HOUSE BILL REPORT

SSB 5046

BYSenate Committee on Financial Institutions (originally sponsored by Senators Bottiger, Metcalf, Moore and Rasmussen)

Limiting the use of riders for health and disability insurance.

House Committe on Financial Institutions & Insurance

Majority Report:  Do pass.  (13)

      Signed by Representatives Lux, Chair; Zellinsky, Vice Chair; Betrozoff, Chandler, Crane, Day, Dellwo, Ferguson, Meyers, Niemi, Nutley, Silver and Winsley.

House Staff:John Conniff (786-7119)

AS PASSED HOUSE APRIL 2, 1987

BACKGROUND:

Presently, the insurance code neither defines nor addresses the use of riders in health insurance policies, health care service contracts, or health maintenance agreements. The Insurance Commissioner prohibits the use of pre-existing condition clauses in individual disability policies if the clause restricts coverage for a health condition occurring more than five years before the effective date of the policy. 

SUMMARY:

A rider is a legal document which modifies coverage by excluding, limiting, or reducing benefits or coverage for pre-existing diseases or physical conditions.

Disability insurance contracts, group disability insurance contracts, health care service contracts, and health maintenance agreements must disclose the number of years a rider is in effect.  In no case may a rider be in effect for more than five years if the insured demonstrates full recovery.

An insured, subscriber, or enrollee may apply to have a rider cancelled, if during the five-year period from the date of issuance of the rider, no health care services have been received for the condition to which the rider applies.  A physician of the carrier's choice must agree to the full medical recovery of the insured, subscriber, or enrollee.  Such agreement may be subject to review by the Insurance Commissioner.  The option to apply for cancellation must be disclosed on the face of the rider.

Fiscal Note:      Not Requested.

House Committee ‑ Testified For:    Ida Karlin, Consumer and Joan Gaumer, Blue Cross.

House Committee - Testified Against:      None Presented.

House Committee - Testimony For:    Some health insurers exclude coverage for diseases, injuries or illnesses despite the fact that the policyholder has recovered from the condition that gave rise to the exclusion.  Policyholders who do fully recover should be permitted to obtain full coverage after the insurer's doctor attests to the policyholder's full recovery.

House Committee - Testimony Against:      None Presented.