H‑2142.1 _____________________________________________
SUBSTITUTE HOUSE BILL 1633
_____________________________________________
State of Washington 57th Legislature 2001 Regular Session
By House Committee on Health Care (originally sponsored by Representatives Campbell and Cody; by request of Insurance Commissioner)
READ FIRST TIME 02/27/01.
_1 AN ACT Relating to technical corrections to chapters 79 and 80,
_2 Laws of 2000; amending RCW 48.20.025, 48.41.030, 48.41.040,
_3 48.41.100, 48.41.110, 48.43.005, 48.43.012, 48.43.015, 48.43.018,
_4 48.43.025, 48.44.017, 48.46.062, and 70.47.060; adding a new
_5 section to chapter 48.43 RCW; and declaring an emergency.
_6 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
_7 Sec. 1. RCW 48.20.025 and 2000 c 79 s 3 are each amended to read
_8 as follows:
_9 (1) The definitions in this subsection apply throughout this
10 section unless the context clearly requires otherwise.
11 (a) "Claims" means the cost to the insurer of health care
12 services, as defined in RCW 48.43.005, provided to a policyholder
13 or paid to or on behalf of the policyholder in accordance with the
14 terms of a health benefit plan, as defined in RCW 48.43.005. This
15 includes capitation payments or other similar payments made to
16 providers for the purpose of paying for health care services for a
17 policyholder.
p. 1 SHB 1633
_1 (b) "Claims reserves" means: (i) The liability for claims which
_2 have been reported but not paid; (ii) the liability for claims
_3 which have not been reported but which may reasonably be expected;
_4 (iii) active life reserves; and (iv) additional claims reserves
_5 whether for a specific liability purpose or not.
_6 (c) "Earned premiums" means premiums, as defined in RCW
_7 48.43.005, plus any rate credits or recoupments less any refunds,
_8 for the applicable period, whether received before, during, or
_9 after the applicable period.
10 (d) "Incurred claims expense" means claims paid during the
11 applicable period plus any increase, or less any decrease, in the
12 claims reserves.
13 (e) "Loss ratio" means incurred claims expense as a percentage
14 of earned premiums.
15 (f) "Reserves" means: (i) Active life reserves; and (ii)
16 additional reserves whether for a specific liability purpose or
17 not.
18 (2) An insurer shall file, for informational purposes only, a
19 notice of its schedule of rates for its individual health benefit
20 plans with the commissioner prior to use.
21 (3) An insurer shall file with the notice required under
22 subsection (2) of this section supporting documentation of its
23 method of determining the rates charged. The commissioner may
24 request only the following supporting documentation:
25 (a) A description of the insurer's rate-making methodology;
26 (b) An actuarially determined estimate of incurred claims which
27 includes the experience data, assumptions, and justifications of
28 the insurer's projection;
29 (c) The percentage of premium attributable in aggregate for
30 nonclaims expenses used to determine the adjusted community rates
31 charged; and
32 (d) A certification by a member of the American academy of
33 actuaries, or other person approved by the commissioner, that the
34 adjusted community rate charged can be reasonably expected to
35 result in a loss ratio that meets or exceeds the loss ratio
36 standard established in subsection (7) of this section.
37 (4) The commissioner may not disapprove or otherwise impede the
38 implementation of the filed rates.
SHB 1633 p. 2
_1 (5) By the last day of May each year any insurer ((providing))
_2 issuing or renewing individual health benefit plans in this state
_3 during the preceding calendar year shall file for review by the
_4 commissioner supporting documentation of its actual loss ratio for
_5 its individual health benefit plans offered or renewed in the
_6 state in aggregate for the preceding calendar year. The filing
_7 shall include aggregate earned premiums, aggregate incurred
_8 claims, and a certification by a member of the American academy of
_9 actuaries, or other person approved by the commissioner, that the
10 actual loss ratio has been calculated in accordance with accepted
11 actuarial principles.
12 (a) At the expiration of a thirty-day period beginning with the
13 date the filing is ((delivered to)) received
by the commissioner,
14 the filing shall be deemed approved unless prior thereto the
15 commissioner contests the calculation of the actual loss ratio.
16 (b) If the commissioner contests the calculation of the actual
17 loss ratio, the commissioner shall state in writing the grounds
18 for contesting the calculation to the insurer.
19 (c) Any dispute regarding the calculation of the actual loss
20 ratio shall, upon written demand of either the commissioner or the
21 insurer, be submitted to hearing under chapters 48.04 and 34.05
22 RCW.
23 (6) If the actual loss ratio for the preceding calendar year is
24 less than the loss ratio established in subsection (7) of this
25 section, a remittance is due and the following shall apply:
26 (a) The insurer shall calculate a percentage of premium to be
27 remitted to the Washington state health insurance pool by
28 subtracting the actual loss ratio for the preceding year from the
29 loss ratio established in subsection (7) of this section.
30 (b) The remittance to the Washington state health insurance
31 pool is the percentage calculated in (a) of ((the
[this])) this
32 subsection, multiplied by the premium earned from each enrollee in
33 the previous calendar year. Interest shall be added to the
34 remittance due at a five percent annual rate calculated from the
35 end of the calendar year for which the remittance is due to the
36 date the remittance is made.
37 (c) All remittances shall be aggregated and such amounts shall
p. 3 SHB 1633
_1 be remitted to the Washington state high risk pool to be used as
_2 directed by the pool board of directors.
_3 (d) Any remittance required to be issued under this section
_4 shall be issued within thirty days after the actual loss ratio is
_5 deemed approved under subsection (5)(a) of this section or the
_6 determination by an administrative law judge under subsection
_7 (5)(c) of this section.
_8 (7) The loss ratio applicable to this section shall be seventy-
_9 four percent minus the premium tax rate applicable to the
10 insurer's individual health benefit plans under RCW 48.14.0201.
11 Sec. 2. RCW 48.41.030 and 2000 c 79 s 6 are each amended to read
12 as follows:
13 The definitions in this section apply throughout this chapter
14 unless the context clearly requires otherwise.
15 (1) "Accounting year" means a twelve-month period determined by
16 the board for purposes of record-keeping and accounting. The first
17 accounting year may be more or less than twelve months and, from
18 time to time in subsequent years, the board may order an
19 accounting year of other than twelve months as may be required for
20 orderly management and accounting of the pool.
21 (2) "Administrator" means the entity chosen by the board to
22 administer the pool under RCW 48.41.080.
23 (3) "Board" means the board of directors of the pool.
24 (4) "Commissioner" means the insurance commissioner.
25 (5) "Covered person" means any individual resident of this
26 state who is eligible to receive benefits from any member, or
27 other health plan.
28 (6) "Health care facility" has the same meaning as in RCW
29 70.38.025.
30 (7) "Health care provider" means any physician, facility, or
31 health care professional, who is licensed in Washington state and
32 entitled to reimbursement for health care services.
33 (8) "Health care services" means services for the purpose of
34 preventing, alleviating, curing, or healing human illness or
35 injury.
36 (9) "Health carrier" or "carrier" has the same meaning as in
37 RCW 48.43.005.
SHB 1633 p. 4
_1 (10) "Health coverage" means any group or individual disability
_2 insurance policy, health care service contract, and health
_3 maintenance agreement, except those contracts entered into for the
_4 provision of health care services pursuant to Title XVIII of the
_5 Social Security Act, 42 U.S.C. Sec. 1395 et seq. The term does not
_6 include short-term care, long-term care, dental, vision, accident,
_7 fixed indemnity, disability income contracts, ((civilian
health
_8 and medical program for the uniform services
(CHAMPUS), 10 U.S.C.
_9 55,)) limited benefit or credit insurance,
coverage issued as a
10 supplement to liability insurance, insurance arising out of the
11 worker's compensation or similar law, automobile medical payment
12 insurance, or insurance under which benefits are payable with or
13 without regard to fault and which is statutorily required to be
14 contained in any liability insurance policy or equivalent self-
15 insurance.
16 (11) "Health plan" means any arrangement by which persons,
17 including dependents or spouses, covered or making application to
18 be covered under this pool, have access to hospital and medical
19 benefits or reimbursement including any group or individual
20 disability insurance policy; health care service contract; health
21 maintenance agreement; uninsured arrangements of group or group-
22 type contracts including employer self-insured, cost-plus, or
23 other benefit methodologies not involving insurance or not
24 governed by Title 48 RCW; coverage under group-type contracts
25 which are not available to the general public and can be obtained
26 only because of connection with a particular organization or
27 group; and coverage by medicare or other governmental benefits.
28 This term includes coverage through "health coverage" as defined
29 under this section, and specifically excludes those types of
30 programs excluded under the definition of "health coverage" in
31 subsection (10) of this section.
32 (12) "Medical assistance" means coverage under Title XIX of the
33 federal Social Security Act (42 U.S.C., Sec. 1396 et seq.) and
34 chapter 74.09 RCW.
