Insurance - Digest of Bills

Digest of Bills - 2003

INSURANCE

S.B. 03-59 Division of insurance - creation - termination. Recreates and reenacts the functions and duties of the division of insurance as outlined in article 1 of title 10, Colorado Revised Statutes, prior to its automatic repeal on July 1, 2002. Amends the dates on which sunset reviews are conducted by the department of regulatory agencies so as to implement a staggered schedule of reviews, dealing with one of 4 categories of regulatory activity every 2 years, starting in 2004.

APPROVED by Governor March 18, 2003
EFFECTIVE July 1, 2003

S.B. 03-68 Commission on mandated health insurance benefits - creation - cash fund - appropriation. Creates the commission on mandated health insurance benefits (commission) to assess the impact of existing and future mandated health care benefits. Requires the appointment of 11 members to the commission as follows:

● One member of the senate business affairs and labor committee, appointed by the president of the senate in consultation with the minority leader;

● One member of the house of representatives business affairs and labor committee, appointed by the speaker of the house in consultation with the minority leader;

● One employee of the division of insurance (division), appointed by the governor;

● One member who represents the health insurance industry, appointed by the governor;

● One member who represents a health maintenance organization, appointed by the governor;

● 2 members who represent health care providers, appointed by the governor;

● 2 private citizens, appointed by the governor, one with an interest in mandated health insurance benefits, and one who represents a consumer health advocacy group; and

● 2 members who are business owners with less than 50 employees each, appointed by the governor.

Requires the commission to meet regularly and at the request of the speaker of the house or the president of the senate. Allows members to be reimbursed for travel and expenses incurred for no more than 8 meetings per year in the performance of their duties.

Requires the division staff to assist the commission. Requires the commission to:

● Review and evaluate statutorily mandated health care coverage provisions;

● Advise the division on matters relating to health insurance mandates;

● Request information and prescribe the time frame and format in which it shall be submitted;

● Assist the commissioner in assessing proposed and existing mandated health benefits;

● Provide information and recommendations relating to mandated health insurance benefits to the governor or the general assembly upon request;

● Recommend a standard health benefits plan for Coloradans;

● Report annually to the general assembly on commission activities;

● Make recommendations to the applicable legislative committees regarding the implementation of legislation; and

● Prepare a study that assesses the social and financial impact of any proposed mandate addressed in proposed legislation to the appropriate legislative committee at the request of the speaker of the house or president of the senate.

Funds the activities of the commission through a fee assessment payable by insurers and deposited in a newly created cash fund. Repeals the commission, effective July 1, 2005.

Appropriates $18,144 to the department of regulatory agencies for the implementation of the act.

APPROVED by Governor May 20, 2003
EFFECTIVE May 20, 2003

S.B. 03-312 Health care coverage - fee-for-service dental plans. Clarifies that offering a fee-for-service dental plan where no premium is charged is not considered transacting the business of insurance. Requires the offeror of a fee-for-service dental plan to advise the consumer that the plan is not an insurance plan and that the consumer is responsible for all charges.

APPROVED by Governor May 14, 2003
EFFECTIVE August 6, 2003
NOTE: This act was passed without a safety clause. For further explanation concerning the effective date, see page vi of this digest.

S.B. 03-331 Health benefit coverage - duties of the commissioner - investigation of denial of benefits - reporting requirement. Allows the insurance commissioner (commissioner) to investigate denial of health benefit claims filed by health care providers against a health benefit plan. States that the commissioner is not prohibited from enforcing the laws related to health benefit coverage. Beginning October 1, 2004, requires the commissioner to report annually to the business affairs and labor committees of the house of representatives and the senate on the number, nature, and outcome of complaints filed against health insurers for the previous year.

APPROVED by Governor June 5, 2003
EFFECTIVE June 5, 2003

S.B. 03-345 Compulsory motor vehicle coverage - self-insurers. Clarifies that certain compulsory motor vehicle coverage requirements do not apply to any person who has received a certificate of self-insurance from the commissioner of insurance (commissioner). Clarifies that the commissioner may issue a certificate of self-insurance to a person if the commissioner is satisfied that such person is able and will continue to be able to pay benefits for any basic coverage required.

