H-4206              _______________________________________________

                                                   HOUSE BILL NO. 2022

                        _______________________________________________

State of Washington                              49th Legislature                              1986 Regular Session

By Representatives P. King and Zellinsky

Read first time 1/24/86 and referred to Committee on Financial Institutions & Insurance.

AN ACT Relating to reduction or refusal of insurance benefits on basis of other existing coverages; and reenacting and amending RCW 48.21.200.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

        Sec. 1.  Section 20, chapter 266, Laws of 1975 1st ex. sess. as amended by section 24, chapter 106, Laws of 1983 and by section 16, chapter 202, Laws of 1983 and RCW 48.21.200 are each reenacted and amended to read as follows:

          (1) No group disability insurance policy which provides benefits for hospital, medical, or surgical expenses shall be delivered or issued for delivery in this state after September 8, 1975 which contains any provision whereby the insurer may reduce or refuse to pay such benefits otherwise payable thereunder solely on account of the existence of similar benefits provided under any individual disability insurance policy, or under any individual health care service contract.

          (2) No group disability insurance policy providing hospital, medical or surgical expense benefits and which contains a provision for the reduction of benefits otherwise payable thereunder on the basis of other existing coverages, shall provide that such reduction will operate to reduce total benefits payable below an amount ((equal to one hundred percent of total allowable expenses)) authorized under guidelines established by the commissioner.  The commissioner shall by rule establish such guidelines for the application of this section, including:  (a) The procedures by which persons insured under such policies are to be made aware of the existence of such a provision; (b) the benefits which may be subject to such a provision; (c) the effect of such a provision on the benefits provided; (d) establishment of the order of benefit determination; and (e) reasonable claim administration procedures to expedite claim payments under such a provision:  PROVIDED, HOWEVER, That any group disability insurance policy which is issued as part of an employee insurance benefit program authorized by RCW 41.05.025(3) may exclude all or part of any deductible amounts from the definition of total allowable expenses for purposes of coordination of benefits within the plan and between such plan and other applicable group coverages:  AND PROVIDED FURTHER, That any group disability insurance policy providing coverage for persons in this state may exclude all or part of any deductible amounts required by a group disability insurance policy from the definition of total allowable expenses for purposes of coordination of benefits between such policy and a group disability insurance policy issued as part of an employee insurance benefit program authorized by RCW 41.05.025(3).

          (3) The provisions of this section shall apply to health care service contractor contracts and health maintenance organization agreements.