Bill Text: PA HB479 | 2011-2012 | Regular Session | Introduced

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Bill Title: Providing for prohibition on lifetime and annual limits on essential health benefits; imposing duties on the Insurance Department; and imposing penalties.

Spectrum: Partisan Bill (Democrat 16-0)

Status: (Introduced - Dead) 2011-02-10 - Referred to INSURANCE [HB479 Detail]

Download: Pennsylvania-2011-HB479-Introduced.html

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PRINTER'S NO. 571
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No. 479 Session of2011
INTRODUCED BY KOTIK, DeLUCA, READSHAW, LONGIETTI, B. BOYLE, BURNS, GEORGE, KORTZ, MUNDY, M. O'BRIEN, WAGNER, FABRIZIO, PASHINSKI, PAYTON AND HORNAMAN, FEBRUARY 10, 2011
REFERRED TO COMMITTEE ON INSURANCE, FEBRUARY 10, 2011
AN ACT
Providing for prohibition on lifetime and annual limits on
essential health benefits; imposing duties on the Insurance
Department; and imposing penalties.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Definitions.
The following words and phrases when used in this act shall
have the meanings given to them in this section unless the
context clearly indicates otherwise:
"Commissioner." The Insurance Commissioner of the
Commonwealth.
"Covered benefits" or "benefits." Those health care services
to which an individual is entitled under the terms of a health
benefit plan.
"Department." The Insurance Department of the Commonwealth.
"Essential health benefits." The term has the meaning under
section 1302(b) of the Patient Protection and Affordable Care
Act (PPACA) (Public Law 111-148, 124 Stat. 119) and applicable
regulations. The term includes:
(1) Ambulatory patient services.
(2) Emergency services.
(3) Hospitalization.
(4) Laboratory services.
(5) Maternity and newborn care.
(6) Mental health and substance abuse disorder services,
including behavioral health treatment.
(7) Pediatric services, including oral and vision care.
(8) Prescription drugs.
(9) Preventive and wellness services and chronic disease
management.
(10) Rehabilitative and habilitative services and
devices.
"Group health insurance coverage." In connection with a
group health plan, health insurance coverage offered in
connection with such plan.
"Group health plan." An employee welfare benefit plan as
defined in section 3(1) of the Employee Retirement Income
Security Act of 1974 (Public Law 93-406, 88 Stat. 829), to the
extent that the plan provides medical care, as defined in this
section, and including items and services paid for as medical
care to employees, including both current and former employees,
or their dependents as defined under the terms of the plan
directly or through insurance, reimbursement or otherwise.
"Health benefit plan." A policy, contract, certificate or
agreement offered by a health carrier to provide, deliver,
arrange for, pay for or reimburse any of the costs of health
care services. The term includes short-term and catastrophic
health insurance policies and a policy that pays on a cost-
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incurred basis, except as otherwise specifically exempted in
this definition. The term does not include:
(1) Coverage only for accident or disability income
insurance or any combination thereof.
(2) Coverage issued as a supplement to liability
insurance.
(3) Liability insurance, including general liability
insurance and automobile liability insurance.
(4) Workers' compensation or similar insurance.
(5) Automobile medical payment insurance.
(6) Credit-only insurance.
(7) Coverage for onsite medical clinics.
(8) Other similar insurance coverage, specified in
Federal regulations issued pursuant to the Health Insurance
Portability Accountability Act of 1996 (Public Law 104-191,
110 Stat. 1936), under which benefits for medical care are
secondary or incidental to other insurance benefits.
(9) The following benefits if they are provided under a
separate policy, certificate or contract of insurance or are
otherwise not an integral part of the plan:
(i) Limited scope dental or vision benefits.
(ii) Benefits for long-term care, nursing home care,
home health care, community-based care or any combination
thereof.
(iii) Other similar, limited benefits specified in
Federal regulations issued pursuant to the Health
Insurance Portability Accountability Act of 1996.
(10) The following benefits if the benefits are provided
under a separate policy, certificate or contract of
insurance, there is no coordination between the provision of
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the benefits and any exclusion of benefits under any group
health plan maintained by the same plan sponsor, and the
benefits are paid with respect to an event without regard to
whether benefits are provided with respect to such an event
under any group health plan maintained by the same plan
sponsor:
(i) Coverage only for a specified disease or
illness.
(ii) Hospital indemnity or other fixed indemnity
insurance.
(11) The following if offered as a separate policy,
certificate or contract of insurance:
(i) Medicare supplemental health insurance as
defined under section 1882(g)(1) of the Social Security
Act (49 Stat. 620, 42 U.S.C. § 301 et seq.).
(ii) Coverage supplemental to the coverage provided
under 10 U.S.C. Ch. 55 (relating to medical and dental
care).
(iii) Similar supplemental coverage provided to
coverage under a group health plan.
"Health care services." Services for the diagnosis,
prevention, treatment, cure or relief of a health condition,
illness, injury or disease.
"Health carrier." A company or health insurance entity
licensed in this Commonwealth to offer or issue any individual
or group health, sickness or accident policy or subscriber
contract or certificate or plan that provides medical or health
care coverage by a health care facility or licensed health care
