WSR 01-15-084

PROPOSED RULES

OFFICE OF THE

INSURANCE COMMISSIONER

[ Filed July 18, 2001, 9:23 a.m. ]

Original Notice.

Preproposal statement of inquiry was filed as WSR 01-05-108.

Title of Rule: Unfair practice relating to health coverage.

Purpose: The proposed rule clarifies that unfair discrimination based on sex in the provision of health coverage is prohibited under Washington law. The rule describes specific situations that constitute such unfair discrimination based on sex, and requires that carriers and plans not unfairly discriminate on the basis of sex in those situations.

Other Identifying Information: Insurance Commissioner Matter No. R-2001-02.

Statutory Authority for Adoption: RCW 48.02.060, 48.18.480, 48.20.450, 48.20.460, 48.21.045, 48.30.010, 48.30.300, 48.41.110, 48.41.170, 48.42.010, 48.42.040, 48.42.100, 48.43.012, 48.43.025, 48.43.035, 48.43.041, 48.43.115, 48.44.020, 48.44.023, 48.44.050, 48.44.220, 48.46.060, 48.46.066, 48.46.110, 48.46.200, 49.60.010, 49.60.030, 49.60.120, 49.60.178, 49.60.220.

Statute Being Implemented: RCW 48.02.060, 48.18.480, 48.20.450, 48.20.460, 48.21.045, 48.30.010, 48.30.300, 48.41.110, 48.41.170, 48.42.010, 48.42.040, 48.42.100, 48.43.012, 48.43.025, 48.43.035, 48.43.041, 48.43.115, 48.44.020, 48.44.023, 48.44.050, 48.44.220, 48.46.060, 48.46.066, 48.46.110, 48.46.200, 49.60.010, 49.60.030, 49.60.120, 49.60.178, 49.60.220.

Summary: The proposal would adopt a new WAC section regarding unfair discrimination based on sex in the provision of health coverage. The area of prescription contraception is used as an example to clarify the application in that area.

Reasons Supporting Proposal: Many interested parties expressed concerns or made inquiries about previously adopted rules regarding this subject. The commissioner decided that a new rule making with a new opportunity to comment would be in the best interest of all parties. The proposed rules are clear, and this rule procedure has been focused on application of the principles of unfair discrimination.

Name of Agency Personnel Responsible for Drafting: Bill Hagens, Olympia, Washington, (360) 586-5597; Implementation: Beth Berendt, Olympia, Washington (360) 664-4627; and Enforcement: Carol Sureau, Lacey, Washington, (360) 407-0048.

Name of Proponent: Mike Kreidler, Insurance Commissioner, governmental.

Rule is not necessitated by federal law, federal or state court decision.

Explanation of Rule, its Purpose, and Anticipated Effects: Carriers need guidance on how to comply with state and federal laws that prohibit sex discrimination in insurance transactions and health plan benefits. There are a number of state and federal laws that prohibit sex discrimination in health insurance benefits, including but not limited to contraceptive health care services. The laws include 42 U.S.C. 2000 and chapter 49.60 RCW, in addition to provisions of the state insurance code. The proposal clarifies the Office of the Insurance Commissioner (OIC) regulation of unfair sex discrimination and provide clear guidance to carriers and consumers. Existing rule sections, WAC 284-43-821, 284-43-823, and 284-43-824 would be repealed prior to ever becoming effective.

Proposal Changes the Following Existing Rules: There is a proposed new section, WAC 284-43-822 that addresses the subject of unfair discrimination based on sex and illustrates the application of the principle in the area of prescription contraception. Existing sections WAC 284-43-821, 284-43-823, and 284-43-824 would be repealed.

A small business economic impact statement has been prepared under chapter 19.85 RCW.