States that this act shall take effect only if House Bill 03-1188 becomes law.

APPROVED by Governor June 5, 2003
EFFECTIVE June 5, 2003
NOTE: House Bill 03-1188 was signed by the Governor May 2, 2003.

H.B. 03-1033 Health benefit coverage - procedure for the denial of benefits. Harmonizes provisions of law concerning the procedure for denying health benefits with the federal "Employee Retirement Income Security Act" (ERISA). Requires the insurance commissioner to promulgate rules that reflect the requirements of ERISA rules. Outlines the specific information that must be included in a denial of health benefit coverage.

APPROVED by Governor April 29, 2003
EFFECTIVE January 1, 2004

H.B. 03-1163 Health insurance - individual - CoverColorado. Deletes obsolete definitions. Allows the CoverColorado board (board) to issue policies to dependents of eligible individuals at premiums and in health benefit plan designs that are different from those offered to eligible individuals. Allows the board to offer health benefit plans with deductibles greater than $5,000 to eligible individuals. Limits the period for excluding a federally eligible individual's preexisting conditions under certain circumstances. Clarifies that the special fee assessed against health benefit carriers to fund CoverColorado is based on Colorado covered lives. Allows the board to obtain more current information from carriers on the number of covered lives for the purposes of the special fee to be assessed. Deletes the provision that requires an insurer to recoup from its covered lives the amount of the assessment for CoverColorado.

Makes the act apply to premium taxes, fines, and penalties assessed against health insurers authorized to conduct business in this state and to coverage under CoverColorado on or after May 21, 2003.

APPROVED by Governor May 21, 2003
EFFECTIVE May 21, 2003

H.B. 03-1164 Small employer health insurance - premium adjustments - mandatory coverages - study of ceding risk to CoverColorado - pilot program of multiple employer welfare arrangements - individual health benefit plans - direct contracting with providers for the purposes of medicaid - confidentiality of health information - appropriation. Makes legislative findings that the assessment paid by insurers to CoverColorado should not be the exclusive method of funding CoverColorado. Requires the board of directors of CoverColorado (board) to increase premiums for CoverColorado to 150% of the standard risk rate on July 1, 2003. Also requires that the board evaluate a reduction in benefits before it assesses insurers on or after July 1, 2003. Requires the board, in consultation with the insurance commissioner (commissioner), to evaluate the impact of small employer carriers ceding to CoverColorado any insurance risk of a business group of one who is presumptively eligible for CoverColorado. Requires the board to submit a report to the business affairs and labor committees of the house of representatives and the senate no later than February 1, 2004. Allows the board to build the cost of the evaluation to cede risk into the assessment paid by insurers.

Allows a small employer carrier that currently provides group coverage to a small employer to market individual health benefit plans to ineligible employees and dependents with the permission of the employer. Allows a small employer to set valid and acceptable standards for employee eligibility for health benefit coverage based on the terms and conditions of employment. Allows a small employer carrier to provide different benefits for insureds and dependents covered under the same policy and encourage health care condition management based on clinical guidelines.

Allows for rating flexibility for small employer health benefit coverage based on health status, claims experience, standard industrial classification, and other factors. Phases in rating flexibility over 2 years. Allows for a separate rating adjustment based on smoking status. Requires the commissioner to evaluate how rating flexibility affects the small group market. Requires the commissioner to report his or her findings to the business affairs and labor committees of the house of representatives and the senate no later than January 15, 2007.

Allows a small employer carrier to offer a basic plan that does not include mandated health benefits for the following:

● Low-dose mammography screening;

● Mental illness;

● Prostate screening;

● Hospitalization and general anesthesia for dental procedures for minors;

● The availability of treatment for alcoholism; and

● The availability of hospice care.

Requires the commissioner to survey small employer carriers to determine the range of benefits available annually. Requires the commissioner to implement a basic plan that approximates the lowest level of coverage and a standard plan that approximates the average level of coverage. Specifies that the commissioner shall amend rules related to basic and standard health benefit plans no more frequently than every 2 years. Describes the plan types that constitute a basic and standard health benefit plan.