35 (13) "Medicare" means coverage under Title XVIII of the Social
36 Security Act, (42 U.S.C. Sec. 1395 et seq., as amended).
37 (14) "Member" means any commercial insurer which provides
38 disability insurance or stop loss insurance, any health care
p. 5 SHB 1633
_1 service contractor, and any health maintenance organization
_2 licensed under Title 48 RCW. "Member" also means the Washington
_3 state health care authority as issuer of the state uniform medical
_4 plan. "Member" shall also mean, as soon as authorized by federal
_5 law, employers and other entities, including a self-funding entity
_6 and employee welfare benefit plans that provide health plan
_7 benefits in this state on or after May 18, 1987. "Member" does not
_8 include any insurer, health care service contractor, or health
_9 maintenance organization whose products are exclusively dental
10 products or those products excluded from the definition of "health
11 coverage" set forth in subsection (10) of this section.
12 (15) "Network provider" means a health care provider who has
13 contracted in writing with the pool administrator or a health
14 carrier contracting with the pool administrator to offer pool
15 coverage to accept payment from and to look solely to the pool or
16 health carrier according to the terms of the pool health plans.
17 (16) "Plan of operation" means the pool, including articles, by-
18 laws, and operating rules, adopted by the board pursuant to RCW
19 48.41.050.
20 (17) "Point of service plan" means a benefit plan offered by
21 the pool under which a covered person may elect to receive covered
22 services from network providers, or nonnetwork providers at a
23 reduced rate of benefits.
24 (18) "Pool" means the Washington state health insurance pool as
25 created in RCW 48.41.040.
26 Sec. 3. RCW 48.41.040 and 2000 c 80 s 1 are each amended to read
27 as follows:
28 (1) There is created a nonprofit entity to be known as the
29 Washington state health insurance pool. All members in this state
30 on or after May 18, 1987, shall be members of the pool. When
31 authorized by federal law, all self-insured employers shall also
32 be members of the pool.
33 (2) Pursuant to chapter 34.05 RCW the commissioner shall,
34 within ninety days after May 18, 1987, give notice to all members
35 of the time and place for the initial organizational meetings of
36 the pool. A board of directors shall be established, which shall
37 be comprised of ten members. The governor shall select one member
SHB 1633 p. 6
_1 of the board from each list of three nominees submitted by
_2 statewide organizations representing each of the following: (a)
_3 Health care providers; (b) health insurance agents; (c) small
_4 employers; and (d) large employers. The governor shall select two
_5 members of the board from a list of nominees submitted by
_6 statewide organizations representing health care consumers. In
_7 making these selections, the governor may request additional names
_8 from the statewide organizations representing each of the persons
_9 to be selected if the governor chooses not to select a member from
10 the list submitted. The remaining four members of the board shall
11 be selected by election from among the members of the pool. The
12 elected members shall, to the extent possible, include at least
13 one representative of health care service contractors, one
14 representative of health maintenance organizations, and one
15 representative of commercial insurers which provides disability
16 insurance. The members of the board shall elect a chair from the
17 voting members of the board. The insurance commissioner shall be
18 a nonvoting, ex officio member. When self-insured organizations
19 other than the Washington state health care authority become
20 eligible for participation in the pool, the membership of the
21 board shall be increased to eleven and at least one member of the
22 board shall represent the self-insurers.
23 (3) The original members of the board of directors shall be
24 appointed for intervals of one to three years. Thereafter, all
25 board members shall serve a term of three years. Board members
26 shall receive no compensation, but shall be reimbursed for all
27 travel expenses as provided in RCW 43.03.050 and 43.03.060.
28 (4) The board shall submit to the commissioner a plan of
29 operation for the pool and any amendments thereto necessary or
30 suitable to assure the fair, reasonable, and equitable
31 administration of the pool. The commissioner shall, after notice
32 and hearing pursuant to chapter 34.05 RCW, approve the plan of
33 operation if it is determined to assure the fair, reasonable, and
34 equitable administration of the pool and provides for the sharing
35 of pool losses on an equitable, proportionate basis among the
36 members of the pool. The plan of operation shall become effective
37 upon approval in writing by the commissioner consistent with the
38 date on which the coverage under this chapter must be made
p. 7 SHB 1633
_1 available. If the board fails to submit a plan of operation
_2 within one hundred eighty days after the appointment of the board
_3 or any time thereafter fails to submit acceptable amendments to
_4 the plan, the commissioner shall, within ninety days after notice
_5 and hearing pursuant to chapters 34.05 and 48.04 RCW, adopt such
_6 rules as are necessary or advisable to effectuate this chapter.
_7 The rules shall continue in force until modified by the
_8 commissioner or superseded by a plan submitted by the board and
_9 approved by the commissioner.
10 (5) The board is subject to the provisions of the open public
11 meetings act, chapter 42.30 RCW.
12 Sec. 4. RCW 48.41.100 and 2000 c 79 s 12 are each amended to read
13 as follows:
14 (1) The following persons who are residents of this state are
15 eligible for pool coverage:
16 (a) Any person who provides evidence of a carrier's decision
17 not to accept him or her for enrollment in an individual health
18 benefit plan as defined in RCW 48.43.005 based upon, and within
19 ninety days of the receipt of, the results of the standard health
20 questionnaire designated by the board and administered by health
21 carriers under RCW 48.43.018;
22 (b) Any person who continues to be eligible for pool coverage
23 based upon the results of the standard health questionnaire
24 designated by the board and administered by the pool administrator
25 pursuant to subsection (3) of this section;
26 (c) Any person who resides in a county of the state where no
27 carrier or insurer ((regulated)) eligible
under chapter 48.15 RCW
28 offers to the public an individual health benefit plan other than
29 a catastrophic health plan as defined in RCW 48.43.005 at the time
30 of application to the pool, and who makes direct application to
31 the pool; and
32 (d) Any medicare eligible person upon providing evidence of
33 rejection for medical reasons, a requirement of restrictive
34 riders, an up-rated premium, or a preexisting conditions
35 limitation on a medicare supplemental insurance policy under
36 chapter 48.66 RCW, the effect of which is to substantially reduce
SHB 1633 p. 8
_1 coverage from that received by a person considered a standard risk
_2 by at least one member within six months of the date of
_3 application.
_4 (2) The following persons are not eligible for coverage by the
_5 pool:
_6 (a) Any person having terminated coverage in the pool unless
_7 (i) twelve months have lapsed since termination, or (ii) that
_8 person can show continuous other coverage which has been
_9 involuntarily terminated for any reason other than nonpayment of
10 premiums. However, these exclusions do not apply to eligible
11 individuals as defined in section 2741(b) of the federal health
12 insurance portability and accountability act of 1996 (42 U.S.C.
13 Sec. 300gg-41(b));
14 (b) Any person on whose behalf the pool has paid out one
15 million dollars in benefits;
16 (c) Inmates of public institutions and persons whose benefits
17 are duplicated under public programs. However, these exclusions do
18 not apply to eligible individuals as defined in section 2741(b) of
19 the federal health insurance portability and accountability act of
20 1996 (42 U.S.C. Sec. 300gg-41(b));
21 (d) Any person who resides in a county of the state where any
22 carrier or insurer regulated under chapter 48.15 RCW offers to the
23 public an individual health benefit plan other than a catastrophic
24 health plan as defined in RCW 48.43.005 at the time of application
25 to the pool and who does not qualify for pool coverage based upon
26 the results of the standard health questionnaire, or pursuant to
27 subsection (1)(d) of this section.
28 (3) When a carrier or insurer regulated under chapter 48.15 RCW
29 begins to offer an individual health benefit plan in a county
30 where no carrier had been offering an individual health benefit
31 plan:
32 (a) If the health benefit plan offered is other than a
33 catastrophic health plan as defined in RCW 48.43.005, any person
34 enrolled in a pool plan pursuant to subsection (1)(c) of this
35 section in that county shall no longer be eligible for coverage
36 under that plan pursuant to subsection (1)(c) of this section, but
37 may continue to be eligible for pool coverage based upon the
38 results of the standard health questionnaire designated by the
p. 9 SHB 1633
_1 board and administered by the pool administrator. The pool
_2 administrator shall offer to administer the questionnaire to each
_3 person no longer eligible for coverage under subsection (1)(c) of
_4 this section within thirty days of determining that he or she is
_5 no longer eligible;
_6 (b) Losing eligibility for pool coverage under this subsection
_7 (3) does not affect a person's eligibility for pool coverage under
_8 subsection (1)(a), (b), or (d) of this section; and
_9 (c) The pool administrator shall provide written notice to any
10 person who is no longer eligible for coverage under a pool plan
11 under this subsection (3) within thirty days of the
12 administrator's determination that the person is no longer
13 eligible. The notice shall: (i) Indicate that coverage under the
14 plan will cease ninety days from the date that the notice is
15 dated; (ii) describe any other coverage options, either in or
16 outside of the pool, available to the person; (iii) describe the
17 procedures for the administration of the standard health
18 questionnaire to determine the person's continued eligibility for
19 coverage under subsection (1)(b) of this section; and (iv)
20 describe the enrollment process for the available options outside
21 of the pool.
