Chapter 752
AN ACT
HB 3321
Relating to health insurance; creating new
provisions; amending ORS 731.146, 731.484, 731.486, 743.734 and 743.748; and
declaring an emergency.
Be It Enacted by the People of
the State of
SECTION 1. ORS 731.146 is amended to read:
731.146. (1) “Transact
insurance” means one or more of the following acts effected by mail or
otherwise:
(a) Making or proposing
to make an insurance contract.
(b) Taking or receiving
any application for insurance.
(c) Receiving or
collecting any premium, commission, membership fee, assessment, due or other
consideration for any insurance or any part thereof.
(d) Issuing or
delivering policies of insurance.
(e) Directly or
indirectly acting as an insurance producer for, or otherwise representing or
aiding on behalf of another, any person in the solicitation, negotiation,
procurement or effectuation of insurance or renewals thereof, the dissemination
of information as to coverage or rates, the forwarding of applications, the
delivering of policies, the inspection of risks, the fixing of rates, the
investigation or adjustment of claims or losses, the transaction of matters
subsequent to effectuation of the policy and arising out of it, or in any other
manner representing or assisting a person with respect to insurance.
(f) Advertising locally
or circularizing therein without regard for the source of such circularization,
whenever such advertising or circularization is for the purpose of solicitation
of insurance business.
(g) Doing any other kind
of business specifically recognized as constituting the doing of an insurance
business within the meaning of the Insurance Code.
(h) Doing or proposing
to do any insurance business in substance equivalent to any of paragraphs (a)
to (g) of this subsection in a manner designed to evade the provisions of the
Insurance Code.
(2) Subsection (1) of
this section does not include, apply to or affect the following:
(a) Making investments
within a state by an insurer not admitted or authorized to do business within
such state.
(b) Except as provided
in ORS 743.015, doing or proposing to do any insurance business arising out of
a policy of group life insurance [or
group health insurance, or both,] or a policy of blanket health insurance, if
the master policy was validly issued to cover a group organized primarily for
purposes other than the procurement of insurance and was delivered in and
pursuant to the laws of another state in which:
(A) The insurer was
authorized to do an insurance business;
(B) The policyholder is
domiciled or otherwise has a bona fide situs; and
(C) With respect to a
policy of blanket health insurance, the policy was approved by the director of
such state.
(c) Except as
provided in ORS 743.015, doing or proposing to do any insurance business
arising out of a policy of group health insurance, if the master policy was
validly issued to cover an employer group other than an association, trust or
multiple employer welfare arrangement and was delivered in and pursuant to the
laws of another state in which:
(A) The insurer was
authorized to do an insurance business; and
(B) The policyholder is
domiciled or otherwise has a bona fide situs.
[(c)] (d) Investigating, settling, or litigating claims under
policies lawfully written within a state, or liquidating assets and
liabilities, all resulting from the insurer’s former authorized operations
within such state.
[(d)] (e) Transactions within a state under a policy
subsequent to its issuance if the policy was lawfully solicited, written and
delivered outside the state and did not cover a subject of insurance resident,
located or to be performed in the state when issued.
[(e)] (f) The continuation and servicing of life or health
insurance policies remaining in force on residents of a state if the insurer
has withdrawn from such state and is not transacting new insurance therein.
(3) If mail is used, an
act shall be deemed to take place at the point where the matter transmitted by
mail is delivered and takes effect.
SECTION 2. ORS 731.484 is amended to read:
731.484. (1) No insurer
or insurance producer selling a policy of group life insurance or group health
insurance subject to [the] an
exemption in ORS 731.146 (2)(b) or (c) is authorized to sell membership
in a group for the purpose of qualifying an applicant who is an individual for
the insurance.
(2) No insurer or
insurance producer selling membership in a group is authorized to offer a
policy of group life insurance or group health insurance subject to [the] an exemption in ORS 731.146
(2)(b) or (c) for the purpose of selling membership in the group.
SECTION 3. ORS 731.486 is amended to read:
731.486. (1) The
exemption in ORS 731.146 (2)(b) does not apply to an
insurer that offers coverage under [a
group health insurance policy or] a group life insurance policy in this
state unless the Director of the Department of Consumer and Business Services
determines that the exemption applies.
(2) The insurer shall
submit evidence to the director that the exemption applies. When a master
policy for a policy of group life insurance is delivered or issued for
delivery outside this state to trustees of a fund for two or more employers,
for one or more labor unions, for one or more employers and one or more labor
unions or for an association, the insurer shall also submit evidence showing
compliance with[:]
[(a) ORS 743.526, for a policy of group health insurance; or]
[(b)] ORS 743.354[, for a policy of group life insurance].
(3) The director shall
review the evidence submitted and may request additional evidence as needed.
