INSURANCE COMMISSIONER

[Insurance Commissioner Matter R 2020-14—Filed November 3, 2020, 6:20 p.m.]

Preproposal statement of inquiry was filed as WSR 20-17-056.

Title of Rule and Other Identifying Information: Mitigating inequity in the health insurance market.

Hearing Location(s): On December 8, 2020, at 9 a.m. Zoom meeting. Detailed information for attending the Zoom meeting posted on the office of the insurance commissioner (OIC) website here https://www.insurance.wa.gov/mitigating-inequity-health-insurance-market-r-2020-14. Due to the COVID-19 public health emergency, this hearing will be held via Zoom.

Date of Intended Adoption: December 9, 2020.

Submit Written Comments to: Tabba Alam, P.O. Box 40260, Olympia, WA 98504-0260, email rulescoordinator@oic.wa.gov, fax 360-586-3109, by December 8, 2020.

Assistance for Persons with Disabilities: Contact Melanie Watness, phone 360-725-7013, fax 360-586-2023, TTY 360-586-0241, email MelanieW@oic.wa.gov, by December 4, 2020.

Purpose of the Proposal and Its Anticipated Effects, Including Any Changes in Existing Rules: The commissioner will consider adopting rules regarding adding new WAC 284-43-6590 to chapter 284-43 WAC, necessary to implement HB [SHB] 2554, chapter 283, Laws of 2020, concerning mandatory benefits, notices and fees related to mandatory benefits.

Reasons Supporting Proposal: The legislature passed HB [SHB] 2554 in 2020, that requires the insurance commissioner to assess a fee on a health carrier that excludes, under state or federal law, any health benefit required or mandated by Title 48 RCW, or rules adopted by the commissioner from any health plan or student health plan. The legislation requires health carriers to provide notice on their website about alternative ways to get access to excluded mandatory benefits. OIC is required, to provide notices and information about the carriers' excluded benefits on their website. Further, it also requires the health benefit exchange to update their website and provide notice about ay [ways] to get access alternatively in a timely manner. The rule has also been developed to ensure that OIC's process for collecting the fee and the fee-waiver process described by the bill is detailed.

Statutory Authority for Adoption: HB [SHB] 2554 (chapter 283, Laws of 2020, effective date June 11, 2020); RCW 48.02.060, 48.43.072, 48.43.073.

Statute Being Implemented: HB [SHB] 2554 (chapter 283, Laws of 2020).

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

Name of Proponent: Mike Kreidler, insurance commissioner, governmental.

Name of Agency Personnel Responsible for Drafting: Tabba Alam, P.O. Box 40260, Olympia, WA, 360-725-7170; Implementation: Molly Nolette/Melanie Anderson, P.O. Box 40255, Tumwater, WA, 360-725-7117/360-725-7214; and Enforcement: Toni Hood, P.O. Box 40255, Tumwater, WA, 360-725-7050.

A school district fiscal impact statement is not required under RCW 28A.305.135.

A cost-benefit analysis is required under RCW 34.05.328. A preliminary cost-benefit analysis may be obtained by contacting Tabba Alam, 302 Sid Snyder Avenue S.W., Olympia, WA 98504, phone 360-725-7170, email rulescoordinator@oic.wa.gov, www.insurance.wa.gov.

This rule proposal, or portions of the proposal, is exempt from requirements of the Regulatory Fairness Act because the proposal:

Is exempt under RCW 19.85.025(4).

Explanation of exemptions: This rule only impacts large insurance carriers which are not classified as small businesses as defined by RCW 19.85.020(2). While calculating we have applied default cost of compliance $1,000 as it is indeterminate at this time. OIC has directly heard from stakeholders regarding questions and issues related to implementation and have revised internal processes to respond to some of these issues. OIC has determined that the compliance with the proposed rule does not put any disproportionate impact on small businesses or government agencies.

2019 Industry NAICS Code	Estimated Cost of Compliance	Industry Description	NAICS Code Title	Average Number of Employees/Business	Minor Cost Estimate - 0.003% of Avg. Annual Receipts
524114	$1,000	Direct Health and Medical Insurance Carriers	Finance and insurance	742 (Not small business)	$3,503,165

Source: United States Census Bureau (2017). Retrieved October 20, 2020, from census.gov.

Insurance Commissioner

WAC 284-43-6590Requirements for mitigating inequity in the health insurance market.

For the purposes of mitigating inequity in the health insurance market, unless waived by the commissioner pursuant to RCW 48.43.725 and subsection (3) of this section, the commissioner must assess a fee on any health carrier offering a health plan or student health plan that excludes, under state or federal law, any benefit mandated or required by Title 48 RCW or rules adopted by the commissioner. Such health carrier must:

(1) Notify each enrollee in writing of the following:

(a) Which benefits the health plan or student health plan does not cover; and

(b) Alternate ways in which the enrollees may access excluded benefits in a timely manner.

(2) As part of its form filing:

(a) Provide a sample notification to enrollees as required in subsection (1) of this section;

(b) Include in the benefit description alternate ways enrollees may access excluded benefits in a timely manner; and

(3) As part of its rate filing:

(a) Include a cover letter and as a separate supporting document, a description of excluded benefits and the specific state or federal law permitting the benefit exclusion;

(b) Submit the health carrier's supporting documentation for calculating the amount of estimated fee, per member per month and in total. The estimated fee in total must be the actuarial equivalent of costs attributed to the provision and administration of the excluded benefit for members in the rating group or rating pool. The carrier must include a certification by a member of the American Academy of Actuaries that the estimated fee in total is the actuarial equivalent of costs attributed to the provision and administration of the excluded benefit; and

(c) If a health carrier intends to request the commissioner's approval to waive the fee calculated in this subsection, the health carrier must submit:

(i) A separate document requesting a fee waiver;

(ii) A description of any excluded mandated or required benefit and the specific state or federal law permitting the benefit exclusion; and

(iii) A detailed description of alternative access provided by the carrier to any excluded mandated or required benefit. The description should include sufficient information for the commissioner to determine whether a carrier excluding a mandated or required benefit has provided enrollees alternative access to such benefit. In making a fee-waiver determination, the commissioner may take into account timely access, cost, ease of use, and provider access.

(d) The commissioner may request from the carrier additional information or documents necessary to evaluate the fee-waiver request.

(4) The commissioner's determination whether to grant the fee waiver requested by the carrier will be part of the rate filing records.

(5) If a fee waiver is not requested or granted based upon a request in the rate filing, fees calculated and assessed by the commissioner under RCW 48.43.725(2) and subsection (3) of this section, must be paid by the health carrier to the OIC within sixty days after the rate filing is approved.