Creates a pilot program for up to 18 multiple employer welfare arrangements (MEWAs) to be created statewide. Allows these MEWAs to be fully insured or self-funded plans. Defines terms. Requires MEWAs participating in the pilot program to have a professional affiliation. Allows pilot program MEWAs to offer health benefit coverage to member employers. Specifies that once an employer participates in a MEWA, the employer may not withdraw until the end of the contract term. Requires each MEWA to accept all employers within the MEWA's professional affiliation regardless of the health status of individuals within the small employer group or size of the small employer group. Clarifies that MEWAs created pursuant to this act are not multiple employer health trusts.

Requires the commissioner to monitor MEWAs participating in the pilot program. Mandates the department of regulatory agencies to evaluate the pilot program before October 15, 2007, and report to the general assembly concerning:

● The number of persons insured through a MEWA;

● The cost of insurance premium rates for MEWA participants compared to other group insurance;

● Whether MEWAs have affected the insurance market either positively or negatively; and

● Any other factors deemed necessary by the division.

Clarifies that the MEWA pilot program shall be cash funded and that the cost of the evaluation by the department of regulatory agencies shall be paid from moneys in the multiple employer welfare arrangement cash fund. Creates such cash fund.

Allows an insurer to offer one or more health coverage plans that contain deductibles and coinsurance without any limitation on the maximum out-of-pocket payable by the insured.

Allows health maintenance organizations to comply with new federal regulations concerning the "Health Insurance Portability and Accountability Act of 1996" (HIPAA). Clarifies that "covered entities" as defined in federal regulations for HIPAA are not subject to the criminal provisions concerning medical record theft.

Allows the department of health care policy and financing to contract with one or more providers who are able to provide cost-effective and quality health care through a capitated partial risk program. Specifies that a provider or entity participating in such a program is not engaged in transacting insurance.

Makes an appropriation of $27,117 to the division of insurance in the department of regulatory agencies for the implementation of the MEWA pilot program.

Takes effect July 1, 2003; except that the provisions related to marketing individual policies to ineligible employees and dependent of a small employer, market of different benefits for insureds and dependents covered under the same policy, the encouragement of appropriate management of health care conditions through the use of clinical guidelines, and the offering of no limits on the out-of-pocket maximums for deductibles and coinsurance are effective January 1, 2004, and shall apply to health benefit plans issued or renewed to small employers on or after said date.

APPROVED May 20, 2003
PORTIONS EFFECTIVE July 1, 2003
PORTIONS EFFECTIVE January 1, 2004

H.B. 03-1188 Automobile insurance - required coverage - optional coverage. Requires the commissioner of insurance to administer and enforce the motor vehicle insurance laws and to promulgate any rules necessary for such administration and enforcement.

Relocates certain provisions of the "Colorado Auto Accident Reparations Act" to part 6 of article 4 of title 10. Requires every owner of a motor vehicle to carry minimum basic motor vehicle coverage as follows:

● $25,000 legal liability coverage for bodily injury or death, to any one person in any one accident;

● $50,000 legal liability coverage for bodily injury or death, to all persons in any one accident; and

● $15,000 for property damage in any one accident.

Allows insurers to offer enhanced benefits that are more extensive than the required minimum coverages. Requires insurers to offer collision coverage.

APPROVED by Governor May 2, 2003
EFFECTIVE July 1, 2003

H.B. 03-1253 Motor vehicle insurance - repair businesses. Prohibits a motor vehicle insurer from:

● Requiring that appraisals or repairs to motor vehicles be made or not be made by a specified motor vehicle repair business (business);

● Representing to a claimant that the use of or the failure to use a particular business may result in nonpayment or delayed payment;

● Coercing or inducing by incentive a claimant to use a particular business for repairs;

● Contracting with an agent for the insurer on the condition a business does claims work at a price established by the insurer;

● Using disincentives to discourage a claimant from using a business;

● Soliciting a referral fee in exchange for referring the claimant to a business;

● Requiring the claimant to travel an unreasonable distance to choose a business;

● Misinforming a claimant to induce the use of a particular business; or

● In the settlement of a claim by a third party against a claimant, requiring a third-party claimant to have repairs done by a particular business.