Small Business Economic Impact Statement

Overview: On February 21, 2001, Commissioner Kreidler filed a CR-101 for R 2001-02, a rule making to address unfair sex discrimination. The rule making was begun after the commissioner reviewed the comments, inquiries, and requests for reconsideration of interested parties regarding a previous rule making. The earlier rules (R 2000-03) were adopted January 9, 2001. After considering the adopted rules and the surrounding circumstances, Commissioner Kreidler decided to revisit the subject in a new rule making which would allow new opportunities to comment. An emergency rule was filed to delay the implementation of the adopted rules and allow time for new opportunities to comment and any permanent rule making to take place. The CR-101 noted that the previous rules may be amended or repealed in the existing rule making. The proposal in this rule making is for a new WAC section and to repeal the existing rules. However, if no adoption of permanent rules occurs in this rule making, the emergency will lapse and the existing rules would be allowed to become effective.

Federal law and federal regulation and other state law and regulation: This rule is not required by federal law or regulation. However, federal regulation and court cases do have an impact on this subject. Title VII of the Civil Rights Act of 1964 and the Pregnancy Discrimination Act prohibit unfair discrimination based on sex. Title VII of the Civil Rights Act of 1964, SEC. 2000e. (Section 701)(k) defines what the terms "because of sex" and "on the basis of sex" means. It states that women "shall be treated the same for all employment-related purposes, including receipt of benefits under fringe benefit programs, as other persons not so affected but similar in their ability or inability to work, and nothing in section 2000e-2(h) of this title (section 703(h)) shall be interpreted to permit otherwise."

A decision by the Equal Employment Opportunity Commission (EEOC) on December 14, 2000, addresses the subject of unfair discrimination based on sex. The EEOC ruled that to exclude prescription contraceptives while covering other prescription drugs was unfair discrimination. In a June 12, 2001, decision, Erickson v. Bartell Drug Company,1 Judge Robert S. Lasnik of the U.S. District Court, Western District of Washington also held that excluding prescription contraceptives while covering other prescription drugs is unfair discrimination based on sex. The federal regulation applies to all employers providing group coverage for groups of fifteen and over.

In addition to the provisions in Title 48 RCW noted in the CR-102, chapter 49.60 RCW also regulates the subject of unfair discrimination. Chapter 49.60 RCW and chapter 162-30 WAC apply to employers providing group coverage for groups of eight and over. RCW 49.60.180(3) states that it is an unfair practice for an employer to "...discriminate against any person in compensation or in other terms or conditions of employment because of age, sex..."

The Washington State Human Rights Commission further elaborates on these concepts in chapter 162-30 WAC. That chapter addresses sex discrimination by employers. WAC 162-30-020(1) states that "The overall purpose of the law against discrimination in employment because of sex is to equalize employment opportunity for men and women. This regulation explains how the law applies to employment practices that disadvantage women because of pregnancy or childbirth.

(2) Findings and definitions. Pregnancy is an expectable incident in the life of a woman. Discrimination against women because of pregnancy or childbirth lessens the employment opportunities of women.

(a) "Pregnancy" includes, but is not limited to, pregnancy, the potential to become pregnant, and pregnancy related conditions.

(b) "Pregnancy related conditions" include, but are not limited to, related medical conditions, miscarriage, pregnancy termination, and the complications of pregnancy."

The WAC continues on in further detail. WAC 162-30-020(5) "Employee benefits provided in part or in whole by the employer must be equal for male and female employees. For example, it is an unfair practice to:

(a) Provide full health insurance coverage to male employees but fail to provide full health insurance coverage, including pregnancy and childbirth, to female employees."

Industry affected by the proposed rule: The industry codes directly affected by the proposed rules include Hospital and Medical Service Plans, industry code #6324 and health plans offered by Accident and Health Insurers, industry code #6321. In Washington, hospital and medical service plans are called health care service contractors (HCSCs) and health maintenance organizations (HMOs).

Purchasers of health plans could also be impacted. Possible cost impacts to the benefit offered by the directly regulated industry could in turn lead to downstream cost impacts or changes in the shape of the benefits. In other words, if the insurance product may be impacted for the seller, those impacts may also affect the purchaser of the insurance product. Since the proposed rule impacts all health plans offered by all health carriers regulated by the commissioner, all groups and individuals may potentially be affected. Thus, the indirect impacts could extend to all industries.