22 Sec. 5. RCW 48.41.110 and 2000 c 80 s 2 are each amended to read
23 as follows:
24 (1) The pool shall offer one or more care management plans of
25 coverage. Such plans may, but are not required to, include point of
26 service features that permit participants to receive in-network
27 benefits or out-of-network benefits subject to differential cost
28 shares. Covered persons enrolled in the pool on January 1, 2001,
29 may continue coverage under the pool plan in which they are
30 enrolled on that date. However, the pool may incorporate managed
31 care features into such existing plans.
32 (2) The administrator shall prepare a brochure outlining the
33 benefits and exclusions of the pool policy in plain language.
34 After approval by the board, such brochure shall be made
35 reasonably available to participants or potential participants.
36 (3) The health insurance policy issued by the pool shall pay
37 only reasonable amounts for medically necessary eligible health
SHB 1633 p. 10
_1 care services rendered or furnished for the diagnosis or treatment
_2 of illnesses, injuries, and conditions which are not otherwise
_3 limited or excluded. Eligible expenses are the reasonable amounts
_4 for the health care services and items for which benefits are
_5 extended under the pool policy. Such benefits shall at minimum
_6 include, but not be limited to, the following services or related
_7 items:
_8 (a) Hospital services, including charges for the most common
_9 semiprivate room, for the most common private room if semiprivate
10 rooms do not exist in the health care facility, or for the private
11 room if medically necessary, but limited to a total of one hundred
12 eighty inpatient days in a calendar year, and limited to thirty
13 days inpatient care for mental and nervous conditions, or alcohol,
14 drug, or chemical dependency or abuse per calendar year;
15 (b) Professional services including surgery for the treatment
16 of injuries, illnesses, or conditions, other than dental, which
17 are rendered by a health care provider, or at the direction of a
18 health care provider, by a staff of registered or licensed
19 practical nurses, or other health care providers;
20 (c) The first twenty outpatient professional visits for the
21 diagnosis or treatment of one or more mental or nervous conditions
22 or alcohol, drug, or chemical dependency or abuse rendered during
23 a calendar year by one or more physicians, psychologists, or
24 community mental health professionals, or, at the direction of a
25 physician, by other qualified licensed health care practitioners,
26 in the case of mental or nervous conditions, and rendered by a
27 state certified chemical dependency program approved under chapter
28 70.96A RCW, in the case of alcohol, drug, or chemical dependency
29 or abuse;
30 (d) Drugs and contraceptive devices requiring a prescription;
31 (e) Services of a skilled nursing facility, excluding custodial
32 and convalescent care, for not more than one hundred days in a
33 calendar year as prescribed by a physician;
34 (f) Services of a home health agency;
35 (g) Chemotherapy, radioisotope, radiation, and nuclear medicine
36 therapy;
37 (h) Oxygen;
38 (i) Anesthesia services;
p. 11 SHB 1633
_1 (j) Prostheses, other than dental;
_2 (k) Durable medical equipment which has no personal use in the
_3 absence of the condition for which prescribed;
_4 (l) Diagnostic x-rays and laboratory tests;
_5 (m) Oral surgery limited to the following: Fractures of facial
_6 bones; excisions of mandibular joints, lesions of the mouth, lip,
_7 or tongue, tumors, or cysts excluding treatment for
_8 temporomandibular joints; incision of accessory sinuses, mouth
_9 salivary glands or ducts; dislocations of the jaw; plastic
10 reconstruction or repair of traumatic injuries occurring while
11 covered under the pool; and excision of impacted wisdom teeth;
12 (n) Maternity care services;
13 (o) Services of a physical therapist and services of a speech
14 therapist;
15 (p) Hospice services;
16 (q) Professional ambulance service to the nearest health care
17 facility qualified to treat the illness or injury; and
18 (r) Other medical equipment, services, or supplies required by
19 physician's orders and medically necessary and consistent with the
20 diagnosis, treatment, and condition.
21 (4) The board shall design and employ cost containment measures
22 and requirements such as, but not limited to, care coordination,
23 provider network limitations, preadmission certification, and
24 concurrent inpatient review which may make the pool more cost-
25 effective.
26 (5) The pool benefit policy may contain benefit limitations,
27 exceptions, and cost shares such as copayments, coinsurance, and
28 deductibles that are consistent with managed care products, except
29 that differential cost shares may be adopted by the board for
30 nonnetwork providers under point of service plans. The pool benefit
31 policy cost shares and limitations must be consistent with those
32 that are generally included in health plans approved by the
33 insurance commissioner; however, no limitation, exception, or
34 reduction may be used that would exclude coverage for any disease,
35 illness, or injury.
36 (6) The pool may not reject an individual for health plan
37 coverage based upon preexisting conditions of the individual or
38 deny, exclude, or otherwise limit coverage for an individual's
SHB 1633 p. 12
_1 preexisting health conditions; except that it shall impose a six-
_2 month benefit waiting period for preexisting conditions for which
_3 medical advice was given, for which a health care provider
_4 recommended or provided treatment, or for which a prudent
_5 layperson would have sought advice or treatment, within six months
_6 before the effective date of coverage. The preexisting condition
_7 waiting period shall not apply to prenatal care services. The pool
_8 may not avoid the requirements of this section through the
_9 creation of a new rate classification or the modification of an
10 existing rate classification. Credit against the waiting period
11 shall be as provided in subsection (7) of this section.
12 (7)(a) Except as provided in (b) of this subsection, the pool
13 shall credit any preexisting condition waiting period in its plans
14 for a person who was enrolled at any time during the sixty-three
15 day period immediately preceding the date of application for the
16 new pool plan ((in a group health benefit plan or an
individual
17 health benefit plan other than a catastrophic health
plan. The pool
18 must credit the period of coverage the person was
continuously
19 covered under the immediately preceding health plan)).
For the
20 person previously enrolled in a group health benefit plan, the
21 pool must credit the aggregate of all periods of preceding
22 coverage not separated by more than sixty-three days toward the
23 waiting period of the new health plan. For the person previously
24 enrolled in an individual health benefit plan other than a
25 catastrophic health plan, the pool must credit the period of
26 coverage the person was continuously covered under the immediately
27 preceding health plan toward the waiting period of the new health
28 plan. For the purposes of this subsection, a preceding health plan
29 includes an employer-provided self-funded health plan.
30 (b) The pool shall waive any preexisting condition waiting
31 period for a person who is an eligible individual as defined in
32 section 2741(b) of the federal health insurance portability and
33 accountability act of 1996 (42 U.S.C. 300gg-41(b)).
34 (8) If an application is made for the pool policy as a result
35 of rejection by a carrier, then the date of application to the
36 carrier, rather than to the pool, should govern for purposes of
37 determining preexisting condition credit.
p. 13 SHB 1633
_1 Sec. 6. RCW 48.43.005 and 2000 c 79 s 18 are each amended to read
_2 as follows:
_3 Unless otherwise specifically provided, the definitions in this
_4 section apply throughout this chapter.
_5 (1) "Adjusted community rate" means the rating method used to
_6 establish the premium for health plans adjusted to reflect
_7 actuarially demonstrated differences in utilization or cost
_8 attributable to geographic region, age, family size, and use of
_9 wellness activities.
10 (2) "Basic health plan" means the plan described under chapter
11 70.47 RCW, as revised from time to time.
12 (3) "Basic health plan model plan" means a health plan as
13 required in RCW 70.47.060(2)(d).
14 (4) "Basic health plan services" means that schedule of covered
15 health services, including the description of how those benefits
16 are to be administered, that are required to be delivered to an
17 enrollee under the basic health plan, as revised from time to
18 time.
19 (((4))) (5) "Catastrophic health
plan" means:
20 (a) In the case of a contract, agreement, or policy covering a
21 single enrollee, a health benefit plan requiring a calendar year
22 deductible of, at a minimum, one thousand five hundred dollars and
23 an annual out-of-pocket expense required to be paid under the plan
24 (other than for premiums) for covered benefits of at least three
25 thousand dollars; and
26 (b) In the case of a contract, agreement, or policy covering
27 more than one enrollee, a health benefit plan requiring a calendar
28 year deductible of, at a minimum, three thousand dollars and an
29 annual out-of-pocket expense required to be paid under the plan
30 (other than for premiums) for covered benefits of at least five
31 thousand five hundred dollars; or
32 (c) Any health benefit plan that provides benefits for hospital
33 inpatient and outpatient services, professional and prescription
34 drugs provided in conjunction with such hospital inpatient and
35 outpatient services, and excludes or substantially limits
36 outpatient physician services and those services usually provided
37 in an office setting.
