Section 35: Clarifies Definition of Nongroup Health Insurance Carriers

(a) Any nongroup health plan offered, sold, issued, delivered, made effective, or renewed by any carrier on or after August fifteenth, nineteen hundred and ninety-six shall comply with the provisions of this chapter; provided, however, that the offer, sale, issue, renewal or delivery of a conversion nongroup health plan shall not obligate the carrier to otherwise offer, sell, issue, renew or deliver a nongroup health plan to any person to whom it does not have such an obligation pursuant to a group policy, contract or agreement with an employer or through a trust or association; provided, however, that a conversion nongroup health plan shall be subject to all other requirements of this chapter.

(b) (1) As a condition of doing business in the commonwealth, a carrier that offers health benefit plans to qualified small businesses, as defined by chapter one hundred and seventy-six J, shall participate in the nongroup health insurance market. A carrier shall be exempt from this requirement if, as of the close of the preceding calendar year, the combined total of eligible employees and eligible dependents, as defined by chapter one hundred and seventy-six J, enrolled in health benefit plans offered by it to qualified small businesses does not exceed five thousand individuals.

(2) A carrier that, as of the close of the preceding calendar year, has a combined total of five thousand or more eligible employees and eligible dependents, as defined by chapter one hundred and seventy-six J, who are residents of the commonwealth and who are enrolled in health benefit plans sold, issued, delivered, made effective or renewed to qualified small businesses pursuant to its license under chapter one hundred and seventy-six G, shall be considered to be participating in the nongroup health insurance market only if it offers for sale, issue, delivery, effectuation or renewal, including renewal through the connector, to any eligible individual a guaranteed issue managed care plan, subject to the exceptions set forth in this chapter.

(3) A carrier that, as of the close of the preceding calendar year, has a combined total of five thousand or more eligible employees and eligible dependents, as defined by chapter one hundred and seventy-six J, who are residents of the commonwealth and who are enrolled in health benefit plans sold, issued, delivered, made effective or renewed to qualified small businesses pursuant to its license or licenses under chapter one hundred and seventy-five, chapter one hundred and seventy-six A or chapter one hundred and seventy-six B, shall be considered to be participating in the nongroup health insurance market only if it offers for sale, issue, delivery, effectuation or renewal, including renewal through the connector, to any eligible individual a guaranteed issue medical plan, subject to the exceptions set forth in this chapter. For the purposes of this section, neither an eligible employee, nor an eligible dependent, shall be considered to be enrolled in a health benefit plan issued pursuant to a carrier's license under chapter one hundred and seventy-five if said health benefit plan is sold, issued, delivered, made effective or renewed to said eligible employee or eligible dependent as a supplement to a health benefit plan subject to licensure under chapter one hundred and seventy-six G.

(4) A carrier that is required, pursuant to subsection (3), to offer for sale to any eligible individual a guaranteed issue medical plan may instead offer for sale, issue, delivery, effectuation or renewal to any eligible individual a guaranteed issue preferred provider plan, subject to the exceptions set forth in this chapter; provided, however, that nothing in this chapter shall prohibit a carrier from offering both a guaranteed issue medical plan and a guaranteed issue preferred provider plan should it so choose.

(c) Notwithstanding the requirements of section four and section twenty-two of chapter seven and section twenty-seven B and section twenty-nine A of chapter twenty-nine, no later than sixty days after August fifteenth, nineteen hundred and ninety-six, the executive office for administration and finance shall contract with a total of three contractors, including a certified employee health benefits plan specialist, an associate in risk management or licensed life and health insurance advisor. One of the three contractors hired shall be an actuary, who shall be a member of the American Academy of Actuaries. The contractors hired shall be members in good standing of their respective local or national accrediting bodies, shall specialize in health care, and shall not be employees of any licensed carrier or the commonwealth.

