H-4354 _______________________________________________
HOUSE BILL NO. 1895
_______________________________________________
State of Washington 50th Legislature 1988 Regular Session
By Representative Patrick
Read first time 1/29/88 and referred to Committee on Health Care.
AN ACT Relating to health care insurance; amending RCW 48.21.120, 48.21.260, 48.21.270, 48.44.370, 48.44.380, 48.46.450, and 48.46.460; adding a new section to chapter 48.18 RCW; adding a new section to chapter 48.19 RCW; creating a new section; and providing retroactive application.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
NEW SECTION. Sec. 1. A new section is added to chapter 48.18 RCW to read as follows:
No group disability insurer, group health care service contractor, or group health maintenance organization may cancel, fail to renew, terminate, or decrease the hospital or medical expense coverage offered by any group policy, contract, or agreement without the prior written consent of the group policy, contract, or agreement holder.
NEW SECTION. Sec. 2. A new section is added to chapter 48.19 RCW to read as follows:
No group disability insurer, group health care service contractor, or group health maintenance organization may increase the premium rates for any group hospital or medical expense policy, contract, or agreement within a one-year period by a percentage that is more than the average percentage increase of the premium rate increases imposed in the last year on the three largest groups afforded hospital or medical expense coverage by the insurer, contractor, or organization.
Sec. 3. Section .21.12, chapter 79, Laws of 1947 and RCW 48.21.120 are each amended to read as follows:
((Any))
Subject to section 2 of this act, a contract of group disability
insurance may provide for the readjustment of the rate of premium based on the
experience thereunder at the end of the first year or of any subsequent year of
insurance thereunder, and such readjustment may be made retroactive only for
such policy year. Any refund under any plan for readjustment of the rate of
premium based on the experience under group policies heretofore or hereafter
issued, and any dividend paid under such policies may be used to reduce the
employer's share of the cost of the coverage, except that if the aggregate
refunds or dividends under such group policy and any other group policy or
contract issued to the policyholder exceed the aggregate contributions of the
employer toward the cost of the coverages, such excess shall be applied by the
policyholder for the sole benefit of insured employees.
Sec. 4. Section 3, chapter 190, Laws of 1984 and RCW 48.21.260 are each amended to read as follows:
(1) Except as otherwise provided by this section, any group disability insurance policy issued, renewed, or amended on or after January 1, 1985, that provides benefits for hospital or medical expenses shall contain a provision granting a person covered by the group policy the right to obtain a conversion policy from the insurer upon termination of the person's eligibility for coverage under the group policy.
(2) An insurer need not offer a conversion policy to:
(a) A person whose coverage under the group policy ended when the person's employment or membership was terminated for misconduct: PROVIDED, That when a person's employment or membership is terminated for misconduct, a conversion policy shall be offered to the spouse and/or dependents of the terminated employee or member. The policy shall include in the conversion provisions the same conversion rights and conditions which are available to employees or members and their spouses and/or dependents who are terminated for reasons other than misconduct;
(b) A person who is eligible for federal Medicare coverage; or
(c) A person who is covered under another group plan, policy, contract, or agreement providing benefits for hospital or medical care.
(3) To obtain the conversion policy, a person must submit a written application and the first premium payment for the conversion policy not later than thirty-one days after the date the person's group coverage terminates. The conversion policy shall become effective, without lapse of coverage, immediately following termination of coverage under the group policy.
(4) If an insurer or group policyholder does not renew, cancels, or otherwise terminates the group policy, the insurer shall offer a conversion policy to any person who was covered under the terminated policy unless the person is eligible to obtain substantially identical group hospital or medical expense coverage within thirty-one days after such nonrenewal, cancellation, or termination of the group policy at premium rates no more than twenty percent higher than under the previous group policy.
(5) The ((insurer
shall determine the)) premium for the conversion policy ((in accordance
with the insurer's table of premium rates applicable to the age and class of
risk of each person to be covered under the policy and the type and amount of
benefits provided)) shall be no more than twenty percent higher than
under the previous group policy.
