Bill Text: MI HB6036 | 2009-2010 | 95th Legislature | Introduced
Bill Title: Insurance; health; continuation of dependent care coverage and no rescission for failure to complete medical underwriting and guaranteed renewal without underwriting of health in small group; provide for, and provide for general amendments. Amends secs. 2213b, 3406f & 3711 of 1956 PA 218 (MCL 500.2213b et seq.) & adds secs. 2264b & 3710. TIE BAR WITH: HB 6034'10, HB 6035'10, HB 6037'10, SB 1242'10, SB 1243'10, SB 1244'10, SB 1245'10
Spectrum: Slight Partisan Bill (Democrat 3-1)
Status: (Introduced - Dead) 2010-04-14 - Printed Bill Filed 04/14/2010 [HB6036 Detail]
Download: Michigan-2009-HB6036-Introduced.html
HOUSE BILL No. 6036
April 13, 2010, Introduced by Reps. Roy Schmidt, Ball, Johnson and Corriveau and referred to the Committee on Health Policy.
A bill to amend 1956 PA 218, entitled
"The insurance code of 1956,"
by amending sections 2213b, 3406f, and 3711 (MCL 500.2213b,
500.3406f, and 500.3711), section 2213b as amended by 1998 PA 457,
section 3406f as added by 1996 PA 517, and section 3711 as added by
2003 PA 88, and by adding sections 2264b and 3710.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 2213b. (1) Except as provided in this section, an insurer
that delivers, issues for delivery, or renews in this state an
expense-incurred hospital, medical, or surgical individual policy
under chapter 34 shall renew or continue in force the policy at the
option of the individual. This subsection does not apply to a
health benefit plan as defined in section 3751.
(2) Except as provided in this section and section 3711, an
insurer that delivers, issues for delivery, or renews in this state
an expense-incurred hospital, medical, or surgical group policy or
certificate under chapter 36 shall renew or continue in force the
policy or certificate at the option of the sponsor of the plan.
(3) Guaranteed renewal is not required in cases of fraud,
intentional misrepresentation of material fact, lack of payment, if
the insurer no longer offers that particular type of coverage in
the market, or if the individual or group moves outside the service
area.
(4) Subsections (1), (2), and (3) do not apply to a short-term
or 1-time limited duration policy or certificate of no longer than
6 months.
(5) For the purposes of this section and section 3406f, a
short-term or 1-time limited duration policy or certificate of no
longer than 6 months is an individual health policy that meets all
of the following:
(a) Is issued to provide coverage for a period of 185 days or
less, except that the health policy may permit a limited extension
of benefits after the date the policy ended solely for expenses
attributable to a condition for which a covered person incurred
expenses during the term of the policy.
(b) Is nonrenewable, provided that the health insurer may
provide coverage for 1 or more subsequent periods that satisfy
subdivision (a), if the total of the periods of coverage do not
exceed a total of 185 days out of any 365-day period, plus any
additional days permitted by the policy for a condition for which a
covered person incurred expenses during the term of the policy.
(c) Does not cover any preexisting conditions.
(d) Is available with an immediate effective date, without
underwriting, upon receipt by the insurer of a completed
application indicating eligibility under the health insurer's
eligibility requirements, except that coverage that includes
optional benefits may be offered on a basis that does not meet this
requirement.
(6) An insurer that delivers, issues for delivery, or renews
in this state a short-term or 1-time limited duration policy or
certificate
of no longer than 6 months shall provide the following
to
the commissioner:
(a)
By no later than February 1,
1999, a written report that
discloses
both of the following:
(i) The gross written premium for short-term or 1-time
limited
duration
policies or certificates of no longer than 6 months issued
in
this state during the 1996 calendar year.
(ii) The gross written premium for all individual
expense-
incurred
hospital, medical, or surgical policies or certificates
issued
or delivered in this state during the 1996 calendar year
other
than policies or certificates described in subparagraph (i).
(b)
By by no later than March 31, 1999
and annually thereafter
,
a written annual report to the commissioner that discloses both
of the following:
(a) (i) The
gross written premium for short-term or 1-time
limited duration policies or certificates issued in this state
during the preceding calendar year.
(b) (ii) The
gross written premium for all individual expense-
incurred hospital, medical, or surgical policies or certificates
issued or delivered in this state during the preceding calendar
year
other than policies or certificates described in subparagraph
(i) subdivision
(a).
(7) The commissioner shall maintain copies of reports prepared
pursuant to subsection (6) on file with the annual statement of
each reporting insurer. The commissioner shall annually compile the
reports received under subsection (6). The commissioner shall
provide this annual compilation to the senate and house of
representatives standing committees on insurance issues no later
than
the June 1 immediately following the February 1 or March 31
date for which the reports under subsection (6) are provided.
(8) In each calendar year, a health insurer shall not continue
to issue short-term or 1-time limited duration policies or
certificates if to do so the collective gross written premiums on
those policies or certificates would total more than 10% of the
collective gross written premiums for all individual expense-
incurred hospital, medical, or surgical policies or certificates
issued or delivered in this state either directly by that insurer
or through a corporation that owns or is owned by that insurer.
Sec. 2264b. (1) Any policy, certificate, or contract
delivered, issued for delivery, or renewed in this state that
provides for hospital or medical care coverage or reimbursement for
hospital or medical care for dependent children shall permit
continuation of that coverage for a child until that child attains
age 26 even if the child is no longer considered a dependent if the
child meets all of the following:
(a) Is unmarried.
(b) Has no dependents of his or her own.
(c) Is a resident of this state or resides somewhere else
temporarily.
(d) Is not eligible for a group health benefits or coverage
plan from his or her employer.
(e) Is not provided coverage under any other group or
individual health benefits or coverage plan.
