Life and Health News
We are celebrating over 25 years of providing selected items of current interest to our clients and friends. The items contained in this newsletter are derived from bulletins, regulations and legislative activity affecting the insurance industry. Please feel free to share this newsletter with others that may be interested. Contact our office for further details about any of the items contained in the newsletter.
AGENT / PRODUCER LICENSING AND APPOINTMENT
Vermont's Securities Division and Insurance Division issued a joint bulletin to all insurance producers noting that the Department of Financial Regulation is aware that some producers are offering investment advice without the expertise and securities registration required by law, often in the context of advising the consumer to sell a security in connection with the purchase of an insurance product. Producers are cautioned that the recommendation to replace securities such as mutual funds, stocks, bonds, variable insurance products and various other investment vehicles defined as securities under state law is offering of investment advice and is unlawful unless the producer is registered with the Securities Division as an investment adviser representative. Insurance Bulletin No, 161 & Securities Bulletin S-2015-02
Maine issued a bulletin to clarify how the annuity illustration standards apply to participating income annuity illustrations. Bulletin 408
Ohio amended its regulations to provide new annuity mortality tables for use in determining reserve liabilities for annuities Rule 3901-3-17
Rhode Island issued a bulletin to clarify annuity illustration standards in Insurance Regulation 41 applicable to participating income annuities. The Division requires that a company's expectations used in such illustrations be both subjectively and objectively reasonable, as described in the bulletin. Insurance Bulletin Number 2015-9
AUTISM SPECTRUM DISORDERS
North Carolina enacted legislation requiring health benefit plans to cover the treatment of autism spectrum disorders. Senate Bill 676, 58-3-192
Tennessee published a bulletin addressing credit for reinsurance ceded to unauthorized reinsurers by captive insurance companies. The bulletin provides a list (although not exhaustive) of acceptable reinsurance structures and notes that the Department retains discretion on granting credit for reinsurance to any unauthorized reinsurer on a case-by-case basis. Captives are encouraged to meet with the Department to work out arrangements. Bulletin No. 15-02
Ohio amended its rules pertaining to access to confidential personal information. Rule 3901-1-02
DATA CALLS / REGULATORY REPORTING
Arkansas issued a bulletin addressing the January 1, 2016 data submission requirements under "The Arkansas Healthcare Transparency Initiative Act of 2015." Submitting entities, required to register at www.arkansasapcd.net by November 15, 2015, are to submit test files by January 1, 2016 in the format required by the Data Submission Guide (DSG) published with Rule 100. Entities may access the DSG at http://www.insurance.arkansas.gov/ or www.arkansasapcd.net. Entities may be granted a waiver or extension by submitting an exemption request to the Commissioner. Bulletin No. 17-2015
Oklahoma issued a bulletin advising that beginning January 1, 2016, all market conduct annual statement (MCAS) filing fees must be submitted electronically to the OID on a form approved by the Commissioner. Bulletin No. LH 2015-03
Oregon adopted legislation establishing prominent carrier reporting requirements for all non-claims based primary care expenditures for calendar year 2014. All data must be submitted to the Department no later than December 31, 2015. OAR 836-053-1510
Florida published an Informational Memorandum to notify health insurance issuers of the applicability of Statement of Statutory Accounting Principles (SSAP) Number 107 to receivables owed to a health insurance issuer pursuant to the risk corridors program described in Section 1342 of the Affordable Care Act. Informational Memorandum OIR-15-07M
FRAUD / ANTI-FRAUD
California enacted legislation to broaden its Penal Code to include insurance fraud within the definition of "criminal profiteering activity." Insurance fraud also is listed under "organized crime" under this bill. AB 160
California enacted legislation that extends requirements of the Knox-Keene Health Care Service Plan Act of 1975 to a nongrandfathered health service plan that offers, amends or renews a group health plan contract and an insurer issuing a policy, except a health care service plan or insurer issuing a specialized health care service plan or policy that provides less than 60% minimum value in the large group market and would require that the persons to be covered are also covered by a contract or plan that provides at least 60% minimum value. AB 248
HEALTH CARE EXCHANGE / MARKETPLACE
Oregon adopted regulation pertaining to the 2016 administrative charge on insurers offering qualified health plans or stand-alone dental plans through the marketplace. OAR 945-030-0035
HEALTH INSURANCE - COMPREHENSIVE