(4) An insurer shall
submit to the director any changes in the evidence submitted under subsection
(2) of this section.
(5) The director may
order an insurer to cease offering a policy or coverage under a policy if the
director determines that the exemption under ORS 731.146 (2)(b)
is no longer satisfied.
(6) Coverage under a
master group life [or health]
insurance policy delivered or issued for delivery outside this state that does
not qualify for the exemption in ORS 731.146 (2)(b)
may be offered in this state if the director determines that the state in which
the policy was delivered or issued for delivery has requirements that are
substantially similar to those established under ORS 743.360 [or 743.522 (2)] and that the policy
satisfies those requirements.
(7) Coverage under a
master group health insurance policy that is delivered or issued for delivery
outside this state to an association or trust may be offered in this state if
the director determines that the association or trust meets applicable
standards under ORS 743.522 (1)(b) or (c) or (2).
[(7)] (8) This section does not
apply to any master policy issued to a multistate employer or labor union.
[(8)] (9) The director may adopt
rules to carry out this section.
SECTION 4. ORS 743.734 is amended to read:
743.734. (1) Every group health benefit plan shall be subject to the
provisions of ORS 743.733 to 743.737, if the plan provides health benefits
covering one or more employees of a small employer and if any one of the
following conditions is met:
(a) Any portion of the
premium or benefits is paid by a small employer or any eligible employee is
reimbursed, whether through wage adjustments or otherwise, by a small employer
for any portion of the health benefit plan premium; or
(b) The health benefit
plan is treated by the employer or any of the eligible employees as part of a
plan or program for the purposes of section 106, section 125 or section 162 of
the Internal Revenue Code of 1986, as amended.
(2) Except as provided
in ORS 743.733 to 743.737, no law requiring the coverage or the offer of
coverage of a health care service or benefit applies to the basic health
benefit plans offered or delivered to a small employer.
(3) Except as otherwise
provided by law or ORS 743.733 to 743.737, no health benefit plan offered to a
small employer shall:
(a) Inhibit a small
employer carrier from contracting with providers or groups of providers with
respect to health care services or benefits; or
(b) Impose any
restriction on the ability of a small employer carrier to negotiate with
providers regarding the level or method of reimbursing care or services
provided under health benefit plans.
(4) Except to determine
the application of a preexisting conditions provision for a late enrollee, a
small employer carrier shall not use health statements when offering small
employer health benefit plans and shall not use any other method to determine
the actual or expected health status of eligible enrollees. Nothing in this
subsection shall prevent a carrier from using health statements or other
information after enrollment for the purpose of providing services or arranging for the provision of services under a health
benefit plan.
(5) Except in the case
of a late enrollee and as otherwise provided in this section, a small employer
carrier shall not impose different terms or conditions on the coverage,
premiums or contributions of any eligible employee in a small employer group
that are based on the actual or expected health status of any eligible
employee.
(6) A small employer
carrier may provide different health benefit plans to different categories of
employees of a small employer when the employer has chosen to establish
different categories of employees in a manner that does not relate to the
actual or expected health status of such employees or their dependents. Except
as provided in ORS 743.736 (10):
(a) When a small
employer carrier offers coverage to a small employer, the small employer
carrier shall offer coverage to all eligible employees of the small employer,
without regard to the actual or expected health status of any eligible
employee.
(b) If the small
employer elects to offer coverage to dependents of eligible employees, the
small employer carrier shall offer coverage to all dependents of eligible
employees, without regard to the actual or expected health status of any
eligible dependent.
(7) A health benefit
plan issued to a small employer group through an association health plan is
exempt from subsection (1) of this section. For purposes of this subsection, an
association health plan is group health insurance described in ORS 743.522 (2)
or a health benefit plan that:
(a) Is delivered or
issued for delivery to:
(A) An association or
trust established in this state, that meets applicable requirements of ORS
743.524 or 743.526, or to a multiple employer welfare arrangement located
inside this state, subject to ORS 750.301 to 750.341; or
(B) An association or
trust established in another state, that is approved by the director under ORS
731.486 (7), or a multiple employer welfare arrangement located in another
state that complies with ORS 750.311; and
(b) Satisfies all of the
following:
(A) The initial premium
rate for the association health plan does not vary by more than 50 percent
across the groups of small employers under the plan.
(B) The association
policyholder does not discriminate in membership requirements based on actual
or expected health status of individual enrollees or prospective enrollees, in
accordance with ORS 743.752 (5).
(C) Small employer
groups that have two or more eligible employees and that meet the membership
requirements for the association are not excluded from the association health
plan.
(D) Except as provided
in subsection (8) of this section, the association health plan maintains a 95
percent retention rate.
