Original Notice.

     Preproposal statement of inquiry was filed as WSR 13-03-140.

     Title of Rule and Other Identifying Information: Open and special enrollment periods - health plans.

     Hearing Location(s): Office of the Insurance Commissioner, Training Room (T-120), 5000 Capitol Way South, Tumwater, WA, on June 26, 2013, at 10:00 a.m.

     Date of Intended Adoption: July 9, 2013.

     Submit Written Comments to: Meg Jones, 5000 Capitol Way South, Tumwater, WA, e-mail rulescoordinator@oic.wa.gov, fax (360) 586-3109, by June 26, 2013.

     Assistance for Persons with Disabilities: Contact Lori [Lorie] Villaflores by June 24, 2013, TTY (360) 586-0241 or (360) 725-7087.

     Purpose of the Proposal and Its Anticipated Effects, Including Any Changes in Existing Rules: The proposed rules are designed to align the exchange and off-exchange marketplaces to address the risk of adverse selection, and ensure that each issuer administers open and special enrollment periods for the individual and small group markets consistently.

     Reasons Supporting Proposal: For small group plans, the option of conducting open enrollment is available to issuers; these proposed rules will standardize practices related to how open enrollment must be conducted if an issuer elects to do so for its small group offerings. In addition, federal law requires issuers to conduct a special annual enrollment period for small groups whose sponsor is unable to comply with a material plan provision relating to employer contribution or group participation rules. These proposed rules would establish that requirement in our state code.

     Beginning January 1, 2014, absent open enrollment requirements, health plan issuers must enroll all applicants at any time during the benefit year. Beginning October 1, 2013, and each October 1 thereafter, the health benefit exchange will conduct open enrollment for individual health plans offered on the exchange. The first year, open enrollment closes in March 2014; subsequently it will end in December of each year. This creates a risk of adverse selection for the off-exchange markets, someone with a specific health care need can enroll, receive the service, and disenroll, unless open enrollment periods are established that parallel the exchange's time frames. The proposed rules address this risk.

     Statutory Authority for Adoption: RCW 48.02.060, 48.18.120(2), 48.20.450, 48.43.0122, 48.43.720(3), 48.44.050, and 48.46.200.

     Statute Being Implemented: RCW 48.18.120, 48.20.450, 48.20.500, 48.43.012, 48.43.015, 48.43.008, 48.43.035, 48.43.700, and 43.71.040.

     Rule is necessary because of federal law, 45 C.F.R. 147.104; 45 C.F.R. 147.106; 45 C.F.R. 155.420; 45 C.F.R. 155.725.

     Name of Proponent: Office of the insurance commissioner, governmental.

     Name of Agency Personnel Responsible for Drafting: Meg Jones, P.O. Box 40258, Olympia, WA, (360) 725-7170; Implementation: Beth Berendt, P.O. Box 40258, Olympia, WA, (360) 725-7117; and Enforcement: Leslie Krier, P.O. Box 40258, Olympia, WA, (360) 725-7216.

     No small business economic impact statement has been prepared under chapter 19.85 RCW. The entities affected by the rule do not meet the definition of small business.

     A cost-benefit analysis is required under RCW 34.05.328. A preliminary cost-benefit analysis may be obtained by contacting Meg Jones, P.O. Box 40258, Olympia, WA 98504, phone (360) 725-7170, fax (360) 586-3109, e-mail rulescoordinator@oic.wa.gov.

May 22, 2013

Mike Kreidler

Insurance Commissioner

OTS-5362.9

NEW SECTION
WAC 284-170-400   Preexisting condition limitations.   For health plans offered, issued or renewed on or after January 1, 2014, issuers must not condition or otherwise limit enrollment based on preexisting conditions.

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     (2) For small group health plans offered on the health benefit exchange, an issuer must comply with the open enrollment period requirements for the dates of the open enrollment established by the health benefit exchange.

     (3) For small group health plans offered off the health benefit exchange, the issuer may elect to limit enrollment to an open enrollment period. Such an open enrollment period must:

     (a) Be a minimum of forty-five days in length;

     (b) Apply in the same manner and with the same conditions to all plans the issuer offers in the off-exchange small group market. An issuer may not establish different open enrollment periods or requirements for specific health benefit plans;

     (c) Begin at the same time as the individual market open enrollment period.

     (4) If an issuer does not hold an open enrollment period for small group plans off the health benefit exchange, the issuer must permit qualified small groups to purchase coverage at any point during the year, and permit the small group an annual election period.