California enacted legislation requiring that an individual within a family not have a maximum out-of-pocket limit greater than the limit for individual coverage for the same product. AB 1305
California enacted legislation that, as of July 1, 2016, requires a health care service plan and a health insurer that contracts with providers for alternative rates of payment, to publish a provider directory with information on contracting providers that deliver services to the plan's enrollees or the insurer's insureds and requires the insurer or plan to make an online directory available on the entity's website. SB 137
California enacted legislation to prohibit the formulary or formularies for outpatient prescription drugs maintained by a health care service plan or health insurer from discouraging the enrollment of individuals with health conditions and from reducing the generosity of the benefit for enrollees or insureds with a particular condition. Until January 1, 2020, cost sharing for covered outpatient prescription drugs for an individual prescription cannot exceed $250 for a supply of up to 30 days. After January 1, 2020, a nongrandfathered individual or small group plan will be required to use specified definitions for each tier of a drug formulary. AB 339
California updated its regulation addressing provider network access standards and maintenance of accurate directories. T. 10 s 2240
Washington promulgated a rule requiring every issuer offering or renewing a health benefit plan on or after January 1, 2016, to attest to the Insurance Commissioner that the transparency tools available to their members meet the requirements of RCW 48.43.007. The attestation must be filed annually for each line of business written, lines being defined as individual, small group and large group health plans. The form requires the signature of a company officer responsible for ensuring compliance with RCW 48.43.007 and must be submitted no later than February 1. Instructions for filing of the form will be available on the Commissioner's website no later than 60 days prior to the filing deadline. WAC 284-43-927
HEALTH INSURANCE / HEALTH RATES
Massachusetts issued a bulletin providing guidance to insured health carriers about the use of standard prior authorization forms when reviewing requests for behavioral health services. Bulletin 15-08
New Jersey amended its exhibit A pertaining to Individual health benefits plans [A/50] [B] [C] [D]. NJAC 11:20 Exhibit A
North Carolina enacted legislation encouraging diabetes education as part of well-child care. Senate Bill 694
North Dakota issued a bulletin that provides guidance on the definition of a small employer for insurance companies issuing health benefit plans. Bulletin 2015-3
Oregon issued a memorandum that addresses issues related to Medicare eligibility due to End Stage Renal Disease (ESRD) and Medicare-approved amount caps on kidney dialysis coverage. Memorandum of November 4, 2015
INTERNAL AND EXTERNAL REVIEW
North Carolina amended timeline requirements for requests for expedited external reviews for health benefit plans. Insurance Code: 58-50-82
Utah updated its regulation addressing the unfair marketing practices rule on misleading names to provide guidance to all licensees (producers, limited lines producers, consultants and insurers licensed under Title 31A of the Code). The language is changed to note that licensees must use their full legal names to obtain licensing and must notify the Commissioner of any assumed name that will be used. R590-154-1 Dated 11-13-2015
Delaware published a bulletin to notify carriers of a deceptive solicitation from "Register Delaware." It states that several carriers have received "Past Due Notices" from an entity calling itself "Register Delaware" billing for "statutory representation." The Department states that this is not a legitimate invoice or official annual report and is being investigated by the Attorney General's office. Any carrier victimized by this notice should complete a complaint form and immediately contact the Consumer Protection Unit of the Attorney General's Office at (302) 577-8600 or 1-800-220-5424. Domestic/Foreign Insurers Bulletin No. 80
SMALL EMPLOYER GROUPS
Alaska issued a bulletin addressing the Protecting Affordable Coverage for Employees Act (PACE). For purposes of the medical loss ratio (MLR) reporting and rebate requirements under 45 C.F.R. Part 158 only, the division will use the federal regulation definition of small employer and large employer as amended under PACE. Bulletin B 15-09
District of Columbia issued a bulletin to clarify the effect of the Protecting Affordable Coverage for Employees Act (PACE Act) on the definition of small employer in DC as applied to health benefit plans. For years beginning January 1, 2016 and later, DC will use the definition supplied by the PACE Act and rescinds Bulletin 15-IB-05-04/28. Bulletin 15-IB-07-10/20
Georgia issued a bulletin to avoid confusion and ensure continuity of the small group market in view of recent enactment of the PACE Act, confirming that the small employer definition is 1-50 employees and the counting methodology for group purposes is limited to full time equivalent employees. Bulletin 15-EX-3