Parts of the proposed rule which may impose a cost to business: Currently, unfair discrimination based on sex is prohibited in insurance statutes and statutes regulating the provision of benefits to employees.2 The proposed rule restates that it is an unfair practice for any health carrier to restrict, exclude, or reduce coverage or benefits under any health plan on the basis of sex. It cites the application of the concept to the subject of prescription contraceptive coverage as an example of the regulation. It also clarifies the application of cost-sharing agreements. Health plans are not currently allowed to discriminate unfairly based on sex. RCW 48.30.300(1) states this principle "...The amount of benefits payable, or any term, rate, condition, or type of coverage shall not be restricted, modified, excluded, increased or reduced on the basis of the sex...."

The proposed rule does not require coverage of prescription contraceptives or of any prescription drugs. The proposed rule only illustrates how treating prescription contraceptives differently than other prescription drugs may be unfair discrimination. The proposed rule allows for cost-sharing to the same extent as other covered prescriptions. Carriers can reshape benefits or change cost-sharing arrangements to account for any costs that may be incurred by treating this coverage in a nondiscriminatory fashion. Purchasers can alter copays, deductibles, and other cost-sharing arrangements to pass along any costs inherent in treating prescription contraceptives (or any other benefit) in a fair manner by treating it in the same fashion as any other covered benefit.

The percentage of the industries in the four-digit standard industrial classification that will be affected by the proposed rule: The proposed rule would affect 100% of the health plans subject to regulation by the insurance commissioner. As noted later in this document, coverage of the subject varies from plan to plan and carrier to carrier. All plans would be required to comply with the rule.

Proportionality of economic burden on small businesses within the four-digit classification: The commissioner does not believe that there will be direct disproportionate economic impacts on smaller carriers or indirect disproportionate impacts on small business purchasers. Existing rules and laws are clarified. The requirement of providing nondiscriminatory coverage is made clearer but carriers, businesses, and individuals can determine the manner of achieving that end result. As noted, cost-sharing can be used to relieve any additional costs if it is used in a nondiscriminatory manner. Potential costs of compliance are further developed later in this report.

The commissioner is committed to keeping costs proportionate and fair for the smaller carriers and for all affected persons and businesses and welcomes any comments and suggestions on how that may be better accomplished.

Mitigation techniques that have been considered and incorporated into the proposed rule to reduce economic impact of the rule on small businesses and still meet the objectives of the proposed rule: The rules are being proposed with a delayed effective date to enable industry and interested persons additional time to comment on the proposal and to allow time for implementation. As noted earlier, the scope of the proposed rules have been reduced from earlier discussions and are narrower than the existing rules. Thus, the rule making itself is a mitigatory measure. Affected parties will have adequate time to prepare any systemic changes necessary to comply with the proposed rules. Suggested text changes have been included to provide more clarity and focus. The rule drafters will continue to discuss the proposed rules with industry representatives to discuss methods to reduce any potential costs.

The commissioner initiated the rule making to consider issues raised by interested parties. The scope of the proposed rule has been narrowed from the existing rules that were adopted in January of 2000 and the proposed effective date has been delayed from July of 2000 to January 1, 2001. To the extent that the existing rule would have incurred costs, those costs have been already mitigated to some degree.

Discussions with industry and other interested parties have lead to the development of the text as proposed. These have included clarifying language to mitigate economic impacts to the greatest possible extent while achieving the goals of the rule-making.

The commissioner is open to any comments that would achieve the purpose of the rule making and would reduce any economic impacts. Other mitigatory measures available to all businesses, including small businesses are to modify cost-sharing arrangements. Carriers and businesses are allowed to pass along any possible costs inherent in the rule as long as it is done in a fair and equitable manner. The commissioner encourages any suggestions that can accomplish the goals in a more cost-efficient manner and encourages dialogue with all carriers.