provider that is governed under this act or any of the
following:
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(1) The act of December 29, 1972 (P.L.1701, No.364),
known as the Health Maintenance Organization Act.
(2) The act of May 18, 1976 (P.L.123, No.54), known as
the Individual Accident and Sickness Insurance Minimum
Standards Act.
(3) 40 Pa.C.S. Ch. 61 (relating to hospital plan
corporations) or 63 (relating to professional health services
plan corporations).
(4) Article XXIV of the act of May 17, 1921 (P.L.682,
No.284), known as The Insurance Company Law of 1921.
"Health maintenance organization." An organized system which
combines the delivery and financing of health care and which
provides basic health services to voluntarily enrolled
subscribers for a fixed prepaid fee.
"Individual health insurance coverage." Health insurance
coverage offered to individuals in the individual market, which
includes a health benefit plan provided to individuals through a
trust arrangement, association or other discretionary group that
is not an employer plan, but does not include short-term limited
duration insurance. For purposes of this subsection, a health
carrier offering health insurance coverage in connection with a
group health plan shall not be deemed to be a health carrier
offering individual health insurance coverage solely because the
carrier offers a conversion policy.
"Medical care." Amounts paid for:
(1) The diagnosis, care, mitigation, treatment or
prevention of disease or amounts paid for the purpose of
affecting any structure or function of the body.
(2) Transportation primarily for and essential to
medical care referred to in paragraph (1).
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(3) Insurance covering medical care referred to in
paragraphs (1) and (2).
Section 2. Applicability and scope.
(a) Applicability.--Except as provided in subsections (b)
and (c), this act applies to any health carrier providing
coverage under an individual or group health benefit plan.
(b) Lifetime limits.--The prohibition on lifetime limits
applies to grandfathered plan coverage providing individual
health insurance coverage or group health insurance coverage.
(c) Annual limits.--The prohibition and limits on annual
limits applies to grandfathered plan coverage providing group
health insurance coverage, but it does not apply to
grandfathered plan coverage providing individual health
insurance coverage.
(d) Definition.--For purposes of this section,
"grandfathered plan coverage" means coverage provided by a
health carrier in which an individual was enrolled on March 23,
2010, for as long as it maintains that status in accordance with
Federal regulations.
Section 3. Prohibition on lifetime and annual limits.
(a) General rule.--
(1) Except as provided in subsection (b), a health
carrier offering group or individual health insurance
coverage shall not establish a lifetime limit on the dollar
amount of essential health benefits for any individual.
(2) (i) Except as provided in subparagraph (ii) and
subsections (b) and (c), a health carrier shall not
establish any annual limit on the dollar amount of
essential health benefits for any individual.
(ii) A health flexible spending arrangement (FSA),
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as defined in section 106(c)(2) of the Internal Revenue
Code of 1986 (Public Law 99-514, 26 U.S.C. § 106(c)(2)),
a medical savings account (MSA), as defined in section
220(d) of the Internal Revenue Code of 1986, and a health
savings account (HSA), as defined in section 223 of the
Internal Revenue Code of 1986 are not subject to the
requirements of this paragraph.
(b) Permitted under law.--The provisions of subsection (a)
shall not prevent a health carrier from placing annual or
lifetime dollar limits for any individual on specific covered
benefits that are not essential health benefits to the extent
that such limits are otherwise permitted under applicable
Federal or State law.
(c) Exclusion of benefits.--Nothing in this section
prohibits a health carrier from excluding all benefits for a
given condition.
Section 4. Annual limits prior to January 1, 2014.
(a) General rule.--For plan or policy years beginning prior
to January 1, 2014, for any individual, a health benefit plan
may establish an annual limit on the dollar amount of benefits
that are essential health benefits provided the limit is no less
than the following:
(1) For a plan or policy year beginning after September
22, 2010, but before September 23, 2011, $750,000.
(2) For a plan or policy year beginning after September
22, 2011, but before September 23, 2012, $1,250,000.
(3) For a plan or policy year beginning after September
22, 2012, but before January 1, 2014, $2,000,000.
(b) Limit determination.--In determining whether an
individual has received benefits that meet or exceed the
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allowable limits, as provided in subsection (a), a health
carrier shall take into account only essential health benefits.
(c) Waiver.--
(1) For plan or policy years beginning prior to January
1, 2014, a health benefit plan is exempt from the annual
limit requirements if the plan is approved for a waiver from
such requirements by the Department of Health and Human
Services but such exemption only applies for the specified
period of time that the waiver from the Department of Health
and Human Services is applicable.
(2) (i) At the time a health benefit plan receives a
waiver from the Department of Health and Human Services,
the health benefit plan shall notify prospective
applicants and affected policyholders and the
commissioner in each state where prospective applicants
and any affected insured are known to reside.
(ii) At the time the waiver expires or is otherwise
no longer in effect, the health benefit plan shall notify
