Insurance - Digest of Bills

Digest of Bills - 2005

INSURANCE

S.B. 05-37 Health insurance - denial of benefits - procedure - appeals process. In provisions governing the denial of benefits by a health insurer, allows a covered person to request a second-level internal appeal from a denial of health benefits. If a health coverage plan denies a benefit because the treatment is an excluded benefit and the claimant presents evidence from a medical doctor or dentist that the contractual exclusion does not apply to the denied benefit, allows the benefit denial to be subject to the appeals process. Requires a carrier to notify a covered person of the right to appeal a denial of benefits through a 2-level review process.

Mandates that the first-level appeal be evaluated by a physician in consultation with an appropriate clinical peer, neither of whom was involved in the initial adverse determination. Requires second-level internal appeals to be reviewed by a health care professional with appropriate expertise, who was not previously involved in the appeal, and who does not have a financial interest in the appeal or the outcome of the review. Allows the covered person to be present for the second-level review, to bring advocates and health care professionals, and to present materials to the review committee. Requires the health coverage plan and the covered person to provide materials presented at the review to the other party at least 5 days prior to the review. Requires the health coverage plan to notify the covered person that a recording shall be made of the appeal unless neither party wants it, and that such recording shall be available and may be included in any external future review.

Requires each insurer to report the number and outcome of second-level internal appeals annually. Directs the insurance commissioner to publish this information together with information on third-level external appeals.

APPROVED by Governor June 1, 2005
EFFECTIVE January 1, 2006

S.B. 05-70 Insurance coverage - active duty military personnel. Prohibits an automobile insurer from reducing or cancelling insurance coverage except for nonpayment, refusing to issue or renew a policy, or surcharging a newly issued or renewed policy due to a covered person's failure to maintain coverage during deployment by or active duty in the United States military if the person was not required to maintain insurance pursuant to Colorado law or the law of another state.

Requires an insurer that has issued an individual sickness and accident insurance policy to a person who is deployed by or called to active duty in the United States military and who allows the coverage to lapse during the deployment or activation to issue the same individual coverage to the person upon application by the person for the coverage. Requires the application to contain reasonable evidence of the individual sickness and accident insurance that covered the person prior to deployment or activation. Allows a sickness and accident insurer to increase premiums for such policies based on general rate increases applicable to all policyholders but precludes the insurer from:

● Restricting benefits or increasing premiums for the coverage as a result of the lapse in coverage;

● Using any health condition originating or newly treated during the lapse in coverage to rate the policy; or

● Limiting benefits by an exclusionary rider or by applying a preexisting condition limitation provision to the policy.

Defines the failure to comply with these provisions as an unfair method of competition and an unfair or deceptive act or practice in the business of insurance.

Specifies that the act applies to actions taken by insurers on or after April 14, 2005.

APPROVED by Governor April 14, 2005
EFFECTIVE April 14, 2005

S.B. 05-103 Small group sickness and accident insurance - exemption from rate-up for participation in a multiple welfare arrangement. Exempts a small employer seeking coverage in the small group market from the up-to-35% increased rate that carriers may charge small employers who have been self-funded or insured through a policy outside the small group health insurance market if the employer:

● Currently or immediately prior to seeking coverage in the small group market participates or participated in a multiple employer welfare arrangement; and

● Is no longer eligible to participate in a multiple employer welfare arrangement due to a change in employment status or a change in business purpose.

APPROVED by Governor April 29, 2005
EFFECTIVE January 1, 2006
NOTE: This act was passed without a safety clause. For further explanation concerning the effective date, see page vi of this digest.

S.B. 05-107 Life insurance - viatical settlements - regulation - appropriation. Creates the "Viatical Settlements Act". Authorizes the owner of a life insurance policy (a "viator") to sell the viator's interest in the benefits payable upon the viator's death to a third party (a "viatical settlement provider") for an amount that is less than the expected death benefit pursuant to a viatical settlement contract. Regulates viatical settlement providers by:

● Restricting the business of viatical settlements to licensed life insurance producers;

● Restricting the permissible terms of viatical settlement contracts, mandating procedural safeguards applicable to the negotiation of such contracts, and requiring viatical settlement contracts to be filed with the commissioner of insurance prior to use;

● Requiring annual reporting and record retention;

● Authorizing the commissioner to conduct examinations of viatical settlement providers;

● Specifying confidentiality, advertising, and disclosure requirements;

● Creating special protections for viators who are chronically or terminally ill;

● Prohibiting certain conflicts of interest and fraudulent acts and requiring viatical settlement providers to adopt anti-fraud initiatives; and

● Specifying licensing fees and penalties for violations, including unfair trade practices.

Authorizes the commissioner to adopt rules to implement the act. Specifies that the act does not preempt the "Colorado Securities Act". Defines "viatical settlement investment" to exclude a transaction between a viator and a viatical settlement provider, and amends the definition of "security" to include viatical settlement investments.