(8)(a) The 95 percent
retention rate in subsection (7) of this section does not include employer
groups that:
(A) Go out of business,
whether through merger, acquisition or any other reason;
(B) No longer meet
eligibility requirements for membership in the association;
(C) No longer meet
participation requirements for employers that are set forth in the plan
documents; or
(D) Fail to pay
premiums.
(b) An association
health plan that fails to maintain the 95 percent retention rate during any
year may have 12 months to correct the retention level before losing the
exemption under subsection (7) of this section.
SECTION 5. ORS 743.748 is amended to read:
743.748. (1) Each carrier offering a health benefit plan shall submit to
the Director of the Department of Consumer and Business Services on or before
April 1 of each year a report that contains:
(a) The following
information for the preceding year that is derived from the exhibit of
premiums, enrollment and utilization included in the carrier’s annual report:
(A) The total number of
members;
(B) The total amount of
premiums;
(C) The total amount of
costs for claims;
(D) The medical loss
ratio;
(E) The average amount
of premiums per member per month; and
(F) The percentage
change in the average premium per member per month, measured from the previous
year.
(b) The following
aggregate financial information for the preceding year that is derived from the
carrier’s annual report:
(A) The total amount of
general administrative expenses, including identification of the five largest
nonmedical administrative expenses and the assessment against the carrier for
the Oregon Medical Insurance Pool;
(B) The total amount of
the surplus maintained;
(C) The total amount of
the reserves maintained for unpaid claims;
(D) The total net
underwriting gain or loss; and
(E) The carrier’s net
income after taxes.
(c) The retention
rate and claims experience of employer groups within the plan for the preceding
year for association health plans as described in ORS 743.734 (7). This
information is not subject to public disclosure under ORS chapter 192.
(2) A carrier shall
electronically submit the information described in subsection (1) of this
section in a format and according to instructions prescribed by the Department
of Consumer and Business Services by rule after obtaining a recommendation from
the Health Insurance Reform Advisory Committee.
(3) The advisory
committee shall evaluate the reporting requirements under subsection (1)(a) of this section by the following market segments:
(a) Individual health
benefit plans;
(b) Health benefit plans
for small employers;
(c) Health benefit plans
for employers described in ORS 743.733; [and]
(d) Health benefit plans
for employers with more than 50 employees[.]; and
(e) Association
health plans described in ORS 743.734 (7).
(4) The department shall
make the information reported under this section available to the public
through a searchable public website on the Internet.
SECTION 6. ORS 731.146, as amended by section 1 of this
2007 Act, is amended to read:
731.146. (1) “Transact
insurance” means one or more of the following acts effected by mail or
otherwise:
(a) Making or proposing
to make an insurance contract.
(b) Taking or receiving
any application for insurance.
(c) Receiving or
collecting any premium, commission, membership fee, assessment, due or other
consideration for any insurance or any part thereof.
(d) Issuing or delivering
policies of insurance.
(e) Directly or
indirectly acting as an insurance producer for, or otherwise representing or
aiding on behalf of another, any person in the solicitation, negotiation,
procurement or effectuation of insurance or renewals thereof, the dissemination
of information as to coverage or rates, the forwarding of applications, the
delivering of policies, the inspection of risks, the fixing of rates, the
investigation or adjustment of claims or losses, the transaction of matters subsequent
to effectuation of the policy and arising out of it, or in any other manner
representing or assisting a person with respect to insurance.
(f) Advertising locally
or circularizing therein without regard for the source of such circularization,
whenever such advertising or circularization is for the purpose of solicitation
of insurance business.
(g) Doing any other kind
of business specifically recognized as constituting the doing of an insurance
business within the meaning of the Insurance Code.
(h) Doing or proposing
to do any insurance business in substance equivalent to any of paragraphs (a)
to (g) of this subsection in a manner designed to evade the provisions of the
Insurance Code.
(2) Subsection (1) of
this section does not include, apply to or affect the following:
(a) Making investments
within a state by an insurer not admitted or authorized to do business within
such state.
(b) Except as provided
in ORS 743.015, doing or proposing to do any insurance business arising out of
a policy of group life insurance or group health insurance, or both, or
a policy of blanket health insurance, if the master policy was validly issued
to cover a group organized primarily for purposes other than the procurement of
insurance and was delivered in and pursuant to the laws of another state in
which:
(A) The insurer was
authorized to do an insurance business;
(B) The policyholder is
domiciled or otherwise has a bona fide situs; and
(C) With respect to a
policy of blanket health insurance, the policy was approved by the director of
such state.
[(c) Except as provided in ORS 743.015, doing or proposing to do any
insurance business arising out of a policy of group health insurance, if the
master policy was validly issued to cover an employer group other than an
association, trust or multiple employer welfare arrangement and was delivered
in and pursuant to the laws of another state in which:]
[(A) The insurer was authorized to do an
insurance business; and]
[(B) The policyholder is domiciled or otherwise has a bona fide situs.]