Hawaii issued a memorandum stating that the PACE Act has revised the federal definition to remain consistent with Hawaii's definition of a small employer. Memorandum 2015-3H
New Hampshire issued a bulletin pertaining to the definition of a small group in 2016. Bulletin of October 27, 2015
New Mexico issued a bulletin to all insurers pertaining to the definition of small group. The size of a "small group" for the purposes of health insurance in New Mexico will remain at 50 or fewer. Adjustments to already approved rates for 2016 will not be accepted. All future small group rate filings should only include experience and projections for group policies covering employers with 50 or fewer employees. Bulletin 2015-028
North Carolina amended its definition of small employer due to recent changes in federal standards. Insurance Code: 58-50-110
Oregon adopted a regulation that establishes the definition of small employer for health benefit plans. Exhibit A provides methodology for determining the number of employees in group health benefit plans. OAR 836-053-0015 and OAR 836-053-0015 Exhibit A
Tennessee published a bulletin in response to passage of the PACE Act and its definition of small and large employer groups. The Department decided it is in the best interest of Tennessee consumers and the insurance industry to adhere to the federal definition. Bulletin No. 15-01
SOLVENCY / FINANCIAL CONDITION
Ohio amended its hazardous financial condition standards. Rule 3901-3-04
STANDARD VALUATION LAW
California enacted legislation to adopt the NAIC Standard Valuation Law, requiring companies engaging in specified activities relating to the business of life insurance to incorporate the methodology employed by a specified manual of valuation instructions in making determinations relating to the reserve requirements and the minimum standard of valuation for policies and contracts, as specified. SB 696
North Carolina enacted legislation to revise its standard valuation and nonforfeiture laws, as well as provide annual requirements for opinion of the appointed actuary. It also amends deposits of capital and surplus by domestic insurers, provides coverage may be issued by more than one company as long as the company responsible for each coverage is clearly identified, and amends nonrenewal provisions and request for expedited external review. I - HB 361
Connecticut published a bulletin to rescind and replace HC-103 and PC-79 issued on July 8, 2015. It addresses provisions common in health insurance policies, but inappropriate in stop loss policies, per the Commissioner. Bulletin Numbers HC-108 and PC-80
UTILIZATION REVIEW - HEALTH CARE
Louisiana amended its regulation related to utilization review organizations to provide that no health insurer or entity acting on behalf of a health insurer shall act as a utilization review organization unless licensed to do so and further set forth annual reporting requirements for insurers licensed as a URO. LAC 37:XIII.6205, LAC 37:XIII.6207, LAC 37:XIII.6213
Montana issued a memorandum informing disability insurance carriers and independent review organizations (IROs) about the application process to perform external reviews. Advisory Memorandum of November 2, 2015
New York amended its law pertaining to utilization review requirements for health policies in relation to expedited utilization review of court ordered mental health and/or substance use disorder services. I - AB 1327, Ins. Law s 4903, Ins. Law s 4904
DID YOU FINISH ALL OF YOUR 2015 PROJECTS?
It’s hard to believe that 2015 is already coming to an end.
Did you finish all of the projects that you had scheduled? Don’t let the completion of those projects delay the 2016 projects you need to be working on.
First Consulting can help!
Our experienced team of insurance experts can step in at any stage of your drafting and filing project and bring it to a speedy finish. Now your staff will have the time to focus on the projects they should be working on.
Contact me today to find out more and get a no obligation quote.
IS YOUR COMPANY PLANNING TO EXPAND ITS AUTHORITY?
Action such as a name change, re-domestication, acquisition, merger, or adding a new line of business requires a change in an insurance company's certificate of authority. Adding authority in a new jurisdiction requires an insurance company to file with the insurance departments. The Uniform Certificate of Authority Application (UCAA) has streamlined the filings, but the process is still time consuming. Making such filings may be a one-time event for your staff and the experience may not be used again.
First Consulting can help.
We can reduce the amount of time and effort expended. We are experienced with the UCAA and we are also familiar with the various state-specific requirements. Our services include advising what materials are needed for each state’s filing, assembly of the filings, and follow up, as necessary, to secure approval of the filings. Having First Consulting provide these services can free your staff for other functions and projects.
Click here for information on how we can assist you with UCAA filings.
E-mail or call me today for a no obligation proposal and cost estimate.