38 (((5))) (6) "Certification"
means a determination by a review
SHB 1633 p. 14
_1 organization that an admission, extension of stay, or other health
_2 care service or procedure has been reviewed and, based on the
_3 information provided, meets the clinical requirements for medical
_4 necessity, appropriateness, level of care, or effectiveness under
_5 the auspices of the applicable health benefit plan.
_6 (((6))) (7) "Concurrent
review" means utilization review
_7 conducted during a patient's hospital stay or course of treatment.
_8 (((7))) (8) "Covered person"
or "enrollee" means a person
_9 covered by a health plan including an enrollee, subscriber,
10 policyholder, beneficiary of a group plan, or individual covered
11 by any other health plan.
12 (((8))) (9) "Dependent"
means, at a minimum, the enrollee's
13 legal spouse and unmarried dependent children who qualify for
14 coverage under the enrollee's health benefit plan.
15 (((9))) (10) "Eligible
employee" means an employee who works on
16 a full-time basis with a normal work week of thirty or more
17 hours. The term includes a self-employed individual, including a
18 sole proprietor, a partner of a partnership, and may include an
19 independent contractor, if the self-employed individual, sole
20 proprietor, partner, or independent contractor is included as an
21 employee under a health benefit plan of a small employer, but does
22 not work less than thirty hours per week and derives at least
23 seventy-five percent of his or her income from a trade or business
24 through which he or she has attempted to earn taxable income and
25 for which he or she has filed the appropriate internal revenue
26 service form. Persons covered under a health benefit plan pursuant
27 to the consolidated omnibus budget reconciliation act of 1986
28 shall not be considered eligible employees for purposes of minimum
29 participation requirements of chapter 265, Laws of 1995.
30 (((10))) (11) "Emergency medical
condition" means the emergent
31 and acute onset of a symptom or symptoms, including severe pain,
32 that would lead a prudent layperson acting reasonably to believe
33 that a health condition exists that requires immediate medical
34 attention, if failure to provide medical attention would result in
35 serious impairment to bodily functions or serious dysfunction of a
36 bodily organ or part, or would place the person's health in
37 serious jeopardy.
38 (((11))) (12) "Emergency
services" means otherwise covered
p. 15 SHB 1633
_1 health care services medically necessary to evaluate and treat an
_2 emergency medical condition, provided in a hospital emergency
_3 department.
_4 (((12))) (13) "Enrollee
point-of-service cost-sharing" means
_5 amounts paid to health carriers directly providing services,
_6 health care providers, or health care facilities by enrollees and
_7 may include copayments, coinsurance, or deductibles.
_8 (((13))) (14) "Grievance"
means a written complaint submitted
_9 by or on behalf of a covered person regarding: (a) Denial of
10 payment for medical services or nonprovision of medical services
11 included in the covered person's health benefit plan, or (b)
12 service delivery issues other than denial of payment for medical
13 services or nonprovision of medical services, including
14 dissatisfaction with medical care, waiting time for medical
15 services, provider or staff attitude or demeanor, or
16 dissatisfaction with service provided by the health carrier.
17 (((14))) (15) "Health care
facility" or "facility" means
18 hospices licensed under chapter 70.127 RCW, hospitals licensed
19 under chapter 70.41 RCW, rural health care facilities as defined
20 in RCW 70.175.020, psychiatric hospitals licensed under chapter
21 71.12 RCW, nursing homes licensed under chapter 18.51 RCW,
22 community mental health centers licensed under chapter 71.05 or
23 71.24 RCW, kidney disease treatment centers licensed under chapter
24 70.41 RCW, ambulatory diagnostic, treatment, or surgical
25 facilities licensed under chapter 70.41 RCW, drug and alcohol
26 treatment facilities licensed under chapter 70.96A RCW, and home
27 health agencies licensed under chapter 70.127 RCW, and includes
28 such facilities if owned and operated by a political subdivision
29 or instrumentality of the state and such other facilities as
30 required by federal law and implementing regulations.
31 (((15))) (16) "Health care
provider" or "provider" means:
32 (a) A person regulated under Title 18 or chapter 70.127 RCW, to
33 practice health or health-related services or otherwise practicing
34 health care services in this state consistent with state law; or
35 (b) An employee or agent of a person described in (a) of this
36 subsection, acting in the course and scope of his or her
37 employment.
38 (((16))) (17) "Health care
service" means that service offered
SHB 1633 p. 16
_1 or provided by health care facilities and health care providers
_2 relating to the prevention, cure, or treatment of illness, injury,
_3 or disease.
_4 (((17))) (18) "Health
carrier" or "carrier" means a disability
_5 insurer regulated under chapter 48.20 or 48.21 RCW, a health care
_6 service contractor as defined in RCW 48.44.010, or a health
_7 maintenance organization as defined in RCW 48.46.020.
_8 (((18))) (19) "Health plan"
or "health benefit plan" means any
_9 policy, contract, or agreement offered by a health carrier to
10 provide, arrange, reimburse, or pay for health care services
11 except the following:
12 (a) Long-term care insurance governed by chapter 48.84 RCW;
13 (b) Medicare supplemental health insurance governed by chapter
14 48.66 RCW;
15 (c) Limited health care services offered by limited health care
16 service contractors in accordance with RCW 48.44.035;
17 (d) Disability income;
18 (e) Coverage incidental to a property/casualty liability
19 insurance policy such as automobile personal injury protection
20 coverage and homeowner guest medical;
21 (f) Workers' compensation coverage;
22 (g) Accident only coverage;
23 (h) Specified disease and hospital confinement indemnity when
24 marketed solely as a supplement to a health plan;
25 (i) Employer-sponsored self-funded health plans;
26 (j) Dental only and vision only coverage; and
27 (k) Plans deemed by the insurance commissioner to have a short-
28 term limited purpose or duration, or to be a student-only plan
29 that is guaranteed renewable while the covered person is enrolled
30 as a regular full-time undergraduate or graduate student at an
31 accredited higher education institution, after a written request
32 for such classification by the carrier and subsequent written
33 approval by the insurance commissioner.
34 (((19))) (20) "Material
modification" means a change in the
35 actuarial value of the health plan as modified of more than five
36 percent but less than fifteen percent.
37 (((20))) (21) "Preexisting
condition" means any medical
p. 17 SHB 1633
_1 condition, illness, or injury that existed any time prior to the
_2 effective date of coverage.
_3 (((21))) (22) "Premium"
means all sums charged, received, or
_4 deposited by a health carrier as consideration for a health plan
_5 or the continuance of a health plan. Any assessment or any
_6 "membership," "policy," "contract," "service," or similar fee or
_7 charge made by a health carrier in consideration for a health plan
_8 is deemed part of the premium. "Premium" shall not include amounts
_9 paid as enrollee point-of-service cost-sharing.
10 (((22))) (23) "Review
organization" means a disability insurer
11 regulated under chapter 48.20 or 48.21 RCW, health care service
12 contractor as defined in RCW 48.44.010, or health maintenance
13 organization as defined in RCW 48.46.020, and entities affiliated
14 with, under contract with, or acting on behalf of a health carrier
15 to perform a utilization review.
16 (((23))) (24) "Small
employer" or "small group" means any
17 person, firm, corporation, partnership, association, political
18 subdivision except school districts, or self-employed individual
19 that is actively engaged in business that, on at least fifty
20 percent of its working days during the preceding calendar quarter,
21 employed no more than fifty eligible employees, with a normal work
22 week of thirty or more hours, the majority of whom were employed
23 within this state, and is not formed primarily for purposes of
24 buying health insurance and in which a bona fide employer-employee
25 relationship exists. In determining the number of eligible
26 employees, companies that are affiliated companies, or that are
27 eligible to file a combined tax return for purposes of taxation by
28 this state, shall be considered an employer. Subsequent to the
29 issuance of a health plan to a small employer and for the purpose
30 of determining eligibility, the size of a small employer shall be
31 determined annually. Except as otherwise specifically provided, a
32 small employer shall continue to be considered a small employer
33 until the plan anniversary following the date the small employer
34 no longer meets the requirements of this definition. The term
35 "small employer" includes a self-employed individual or sole
36 proprietor. The term "small employer" also includes a self-employed
37 individual or sole proprietor who derives at least seventy-five
38 percent of his or her income from a trade or business through
SHB 1633 p. 18
_1 which the individual or sole proprietor has attempted to earn
_2 taxable income and for which he or she has filed the appropriate
_3 internal revenue service form 1040, schedule C or F, for the
_4 previous taxable year.
