WSR 11-02-078

PROPOSED RULES

OFFICE OF

INSURANCE COMMISSIONER

[ Insurance Commissioner Matter No. R 2010-08 -- Filed January 5, 2011, 9:06 a.m. ]

Original Notice.

Preproposal statement of inquiry was filed as WSR 10-17-110.

Title of Rule and Other Identifying Information: The proposed rule sets forth the standards, submission requirements and instructions related to the data call authorized by ESHB 1714 (chapter 172, Laws of 2010).

Hearing Location(s): OIC Tumwater Office, Training Room 120, 5000 Capitol Boulevard, Tumwater, WA, http://www.insurance.wa.gov/about/directions.shtml, on February 9, 2011, at 10:00 a.m.

Date of Intended Adoption: February 23, 2011.

Submit Written Comments to: Meg L. Jones, P.O. Box 40258, Olympia, WA 98504-0258, e-mail megj@oic.wa.gov, fax (360) 586-3109, by February 9, 2011.

Assistance for Persons with Disabilities: Contact Lorie Villaflores, TTY (360) 586-0241 or (360) 725-7087.

Purpose of the Proposal and Its Anticipated Effects, Including Any Changes in Existing Rules: The commissioner anticipates that the proposed rule will provide the commissioner and any retained consultant with data necessary to compare the performance of the small group and association health plan markets in Washington state.

Reasons Supporting Proposal: The legislation requiring the commissioner's report on market performance, ESHB 1714, specifically prohibits a data call for information unless rules have been adopted regarding the data call.

Statutory Authority for Adoption: RCW 48.02.060, chapter 162, Laws of 2010.

Statute Being Implemented: Chapter 162, Laws of 2010.

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

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

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

No small business economic impact statement has been prepared under chapter 19.85 RCW. None of the entities affected by the proposed rule qualify as small business entities.

A cost-benefit analysis is required under RCW 34.05.328. A preliminary cost-benefit analysis may be obtained by contacting Meg L. Jones, P.O. Box 40258, Olympia, WA 98504-0258, phone (360) 725-7170, fax (360) 586-3109, e-mail megj@oic.wa.gov.

January 5, 2011

Mike Kriedler

Insurance Commissioner

Chapter 284-199 WAC

Health Insurance Market Performance Data Call Rules


NEW SECTION
WAC 284-199-001   Scope.   This chapter applies to health care service contractors, health maintenance organizations, disability insurers, multiple employer welfare arrangements or any other company that bore risk between 2005 and 2008 for covered lives in the state of Washington, either through a small employer health plan, an association health plan, or any other arrangement to which two or more employers contribute to provide health care for employees. The chapter does not apply to direct patient provider primary care practices as defined in chapter 48.150 RCW.

(1) For purposes of this chapter only, the term "carrier" is used to refer to any entity identified in this chapter.

(2) This chapter explains to carriers the requirements associated with the commissioner's data call pursuant to chapter 172, 2010 laws.

(3) This chapter is effective until midnight September 30, 2011.

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NEW SECTION
WAC 284-199-005   Definitions.   The following definitions apply to this chapter, unless the context clearly requires otherwise.

(1) "Association health plan" means a health benefit plan or policy issued through an association either pursuant to a master contract or through individual or group contracts that predicate eligibility for enrollment in whole or in part on membership in an association. Multiple employer welfare arrangements and member governed groups are included in the definition of association for purposes of this definition.

(2) "Comprehensive medical plan" means a plan providing "comprehensive health care services" as described in RCW 48.46.020(4), RCW 48.41.110(4) or RCW 48.41.120.

(3) "Data Call" means the commissioner's request for information pursuant to chapter 172 RCW, laws of 2010.

(4) "Direct earned premium" means premium as defined in RCW 48.43.005, plus any rate credits or recoupment less any refunds, for the applicable period, whether received before, during or after the applicable period.

(5) "Eligibility" means the standards used to determine whether an applicant may enroll in a health benefit plan.

(6) "Enrollment" means the process, standards and practices used to enroll an applicant under a health benefit plan, regardless of whether the process, standards or practices are imposed by a carrier or an association or an administrative agent on their behalf.

(7) "Enrollee" means a person entitled to coverage for benefits under a health benefit plan, including an enrollee, subscriber, policyholder, beneficiary of a group plan, or an individual covered by any other health plan.

(8) "General administrative expenses" means actual incurred expenses allocated separately to loss adjustment, commissions, other acquisition costs, advertising, general office expenses, taxes, licenses and fees, and all other expenses.