Appropriates $5,626 to the department of regulatory agencies for allocation to the division of insurance for the implementation of the act.

APPROVED by Governor June 3, 2005
EFFECTIVE January 1, 2006

S.B. 05-168 Health insurance - benefit coverage - disclosure of rate increases - public entity. Requires a carrier that offers health benefit coverage to a public entity to annually disclose to the entity, upon request of the entity, and with the issuance of the employer's rate renewal:

● The total number of employees covered by the carrier for the public entity;

● The total dollar amount of claims paid by the carrier on behalf of the public entity;

● Total of premiums paid; and

● The number of claims that exceed $10,000 for any one covered person.

APPROVED by Governor June 1, 2005
EFFECTIVE January 1, 2006

S.B. 05-169 Assembly for comprehensive state health care reform - appropriation. Establishes the assembly for comprehensive state health care reform ("health care assembly"). Requires members of the health care assembly to be appointed from various backgrounds, including members of the general assembly; representatives of health care professionals; health care industry, business, and labor representatives; executive department administrators; citizens; and others. Requires members to maintain contact with the constituents they represent to keep them informed about the discussions of the health care assembly and to solicit viewpoints and proposals. Requires the senate and house health and human services committees to appoint a neutral entity to organize the health care assembly. Requires the neutral entity to appoint a facilitator to direct presentations to and discussions of the health care assembly. States that members of the health care assembly shall not receive compensation.

Requires the health care assembly to meet over a period of 24 months to discuss health care reform proposals and to decide upon a proposal to present to the general assembly. Requires the presentation of the proposal or, if an agreement cannot be reached, a presentation explaining why no recommendations could be made, on or before January 1, 2008. Creates the health care assembly cash fund in the state treasury for the purpose of receiving gifts, grants, and donations for purposes of carrying out activities of the health care assembly.

Repeals the health care assembly on July 1, 2009.

Appropriates $1,200 from the health care assembly cash fund in the state treasury for the implementation of this act.

VETOED by Governor May 26, 2005

S.B. 05-227 Commission on mandated health insurance benefits - continuation - health care task force - creation - duties. Continues the commission on mandated health insurance benefits until July 1, 2010. Creates the health care task force to address health care issues that may affect health insurance, emerging trends in Colorado health care, affordable health insurance, health care delivery, managed care issues, the medically indigent population, costs and benefits of preventative and early treatment, rural health care issues, the uninsured population, network adequacy, provider reimbursement processes, and certificates of need. Repeals the health care task force on July 1, 2010.

APPROVED by Governor June 2, 2005
EFFECTIVE June 2, 2005

S.B. 05-235 Small group sickness and accident insurance - offer of domestic partner and domestic partner dependent coverage. Clarifies that a small employer carrier may offer and a small employer may accept or reject coverage for employees' domestic partners and their dependents under a standard or basic health benefit plan.

APPROVED by Governor June 2, 2005
EFFECTIVE June 2, 2005

H.B. 05-1060 CoverColorado - tax credits. To apply for a tax credit for a contribution to CoverColorado, requires an insurance company to declare in its second quarter tax statement its intent to make a contribution in the amount of its second quarter tax payment or a lesser amount as specified by the commissioner of insurance. Requires the commissioner to issue an allocation notice to such companies by September 30 that lists, subject to the existing annual $5 million maximum, the amount of the qualifying contribution. Requires the companies to make the contributions by October 31. Allows the companies to claim the tax credit in one or more of their subsequent tax payments. If the full $5 million has not been contributed by October 31, follows the same procedure in the subsequent annual tax payment. Prohibits the imposition of a retaliatory tax. Authorizes the commissioner to promulgate rules. Deems contribution offers made prior to April 22, 2005, to be of no effect.

APPROVED by Governor April 22, 2005
EFFECTIVE April 22, 2005

H.B. 05-1101 Sickness and accident insurance - dependent coverage for persons under 25 years of age. Requires individual and group sickness and accident insurance policies that offer dependent coverage to offer to the parent, for an additional premium if applicable, the same dependent coverage for an unmarried child who is under 25 years of age, and is not a dependent as defined by Colorado law, if the child has the same legal residence as the parent or is financially dependent upon the parent. Allows the policyholder to determine if the parent or the policyholder shall pay any additional premium.

BECAME LAW June 9, 2005
EFFECTIVE January 1, 2006
NOTE: This act was passed without a safety clause. For further explanation concerning the effective date, see page vi of this digest.

H.B. 05-1119 Personal property and casualty insurance - health insurance - monthly and electronic payments required. Requires insurers to offer the option of making monthly premium payments and to allow payment of premiums by automatic electronic transfer.