affected policyholders and the commissioner in each state
where any affected insured is known to reside.
Section 5. Reinstatement of coverage.
(a) General rule.--
(1) This section applies to any individual:
(i) Whose coverage or benefits under a health
benefit plan ended by reason of reaching a lifetime limit
on the dollar value of all benefits for the individual.
(ii) Who, due to the provisions of this section,
becomes eligible, or is required to become eligible, for
benefits not subject to a lifetime limit on the dollar
value of all benefits under the health benefit plan:
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(A) for group health insurance coverage, on the
first day of the first plan year beginning on or
after September 23, 2010; or
(B) for individual health insurance coverage, on
the first day of the first policy year beginning on
or after September 23, 2010.
(2) For individual health insurance coverage, an
individual is not entitled to reinstatement under the health
benefit plan under this section if the individual reached his
or her lifetime limit and the contract is not renewed or is
otherwise no longer in effect. However, this section applies
to a family member who reached his or her lifetime limit in a
family plan and other family members remain covered under the
plan.
(b) Notice.--
(1) If an individual described in subsection (a) is
eligible for benefits or is required to become eligible for
benefits under the health benefit plan, the health carrier
shall provide the individual written notice that:
(i) The lifetime limit on the dollar value of all
benefits no longer applies.
(ii) The individual, if still covered under the
plan, is again eligible to receive benefits under the
plan.
(2) If the individual is not enrolled in the plan, or if
an enrolled individual is eligible for, but not enrolled in
any benefit package under the plan, the health benefit plan
shall provide an opportunity for the individual to enroll in
the plan for a period of at least 30 days.
(3) The notices and enrollment opportunity under this
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subsection shall be provided beginning not later:
(i) for group health insurance coverage, the first
day of the first plan year beginning on or after
September 23, 2010; or
(ii) for individual health insurance coverage, the
first day of the first policy year beginning on or after
September 23, 2010.
(4) (i) The notices required under this subsection
shall be provided:
(A) for group health insurance coverage, to an
employee on behalf of the employee's dependent; or
(B) for individual health insurance coverage, to
the primary subscriber on behalf of the primary
subscriber's dependent.
(ii) For group health insurance coverage, the
notices may be included with other enrollment materials
that a health benefit plan distributes to employees,
provided the statement is prominent.
(iii) In addition to subparagraph (i), for group
health insurance coverage, if a notice satisfying the
requirements of this subsection is provided to an
individual, a health carrier's requirement to provide the
notice with respect to that individual is satisfied.
(c) Effective policy date.--For any individual who enrolls
in a health benefit plan in accordance with subsection (b),
coverage under the plan shall take effect not later than:
(1) For group health insurance coverage, the first day
of the first plan year beginning on or after September 23,
2010.
(2) For individual health insurance coverage, the first
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day of the first policy year beginning on or after September
23, 2010.
Section 6. Special enrollment requirement.
(a) General rule.--An individual enrolling in a health
benefit plan for group health insurance coverage in accordance
with section 5 shall be treated as if the individual were a
special enrollee in the plan, as provided under 45 CFR
146.117(d) (relating to special enrollment periods).
(b) Terms.--The individual:
(1) Shall be offered all of the benefit packages
available to similarly situated individuals who did not lose
coverage under the plan by reason of reaching a lifetime
limit on the dollar value of all benefits.
(2) Shall not be required to pay more for coverage than
similarly situated individuals who did not lose coverage by
reason of reaching a lifetime limit on the dollar value of
all benefits.
(c) Differences.--For purposes of subsection (b)(1), any
difference in benefits or cost-sharing constitutes a different
benefit package.
Section 7. Enforcement.
(a) Penalties and remedies.--Upon a determination by hearing
that this act has been violated, the commissioner may pursue one
or more of the following courses of action:
(1) Issue an order requiring the person in violation to
cease and desist from engaging in the violation.
(2) Suspend or revoke or refuse to issue or renew the
certificate or license of the person in violation.
(3) Impose a civil penalty of not more than $5,000 for
each violation.
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(4) Impose any other penalty or remedy deemed
appropriate by the commissioner, including restitution.
(b) Other remedies.--The enforcement remedies imposed under
this section are in addition to any other remedies or penalties
that may be imposed by any other applicable statute, including
the act of July 22, 1974 (P.L.589, No.205), known as the Unfair
Insurance Practices Act. Violations of this act are deemed and
defined by the commissioner to be an unfair method of
competition and an unfair or deceptive act or practice pursuant
to the Unfair Insurance Practices Act.
Section 8. Regulations.
The department shall promulgate any rules and regulations
necessary to implement this act.
Section 9. Effective date.
This act shall take effect in 60 days.
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