     (5) If an issuer conducts an open enrollment period, the issuer must:

     (a) Explain that fact prominently on its web site;

     (b) Include on its web site information about special enrollment periods so that a consumer has the ability to access or request and receive an application packet for enrollment at any time. The displayed information must also include details written in plain language explaining what constitutes a qualifying event for special enrollment; and

     (c) Promptly make application packets available to interested employers or plan sponsors upon request, even if the request is made outside the open enrollment periods.

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     (2) The special annual small group enrollment period required by this section must begin November 15th and extend through December 15th of each year.

     (3) If a small group plan is not renewed at its renewal date because an employer or plan sponsor does not meet an issuer's employer contribution or group participation requirements, and the renewal date is outside the special annual enrollment period in this section, an issuer must permit the employer or plan sponsor to enroll in any other group coverage for which it does meet the employer contribution or group participation requirements.

     (4) At the time of nonrenewal of the plan for the reasons set forth in subsection (1) of this section, the issuer must notify the enrollees of the nonrenewed plan in writing that if the employer or plan sponsor does not identify an alternate small group plan, the enrollees have their special enrollment rights and options on or off the health benefit exchange based on loss of employer or group sponsored coverage.

     (5) For any other situation in which a plan no longer offers benefits to the class of similarly situated individuals that include the group's enrollees, the issuer must notify the enrollees in the plan of their special enrollment rights and options on or off the health benefit exchange.

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     (2) A qualifying event for special enrollment in plans offered on or off the health benefit exchange is:

     (a) The loss, for any reason, of employer sponsored insurance coverage, or the individual or group coverage of a person under whose policy they were enrolled, unless the discontinuation is based on the individual's misrepresentation of a material fact affecting coverage or for fraud related to the discontinued health coverage;

     (b) The loss of eligibility for medicaid or a public program providing health benefits;

     (c) The loss of coverage as the result of dissolution of marriage or termination of a domestic partnership;

     (d) A permanent change in residence, work, or living situation, whether or not within the choice of the individual, where the health plan under which they were covered does not provide coverage in that person's new service area;

     (e) The birth, placement for adoption or adoption of the applicant for whom coverage is sought;

     (f) A situation in which a plan no longer offers benefits to the class of similarly situated individuals that includes the applicant;

     (g) Loss of individual or group coverage purchased on the health benefit exchange due to an error on the part of the exchange, the issuer or the U.S. Department of Health and Human Services.

     (3) Nothing in this rule is intended to alter or affect the requirements of RCW 48.43.517.

     (4) An issuer may require reasonable proof or documentation that an individual seeking special enrollment has experienced a qualifying event.

     (5) An issuer must offer a special enrollee each benefit package available to members of the group who enrolled when first eligible. A special enrollee cannot be required to pay more for coverage than other members of the group who enrolled in the same coverage when first eligible. Any difference in benefits or cost-sharing requirements constitutes a different benefit package.

     (6) An issuer must include detailed information about special enrollment options and rights in its health plan documents provided pursuant to WAC 284-43-820, and in any policy or certificate of coverage provided to an employer, plan sponsor, or enrollee. The notice must be substantially similar to the model notice provided by the U.S. Department of Labor or the U.S. Department of Health and Human Services.

     (7) For children who experience a qualifying event, if the selected plan is not the plan on which the parent is then enrolled, or if the parent does not have coverage, the issuer must permit the parent to enroll when the child seeks enrollment for dependent coverage. An enrolling child must have access to any benefit package offered to employees, even if that requires the issuer to permit the parent to switch benefit packages.

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     (2) Special enrollment periods must not be shorter than sixty days from the date of the qualifying event.

     (3) The effective date of coverage for those enrolling in a small group plan through a special enrollment period is the first date of the next month after the application for coverage is received, unless one of the following exceptions applies:

     (a) For special enrollment of newborn, adopted or placed for adoption children, the date of birth, date of adoption or date of placement for adoption becomes the first effective date of coverage;

     (b) For applicants enrolling after the fifteenth of the month, the issuer must begin coverage not later than the first date of the second month after the application is received, unless the applicant is enrolling due to marriage or the commencement of a domestic partnership. Such applicant's coverage must begin on the first date of the next month, regardless of when in the month the application is received.

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     (2) An issuer must limit the dates for enrollment in plans offered on the individual market off the health benefit exchange to the same time period for open enrollment established by the health benefit exchange.

     (3) In addition to the open enrollment period established by the exchange, an issuer participating in the off-exchange individual market must hold an open enrollment period between March 15th and April 30th each year, making its child-only policies available to those under age nineteen.

     (4) An issuer must prominently display information on its web site about open enrollment periods and special enrollment periods, applicable to its plans offered either on or off the health benefit exchange.

     (a) The web site information about enrollment periods must provide a consumer with the ability to access or request and receive an application packet for enrollment at any time.