_5 (((24))) (25) "Utilization
review" means the prospective,
_6 concurrent, or retrospective assessment of the necessity and
_7 appropriateness of the allocation of health care resources and
_8 services of a provider or facility, given or proposed to be given
_9 to an enrollee or group of enrollees.
10 (((25))) (26) "Wellness
activity" means an explicit program of
11 an activity consistent with department of health guidelines, such
12 as, smoking cessation, injury and accident prevention, reduction
13 of alcohol misuse, appropriate weight reduction, exercise,
14 automobile and motorcycle safety, blood cholesterol reduction, and
15 nutrition education for the purpose of improving enrollee health
16 status and reducing health service costs.
17 Sec. 7. RCW 48.43.012 and 2000 c 79 s 19 are each amended to read
18 as follows:
19 (1) No carrier may reject an individual for an individual
20 health benefit plan based upon preexisting conditions of the
21 individual except as provided in RCW 48.43.018.
22 (2) No carrier may deny, exclude, or otherwise limit coverage
23 for an individual's preexisting health conditions except as
24 provided in this section.
25 (3) For an individual health benefit plan originally issued on
26 or after March 23, 2000, preexisting condition waiting periods
27 imposed upon a person enrolling in an individual health benefit
28 plan shall be no more than nine months for a preexisting condition
29 for which medical advice was given, for which a health care
30 provider recommended or provided treatment, or for which a prudent
31 layperson would have sought advice or treatment, within six months
32 prior to the effective date of the plan. No carrier may impose a
33 preexisting condition waiting period on an individual health
34 benefit plan issued to an eligible individual as defined in
35 section 2741(b) of the federal health insurance portability and
36 accountability act of 1996 (42 U.S.C. 300gg-41(b)).
p. 19 SHB 1633
_1 (4) Individual health benefit plan preexisting condition
_2 waiting periods shall not apply to prenatal care services.
_3 (5) No carrier may avoid the requirements of this section
_4 through the creation of a new rate classification or the
_5 modification of an existing rate classification. A new or changed
_6 rate classification will be deemed an attempt to avoid the
_7 provisions of this section if the new or changed classification
_8 would substantially discourage applications for coverage from
_9 individuals who are higher than average health risks. These
10 provisions apply only to individuals who are Washington residents.
11 Sec. 8. RCW 48.43.015 and 2000 c 80 s 3 are each amended to read
12 as follows:
13 (1) ((For a health benefit plan offered to a
group other than a
14 small group, every health carrier shall reduce any
preexisting
15 condition exclusion or limitation for persons or
groups who had
16 similar health coverage under a different health plan
at any time
17 during the three-month period immediately preceding
the date of
18 application for the new health plan if such person
was
19 continuously covered under the immediately preceding
health plan.
20 If the person was continuously covered for at least
three months
21 under the immediately preceding health plan, the
carrier may not
22 impose a waiting period for coverage of preexisting
conditions. If
23 the person was continuously covered for less than
three months
24 under the immediately preceding health plan, the
carrier must
25 credit any waiting period under the immediately
preceding health
26 plan toward the new health plan. For the purposes of
this
27 subsection, a preceding health plan includes an
employer-provided
28 self-funded health plan and plans of the Washington
state health
29 insurance pool.
30 (2) For a health benefit plan offered to a small
group, every
31 health carrier shall reduce any preexisting condition
exclusion or
32 limitation for persons or groups who had similar
health coverage
33 under a different health plan at any time during the
three-month
34 period immediately preceding the date of application
for the new
35 health plan if such person was continuously covered
under the
36 immediately preceding health plan. If the person was
continuously
37 covered for at least nine months under the
immediately preceding
SHB 1633 p. 20
_1 health plan, the carrier may not impose a waiting
period for
_2 coverage of preexisting conditions. If the person
was continuously
_3 covered for less than nine months under the
immediately preceding
_4 health plan, the carrier must credit any waiting
period under the
_5 immediately preceding health plan toward the new
health plan. For
_6 the purposes of this subsection, a preceding health
plan includes
_7 an employer‑provided self-funded health plan
and plans of the
_8 Washington state health insurance pool.
_9 (3))) For a health benefit plan offered to
a group, every
10 health carrier shall reduce any preexisting condition exclusion,
11 limitation, or waiting period in the group health plan in
12 accordance with the provisions of section 2701 of the federal
13 health insurance portability and accountability act of 1996 (42
14 U.S.C. Sec. 300gg).
15 (2) For a health benefit plan offered to a group other than a
16 small group:
17 (a) If the individual applicant's immediately preceding health
18 plan coverage terminated during the period beginning ninety days
19 and ending sixty-four days before the date of application for the
20 new plan and such coverage was similar and continuous for at least
21 three months, then the carrier shall not impose a waiting period
22 for coverage of preexisting conditions under the new health plan.
23 (b) If the individual applicant's immediately preceding health
24 plan coverage terminated during the period beginning ninety days
25 and ending sixty-four days before the date of application for the
26 new plan and such coverage was similar and continuous for less
27 than three months, then the carrier shall credit the time covered
28 under the immediately preceding health plan toward any preexisting
29 condition waiting period under the new health plan.
30 (c) For the purposes of this subsection, a preceding health
31 plan includes an employer-provided self-funded health plan and
32 plans of the Washington state health insurance pool.
33 (3) For a health benefit plan offered to a small group:
34 (a) If the individual applicant's immediately preceding health
35 plan coverage terminated during the period beginning ninety days
36 and ending sixty-four days before the date of application for the
37 new plan and such coverage was similar and continuous for at least
p. 21 SHB 1633
_1 nine months, then the carrier shall not impose a waiting period
_2 for coverage of preexisting conditions under the new health plan.
_3 (b) If the individual applicant's immediately preceding health
_4 plan coverage terminated during the period beginning ninety days
_5 and ending sixty-four days before the date of application for the
_6 new plan and such coverage was similar and continuous for less
_7 than nine months, then the carrier shall credit the time covered
_8 under the immediately preceding health plan toward any preexisting
_9 condition waiting period under the new health plan.
10 (c) For the purpose of this subsection, a preceding health plan
11 includes an employer-provided self-funded health plan and plans of
12 the Washington state health insurance pool.
13 (4) For a health benefit plan offered to an individual, other
14 than an individual to whom subsection (((4))) (5)
of this section
15 applies, every health carrier shall credit any preexisting
16 condition waiting period in that plan for a person who was
17 enrolled at any time during the sixty-three day period immediately
18 preceding the date of application for the new health plan in a
19 group health benefit plan or an individual health benefit plan,
20 other than a catastrophic health plan, and (a) the benefits under
21 the previous plan provide equivalent or greater overall benefit
22 coverage than that provided in the health benefit plan the
23 individual seeks to purchase; or (b) the person is seeking an
24 individual health benefit plan due to his or her change of
25 residence from one geographic area in Washington state to another
26 geographic area in Washington state where his or her current
27 health plan is not offered, if application for coverage is made
28 within ninety days of relocation; or (c) the person is seeking an
29 individual health benefit plan: (i) Because a health care provider
30 with whom he or she has an established care relationship and from
31 whom he or she has received treatment within the past twelve
32 months is no longer part of the carrier's provider network under
33 his or her existing Washington individual health benefit plan; and
34 (ii) his or her health care provider is part of another carrier's
35 provider network; and (iii) application for a health benefit plan
36 under that carrier's provider network individual coverage is made
37 within ninety days of his or her provider leaving the previous
38 carrier's provider network. The carrier must credit the period of
SHB 1633 p. 22
_1 coverage the person was continuously covered under the immediately
_2 preceding health plan toward the waiting period of the new health
_3 plan. For the purposes of this subsection (((3)))
(4), a preceding
_4 health plan includes an employer-provided self-funded health plan
_5 and plans of the Washington state health insurance pool.
_6 (((4))) (5) Every health carrier shall
waive any preexisting
_7 condition waiting period in its individual plans for a person who
_8 is an eligible individual as defined in section 2741(b) of the
_9 federal health insurance portability and accountability act of
10 1996 (42 U.S.C. Sec. 300gg-41(b)).
11 (((5))) (6) Subject to the provisions
of subsections (1)
12 through (((4))) (5) of this section,
nothing contained in this
13 section requires a health carrier to amend a health plan to
14 provide new benefits in its existing health plans. In addition,
15 nothing in this section requires a carrier to waive benefit
16 limitations not related to an individual or group's preexisting
17 conditions or health history.
18 Sec. 9. RCW 48.43.018 and 2000 c 80 s 4 are each amended to read
19 as follows:
20 (1) Except as provided in (a) through (c) of this subsection, a
21 health carrier may require any person applying for an individual
22 health benefit plan to complete the standard health questionnaire
23 designated under chapter 48.41 RCW.