Steps the commissioner will take to reduce the costs of the rule on small businesses: The mitigation techniques incorporated above will aid in reducing economic impacts. The rule-drafting process will continue to be open and small businesses and interested parties are invited to comment on the proposed rule and offer any suggestions or alternatives. The rule drafters will continue to discuss the proposed rules with industry representatives and interested parties to discuss methods to reduce any potential costs on smaller carriers and affected businesses. Additionally, the commissioner will provide technical assistance to aid all carriers in understanding and implementing the new rule.

Mitigation techniques considered for incorporation but not included in the proposed rule: It was suggested that the language regarding devices be stricken or defined. This is still under consideration to determine possible impacts.

Reporting, record-keeping, and other compliance requirements of the proposed rule: There are no new reporting or record-keeping requirements. Health plans would be prevented from unfairly discriminating on the basis of sex with regards to the benefits offered and the terms and conditions of coverage.

Professional services that a small business is likely to need in order to comply with the reporting, record-keeping, and other compliance requirements of the proposed rule: It is not apparent that the rules will occasion the need for any additional staffing or professional services for reporting or record keeping. If carriers or small carriers believe that additional staffing or services are needed due to these rules (and not the underlying state or federal statutes), they are encouraged to cite the section that would require the staffing and recommend methods to ameliorate the need if at all possible. Indirectly impacted parties, including small business purchasers, will not have any record-keeping or reporting requirements.

The commissioner will seek to provide whatever technical assistance is necessary to enable any carriers, including the smaller carriers, to understand and implement the rule. The commissioner will take steps to ensure that indirectly impacted businesses and persons understand the rule and existing state and federal laws regarding the subject.

Costs of compliance:

Cost of equipment: There is no anticipated additional cost of equipment.

Cost of supplies: There is no anticipated cost of supplies attributable to the rule.

Cost of labor: It is not anticipated that the rule will be responsible for additional cost of labor. There are always costs associated with reading and comprehending any rule changes but it is believed that these costs are nominal. The OIC does not expect that any additional staff will be required as a result of this rule.

Cost of increased administration: There is no significant anticipated increased cost of administration attributable to the rules. No parallel administrative systems are required to track plans or benefits. While not every plan offered by every carrier that covers prescription drugs also covers prescription contraceptives in the same fashion, many plans do treat the subjects the same. There will be some costs in harmonizing the plans and possibly retailoring the cost-sharing arrangements of a plan.

Cost of prescription contraception: As noted previously, this rule does not require coverage of any type of prescription benefit. It does not "mandate" any benefit. The rule addresses the issue of what is unfair discrimination in health plans. Existing state and federal employment and insurance laws already prohibit unfair discrimination based on sex. A federal regulatory decision and a federal court decision hold that excluding prescription contraceptives from coverage under a prescription benefit or treating it differently in terms of restrictions or limitations is tantamount to unfair discrimination. This rule seeks to clarify the subject and the application of those principles, which will provide more certainty for industry, consumers, and purchasers. While prescription coverage may not be required under this rule, potential cost issues regarding inclusion of prescription contraceptives will be further discussed to provide background for discussion of the subject.

What is Currently Covered: Many of the plans currently offered cover some or all of the available contraceptive methods. A national study found that half "of traditional indemnity (fee-for-service) plans do not cover any reversible contraception (Chart A), and only 15% cover all five prescription methods -- the pill, IUD, diaphragm, implant and injectable. While 97% cover some form of prescription drugs, only 33% cover the pill."3 The study found that 7% of the health maintenance organizations (HMOs) surveyed cover no prescription contraceptives, and only 39% cover all five.4