     (b) The displayed information must include details written in plain language explaining what constitutes a qualifying event for special enrollment.

     (5) For individual plans offered either on or off the health benefit exchange, an issuer must include detailed information about special enrollment options and rights in its health plan documents provided pursuant to WAC 284-43-820, and in the policy or certificate of coverage provided to an employer, plan sponsor or enrollee. The notice must be substantially similar to the model notice provided by the U.S. Department of Health and Human Services.

     (6) Written notice of open enrollment must be provided to enrolled persons at some point between September 1st and September 30th of each year.

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     (2) A qualifying event means the occurrence of one of the following:

     (a) The discontinuation for any reason of employer sponsored insurance coverage due to action by either the employer or the issuer or due to the individual's loss of eligibility for the employer sponsored coverage, or the discontinuation of the individual or group coverage of a person under whose policy they were enrolled, unless the discontinuation is based on the individual's misrepresentation of a material fact affecting coverage or for fraud related to the discontinued health coverage;

     (b) The loss of eligibility for medicaid or a public program providing health benefits;

     (c) The loss of coverage as the result of dissolution of marriage or termination of a domestic partnership;

     (d) A permanent change in residence, work, or living situation, whether or not within the choice of the individual, where the health plan under which they were covered does not provide coverage in that person's new service area;

     (e) The birth, placement for or adoption of the person for whom coverage is sought. For newborns, coverage must be effective from the moment of birth; for those adopted or placed for adoption, coverage must be effective from the date of adoption or placement for adoption, whichever occurs first;

     (f) A situation in which a plan no longer offers any benefits to the class of similarly situated individuals that includes the individual;

     (g) Coverage is discontinued in a qualified health plan by the health benefit exchange pursuant to 45 C.F.R. 155.430 and the three month grace period for continuation of coverage has expired;

     (h) Exhaustion of COBRA coverage due to failure of the employer to remit premium;

     (i) Loss of COBRA coverage where the individual has exceeded the lifetime limit in the plan and no other COBRA coverage is available;

     (j) If the person discontinues coverage under a health plan offered pursuant to chapter 48.41 RCW;

     (k) Loss of coverage as a dependent on a group plan due to age, if a conversion plan is not available.

     (3) If the special enrollee had prior coverage, an issuer must offer a special enrollee each of the benefit packages available to individuals who enrolled during the open enrollment period within the same metal tier or level at which the person was previously enrolled. Any difference in benefits or cost-sharing requirements for different individuals constitutes a different benefit package.

     (a) A special enrollee cannot be required to pay more for coverage than a similarly situated individual who enrolls during open enrollment.

     (b) An issuer may limit a special enrollee who was enrolled in a catastrophic plan as defined in RCW 48.43.005(8) to the plans available during open enrollment at either the bronze or silver level.

     (c) An issuer may restrict a special enrollee whose eligibility is based on their status as a dependent to the same metal tier for the plan on which the primary subscriber is enrolled.

     (4) An issuer may require reasonable proof or documentation that an individual seeking special enrollment has experienced a qualifying event.

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     (2) In addition to the special enrollment qualifying events set forth in WAC 284-170-428, the following special enrollment opportunities must be made available for individual plans offered on the health benefit exchange:

     (a) Native Americans must be permitted to enroll or change from one qualified health plan to another qualified health plan one time per month;

     (b) If the applicant lost prior coverage because a qualified health plan violated a material provision of the insurance contract, policy or certificate of coverage;

     (c) If applicant lost prior coverage due to errors by the health benefit exchange staff or the U.S. Department of Health and Human Services;

     (d) If the applicant seeks enrollment because they gained citizenship or acquired lawfully present status.

     (3) An individual who experiences a qualifying event and whose prior coverage was on a catastrophic health plan as defined in RCW 48.43.005 (8)(c)(i) may be limited by the exchange to enrollment in a bronze or silver level plan.

     (4) This section must not be interpreted or applied to preclude or limit the health benefit exchange's rights to automatically enroll qualified individuals based on good cause or as required by the U.S. Department of Health and Human Services.

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     (2) The effective date of coverage for those enrolling in an individual health plan through a special enrollment period is the first date of the next month after the premium is received by the issuer, unless one of the following exceptions applies:

     (a) For those enrolling after the twentieth of the month, the issuer must begin coverage not later than the first date of the second month after the application is received;

     (b) For special enrollment of newborn, adopted or placed for adoption children, the date of birth, date of adoption or date of placement for adoption, as applicable, becomes the first effective date of coverage;

     (c) For special enrollment based on marriage or the beginning of a domestic partnership, and for special enrollment based on loss of minimum essential coverage, coverage must begin on the first day of the next month.

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