(9) "Health benefit plan" means any policy, contract or agreement offered to provide, arrange, reimburse or pay for a comprehensive medical plan.

(10) "Health plan rate" means the rate used to calculate the premium charged, received or deposited as consideration for a health benefit plan or the continuance of a health benefit plan.

(11) "Health plan premium" means the amount agreed upon as a fee for coverage under a comprehensive medical plan for a defined period of time, regardless of the entity responsible for paying the premium or its equivalent, exclusive of cost-sharing amounts paid by enrollees at the time of service.

(12) "Health status factors" means information about an enrollee or applicant used to evaluate the enrollee or applicant's eligibility for coverage or receipt of benefits under a comprehensive medical plan. Health status factors may include, but are not limited to, information about a person's health status, medical condition, claims experience, receipt of health care, medical history, disability and evidence of insurability such as criminal history or domestic violence.

(13) "Incurred claims" means the sum of the following:

(a) Dollar amount of claims closed with payments; plus

(b) Reserves for reported claims at the end of the current year; minus

(c) Reserves for reported claims at the end of the previous year; plus

(d) Reserves for incurred but not reported claims at the end of the current year; minus

(e) Reserves for incurred but not reported claims at the end of the previous year; plus

(f) Reserves for loss adjustment expense at the end of the current year; minus

(g) Reserves for loss adjustment expense at the end of the previous year.

(14) "PPACA" means the Patient Protection and Affordable Coverage Act, P.L. 111-148 (2010).

(15) "Resident' means that person enrolled in a health benefit plan or applying for enrollment in a health benefit plan who resides in Washington State or whose employer is based in Washington State.

(16) "Small group health plan" means a health plan issued to a group of 2 to 50 or a grandfathered health plan issued to a small group of one in effect between 2005 and 2008.

(17) "Submission" means the transfer to and actual receipt by the commissioner of data, documents and information, performed by the carrier or the carrier's third party expert consistent with the format, method and timing specified by the commissioner.

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Reviser's note: The typographical error in the above section occurred in the copy filed by the agency and appears in the Register pursuant to the requirements of RCW 34.08.040.
NEW SECTION
WAC 284-199-010   Acknowledgment.   Carriers must acknowledge receipt of the data call by sending an electronic mail acknowledgment to the commissioner's mailbox: 1714survey@oic.wa.gov. The carrier must include the name, e-mail address and telephone number of the contact person within the organization regarding the data call.

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Reviser's note: The unnecessary underscoring in the above section occurred in the copy filed by the agency and appears in the Register pursuant to the requirements of RCW 34.08.040.
NEW SECTION
WAC 284-199-015   Aggregation of data.   If a carrier determines that an association health plan block of business subject to the reporting requirements under chapter 172, laws of 2010 covers fewer than ten thousand lives in any of the reporting years, the carrier may contract with a third party to aggregate the information with other carrier data that similarly qualifies.

(1) The third party must respond to the data call within the time frames required of the carrier, and follow the commissioner's instructions for submission. If the commissioner requires resubmission of the data, in whole or in part, the third party must respond within the time frame that the commissioner requires.

(2) No extensions of time may be granted by the commissioner in order to accommodate a carrier's election to report data for a plan on an aggregated basis.

(3) If the plan block of business size changes from year to year, and in any year covers more than ten thousand lives, the plan must report data on a non-aggregated basis for those years when the plan block of business size exceeds ten thousand lives.

(4) The data submitted by a third party aggregating data for multiple carriers must identify each carrier whose data is included in the submission, and include a statement executed by the carrier attesting to the accuracy of the data submitted by the carrier. The form of the statement is posted on the commissioner's web site.

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NEW SECTION
WAC 284-199-020   Survey instrument.   (1) The data call will be issued in the form of a survey instrument, template for narrative responses and record format instructions, containing questions requiring narrative as well as numeric responses. Carriers must respond to the survey instrument pursuant to the instructions posted on the commissioner's web site.

(2) The commissioner may request information not specifically referenced in ESHB 1714, chapter 172, laws of 2010. Carrier submission of data sets requested but not specifically referenced in chapter 172, laws of 2010 are voluntary in nature, and will be included based on the commissioner's determination that they provide information necessary to respond to the Legislature's request for a comparison of the small group and association health plan markets. Data sets that are voluntary will be specifically designated as such in the survey instrument.