24 (a) If a person is seeking an individual health benefit plan
25 due to his or her change of residence from one geographic area in
26 Washington state to another geographic area in Washington state
27 where his or her current health plan is not offered, completion of
28 the standard health questionnaire shall not be a condition of
29 coverage if application for coverage is made within ninety days of
30 relocation.
31 (b) If a person is seeking an individual health benefit plan:
32 (i) Because a health care provider with whom he or she has an
33 established care relationship and from whom he or she has received
34 treatment within the past twelve months is no longer part of the
35 carrier's provider network under his or her existing Washington
36 individual health benefit plan; and
37 (ii) His or her health care provider is part of another
p. 23 SHB 1633
_1 carrier's provider network; and
_2 (iii) Application for a health benefit plan under that
_3 carrier's provider network individual coverage is made within
_4 ninety days of his or her provider leaving the previous carrier's
_5 provider network; then completion of the standard health
_6 questionnaire shall not be a condition of coverage.
_7 (c) If a person is seeking an individual health benefit plan
_8 due to his or her having exhausted continuation coverage provided
_9 under 29 U.S.C. Sec. 1161 et seq., completion of the standard
10 health questionnaire shall not be a condition of coverage if
11 application for coverage is made within ninety days of exhaustion
12 of continuation coverage. A health carrier shall accept an
13 application without a standard health questionnaire from a person
14 currently covered by such continuation coverage if application is
15 made within ninety days prior to the date the continuation
16 coverage would be exhausted and the effective date of the
17 individual coverage applied for is the date the continuation
18 coverage would be exhausted, or within ninety days thereafter.
19 (2) If, based upon the results of the standard health
20 questionnaire, the person qualifies for coverage under the
21 Washington state health insurance pool, the following shall apply:
22 (a) The carrier may decide not to accept the person's
23 application for enrollment in its individual health benefit plan;
24 and
25 (b) Within fifteen business days of receipt of a completed
26 application, the carrier shall provide written notice of the
27 decision not to accept the person's application for enrollment to
28 both the person and the administrator of the Washington state
29 health insurance pool. The notice to the person shall state that
30 the person is eligible for health insurance provided by the
31 Washington state health insurance pool, and shall include
32 information about the Washington state health insurance pool and
33 an application for such coverage. If the carrier does not provide
34 or postmark such notice within fifteen business days, the
35 application is deemed approved.
36 (3) If the person applying for an individual health benefit
37 plan: (a) Does not qualify for coverage under the Washington state
38 health insurance pool based upon the results of the standard
SHB 1633 p. 24
_1 health questionnaire; (b) does qualify for coverage under the
_2 Washington state health insurance pool based upon the results of
_3 the standard health questionnaire and the carrier elects to accept
_4 the person for enrollment; or (c) is not required to complete the
_5 standard health questionnaire designated under this chapter under
_6 subsection (1)(a) or (b) of this section, the carrier shall accept
_7 the person for enrollment if he or she resides within the
_8 carrier's service area and provide or assure the provision of all
_9 covered services regardless of age, sex, family structure,
10 ethnicity, race, health condition, geographic location, employment
11 status, socioeconomic status, other condition or situation, or the
12 provisions of RCW 49.60.174(2). The commissioner may grant a
13 temporary exemption from this subsection if, upon application by a
14 health carrier, the commissioner finds that the clinical,
15 financial, or administrative capacity to serve existing enrollees
16 will be impaired if a health carrier is required to continue
17 enrollment of additional eligible individuals.
18 Sec. 10. RCW 48.43.025 and 2000 c 79 s 23 are each amended to read
19 as follows:
20 (1) For group health benefit plans for groups other than small
21 groups, no carrier may reject an individual for health plan
22 coverage based upon preexisting conditions of the individual and
23 no carrier may deny, exclude, or otherwise limit coverage for an
24 individual's preexisting health conditions; except that a carrier
25 may impose a three-month benefit waiting period for preexisting
26 conditions for which medical advice was given, or for which a
27 health care provider recommended or provided treatment((,
or for
28 which a prudent layperson would have sought advice or
treatment,))
29 within three months before the effective date of coverage. Any
30 preexisting condition waiting period or limitation relating to
31 pregnancy as a preexisting condition shall be imposed only to the
32 extent allowed in the federal health insurance portability and
33 accountability act of 1996.
34 (2) For group health benefit plans for small groups, no carrier
35 may reject an individual for health plan coverage based upon
36 preexisting conditions of the individual and no carrier may deny,
37 exclude, or otherwise limit coverage for an individual's
p. 25 SHB 1633
_1 preexisting health conditions. Except that a carrier may impose a
_2 nine-month benefit waiting period for preexisting conditions for
_3 which medical advice was given, or for which a health care
_4 provider recommended or provided treatment((, or for
which a
_5 prudent layperson would have sought advice or
treatment,)) within
_6 six months before the effective date of coverage. Any preexisting
_7 condition waiting period or limitation relating to pregnancy as a
_8 preexisting condition shall be imposed only to the extent allowed
_9 in the federal health insurance portability and accountability act
10 of 1996.
11 (3) No carrier may avoid the requirements of this section
12 through the creation of a new rate classification or the
13 modification of an existing rate classification. A new or changed
14 rate classification will be deemed an attempt to avoid the
15 provisions of this section if the new or changed classification
16 would substantially discourage applications for coverage from
17 individuals or groups who are higher than average health risks.
18 These provisions apply only to individuals who are Washington
19 residents.
20 NEW SECTION. Sec. 11. A new section is added to chapter 48.43
21 RCW to read as follows:
22 To the extent required of the federal health insurance
23 portability and accountability act of 1996, the eligibility of an
24 employer or group to purchase a health benefit plan set forth in
25 RCW 48.21.045(1)(b), 48.44.023(1)(b), and 48.46.066(1)(b) must be
26 extended to all small employers and small groups as defined in RCW
27 48.43.005.
28 Sec. 12. RCW 48.44.017 and 2000 c 79 s 29 are each amended to read
29 as follows:
30 (1) The definitions in this subsection apply throughout this
31 section unless the context clearly requires otherwise.
32 (a) "Claims" means the cost to the health care service
33 contractor of health care services, as defined in RCW 48.43.005,
34 provided to a contract holder or paid to or on behalf of a
35 contract holder in accordance with the terms of a health benefit
SHB 1633 p. 26
_1 plan, as defined in RCW 48.43.005. This includes capitation
_2 payments or other similar payments made to providers for the
_3 purpose of paying for health care services for an enrollee.
_4 (b) "Claims reserves" means: (i) The liability for claims which
_5 have been reported but not paid; (ii) the liability for claims
_6 which have not been reported but which may reasonably be expected;
_7 (iii) active life reserves; and (iv) additional claims reserves
_8 whether for a specific liability purpose or not.
_9 (c) "Earned premiums" means premiums, as defined in RCW
10 48.43.005, plus any rate credits or recoupments less any refunds,
11 for the applicable period, whether received before, during, or
12 after the applicable period.
13 (d) "Incurred claims expense" means claims paid during the
14 applicable period plus any increase, or less any decrease, in the
15 claims reserves.
16 (e) "Loss ratio" means incurred claims expense as a percentage
17 of earned premiums.
18 (f) "Reserves" means: (i) Active life reserves; and (ii)
19 additional reserves whether for a specific liability purpose or
20 not.
21 (2) A health care service contractor shall file, for
22 informational purposes only, a notice of its schedule of rates for
23 its individual contracts with the commissioner prior to use.
24 (3) A health care service contractor shall file with the notice
25 required under subsection (2) of this section supporting
26 documentation of its method of determining the rates charged. The
27 commissioner may request only the following supporting
28 documentation:
29 (a) A description of the health care service contractor's rate-
30 making methodology;
31 (b) An actuarially determined estimate of incurred claims which
32 includes the experience data, assumptions, and justifications of
33 the health care service contractor's projection;
34 (c) The percentage of premium attributable in aggregate for
35 nonclaims expenses used to determine the adjusted community rates
36 charged; and
37 (d) A certification by a member of the American academy of
38 actuaries, or other person approved by the commissioner, that the
p. 27 SHB 1633
_1 adjusted community rate charged can be reasonably expected to
_2 result in a loss ratio that meets or exceeds the loss ratio
_3 standard established in subsection (7) of this section.
_4 (4) The commissioner may not disapprove or otherwise impede the
_5 implementation of the filed rates.
_6 (5) By the last day of May each year any health care service
_7 contractor ((providing)) issuing or renewing
individual health
_8 benefit plans in this state during the preceding calendar year
_9 shall file for review by the commissioner supporting documentation
10 of its actual loss ratio for its individual health benefit plans
11 offered or renewed in this state in aggregate for the preceding
12 calendar year. The filing shall include aggregate earned premiums,
13 aggregate incurred claims, and a certification by a member of the
14 American academy of actuaries, or other person approved by the
15 commissioner, that the actual loss ratio has been calculated in
16 accordance with accepted actuarial principles.
