BILL REQ. #:  H-0158.2 

Read first time 01/30/09.   Referred to Committee on Health Care & Wellness.

     AN ACT Relating to health insurance coverage provided by out-of-state health carriers; adding a new chapter to Title 48 RCW; and creating a new section.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION.  Sec. 1   This act may be known and cited as the Washington state health care choice act.

NEW SECTION.  Sec. 2   As used in this chapter:
     (1) "Commissioner" means the insurance commissioner.
     (2) "Domestic carrier" means a disability insurer regulated under chapter 48.20 or 48.21 RCW, a health care service contractor as defined in RCW 48.44.010, or a health maintenance organization as defined in RCW 48.46.020.
     (3) "Foreign health carrier" means a foreign individual health carrier or a foreign small employer health carrier.
     (4) "Foreign individual health carrier" means a carrier licensed to sell individual health benefits plans in any other state.
     (5) "Foreign small employer health carrier" means a carrier licensed to sell small employer health benefits plans in any other state.
     (6) "Hazardous financial condition" means that, based on its present or reasonably anticipated financial condition, a foreign health carrier is unlikely to be able to meet obligations to policyholders with respect to known claims or to any other obligations in the normal course of business.
     (7) "Health care provider" means an individual or entity which, acting within the scope of its license or certification, provides health care services, and includes, but is not limited to, a physician, dentist, nurse, or other health care professional whose professional practice is regulated pursuant to Title 18 RCW.
     (8) "Individual health benefits plan" means a benefits plan for persons and their dependents which pays or provides for hospital and medical expense benefits for covered services.
     (9) "Office" means the office of the insurance commissioner.
     (10) "Resident" means a person whose primary residence is in Washington and who is present in Washington for at least six months of the calendar year.
     (11) "Small employer health benefits plan" means a group benefits plan for persons and their dependents which pays or provides for hospital and medical expense benefits for covered services, offered by any person, firm, corporation, or partnership actively engaged in a business that employs at least two but not more than fifty employees.

NEW SECTION.  Sec. 3   (1) Notwithstanding any other law or rule to the contrary, a foreign individual health carrier may offer and provide individual health benefits plans to residents in this state, if that carrier:
     (a) Offers the same individual health benefits plans in its domiciliary state and is in compliance with all applicable laws, regulations, and other requirements of its domiciliary state; and
     (b) Obtains a certificate of authority to do business as a foreign health carrier in this state, pursuant to section 4 of this act.
     (2) Notwithstanding any other law to the contrary, a foreign small employer health carrier may offer and provide small employer health benefits plans to employers in this state, if that carrier:
     (a) Offers the same small employer health benefits plans in its domiciliary state and is in compliance with all applicable laws, regulations, and other requirements of its domiciliary state; and
     (b) Obtains a certificate of authority to do business as a foreign health carrier in this state, pursuant to section 4 of this act.

NEW SECTION.  Sec. 4   (1) A foreign health carrier may apply for a certificate of authority to do business as a foreign health carrier in this state, using a form prescribed by the commissioner. Upon application, the commissioner shall issue a certificate of authority to the foreign health carrier unless the commissioner determines that the carrier:
     (a) Will not provide health insurance services in compliance with the provisions of this chapter;
     (b) Is in a hazardous financial condition, as determined by an examination by the commissioner conducted in accordance with the financial analysis handbook of the national association of insurance commissioners; or
     (c) Has not adopted procedures to ensure compliance with all applicable federal and state laws.
     (2) A certificate of authority issued pursuant to this section shall be valid for three years from the date of issuance by the commissioner.
     (3) The commissioner shall establish by rule:
     (a) Procedures for a foreign health carrier to renew a certificate of authority, pursuant to and consistent with the provisions of this chapter; and
     (b) A certificate of authority application and renewal fees, the amount of which shall be no greater than is reasonably necessary to enable the office to carry out the provisions of this chapter.