(f) Has not accepted a financial incentive from his or her
employer or other source to decline any other group or individual
health benefits or coverage plan.
(g) Was continuously covered prior to the application for
continuation coverage under 1 or more individual or group health
benefits or coverage plans with no break in coverage that exceeded
62 days.
(2) A covered person's policy, certificate, or contract may
require payment of a premium by the covered person or child,
subject to the commissioner's approval, for any period of
continuation coverage elected under subsection (1). The premium
shall not exceed 102% of the applicable portion of the premium
previously paid for that dependent's coverage under the policy,
certificate, or contract before the termination of coverage at the
specific age provided for in the policy, certificate, or contract.
The applicable portion of the premium previously paid for that
dependent's coverage shall be determined pursuant to rules adopted
by the commissioner under the administrative procedures act of
1969, 1969 PA 306, MCL 24.201 to 24.328, based upon the difference
between the policy's, certificate's, or contract's rating tiers for
adult and dependent coverage or family coverage, as appropriate,
and single coverage, or based upon any other formula or dependent
rating tier that the commissioner considers appropriate and that
provides a substantially similar result.
(3) This section does not prohibit an employer from requiring
an employee to pay all or part of the cost of coverage provided for
that employee's child under this section.
Sec. 3406f. (1) An insurer may exclude or limit coverage for a
condition
as follows:
(a)
For an individual covered under an individual policy or
certificate
or any other policy or certificate not covered under
subdivision
(b) or (c), only if the exclusion or limitation relates
to
a condition for which medical advice, diagnosis, care, or
treatment
was recommended or received within 6 months before
enrollment
and the exclusion or limitation does not extend for more
than
12 months after the effective date of the policy or
certificate.
(b)
For an individual covered under a group policy or
certificate
covering 2 to 50 individuals, only if the exclusion or
limitation
relates to a condition for which medical advice,
diagnosis,
care, or treatment was recommended or received within 6
months
before enrollment and the exclusion or limitation does not
extend
for more than 12 months after the effective date of the
policy
or certificate.
(c)
For for an individual covered under a group policy or
certificate covering more than 50 individuals, only if the
exclusion or limitation relates to a condition for which medical
advice, diagnosis, care, or treatment was recommended or received
within 6 months before enrollment and the exclusion or limitation
does not extend for more than 6 months after the effective date of
the policy or certificate.
(2) As used in this section, "group" means a group health plan
as
defined in section 2791(a)(1) and (2) of part C of title XXVII
of
the public health service act, chapter 373, 110 Stat. 1972, 42
U.S.C.
300gg-91 42 USC 300gg-91, and includes government plans that
are not federal government plans.
(3) This section applies only to an insurer that delivers,
issues for delivery, or renews in this state an expense-incurred
hospital, medical, or surgical policy or certificate. This section
does not apply to any policy or certificate that provides coverage
for specific diseases or accidents only, or to any hospital
indemnity, medicare supplement, long-term care, disability income,
or 1-time limited duration policy or certificate of no longer than
6 months.
(4)
The commissioner and the director of community health
shall
examine the issue of crediting prior continuous health care
coverage
to reduce the period of time imposed by preexisting
condition
limitations or exclusions under subsection (1)(a), (b),
and
(c) and shall report to the governor and the senate and the
house
of representatives standing committees on insurance and
health
policy issues by May 15, 1997. The report shall include the
commissioner's
and director's findings and shall propose
alternative
mechanisms or a combination of mechanisms to credit
prior
continuous health care coverage towards the period of time
imposed
by a preexisting condition limitation or exclusion. The
report
shall address at a minimum all of the following:
(a)
Cost of crediting prior continuous health care coverages.
(b)
Period of lapse or break in coverage, if any, permitted in
a
prior health care coverage.
(c)
Types and scope of prior health care coverages that are
permitted
to be credited.
(d)
Any exceptions or exclusions to crediting prior health
care
coverage.
(e)
Uniform method of certifying periods of prior creditable
coverage.
Sec. 3710. Notwithstanding any other provision of this act, a
health benefit plan shall not be rescinded, canceled, or limited
due to the plan's failure to complete medical underwriting and
resolve all reasonable questions arising from the written
information submitted on or with an application before issuing the
plan's contract. This section does not limit a health benefit
plan's remedies upon a showing of intentional misrepresentation of
material fact.
Sec. 3711. (1) Except as provided in this section, a small
employer carrier that offers health coverage in the small employer
group market in connection with a health benefit plan shall renew
or continue in force that plan at the option of the small employer
or sole proprietor at a premium rate that does not take into
account the claims experience or any change in the health status of
any covered person that occurred after the initial issuance of the
health benefit plan.
(2) Guaranteed renewal under subsection (1) is not required in
cases of: fraud or intentional misrepresentation of the small
employer or, for coverage of an insured individual, fraud or
misrepresentation by the insured individual or the individual's
representative; lack of payment; noncompliance with minimum
participation requirements; if the small employer carrier no longer
offers that particular type of coverage in the market; or if the
sole proprietor or small employer moves outside the geographic
area.
Enacting section 1. This amendatory act does not take effect
unless all of the following bills of the 95th Legislature are
enacted into law:
(a) Senate Bill No.____ or House Bill No.____ (request no.
00083'09).
(b) Senate Bill No.____ or House Bill No.____ (request no.
06174'10).
(c) Senate Bill No.____ or House Bill No.____ (request no.
S06174'10 *).
(d) Senate Bill No.____ or House Bill No.____ (request no.
06472'10).
(e) Senate Bill No.____ or House Bill No.____ (request no.
H06472'10 *).
(f) Senate Bill No.____ or House Bill No.____ (request no.
06473'10).
(g) Senate Bill No.____ or House Bill No.____ (request no.
S06473'10 *).