APPROVED by Governor April 22, 2005
EFFECTIVE December 31, 2005
NOTE: This act was passed without a safety clause. For further explanation concerning the effective date, see page vi of this digest.

H.B. 05-1165 Health insurance regulation - assignment of benefits. Allows a covered person to assign, in writing, payments due under such person's health insurance policy to a licensed hospital or other licensed health care provider for services provided to the covered person that are covered under the policy. Establishes guidelines under which the covered person may revoke the assignment. Specifies that if a carrier fails to honor the assignment, then the carrier is liable for such payment to the licensed hospital or other licensed health care provider.

APPROVED by Governor May 10, 2005
EFFECTIVE August 8, 2005
NOTE: This act was passed without a safety clause. For further explanation concerning the effective date, see page vi of this digest.

H.B. 05-1225 Long-term care - offer of basic or standard plan - repeal. Repeals the requirement that an insurance carrier offering, marketing, or selling long-term care insurance offer the choice of a basic long-term care plan or a standard long-term care plan in addition to any other plan offered. Repeals the long-term care benefit plan advisory committee. Repeals the authority of the commissioner of insurance to adopt rules to implement a basic long-term care plan and a standard long-term care plan.

APPROVED by Governor April 27, 2005
EFFECTIVE August 8, 2005
NOTE: This act was passed without a safety clause. For further explanation concerning the effective date, see page vi of this digest.

H.B. 05-1250 Medical payments coverage - disclosures - exception - insurance commissioner rules. Requires every insurer issuing automobile insurance policies that include medical payments coverage to include in the summary disclosure form required under current law a disclosure specifying that:

● Medical payments coverage pays for reasonable health care expenses incurred for bodily injury caused by an automobile accident, regardless of fault, up to the policy limits chosen by the insured;

● Medical payments coverage is primary to any health insurance coverage available to an insured when injured in an automobile accident;

● Medical payments coverage applies to any coinsurance or deductible amount required to be paid by the person's health coverage plan; and

● An insured who is injured in an automobile accident will not receive benefits from medical payments coverage for any medical expenses incurred as a result of an accident that is the fault of the insured unless medical payments coverage is purchased.

Specifies that insurers issuing commercial automobile insurance policies need not comply with the disclosure requirements in the act. Requires the insurance commissioner to adopt rules regarding the implementation of the disclosure requirements and the definition of commercial automobile insurance policies.

Retains beyond July 1, 2005, the requirement that medical payments coverage be primary to any health insurance benefit of a person injured in an automobile accident and that medical payments coverage apply to any coinsurance or deductible amount required in the injured person's health coverage plan.

Makes the disclosure requirements and rule-making authority provisions of the act effective January 1, 2006, and applicable to automobile insurance policies issued or renewed on or after January 1, 2006. Specifies that the remainder of the act takes effect July 1, 2005, and applies to automobile insurance policies issued or renewed on or after July 1, 2005.

APPROVED by Governor May 4, 2005
PORTIONS EFFECTIVE July 1, 2005
PORTIONS EFFECTIVE January 1, 2006

H.B. 05-1297 Nonadmitted Insurance Act - exemptions from act. Exempts insurance on satellites or other devices intended for launch beyond the earth's atmosphere from the statutory provisions governing transactions with nonadmitted insurers. Requires a licensed broker who places an exempt type of insurance with a nonadmitted insurer to keep the record of coverage in the broker's office. Exempts transactions with exempt commercial policyholders from the disclosure requirements regarding claims-made policies by surplus line brokers or insurers.

APPROVED by Governor June 1, 2005
EFFECTIVE January 1, 2006
NOTE: This act was passed without a safety clause. For further explanation concerning the effective date, see page vi of this digest.

H.B. 05-1312 Sickness and accident insurance - uniform employee application form. Requires the insurance commissioner to develop a uniform employee application form for health coverage. Requires each small group carrier to exclusively use the form for the conduct of business in this state on and after January 1, 2007.

APPROVED by Governor June 1, 2005
EFFECTIVE January 1, 2006

H.B. 05-1320 Credit for reinsurance - conditions. Prohibits credit as an asset or a reduction from liability to any domestic ceding insurer for reinsurance unless the contract contains an insolvency clause. Deletes specific required contract provisions. Prohibits credit to a domestic ceding insurer if the reinsurer's accreditation has been revoked.

Defines and places limitations on the types of reinsurers from whom an asset or reduction of liability may be taken. Requires specific form and content for trust funds maintained by a reinsurer. If an assuming insurer does not meet specific requirements for reinsurance, allows credit if the ceding insurer holds funds meeting certain requirements.

APPROVED by Governor May 25, 2005
EFFECTIVE August 8, 2005
NOTE: This act was passed without a safety clause. For further explanation concerning the effective date, see page vi of this digest.