Requires a motor vehicle insurer to:

● Supply the claimant with a copy of the estimate upon which a settlement is based;

● Require that any estimate prepared by or for the insurer covering visible damages is adequate to restore the motor vehicle within a reasonable time to its condition before the loss;

● Pay for repair services and products based on the prevailing competitive price;

● Disclose to a claimant that the claimant may freely choose any business;

● Assume all reasonable costs sufficient to pay for the claimant's repairs, less any deductible;

● Provide notice to the claimant within 3 business days after the claim is made of the prohibitions and requirements of the act;

● Promptly pay the cost of motor vehicle repair, less the deductible according to the terms of the insurance policy at no less than the prevailing competitive market price; and

● Disclose any ownership interest in, or ownership by or through an affiliation with, a recommended business.

Clarifies that an insurer is not required to furnish required written notices more than once to each claimant for each claim.

Authorizes a claimant or business to submit a written complaint to the commissioner of insurance alleging a violation of this section.

APPROVED by Governor June 5, 2003
EFFECTIVE July 1, 2003

H.B. 03-1273 Motor vehicle insurance - credit scoring - notice requirements. Requires an insurer who uses credit scoring to notify applicants or policyholders. Upon request, requires an insurer to provide an explanation of the significant characteristics of the credit information that impact the insurance score. Requires an insurer to comply with the federal "Fair Credit Reporting Act" if the credit information results in an adverse action to a consumer. Requires the notice to include:

● The name, address, and telephone number of the credit reporting agency;

● The consumer's right to receive a free credit report; and

● The right to dispute erroneous information.

APPROVED by Governor April 1, 2003
EFFECTIVE July 1, 2004

H.B. 03-1294 Health insurance - small employer plans. Allows insurers to require that small employers who have elected to purchase health care coverage from the individual health insurance market or who have self-insured be subject to the following for the first 12 months:

● Underwriting based on health status; and

● Premium rate increases up to 35% of the modified community rate at the time of entry.

Requires premium adjustments for health status to be used only for the calculation of small group premiums and not used for acceptance or rejection of a small group by a carrier.

Allows small employer groups that left the small group health insurance market prior to January 1, 2004, to reenroll in the small group market prior to July 1, 2004, without underwriting for health status used for purposes of establishing the premium for the group for 12 months.

Requires that small business groups that have a gap in health insurance coverage be subject to underwriting for health status to establish the premium for the small business group. Limits the premium increase a small employer carrier may charge to business groups that have a gap in health insurance coverage to 35% for 12 months.

Exempts small employers who are excluded from health insurance coverage within a small group and who have no prior group coverage from underwriting for health status to determine the premium for the group.

Allows for a premium discount for nonsmoking.

APPROVED by Governor June 7, 2003
EFFECTIVE January 1, 2004
NOTE: This act was passed without a safety clause. For further explanation concerning the effective date, see page vi of this digest.

H.B. 03-1299 Life - annuity - minimum legal return. Lowers from 3% to 1.5% the minimum legal return on a life insurance annuity until July 1, 2006.

APPROVED by Governor April 22, 2003
EFFECTIVE August 6, 2003
NOTE: This act was passed without a safety clause. For further explanation concerning the effective date, see page vi of this digest.

H.B. 03-1348 Domestic life insurance companies - funds - separate account contracts. Codifies a domestic life insurance company's authority to accumulate or hold funds paid pursuant to funding agreements or guaranteed investment contracts in a separate account subject to certain criteria. Defines "separate account contract".

APPROVED by Governor May 22, 2003
EFFECTIVE May 22, 2003

H.B. 03-1360 Sickness, health, and accident insurance - small group marketplace - data collection - analysis - repeal. Declares that the shrinking small group health insurance marketplace needs to be studied in order to determine if there is a crisis that needs to be addressed in order to ensure that health insurance is available and affordable to Colorado consumers.

Authorizes the division of insurance (division) to collect information regarding the small group health insurance marketplace. Upon approval of the division and contingent upon available funds for data collection and analysis, makes the data available to a private foundation for analysis and the analysis available to the public. Authorizes the division to accept and expend gifts, grants, and donations for the purpose of the data collection and analysis.

Repeals the act, effective July 1, 2010.

APPROVED by Governor May 22, 2003
EFFECTIVE August 6, 2003
NOTE: This act was passed without a safety clause. For further explanation concerning the effective date, see page vi of this digest.