(1) Said contractors shall develop recommendations consistent with this section relative to the benefits to be provided by, and the cost sharing requirements of, the standard guaranteed issue managed care plan, the standard guaranteed issue medical plan, and the standard guaranteed issue preferred provider plan. Said recommendations shall be based upon the prototype for small group plans under chapter one hundred and seventy-six J, modified to provide for a co-payment for outpatient benefits which is no greater than three-fifths of the co-payment applicable to the small group prototype. The standard plans shall include at least the following medically necessary services: reasonably comprehensive physician services, inpatient and outpatient hospital services, emergency health services, the full range of effective clinical preventive care, and prescription drugs administered on an outpatient basis. For each thirty day supply of generic prescription drugs, a guaranteed issue health plan shall require a twenty dollar co-payment. For each thirty day supply of brand name prescription drugs, a guaranteed issue health plan shall require a twenty-five dollar co-payment. Any insured individual who incurs fifty co-payments for prescription drugs in a calendar year shall not be required to make any additional co-payments for prescription drugs in that calendar year. Each health plan that provides for the purchase of prescription drugs by mail order shall provide a financial incentive to insured individuals who purchase their drugs by mail order. Each of the standard guaranteed issue health plans shall be reasonably actuarially equivalent to each other. The contractors shall report their recommendations, upon which at least two of them shall agree, to the nongroup health insurance advisory board no later than thirty days after their hire.

(2) After due consideration of the recommendations of the contractors, and no later than fourteen days after the submission of said recommendations, said board shall make final recommendations, upon which a majority of the members shall agree and which are consistent with the standards established in paragraph (1), to the commissioner relative to the benefits to be provided by, and the cost sharing requirements of, the standard guaranteed issue health plans. The commissioner shall, no later than fourteen days after the submission of the board's recommendations, either approve or disapprove said recommendations. The commissioner shall not modify the recommendations of said board. If the commissioner does not approve the recommendations of said board, said board shall, after consulting with the contractors, submit new recommendations, upon which a majority of the members agree and which are consistent with the standards established in said paragraph (1), to the commissioner no later than fourteen days following his decision to disapprove the standard benefit plans.

(3) Said board shall review the benefits to be provided by, and the cost sharing requirements of, the standard guaranteed issue health plans on an annual basis. In making its recommendations, the board shall ensure that actuarial equivalence is maintained between the standard guaranteed issue plans. Said board shall make pertinent recommendations to the commissioner who shall approve or disapprove said recommendations within fourteen days. The commissioner shall then take the appropriate steps to ensure the implementation of the standard benefits plans.

(4) A carrier may establish as its guaranteed issue managed care, guaranteed issue medical, or guaranteed issue preferred provider plan a plan with additional benefits or lower cost-sharing requirements than those contained in the standard plans defined by the commissioner pursuant to subsection (a); provided, however, that any such enhanced plan includes the benefits contained in the comparable type of standard plan, that the carrier establishes only one form, whether standard or enhanced, of each type of managed care, medical, or preferred provider guaranteed issue plan or plans that it offers; and provided, further, that such enhanced plan or plans shall be subject to all of the requirements of this chapter applicable to guaranteed issue health plans. A federally qualified health plan provided by a health maintenance organization which provides, at a minimum, the benefits contained in the comparable type of standard plan, including prescription drugs, and is the only form, whether standard or enhanced, which the health maintenance organization offers shall be deemed to meet the requirements of this section. The commissioner may prohibit a carrier from offering an enhanced plan if he finds that the design of the plan may have the effect of discouraging enrollment by eligible individuals.

(d) A carrier that participates in the nongroup health insurance market shall make available to eligible individuals a standard guaranteed issue health plan established pursuant to subsection (c) and may additionally make available to eligible individuals one alternative guaranteed issue health plan with benefits and cost-sharing requirements, including deductibles, that differ from the said standard guaranteed issue health plan. A carrier shall not make available an alternative plan unless said plan has been filed with and approved by the commissioner of insurance. The commissioner shall approve of an alternative plan if said plan: (1) includes at least the following medically necessary services: reasonably comprehensive physician services; inpatient and outpatient hospital services; emergency health care services; and a full range of effective, clinical preventive care administered on an outpatient basis; and (2) contains a disclosure form, which shall be provided to any potential insured, that clearly and concisely states the limitations on the scope of health services and any other benefits to be provided, including an explanation of any deductible or copayment feature; and (3) offers a ten day free look period in compliance with chapter 176D and any regulations promulgated thereunder.

A carrier shall adhere to all other provisions of this chapter when offering any guaranteed issue health plan. The commissioner shall promulgate regulations relative to the guaranteed issue health plans permissible pursuant to this section.