + A majority of the voting members
of the board constitutes a quorum for the transaction of
business. An act by a majority of a quorum is an official act of
the board. + }
(3) The director may fill any vacancy on the board by
appointment.
(4) The board shall have the general powers and authority
granted under the laws of this state to insurance companies with
a certificate of authority to transact health insurance and the
specific authority to:
Enrolled House Bill 2194 (HB 2194-B) Page 2
(a) Enter into such contracts as are necessary or proper to
carry out the provisions and purposes of ORS 735.600 to 735.650
including the authority to enter into contracts with similar
pools of other states for the joint performance of common
administrative functions, or with persons or other organizations
for the performance of administrative functions;
(b) Recover any assessments for, on behalf of, or against
insurers;
(c) Take such legal action as is necessary to avoid the payment
of improper claims against the pool or the coverage provided by
or through the pool;
(d) Establish appropriate rates, rate schedules, rate
adjustments, expense allowances, insurance producers' referral
fees, claim reserves or formulas and perform any other actuarial
function appropriate to the operation of the pool. Rates may not
be unreasonable in relation to the coverage provided, the risk
experience and expenses of providing the coverage. Rates and rate
schedules may be adjusted for appropriate risk factors such as
age and area variation in claim costs and shall take into
consideration appropriate risk factors in accordance with
established actuarial and underwriting practices;
(e) Issue policies of insurance in accordance with the
requirements of ORS 735.600 to 735.650;
(f) Appoint from among insurers appropriate actuarial and other
committees as necessary to provide technical assistance in the
operation of the pool, policy and other contract design, and any
other function within the authority of the board;
(g) Seek advances to effect the purposes of the pool; and
(h) Establish rules, conditions and procedures for reinsuring
risks under ORS 735.600 to 735.650.
(5) Each member of the board is entitled to compensation and
expenses as provided in ORS 292.495.
(6) The director { - of the Department of Consumer and
Business Services - } shall adopt rules, as provided under ORS
chapter 183, implementing policies recommended by the board for
the purpose of carrying out ORS 735.600 to 735.650.
(7) In consultation with the board, the director shall employ
such staff and consultants as may be necessary for the purpose of
carrying out responsibilities under ORS 735.600 to 735.650.
SECTION 3. ORS 735.614 is amended to read:
735.614. (1) If the Oregon Medical Insurance Pool Board
determines at any time that funds in the Oregon Medical Insurance
Pool Account are or will become insufficient for payment of
expenses of the pool in a timely manner, the board shall
determine the amount of funds needed and shall impose and collect
assessments against insurers, as provided in this section, in the
amount of the funds determined to be needed.
(2) Each insurer's assessment shall be determined by
multiplying the total amount to be assessed by a fraction, the
numerator of which equals the number of Oregon insureds and
certificate holders insured or reinsured by each insurer, and the
denominator of which equals the total of all Oregon insureds and
certificate holders insured or reinsured by all insurers, all
determined as of March 31 each year.
(3) The board shall ensure that each insured and certificate
holder is counted only once with respect to any assessment. For
that purpose, the board shall require each insurer that obtains
reinsurance for its insureds and certificate holders to include
in its count of insureds and certificate holders all insureds and
certificate holders whose coverage is reinsured in whole or part.
Enrolled House Bill 2194 (HB 2194-B) Page 3
The board shall allow an insurer who is a reinsurer to exclude
from its number of insureds those that have been counted by the
primary insurer or the primary reinsurer for the purpose of
determining its assessment under this subsection.
(4) { - Each insurer shall pay its assessment as required by
the board. - } { + All insurers authorized to transact medical
insurance in Oregon and that insure persons residing in Oregon
are subject to the assessment under this section. Insureds under
the following types of coverage, as defined by rule by the board,
are excluded in the calculation of the assessment:
(a) Medicaid;
(b) State Children's Health Insurance Program;
(c) Medicare;
(d) Disability income insurance;
(e) Hospital only insurance;
(f) Dental insurance;
(g) Vision only insurance;
(h) Accident only insurance;
(i) Automobile insurance;
(j) Specific disease insurance;
(k) Medical supplemental plans;
(L) TRICARE;
(m) CHAMPUS;
(n) Prescription drug only plans;
(o) Long term care insurance; and
(p) Federal Employees Health Benefits Program. + }
(5) If assessments exceed the amounts actually needed, the
excess shall be held and invested and, with the earnings and
interest, used by the board to offset future net losses or to
reduce pool premiums. For purposes of this subsection, 'future
net losses' includes reserves for claims incurred but not
reported.