Often plans cover some form of prescription drug benefit and some permanent forms of contraception but not reversible forms. A Washington State Department of Health report to the legislature5 addressed the subject of contraception. The report cited a 1998 Alan Guttmacher Institute study6 as finding that "more than two-thirds of typical fee-for-service plans routinely cover abortion, and nine-in-ten cover sterilization, only 15% cover all five of the FDA-approved reversible contraceptive methods - oral contraceptive pills, Norplant, Depo-Provera, IUDs, and diaphragms - and 49% do not cover any reversible contraceptive methods. Thirty-three percent of these plans cover oral contraceptive pills. However, at the same time, over 95% of these same plans cover other prescription drugs and 90% cover other medical devices."7 The report continued on to state that "for permanent contraception such as tubal ligation and vasectomy, private-sector insurance companies cover surgical sterilization 85-90% of the time. Private insurance companies cover induced abortion 64-83% of the time when the health care provider considers the abortion medically necessary or appropriate. Routine obstetric care is covered 93-99% of the time.... The lack of access to reversible prescription contraceptives steers women to more invasive, permanent contraception. Surgical sterilization is the most commonly used form of contraception in the United States. In 1995, 36% of all persons using a form of contraception in the United States were protected by sterilization (25.6% by tubal ligation and 10.2% by vasectomy). While sterilization is a safe and effective method of contraception, it has serious disadvantages. It requires surgery and is, as a practical matter, irreversible. Barriers to access to effective forms of reversible contraception help to explain why so many more people in the United States choose sterilization than in any other country."8

A 1998 survey9 by the insurance commissioner found that half (50%) of all the plans in Washington that were surveyed cover contraception in some form. Thirty percent of all plans covered all five FDA-approved reversible methods of contraception used exclusively by women: Oral contraceptives, IUD, diaphragm, Norplant and Depo-Provera.

The 1998 survey is in the process of being updated but has yet to be released. The preliminary data collected for the updated survey indicates that 61.4% (total of seventy responses) of the one hundred fourteen plans surveyed include a prescription drug benefit (answer Y), and 20.2% (total of twenty-three responses) offer a prescription drug benefit with some form of restrictions (answer R. Often this is higher copays than for other coverage, exclusion of certain drugs or devices, or inclusion only of certain methods. The last often occurs as a rider) for a total of 81.6% (total of ninety-three responses) combined "Yes" or "Yes with some form of restricted benefit."

Of the five, FDA-approved reversible methods of contraception, the following are covered in the plans that are Yes (Y) or Yes with a prescription drug benefit (R):

IUD-Device Y(54.8%, fifty-one responses)
R (8.6%, eight responses)
Total: 63.4%, Total of fifty-nine responses
Diaphragm-Device Y (60.2%, fifty-six responses)
R (8.6%, eight responses)
Total: 68.8%, Total of sixty-four responses
Norplant-Inserted Y (60.2%, fifty-six responses)
R (8.6%, eight responses)
Total: 68.8%, Total of sixty-four responses
DPMA-Injectable Y (66.7%, sixty-two responses)
R (7.5%, seven responses)
Total: 74.2%, Total of sixty-nine responses
OCPs Y (63.4%, fifty-nine responses)
R (19.4%, eighteen responses)
Total: 82.8%, Total of seventy-seven responses

Of the ninety-three plans that include a prescription drug benefit, 16.1% (fifteen responses) of those plans exclude contraceptives. 57%, fifty-three responses, do not exclude them. 26.9%, twenty-five responses note a restriction. This restriction is usually that some form of an optional drug benefit must be purchased.

Of the ninety-three plans that include a prescription drug benefit, 41.9% (thirty-nine responses) cover it as a rider; in 52.7% of the plans (forty-nine responses), it is not a rider. 5.4% (five responses) answered with an "R" - covered as a rider but with restrictions.

Costs of Prescription Contraceptive Coverage: The Washington State Department of Health Sunrise Report incorporated costs estimates from a June 1998 study10 by the Alan Guttmacher Institute. The study was developed by Buck Consultants, an employee actuarial and compensation consulting firm. The study stated that the average estimated cost of adding coverage for the full range of reversible prescription contraceptives to health plans that do not currently cover them would increase total health coverage costs for employees and their dependents by $21.40 per employee per year. In the study, of that total amount, $17.12 would be the employer's costs and $4.28 would be the employee's costs. The premium increase would be of less than 1% of the employers' costs of providing employees with medical coverage. The cited figures do not include the cost savings associated from decreased pregnancy-related medical costs. The major portion of the contraceptive costs, $16 of the $21.40, is the cost of adding oral contraceptives. For those plans already providing oral contraceptives, the additional premium would be approximately $1 per employee per year and broken down as follows:

METHOD COST TO EMPLOYER PER EMPLOYEE PER YEAR
Oral Contraceptives

Diaphragms/Cervical Caps

Injectables (Depo-Provera)

Implants (Norplant)

IUDs

TOTAL

$16.13

0.03

0.77

0.15

0.04

$17.12


The DOH Sunrise Report went on to note that "according to the Alan Guttmacher/Buck Consultants Report, adding all five approved contraceptive methods will increase an employer's total health care cost by less than 1%. However, according to a 1995 study by Foster Higgins, it costs employers with ten or more employees an average of $3,810 each year to cover an employee, spouse and dependents. This being the case, the percentage falls to less than one-half of a percent increase in premium. For those plans covering oral contraceptives, but not the other methods, the additional premium would be negligible."11

The above figures are consistent with previous estimates by Health Insurance Association of America presented to the California Assembly Insurance Committee on the cost of oral contraceptive coverage. The Alan Guttmacher Institute report noted that HIAA estimated that the cost of adding contraceptive coverage (for oral contraceptives only) to a drug plan would be $16.20 per employee per year, or $1.35 per month per employee.12 The DOH Sunrise Report noted also that the Utah public employee plan, the medical insurer for Utah state employees estimated the cost of coverage at $16 per year.13 The Virginia state and local benefits health plan provides coverage for approximately 85,000 employees and cites costs of $16.47 per year.4

Again, it must be noted that approximately half of the plans surveyed in Washington in 1998 offered some form of contraceptive services. In the latest survey, that number has risen to about 61%. The approximate $21 cost per enrollee and approximate $16 responsibility (assuming 20% enrollee responsibility) is if the plan offers no coverage at all. For a plan that offers oral contraceptives, the addition of all other methods is about $1 before any enrollee responsibility.

Costs of Not Providing Contraceptive Coverage: There are potential cost offsets for reducing coverage of unintended pregnancies and pregnancy termination services. In 1993 and 1994, 55% of the pregnancies in Washington were unintended at the time of conception.15 Women who are not using contraception, are not using contraception regularly, or are using less effective methods of contraception due to costs are more likely to have unintended pregnancies. Over five years, a sexually active women who does not use contraception will have an estimated 4.25 unintended pregnancies.16 A study by the American Journal of Public Health found that if 15% of women who were not using any contraceptive method began to use oral contraceptive pills, the resulting savings in pregnancy care costs would cover the cost of oral contraceptive pills for all the other contraceptive pill users in a particular insurance plan.17 The American Journal of Public Health report found that costs of pregnancy-related care ranged from $416 for an induced abortion to $10,638 for a delivery though a caesarian section.18 Complications occurring in the birth can raise the costs many times over. Business and Health19 cited an Alan Guttmacher Institute study that found that every public dollar spent on contraceptive services saved $4.40 in medical and social services to women who would have become pregnant. Of those costs, 75% are medical savings. Business and Health20 also noted that while the addition of contraceptives would add about 1% to an employer's total health costs, this did not account for savings through lower medical costs for unintended pregnancies. It also did not account for savings in employee sick time, maternity leave, and costs of replacing the worker.

Summary: Exact costs will vary from plan to plan. Plans that do not offer a prescription drug benefit will not have to offer any additional coverage for prescription contraception. The majority of plans surveyed in Washington do offer some type of prescription drug benefit. That benefit must be offered with coverage for contraception under the same terms and conditions as any other covered benefit. A third of all plans offered all five types of reversible contraceptives. The majority of the plans that cover prescription drugs do cover contraception in some form but not necessarily all types or on the same conditions as other covered prescription benefits. Those plans may need to reform the benefits that are offered to ensure that they are not unfairly discriminating on the basis of sex. Depending on the benefits offered, costs could run from pennies per enrollee per year to approximately $16 per year. Those costs do not factor in potential cost savings from the reduction in medical costs from reduced unintended pregnancies and the associated costs in employee time and in medical costs. The costs can be further reduced or eliminated by changes in the cost-sharing agreements, which is permitted if applied fairly.