Sec. 5. Section 4, chapter 190, Laws of 1984 and RCW 48.21.270 are each amended to read as follows:
(1) An insurer shall not require proof of insurability as a condition for issuance of the conversion policy.
(2) A conversion policy may not contain an exclusion for preexisting conditions except to the extent that a waiting period for a preexisting condition has not been satisfied under the group policy.
(3) ((An
insurer must offer at least three policy benefit plans that comply with the
following:
(a) A major
medical plan with a five thousand dollar deductible and a lifetime benefit
maximum of two hundred fifty thousand dollars per person;
(b) A
comprehensive medical plan with a five hundred dollar deductible and a lifetime
benefit maximum of five hundred thousand dollars per person; and
(c) A basic
medical plan with a one thousand dollar deductible and a lifetime maximum of
seventy-five thousand dollars per person)) The conversion policy shall provide coverage and
benefits substantially identical to the group policy.
(4) ((The
insurance commissioner may revise the deductibles and lifetime benefit amounts
in subsection (3) of this section from time to time to reflect changing health
care costs.
(5))) The insurance commissioner shall adopt rules to
establish minimum benefit standards for conversion policies.
(((6)))
(5) The commissioner shall adopt rules to establish specific standards
for conversion policy provisions. These rules may include but are not limited
to:
(a) Terms of renewability;
(b) Nonduplication of coverage;
(c) Benefit limitations, exceptions, and reductions; and
(d) Definitions of terms.
Sec. 6. Section 6, chapter 190, Laws of 1984 and RCW 48.44.370 are each amended to read as follows:
(1) Except as otherwise provided by this section, any group health care service contract entered into or renewed on or after January 1, 1985, that provides benefits for hospital or medical expenses shall contain a provision granting a person covered by the group contract the right to obtain a conversion contract from the contractor upon termination of the person's eligibility for coverage under the group contract.
(2) A contractor need not offer a conversion contract to:
(a) A person whose coverage under the group contract ended when the person's employment or membership was terminated for misconduct: PROVIDED, That when a person's employment or membership is terminated for misconduct, a conversion policy shall be offered to the spouse and/or dependents of the terminated employee or member. The policy shall include in the conversion provisions the same conversion rights and conditions which are available to employees or members and their spouses and/or dependents who are terminated for reasons other than misconduct;
(b) A person who is eligible for federal Medicare coverage; or
(c) A person who is covered under another group plan, policy, contract, or agreement providing benefits for hospital or medical care.
(3) To obtain the conversion contract, a person must submit a written application and the first premium payment for the conversion contract not later than thirty-one days after the date the person's eligibility for group coverage terminates. The conversion contract shall become effective, without lapse of coverage, immediately following termination of coverage under the group contract.
(4) If a health care service contractor or group contract holder does not renew, cancels, or otherwise terminates the group contract, the health care service contractor shall offer a conversion contract to any person who was covered under the terminated contract unless the person is eligible to obtain substantially identical group hospital or medical expense coverage within thirty-one days after such nonrenewal, cancellation, or termination of the group contract at premium rates no more than twenty percent higher than under the previous group contract.
(5) The ((health
care service contractor shall determine the)) premium for the conversion
contract ((in accordance with the contractor's table of premium rates
applicable to the age and class of risk of each person to be covered under the
contract and the type and amount of benefits provided)) shall be no more
than twenty percent higher than under the group contract.
Sec. 7. Section 7, chapter 190, Laws of 1984 and RCW 48.44.380 are each amended to read as follows:
(1) A health care service contractor shall not require proof of insurability as a condition for issuance of the conversion contract.
(2) A conversion contract may not contain an exclusion for preexisting conditions except to the extent that a waiting period for a preexisting condition has not been satisfied under the group contract.
(3) ((A
health care service contractor must offer at least three contract benefit plans
that comply with the following:
(a) A major
medical plan with a five thousand dollar deductible and a lifetime benefit
maximum of two hundred fifty thousand dollars per person;
(b) A
comprehensive medical plan with a five hundred dollar deductible and a lifetime
benefit maximum of five hundred thousand dollars per person; and
(c) A basic
medical plan with a one thousand dollar deductible and a lifetime maximum of
seventy-five thousand dollars per person)) The conversion contract shall provide coverage and
benefits substantially identical to the group contract.