17 (a) At the expiration of a thirty-day period beginning with the
18 date the filing is ((delivered to)) received
by the commissioner,
19 the filing shall be deemed approved unless prior thereto the
20 commissioner contests the calculation of the actual loss ratio.
21 (b) If the commissioner contests the calculation of the actual
22 loss ratio, the commissioner shall state in writing the grounds
23 for contesting the calculation to the health care service
24 contractor.
25 (c) Any dispute regarding the calculation of the actual loss
26 ratio shall upon written demand of either the commissioner or the
27 health care service contractor be submitted to hearing under
28 chapters 48.04 and 34.05 RCW.
29 (6) If the actual loss ratio for the preceding calendar year is
30 less than the loss ratio standard established in subsection (7) of
31 this section, a remittance is due and the following shall apply:
32 (a) The health care service contractor shall calculate a
33 percentage of premium to be remitted to the Washington state
34 health insurance pool by subtracting the actual loss ratio for the
35 preceding year from the loss ratio established in subsection (7)
36 of this section.
37 (b) The remittance to the Washington state health insurance
38 pool is the percentage calculated in (a) of this subsection,
SHB 1633 p. 28
_1 multiplied by the premium earned from each enrollee in the
_2 previous calendar year. Interest shall be added to the remittance
_3 due at a five percent annual rate calculated from the end of the
_4 calendar year for which the remittance is due to the date the
_5 remittance is made.
_6 (c) All remittances shall be aggregated and such amounts shall
_7 be remitted to the Washington state high risk pool to be used as
_8 directed by the pool board of directors.
_9 (d) Any remittance required to be issued under this section
10 shall be issued within thirty days after the actual loss ratio is
11 deemed approved under subsection (5)(a) of this section or the
12 determination by an administrative law judge under subsection
13 (5)(c) of this section.
14 (7) The loss ratio applicable to this section shall be seventy-
15 four percent minus the premium tax rate applicable to the health
16 care service contractor's individual health benefit plans under
17 RCW 48.14.0201.
18 Sec. 13. RCW 48.46.062 and 2000 c 79 s 32 are each amended to read
19 as follows:
20 (1) The definitions in this subsection apply throughout this
21 section unless the context clearly requires otherwise.
22 (a) "Claims" means the cost to the health maintenance
23 organization of health care services, as defined in RCW 48.43.005,
24 provided to an enrollee or paid to or on behalf of the enrollee in
25 accordance with the terms of a health benefit plan, as defined in
26 RCW 48.43.005. This includes capitation payments or other similar
27 payments made to providers for the purpose of paying for health
28 care services for an enrollee.
29 (b) "Claims reserves" means: (i) The liability for claims which
30 have been reported but not paid; (ii) the liability for claims
31 which have not been reported but which may reasonably be expected;
32 (iii) active life reserves; and (iv) additional claims reserves
33 whether for a specific liability purpose or not.
34 (c) "Earned premiums" means premiums, as defined in RCW
35 48.43.005, plus any rate credits or recoupments less any refunds,
36 for the applicable period, whether received before, during, or
37 after the applicable period.
p. 29 SHB 1633
_1 (d) "Incurred claims expense" means claims paid during the
_2 applicable period plus any increase, or less any decrease, in the
_3 claims reserves.
_4 (e) "Loss ratio" means incurred claims expense as a percentage
_5 of earned premiums.
_6 (f) "Reserves" means: (i) Active life reserves; and (ii)
_7 additional reserves whether for a specific liability purpose or
_8 not.
_9 (2) A health maintenance organization shall file, for
10 informational purposes only, a notice of its schedule of rates for
11 its individual agreements with the commissioner prior to use.
12 (3) A health maintenance organization shall file with the
13 notice required under subsection (2) of this section supporting
14 documentation of its method of determining the rates charged. The
15 commissioner may request only the following supporting
16 documentation:
17 (a) A description of the health maintenance organization's rate-
18 making methodology;
19 (b) An actuarially determined estimate of incurred claims which
20 includes the experience data, assumptions, and justifications of
21 the health maintenance organization's projection;
22 (c) The percentage of premium attributable in aggregate for
23 nonclaims expenses used to determine the adjusted community rates
24 charged; and
25 (d) A certification by a member of the American academy of
26 actuaries, or other person approved by the commissioner, that the
27 adjusted community rate charged can be reasonably expected to
28 result in a loss ratio that meets or exceeds the loss ratio
29 standard established in subsection (7) of this section.
30 (4) The commissioner may not disapprove or otherwise impede the
31 implementation of the filed rates.
32 (5) By the last day of May each year any health maintenance
33 organization ((providing)) issuing or renewing
individual health
34 benefit plans in this state during the preceding calendar year
35 shall file for review by the commissioner supporting documentation
36 of its actual loss ratio for its individual health benefit plans
37 offered or renewed in the state in aggregate for the preceding
38 calendar year. The filing shall include aggregate earned premiums,
SHB 1633 p. 30
_1 aggregate incurred claims, and a certification by a member of the
_2 American academy of actuaries, or other person approved by the
_3 commissioner, that the actual loss ratio has been calculated in
_4 accordance with accepted actuarial principles.
_5 (a) At the expiration of a thirty-day period beginning with the
_6 date the filing is ((delivered to)) received
by the commissioner,
_7 the filing shall be deemed approved unless prior thereto the
_8 commissioner contests the calculation of the actual loss ratio.
_9 (b) If the commissioner contests the calculation of the actual
10 loss ratio, the commissioner shall state in writing the grounds
11 for contesting the calculation to the health maintenance
12 organization.
13 (c) Any dispute regarding the calculation of the actual loss
14 ratio shall, upon written demand of either the commissioner or the
15 health maintenance organization, be submitted to hearing under
16 chapters 48.04 and 34.05 RCW.
17 (6) If the actual loss ratio for the preceding calendar year is
18 less than the loss ratio standard established in subsection (7) of
19 this section, a remittance is due and the following shall apply:
20 (a) The health maintenance organization shall calculate a
21 percentage of premium to be remitted to the Washington state
22 health insurance pool by subtracting the actual loss ratio for the
23 preceding year from the loss ratio established in subsection (7)
24 of this section.
25 (b) The remittance to the Washington state health insurance
26 pool is the percentage calculated in (a) of this subsection,
27 multiplied by the premium earned from each enrollee in the
28 previous calendar year. Interest shall be added to the remittance
29 due at a five percent annual rate calculated from the end of the
30 calendar year for which the remittance is due to the date the
31 remittance is made.
32 (c) All remittances shall be aggregated and such amounts shall
33 be remitted to the Washington state high risk pool to be used as
34 directed by the pool board of directors.
35 (d) Any remittance required to be issued under this section
36 shall be issued within thirty days after the actual loss ratio is
37 deemed approved under subsection (5)(a) of this section or the
p. 31 SHB 1633
_1 determination by an administrative law judge under subsection
_2 (5)(c) of this section.
_3 (7) The loss ratio applicable to this section shall be seventy-
_4 four percent minus the premium tax rate applicable to the health
_5 maintenance organization's individual health benefit plans under
_6 RCW 48.14.0201.
_7 Sec. 14. RCW 70.47.060 and 2000 c 79 s 34 are each amended to read
_8 as follows:
_9 The administrator has the following powers and duties:
10 (1) To design and from time to time revise a schedule of
11 covered basic health care services, including physician services,
12 inpatient and outpatient hospital services, prescription drugs and
13 medications, and other services that may be necessary for basic
14 health care. In addition, the administrator may, to the extent that
15 funds are available, offer as basic health plan services chemical
16 dependency services, mental health services and organ transplant
17 services; however, no one service or any combination of these
18 three services shall increase the actuarial value of the basic
19 health plan benefits by more than five percent excluding
20 inflation, as determined by the office of financial management.
21 All subsidized and nonsubsidized enrollees in any participating
22 managed health care system under the Washington basic health plan
23 shall be entitled to receive covered basic health care services in
24 return for premium payments to the plan. The schedule of services
25 shall emphasize proven preventive and primary health care and
26 shall include all services necessary for prenatal, postnatal, and
27 well-child care. However, with respect to coverage for subsidized
28 enrollees who are eligible to receive prenatal and postnatal
29 services through the medical assistance program under chapter
30 74.09 RCW, the administrator shall not contract for such services
31 except to the extent that such services are necessary over not
32 more than a one-month period in order to maintain continuity of
33 care after diagnosis of pregnancy by the managed care provider.
34 The schedule of services shall also include a separate schedule of
35 basic health care services for children, eighteen years of age and
36 younger, for those subsidized or nonsubsidized enrollees who
37 choose to secure basic coverage through the plan only for their
SHB 1633 p. 32
_1 dependent children. In designing and revising the schedule of
_2 services, the administrator shall consider the guidelines for
_3 assessing health services under the mandated benefits act of 1984,
_4 RCW 48.47.030, and such other factors as the administrator deems
_5 appropriate.