Cost of compliance for small business compared with the cost of compliance for the largest business: Potential direct costs of compliance with the rule should be proportional for all carriers, large and small. The indirect impacts should also be proportional for purchasers large and small. The rule prohibits unfair discrimination based on sex. Unfair discrimination based on sex is currently prohibited by law; the rule clarifies the application of the principle. Most, if not all, of the costs are attributable to the underlying laws, not these rules. Again, adding a prescription benefit is not required by the rule. An offered benefit may not unfairly discriminate. The provision of prescription contraceptive benefits is not dependent on the size of the health carrier or the size of the purchaser. A national survey indicated that about half of the large group plans cover contraceptives.21 Those figures are essentially the same as the number of plans of all types that offer contraceptives in Washington.22 In Washington, the type of health plan seems to have a higher correlative effect than size of plan or purchaser. The insurance commissioner's study found that of the list of all five reversible types of prescription contraception, 30% of all plans covered the whole list. The breakdown was as follows: Zero indemnity plans, 6% of preferred provider organization plans, 15% of point of service plans, and 50% of ["]gatekeeper" plans.23 The rules drafters will consider any suggested alternatives that accomplish the goals of the rules while mitigating the costs of compliance, particularly those costs incurred by small businesses.

Involvement of affected businesses in development of the rule: The commissioner and staff have engaged in on-going discussions with directly regulated and indirectly impacted parties since the adoption of the existing rules by the prior administration. Comments were solicited in the CR-101 and a discussion draft was shared with interested parties. The commissioner and staff will continue to discuss the proposed rules with industry representatives and interested parties to ascertain any additional methods to reduce any potential costs.

Informing and involvement of small businesses in the development of the proposed rule: All directly affected parties were notified of the beginning of formal rule making by the CR-101. The CR-101 for this rule was filed on February 21, 2001, for publication in the Washington State Register. The CR-101 was mailed to directly impacted and interested parties in June and posted on the commissioner's website. Comments were solicited in the CR-101 and a discussion draft was shared with interested parties. Staff has engaged in dialogue with directly regulated and indirectly impacted parties during the development of the proposal and will continue those conversations during the rule-making process. The commissioner encourages all interested parties to comment on the rule and engage in dialogue about impacts and any possible mitigation.


1 No. C00-1213L, U.S. District Court, Western District of Washington.

2 See chapter 49.60 RCW and Title VII of the federal Civil Rights Act.

3 U.S. Policy Can Reduce Cost Barriers to Contraception, AGI, 1999.

4 U.S. Policy Can Reduce Cost Barriers to Contraception, AGI, 1999.

5 Department of Health, State of Washington, Contraceptive Services Sunrise Review Report, 1998.

6 Darroch JE, Cost to Employer Health Plans of Covering Contraceptives, New York: AGI, 1998.

7 Department of Health, State of Washington, Contraceptive Services Sunrise Review Report, 1998.

8 Department of Health, State of Washington, Contraceptive Services Sunrise Review Report, 1998.

9 Office of the Insurance Commissioner, State of Washington, Reproductive Health Benefits Survey, 1998.

10 Darroch JE, Cost to Employer Health Plans of Covering Contraceptives, New York: AGI, 1998.

11 Department of Health, Contraceptive Services Sunrise Review Report, 1998.

12 Darroch JE, Cost to Employer Health Plans of Covering Contraceptives, New York: AGI, 1998.

13 Department of Health, State of Washington, Contraceptive Services Sunrise Review Report, 1998.

14 Department of Health, State of Washington, Contraceptive Services Sunrise Review Report, 1998.

15 Department of Health, State of Washington, Pregnancy Risk Assessment Monitoring System (PRAMS) Surveillance Report: 1993-4.

16 Department of Health, State of Washington, Contraceptive Services Sunrise Review Report, 1998.

17 Trussell, J. et al., 1995. The Economic Value of Contraception: A comparison of 15 Methods. American Journal of Public Health. 85(04):494-503.