(6) Each insurer's proportion of participation in the pool
shall be determined by the board based on annual statements and
other reports deemed necessary by the board and filed by the
insurer with the board. The board may use any reasonable method
of estimating the number of insureds and certificate holders of
an insurer if the specific number is unknown. With respect to
insurers that are reinsurers, the board may use any reasonable
method of estimating the number of persons insured by each
reinsurer.
(7) The board may abate or defer, in whole or in part, the
assessment of an insurer if, in the opinion of the board, payment
of the assessment would endanger the ability of the insurer to
fulfill the insurer's contractual obligations. In the event an
assessment against an insurer is abated or deferred in whole or
in part, the amount by which the assessment is abated or deferred
may be assessed against the other insurers in a manner consistent
with the basis for assessments set forth in this section. The
insurer receiving the abatement or deferment shall remain liable
to the board for the deficiency for four years.
(8) The board shall abate or defer assessments authorized by
this section if a court orders that assessments cannot be made
applicable to reinsurers. However, if a court orders that
assessments cannot be made applicable to reinsurers, the board
may continue to assess insurers to the end of the biennium in
which the determination is made.
(9) Subject to the approval of the Director of the Department
of Consumer and Business Services, the board may develop a
program for adjusting the assessment of an insurer in the
Enrolled House Bill 2194 (HB 2194-B) Page 4
individual health benefits market based on that insurer's
contribution to reducing the enrollment in the Oregon Medical
Insurance Pool. When developing the program, the board may
consider, but is not limited to, the following factors:
(a) The insurer's level of participation;
(b) Level of health benefit plan coverage offered; and
(c) Assumption of risk in the individual health benefits
market.
SECTION 4. ORS 735.615 is amended to read:
735.615. (1) Except as provided in subsection (3) of this
section, a person who is a resident of this state, as defined by
the Oregon Medical Insurance Pool Board, is eligible for medical
pool coverage if:
(a) An insurer, or an insurance company with a certificate of
authority in any other state, has made within a time frame
established by the board an adverse underwriting decision, as
defined in ORS 746.600 (1)(a)(A), (B) or (D), on individual
medical insurance for health reasons while the person was a
resident;
(b) The person has a history of any medical or health
conditions on the list adopted by the board under subsection (2)
of this section;
(c) The person is a spouse or dependent of a person described
in paragraph (a) or (b) of this subsection; or
(d) The person is eligible for the credit for health insurance
costs under section 35 of the federal Internal Revenue Code, as
amended and in effect on December 31, 2004.
(2) The board may adopt a list of medical or health conditions
for which a person is eligible for pool coverage without applying
for individual medical insurance pursuant to this section.
(3) A person is not eligible for coverage under ORS 735.600 to
735.650 if:
(a) Except as provided in ORS 735.625 (3)(c), the person is
eligible to receive health services as defined in ORS 414.705
that meet or exceed those adopted by the board or is eligible for
Medicare;
(b) The person has terminated coverage in the pool within the
last 12 months and the termination was for:
(A) A reason other than becoming eligible to receive health
services as defined in ORS 414.705; or
(B) A reason that does not meet exception criteria established
by the board;
(c) The person has exceeded the maximum lifetime benefit
established by the board;
(d) The person is an inmate of or a patient in a public
institution named in ORS 179.321;
(e) The person has, on the date of issue of coverage by the
board, coverage under health insurance or a self-insurance
arrangement that is substantially equivalent to coverage under
ORS 735.625; or
(f) The person has the premiums paid or reimbursed by a public
entity or a health care provider { + , + } { - for the sole
purpose of - } reducing the financial loss or obligation of the
payer.
(4) A person applying for coverage shall establish initial
eligibility by providing evidence that the board requires.
(5)(a) Notwithstanding ORS 735.625 (4)(c) and subsection (3)(a)
of this section, if a person becomes eligible for Medicare after
being enrolled in the pool for a period of time as determined by
Enrolled House Bill 2194 (HB 2194-B) Page 5
the board by rule, that person may continue coverage within the
pool as secondary coverage to Medicare.
(b) The board may adopt rules concerning the terms and
conditions for the coverage provided under paragraph (a) of this
subsection.
(6) The board may adopt rules to establish additional
eligibility requirements for a person described in subsection
(1)(d) of this section.