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NEW SECTION
WAC 284-199-025   Submission.   Carriers and their third party consulting experts must comply with the commissioner's data submission standards. Carriers are responsible for the accuracy and completeness of the data for all record groups requested through the data call, and for correcting errors identified during the data validation process in a timely manner, and delivering corrected data on or before the due dates set by the commissioner during the data validation process.

(1) Data, supporting documents and any other information necessary to respond to the commissioner's data call must be submitted to the commissioner by the carrier or their third party consulting expert at the address specified in the instructions not later than 10:00 p.m. on the ninetieth day after these rules are adopted.

(2) Carriers must use the survey template form prepared and posted on the commissioner's web site when responding to the data call, and follow the instructions, requirements and guidelines for the record layout format also posted on the web site. Carriers may submit additional documents or other explanatory information with the completed survey template. These documents must be submitted to the commissioner in pdf format and in compliance with any other record layout format requirements included in the instructions.

(3) If a carrier submitted information to the Department of Health and Human Services pursuant to the data call referenced in 45 CFR 159.120(a), the carrier may comment on any change in experience between 2005-2008, the time frame for data reported under this section, and 2009-2010, the time frame for data reported under the federal interim final rules.

(4) If a carrier elects to submit aggregated data, the Aggregated Submission Statement must be completed and provided to the commissioner by the deadline for submission of the completed survey. The Aggregated Submission Statement must be posted by the commissioner on the agency web site not later than 90 days before the deadline for submission of the data.

(5) Carriers must submit data for an individual company as one file, unless they are aggregating. One individual must coordinate, compile and submit the complete package to the administrator electronically, as explained in the instructions posted on the commissioner's web site.

(6) Carriers may submit data in batches for validation if the data is clearly identified in relation to the survey instrument.

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NEW SECTION
WAC 284-199-030   Resubmission.   If the commissioner requires a carrier to resubmit data because the data file was submitted in an incorrect format or does not otherwise comply with the specifications in this chapter, the carrier must respond within 30 calendar days of receiving a notice to resubmit.

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NEW SECTION
WAC 284-199-035   Validation.   The carrier must validate the completed survey by executing and submitting to the commissioner the Statement of Data Validity posted on the commissioner's web site with the instructions related to this data call pursuant to chapter 172 RCW, laws of 2010.

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NEW SECTION
WAC 284-199-040   Data retention.   Carriers must retain all data, including computers runs produced to support the data call submission, until midnight, September 30, 2011.

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NEW SECTION
WAC 284-199-045   Data fields.   The survey template will require reporting of the following data fields:


Field Description Type (numeric or text) Notes
(1) Type of business Numeric and Text
(2) Lines of coverage Numeric
(3) Resident enrollees on first day of year Numeric
(4) Resident enrollees on last day of year Numeric
(5) Resident enrollees in plan during year Numeric
(6) Resident Enrollee by type Numeric
(7) Annual incurred claims Numeric
(8) Annual net earned premium Numeric
(9) Annual general administrative expenses Numeric Voluntary
(10) Health status factors Text
(11) Non-resident enrollees Numeric
(12) Zip codes of non-resident enrollees Text
(13) Zip codes of resident enrollees Text
(14) Washington resident applicants rejected due to health status factors Numeric
(15) Eligibility requirements Text
(16) Percentage of plan enrollees for whom claims experience was used in setting plan rates Numeric Association health plans only
(17) Percentage of plan enrollees for whom employer group size was used in setting plan rates Numeric Association health plans only
(18) Required number of employees threshold for employers to qualify for coverage Numeric
(19) Percentage of plan enrollees for whom health status factors was used in setting plan rates Numeric
(20) Contract holder Text
(21) Age group band enrollment Numeric
(22) Average age for each band Numeric
(23) Line item where enrollment for block of business is reported on annual statement Numeric
(24) Producer compensation as a percentage of administrative expenses Numeric Voluntary
(25) Association membership bylaws for reported associations Text Voluntary

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NEW SECTION
WAC 284-199-050   Contact person.   Carriers must notify the commissioner of the name of the person within their organization, to whom the survey instrument and data call should be sent. The commissioner will contact the carrier through the person identified to communicate the data call, and to obtain answers to questions about the carrier's data submission. The notification must be submitted to 1714survey@oic.wa.gov, and must include the person's name, title, electronic mail address, physical address and telephone number.

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Reviser's note: The unnecessary underscoring in the above section occurred in the copy filed by the agency and appears in the Register pursuant to the requirements of RCW 34.08.040.

Washington State Code Reviser's Office