18 Trussell, J. et al., 1995. The Economic Value of Contraception: A comparison of 15 Methods. American Journal of Public Health. 85(04):494-503.

19 Business and Health. 1993. Contraception: An Employer's Guide.

20 Business and Health. 1993. Contraception: An Employer's Guide.

21 Darroch JE, Cost to Employer Health Plans of Covering Contraceptives, New York: AGI, 1998.

22 Office of the Insurance Commissioner, State of Washington, Reproductive Health Benefits Survey, 1998.

23 Office of the Insurance Commissioner, State of Washington, Reproductive Health Benefits Survey, 1998.

A copy of the statement may be obtained by writing to Kacy Brandeberry, P.O. Box 40255, Olympia, WA 98504-0255, e-mail Kacyb@oic.wa.gov, phone (360) 664-3784, fax (360) 664-2782.

RCW 34.05.328 applies to this rule adoption. This is a significant legislative rule for the purpose of RCW 34.05.328.

Hearing Location: Senate Hearing Room 4, JA Cherberg Building, 14th and Water, Olympia, Washington, on August 22, 2001, at 10:00 a.m.

Assistance for Persons with Disabilities: Contact Lori Villaflores by August 20, 2001, TDD (360) 407-0409.

Submit Written Comments to: Kacy Brandeberry, P.O. Box 40255, Olympia, WA 98504-0255, e-mail Kacyb@oic.wa.gov, fax (360) 664-2782, by August 21, 2001.

Date of Intended Adoption: September 4, 2001.

July 18, 2001

William J. Hagens

for Mike Kreidler

Insurance Commissioner

OTS-5040.3


NEW SECTION
WAC 284-43-822   Unfair practice relating to health coverage.   (1) It is an unfair practice for any health carrier to restrict, exclude, or reduce coverage or benefits under any health plan on the basis of sex. By way of example, a health plan providing generally comprehensive coverage of prescription drugs and prescription devices restricts, excludes, or reduces coverage or benefits on the basis of sex if it fails to provide prescription contraceptive coverage that complies with this regulation.

(2)(a) Health plans providing generally comprehensive coverage of prescription drugs and prescription devices shall not exclude prescription contraceptives or cover prescription contraceptives on a less favorable basis than other covered prescription drugs and prescription devices. Coverage of prescription contraceptives includes coverage for medically necessary services associated with the prescribing, dispensing, delivery, distribution, administration and removal of a prescription contraceptive to the same extent, and on the same terms, as other outpatient services.

(b) Health plans may not impose benefit waiting periods, limitations, or restrictions on prescription contraceptives that are not required or imposed on other covered prescription drugs and prescription devices.

(c) Health plans may require cost sharing, such as copayments or deductibles, for prescription contraceptives and for services associated with the prescribing, dispensing, delivery, distribution, administration, and removal of the prescription contraceptives, to the same extent that such cost sharing is required for other covered prescription drugs, devices or services.

(d) Health carriers may use, and health plans may limit coverage to, a closed formulary for prescription contraceptives if they otherwise use a closed formulary, but the formulary shall cover each of the types of prescription contraception as defined in (f) of this subsection.

(e) If a health plan excludes coverage for nonprescription drugs and devices except for those required by law, it may also exclude coverage for nonprescription contraceptive drugs and devices.

(f) For purposes of subsections (1) and (2) of this section, "prescription contraceptives" include United States Food and Drug Administration (FDA) approved oral, implant and injectable contraceptive drugs, intrauterine devices, and prescription barrier methods, including contraceptive products declared safe and effective for use as emergency contraception by the FDA.

(g) This section applies prospectively to health plans offered, issued, or renewed by a health carrier on or after January 1, 2002, unless otherwise exempted by law.

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REPEALER

     The following sections of the Washington Administrative Code are repealed:
WAC 284-43-821 Maternity and pregnancy-related exclusions, limitations and conditions in individual plans.
WAC 284-43-823 Maternity and pregnancy-related exclusions, limitations and conditions in group plans.
WAC 284-43-824 Effective date.

Washington State Code Reviser's Office