SECTION 5. ORS 735.616 is amended to read:
735.616. { + (1) An applicant may qualify for portability
health insurance coverage under the Oregon Medical Insurance Pool
if:
(a) An application for coverage is made not later than the 63rd
day after the date of first eligibility; and
(b) The individual is an Oregon resident at the time of the
application. + }
{ - (1) - } { + (2) + } In addition to individuals
otherwise qualified under ORS 735.615, the following individuals
qualify for portability health insurance coverage under the
Oregon Medical Insurance Pool { - if an application for
coverage is made not later than the 63rd day after the date of
first eligibility, as provided in subsection (2) of this section,
and the individual is an Oregon resident at the time of such
application - } :
(a) An individual who has left coverage that was
{ - continuously - } in effect for a { - period - } { +
minimum + } of 180 { + consecutive + } days { - or more - }
under one or more group health benefit plans, if { - : - }
{ - (A) - } the terminated coverage was in a plan issued or
established in a state other than Oregon; { - and - }
{ - (B) The individual was an Oregon resident for at least
180 consecutive days immediately prior to the termination of
coverage; - }
(b) An eligible individual, as defined in ORS 743.760, who has
left coverage under a group health benefit plan or a portability
health benefit plan and whose carrier cannot offer a portability
plan under ORS 743.760 (6) because of:
(A) A change in residence of the eligible individual within
Oregon;
(B) A change in the geographic area served by the group
carrier; or
(C) The carrier's withdrawal from the group market in Oregon in
accordance with ORS 743.737 and 743.754;
(c) An individual who has left coverage that was
{ - continuously - } in effect for { - a - } { + an
uninterrupted + } period of 180 days or more under one or more
Oregon group health benefit plans and the terminated coverage was
provided by:
(A) An employee welfare benefit plan that is exempt from state
regulation under the federal Employee Retirement Income Security
Act of 1974, as amended;
(B) A multiple employer welfare arrangement subject to ORS
750.301 to 750.341; or
(C) A public body of this state in accordance with ORS 731.036;
and
(d) On or after January 1, 1998, an individual who meets the
eligibility requirements of 42 U.S.C. 300gg-41, as amended and in
effect on January 1, 1998, and does not otherwise qualify to
obtain portability coverage from an Oregon group carrier in
accordance with ORS 743.760.
Enrolled House Bill 2194 (HB 2194-B) Page 6
{ - (2) - } { + (3) + } Eligibility for coverage pursuant
to { - subsection (1) - } { + subsections (1) and (2) + } of
this section is subject to the following provisions:
(a) An eligible individual does not include:
(A) 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;
(B) An individual who is covered under another health benefit
plan at the time that portability coverage would commence;
(C) An individual who is eligible to enroll in another health
benefit plan offered by the employer, other than as a late
enrollee, at the time that portability coverage would commence;
or
(D) An individual who is eligible for the federal Medicare
program.
(b) If an eligible individual has left group coverage issued by
an insurance company, a health care service contractor or a
health maintenance organization, the date of first eligibility is
the day following the termination date of the group coverage,
including any period of continuation coverage that was elected by
the individual under federal law or under ORS 743.600 or 743.610.
(c) If an eligible individual has left group coverage issued by
an entity other than an insurance company, a health care service
contractor or a health maintenance organization, the date of
first eligibility is the day following the termination date of
the group coverage, including the full extent of continuation
coverage available to the individual under federal law and ORS
743.600 and 743.610.
(d) If an individual is eligible for coverage pursuant to
subsection { - (1)(b) - } { + (2)(b) + } of this section, the
date of first eligibility is the day following the loss of the
group or portability coverage.
{ - (3) - } { + (4) + } Coverage under the Oregon Medical
Insurance Pool pursuant to { - subsection (1) - }
{ + subsections (1) and (2) + } of this section shall be offered
according to the following provisions:
(a) Coverage is subject to ORS 743.760 (2) and (8);
(b) Coverage may not be subject to a preexisting conditions
provision, exclusion period, waiting period, residency period or
other similar limitation on coverage; and
(c) The individual shall be required to pay a premium rate not
more than the applicable portability risk rate determined by the
Oregon Medical Insurance Pool Board pursuant to ORS 735.625.
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Enrolled House Bill 2194 (HB 2194-B) Page 7
Passed by House February 23, 2009
Repassed by House June 17, 2009
...........................................................
Chief Clerk of House
...........................................................
Speaker of House
Passed by Senate June 15, 2009
...........................................................
President of Senate
Enrolled House Bill 2194 (HB 2194-B) Page 8
Received by Governor:
......M.,............., 2009
Approved:
......M.,............., 2009
...........................................................
Governor
Filed in Office of Secretary of State:
......M.,............., 2009
...........................................................
Secretary of State
Enrolled House Bill 2194 (HB 2194-B) Page 9