NEW SECTION.  Sec. 5   (1) Each individual health benefits plan provided by a foreign individual health carrier to a resident of this state, and each application for the plan, shall disclose in plain language the following:
     (a) The differences between the individual health benefits plan issued by the foreign health carrier, and a policy issued in this state subject to the requirements of Title 48 RCW, using at least fourteen- point boldface type to describe the differences that relate to: Underwriting standards, premium rating, preexisting conditions, renewability, portability, and cancellation; and
     (b) An explanation of which state's laws govern the issuance of, and requirements under, the individual health benefits plan offered under this chapter.
     (2) Each small employer health benefits plan provided by a foreign small employer health carrier to an employer in this state, and each application for the plan, shall disclose in plain language the following:
     (a) The differences between the small employer health benefits plan issued by the foreign health carrier, and a policy issued in this state subject to the requirements of Title 48 RCW, using at least fourteen-point boldface type to describe the differences that relate to: Underwriting standards, premium rating, preexisting conditions, renewability, portability, and cancellation; and
     (b) An explanation of which state's laws govern the issuance of, and requirements under, the small employer health benefits plan offered under this chapter.

NEW SECTION.  Sec. 6   (1) The commissioner may deny, revoke, or suspend, after notice and opportunity to be heard, a certificate of authority issued to a foreign health carrier pursuant to this chapter for a violation of the provisions of this chapter, including any finding by the commissioner that a foreign health carrier is no longer in compliance with any of the conditions for issuance of a certificate of authority set forth in section 4(1) of this act, or the rules adopted pursuant to this chapter. The commissioner shall provide for an appropriate and timely right of appeal for the foreign health carrier whose certificate is denied, revoked, or suspended.
     (2) The commissioner shall establish grievance and independent claims review procedures with respect to claims by a health care carrier or a covered person with which a foreign health carrier shall comply as a condition of issuing policies in this state.
     (3)(a) The commissioner shall establish fair marketing standards for marketing materials used by foreign health carriers to market individual health benefits plans to residents in this state.
     (b) The commissioner shall establish fair marketing standards for marketing materials used by foreign health carriers to market small employer health benefits plans to small employers in this state.
     (4) The procedures and standards established under subsections (2) and (3) of this section shall be applied on a nondiscriminatory basis so as not to place greater responsibilities on foreign health carriers than the responsibilities placed on other health carriers doing business in this state.

NEW SECTION.  Sec. 7   A domestic carrier authorized to do business in this state may apply to the commissioner for an exemption from the provisions of this title and any rules promulgated under those provisions, that would allow the domestic carrier to offer health care plans that are comparable in plan design to health care plans offered by foreign health carriers under this chapter. Upon a domestic carrier's application, the commissioner shall make an order exempting the domestic carrier from those provisions and rules in order to allow the domestic carrier to offer a health care plan or plans that are comparable in design to health care plans offered by foreign health carriers under this chapter. Any health care plan offer by a domestic carrier under an exemption under this section shall be subject to the requirements that apply to health care plans offered by foreign health carriers under this chapter.

NEW SECTION.  Sec. 8   The office shall adopt rules to effectuate the purposes of this chapter, provided, however, that the rules shall not:
     (1) Directly or indirectly require a foreign health carrier to, directly or indirectly, modify coverage or benefit requirements, or restrict underwriting requirements or premium ratings, in any way that conflicts with the carrier's domiciliary state's laws or rules;
     (2) Provide for requirements that are more stringent than those applicable to carriers that are licensed by the commissioner to provide health benefits plans in this state; or
     (3) Require any individual health benefits plan or small employer health benefits plan issued by the foreign health carrier to be countersigned by an insurance agent or broker residing in this state.

NEW SECTION.  Sec. 9   Sections 2 through 8 of this act constitute a new chapter in Title 48 RCW.

NEW SECTION.  Sec. 10   If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.