_6 (2)(a) To design and implement a structure of periodic premiums
_7 due the administrator from subsidized enrollees that is based upon
_8 gross family income, giving appropriate consideration to family
_9 size and the ages of all family members. The enrollment of children
10 shall not require the enrollment of their parent or parents who
11 are eligible for the plan. The structure of periodic premiums shall
12 be applied to subsidized enrollees entering the plan as
13 individuals pursuant to subsection (9) of this section and to the
14 share of the cost of the plan due from subsidized enrollees
15 entering the plan as employees pursuant to subsection (10) of this
16 section.
17 (b) To determine the periodic premiums due the administrator
18 from nonsubsidized enrollees. Premiums due from nonsubsidized
19 enrollees shall be in an amount equal to the cost charged by the
20 managed health care system provider to the state for the plan plus
21 the administrative cost of providing the plan to those enrollees
22 and the premium tax under RCW 48.14.0201.
23 (c) An employer or other financial sponsor may, with the prior
24 approval of the administrator, pay the premium, rate, or any other
25 amount on behalf of a subsidized or nonsubsidized enrollee, by
26 arrangement with the enrollee and through a mechanism acceptable
27 to the administrator.
28 (d) To develop, as an offering by every health carrier
29 providing coverage identical to the basic health plan, as
30 configured on January 1, 2001, a basic health plan model plan with
31 uniformity in enrollee cost-sharing requirements.
32 (3) To design and implement a structure of enrollee cost-
33 sharing due a managed health care system from subsidized and
34 nonsubsidized enrollees. The structure shall discourage
35 inappropriate enrollee utilization of health care services, and
36 may utilize copayments, deductibles, and other cost-sharing
37 mechanisms, but shall not be so costly to enrollees as to
p. 33 SHB 1633
_1 constitute a barrier to appropriate utilization of necessary
_2 health care services.
_3 (4) To limit enrollment of persons who qualify for subsidies so
_4 as to prevent an overexpenditure of appropriations for such
_5 purposes. Whenever the administrator finds that there is danger of
_6 such an overexpenditure, the administrator shall close enrollment
_7 until the administrator finds the danger no longer exists.
_8 (5) To limit the payment of subsidies to subsidized enrollees,
_9 as defined in RCW 70.47.020. The level of subsidy provided to
10 persons who qualify may be based on the lowest cost plans, as
11 defined by the administrator.
12 (6) To adopt a schedule for the orderly development of the
13 delivery of services and availability of the plan to residents of
14 the state, subject to the limitations contained in RCW 70.47.080
15 or any act appropriating funds for the plan.
16 (7) To solicit and accept applications from managed health care
17 systems, as defined in this chapter, for inclusion as eligible
18 basic health care providers under the plan for either subsidized
19 enrollees, or nonsubsidized enrollees, or both. The administrator
20 shall endeavor to assure that covered basic health care services
21 are available to any enrollee of the plan from among a selection
22 of two or more participating managed health care systems. In
23 adopting any rules or procedures applicable to managed health care
24 systems and in its dealings with such systems, the administrator
25 shall consider and make suitable allowance for the need for health
26 care services and the differences in local availability of health
27 care resources, along with other resources, within and among the
28 several areas of the state. Contracts with participating managed
29 health care systems shall ensure that basic health plan enrollees
30 who become eligible for medical assistance may, at their option,
31 continue to receive services from their existing providers within
32 the managed health care system if such providers have entered into
33 provider agreements with the department of social and health
34 services.
35 (8) To receive periodic premiums from or on behalf of
36 subsidized and nonsubsidized enrollees, deposit them in the basic
37 health plan operating account, keep records of enrollee status,
SHB 1633 p. 34
_1 and authorize periodic payments to managed health care systems on
_2 the basis of the number of enrollees participating in the
_3 respective managed health care systems.
_4 (9) To accept applications from individuals residing in areas
_5 served by the plan, on behalf of themselves and their spouses and
_6 dependent children, for enrollment in the Washington basic health
_7 plan as subsidized or nonsubsidized enrollees, to establish
_8 appropriate minimum-enrollment periods for enrollees as may be
_9 necessary, and to determine, upon application and on a reasonable
10 schedule defined by the authority, or at the request of any
11 enrollee, eligibility due to current gross family income for
12 sliding scale premiums. Funds received by a family as part of
13 participation in the adoption support program authorized under RCW
14 26.33.320 and 74.13.100 through 74.13.145 shall not be counted
15 toward a family's current gross family income for the purposes of
16 this chapter. When an enrollee fails to report income or income
17 changes accurately, the administrator shall have the authority
18 either to bill the enrollee for the amounts overpaid by the state
19 or to impose civil penalties of up to two hundred percent of the
20 amount of subsidy overpaid due to the enrollee incorrectly
21 reporting income. The administrator shall adopt rules to define the
22 appropriate application of these sanctions and the processes to
23 implement the sanctions provided in this subsection, within
24 available resources. No subsidy may be paid with respect to any
25 enrollee whose current gross family income exceeds twice the
26 federal poverty level or, subject to RCW 70.47.110, who is a
27 recipient of medical assistance or medical care services under
28 chapter 74.09 RCW. If a number of enrollees drop their enrollment
29 for no apparent good cause, the administrator may establish
30 appropriate rules or requirements that are applicable to such
31 individuals before they will be allowed to reenroll in the plan.
32 (10) To accept applications from business owners on behalf of
33 themselves and their employees, spouses, and dependent children,
34 as subsidized or nonsubsidized enrollees, who reside in an area
35 served by the plan. The administrator may require all or the
36 substantial majority of the eligible employees of such businesses
37 to enroll in the plan and establish those procedures necessary to
38 facilitate the orderly enrollment of groups in the plan and into a
p. 35 SHB 1633
_1 managed health care system. The administrator may require that a
_2 business owner pay at least an amount equal to what the employee
_3 pays after the state pays its portion of the subsidized premium
_4 cost of the plan on behalf of each employee enrolled in the plan.
_5 Enrollment is limited to those not eligible for medicare who wish
_6 to enroll in the plan and choose to obtain the basic health care
_7 coverage and services from a managed care system participating in
_8 the plan. The administrator shall adjust the amount determined to
_9 be due on behalf of or from all such enrollees whenever the amount
10 negotiated by the administrator with the participating managed
11 health care system or systems is modified or the administrative
12 cost of providing the plan to such enrollees changes.
13 (11) To determine the rate to be paid to each participating
14 managed health care system in return for the provision of covered
15 basic health care services to enrollees in the system. Although the
16 schedule of covered basic health care services will be the same or
17 actuarially equivalent for similar enrollees, the rates negotiated
18 with participating managed health care systems may vary among the
19 systems. In negotiating rates with participating systems, the
20 administrator shall consider the characteristics of the
21 populations served by the respective systems, economic
22 circumstances of the local area, the need to conserve the
23 resources of the basic health plan trust account, and other
24 factors the administrator finds relevant.
25 (12) To monitor the provision of covered services to enrollees
26 by participating managed health care systems in order to assure
27 enrollee access to good quality basic health care, to require
28 periodic data reports concerning the utilization of health care
29 services rendered to enrollees in order to provide adequate
30 information for evaluation, and to inspect the books and records
31 of participating managed health care systems to assure compliance
32 with the purposes of this chapter. In requiring reports from
33 participating managed health care systems, including data on
34 services rendered enrollees, the administrator shall endeavor to
35 minimize costs, both to the managed health care systems and to the
36 plan. The administrator shall coordinate any such reporting
37 requirements with other state agencies, such as the insurance
SHB 1633 p. 36
_1 commissioner and the department of health, to minimize duplication
_2 of effort.
_3 (13) To evaluate the effects this chapter has on private
_4 employer-based health care coverage and to take appropriate
_5 measures consistent with state and federal statutes that will
_6 discourage the reduction of such coverage in the state.
_7 (14) To develop a program of proven preventive health measures
_8 and to integrate it into the plan wherever possible and consistent
_9 with this chapter.
10 (15) To provide, consistent with available funding, assistance
11 for rural residents, underserved populations, and persons of
12 color.
13 (16) In consultation with appropriate state and local
14 government agencies, to establish criteria defining eligibility
15 for persons confined or residing in government-operated
16 institutions.
17 (17) To administer the premium discounts provided under RCW
18 48.41.200(3)(a) (i) and (ii) pursuant to a contract with the
19 Washington state health insurance pool.
20 NEW SECTION. Sec. 15. This act is necessary for the immediate
21 preservation of the public peace, health, or safety, or support of
22 the state government and its existing public institutions, and
23 takes effect immediately.
‑‑‑ END ‑‑‑
p. 37 SHB 1633