(4) ((The
insurance commissioner may revise the deductibles and lifetime benefit amounts
in subsection (3) of this section from time to time to reflect changing health
care costs.
(5))) The insurance commissioner shall adopt rules to
establish minimum benefit standards for conversion contracts.
(((6)))
(5) The commissioner shall adopt rules to establish specific standards
for conversion contract provisions. These rules may include but are not
limited to:
(a) Terms of renewability;
(b) Nonduplication of coverage;
(c) Benefit limitations, exceptions, and reductions; and
(d) Definitions of terms.
Sec. 8. Section 9, chapter 190, Laws of 1984 and RCW 48.46.450 are each amended to read as follows:
(1) Except as otherwise provided by this section, any group health maintenance agreement entered into or renewed on or after January 1, 1985, that provides benefits for hospital or medical care shall contain a provision granting a person covered by the group agreement the right to obtain a conversion agreement from the health maintenance organization upon termination of the person's eligibility for coverage under the group agreement.
(2) A health maintenance organization need not offer a conversion agreement to:
(a) A person whose coverage under the group agreement ended when the person's employment or membership was terminated for misconduct: PROVIDED, That when a person's employment or membership is terminated for misconduct, a conversion policy shall be offered to the spouse and/or dependents of the terminated employee or member. The policy shall include in the conversion provisions the same conversion rights and conditions which are available to employees or members and their spouses and/or dependents who are terminated for reasons other than misconduct;
(b) A person who is eligible for federal Medicare coverage; or
(c) A person who is covered under another group plan, policy, contract, or agreement providing benefits for hospital or medical care.
(3) To obtain the conversion agreement, a person must submit a written application and the first premium payment for the conversion agreement not later than thirty-one days after the date the person's eligibility for group coverage terminates. The conversion agreement shall become effective without lapse of coverage, immediately following termination of coverage under the group agreement.
(4) If a health maintenance organization or group agreement holder does not renew, cancels, or otherwise terminates the group agreement, the health maintenance organization shall offer a conversion agreement to any person who was covered under the terminated agreement unless the person is eligible to obtain substantially identical group benefits for hospital or medical care within thirty-one days after such nonrenewal, cancellation, or termination of the group agreement at premium rates no more than twenty percent higher than under the previous group agreement.
(5) The ((health
maintenance organization shall determine the)) premium for the conversion
agreement ((in accordance with the organization's table of premium rates
applicable to the age and class of risk of each person to be covered under the
agreement and the type and amount of benefits provided)) shall be no
more than twenty percent higher than under the group agreement.
Sec. 9. Section 10, chapter 190, Laws of 1984 and RCW 48.46.460 are each amended to read as follows:
(1) A health maintenance organization must offer a conversion agreement for comprehensive health care services and shall not require proof of insurability as a condition for issuance of the conversion agreement.
(2) A conversion agreement may not contain an exclusion for preexisting conditions except to the extent that a waiting period for a preexisting condition has not been satisfied under the group agreement.
(3) A
conversion agreement ((need not)) shall provide coverage and
benefits substantially identical to those provided under the group
agreement. The conversion agreement may contain provisions requiring the
person covered by the conversion agreement to pay reasonable deductibles and
copayments if those provisions had been included in the group agreement.
(4) The insurance commissioner shall adopt rules to establish minimum benefit standards for conversion agreements.
(5) The commissioner shall adopt rules to establish specific standards for conversion agreement provisions. These rules may include but are not limited to:
(a) Terms of renewability;
(b) Nonduplication of coverage;
(c) Benefit limitations, exceptions, and reductions; and
(d) Definitions of terms.
NEW SECTION. Sec. 10. This act is remedial in nature and applies retroactively to all hospital or medical expense conversion policies, contracts, and agreements issued, renewed, amended, or entered into on or after January 1, 1985, as well as to hospital or medical expense conversion policies, contracts, and agreements issued, renewed, amended, or entered into on or after the effective date of this act.
NEW SECTION. Sec. 11. 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.