[(d)] (c) Investigating, settling, or litigating claims under
policies lawfully written within a state, or liquidating assets and
liabilities, all resulting from the insurer’s former authorized operations
within such state.
[(e)] (d) Transactions within a state under a policy
subsequent to its issuance if the policy was lawfully solicited, written and
delivered outside the state and did not cover a subject of insurance resident,
located or to be performed in the state when issued.
[(f)] (e) The continuation and servicing of life or health
insurance policies remaining in force on residents of a state if the insurer
has withdrawn from such state and is not transacting new insurance therein.
(3) If mail is used, an
act shall be deemed to take place at the point where the matter transmitted by
mail is delivered and takes effect.
SECTION 7. ORS 731.484, as amended by section 2 of this
2007 Act, is amended to read:
731.484. (1) No insurer
or insurance producer selling a policy of group life insurance or group health
insurance subject to [an] the
exemption in ORS 731.146 (2)(b) [or (c)]
is authorized to sell membership in a group for the purpose of qualifying an
applicant who is an individual for the insurance.
(2) No insurer or
insurance producer selling membership in a group is authorized to offer a
policy of group life insurance or group health insurance subject to [an] the exemption in ORS 731.146
(2)(b) [or (c)] for the purpose of
selling membership in the group.
SECTION 8. ORS 731.486, as amended by section 3 of this
2007 Act, is amended to read:
731.486. (1) The
exemption in ORS 731.146 (2)(b) does not apply to an insurer that offers
coverage under a group health insurance policy or a group life insurance
policy in this state unless the Director of the Department of Consumer and
Business Services determines that the exemption applies.
(2) The insurer shall
submit evidence to the director that the exemption applies. When a master
policy [for a policy of group life
insurance] is delivered or issued for delivery outside this state to
trustees of a fund for two or more employers, for one or more labor unions, for
one or more employers and one or more labor unions or for an association, the
insurer shall also submit evidence showing compliance with:
(a) ORS 743.526, for
a policy of group health insurance; or
(b) ORS 743.354,
for a policy of group life insurance.
(3) The director shall
review the evidence submitted and may request additional evidence as needed.
(4) An insurer shall
submit to the director any changes in the evidence submitted under subsection
(2) of this section.
(5) The director may
order an insurer to cease offering a policy or coverage under a policy if the
director determines that the exemption under ORS 731.146 (2)(b)
is no longer satisfied.
(6) Coverage under a
master group life or health insurance policy delivered or issued for
delivery outside this state that does not qualify for the exemption in ORS
731.146 (2)(b) may be offered in this state if the
director determines that the state in which the policy was delivered or issued
for delivery has requirements that are substantially similar to those
established under ORS 743.360 or 743.522 (2) and that the policy
satisfies those requirements.
[(7) Coverage under a master group health insurance policy that is
delivered or issued for delivery outside this state to an association or trust
may be offered in this state if the director determines that the association or
trust meets applicable standards under ORS 743.522 (1)(b) or (c) or (2).]
[(8)] (7) This section does not
apply to any master policy issued to a multistate employer or labor union.
[(9)] (8) The director may adopt
rules to carry out this section.
SECTION 9. ORS 743.734, as amended by section 4 of this 2007
Act, is amended to read:
743.734. (1) Every group health benefit plan shall be subject to the
provisions of ORS 743.733 to 743.737, if the plan provides health benefits
covering one or more employees of a small employer and if any one of the
following conditions is met:
(a) Any portion of the
premium or benefits is paid by a small employer or any eligible employee is
reimbursed, whether through wage adjustments or otherwise, by a small employer
for any portion of the health benefit plan premium; or
(b) The health benefit
plan is treated by the employer or any of the eligible employees as part of a
plan or program for the purposes of section 106, section 125 or section 162 of
the Internal Revenue Code of 1986, as amended.
(2) Except as provided
in ORS 743.733 to 743.737, no law requiring the coverage or the offer of
coverage of a health care service or benefit applies to the basic health
benefit plans offered or delivered to a small employer.
(3) Except as otherwise
provided by law or ORS 743.733 to 743.737, no health benefit plan offered to a
small employer shall:
(a) Inhibit a small
employer carrier from contracting with providers or groups of providers with
respect to health care services or benefits; or
(b) Impose any
restriction on the ability of a small employer carrier to negotiate with
providers regarding the level or method of reimbursing care or services
provided under health benefit plans.
(4) Except to determine
the application of a preexisting conditions provision for a late enrollee, a small
employer carrier shall not use health statements when offering small employer
health benefit plans and shall not use any other method to determine the actual
or expected health status of eligible enrollees. Nothing in this subsection
shall prevent a carrier from using health statements or other information after
enrollment for the purpose of providing services or arranging for the provision
of services under a health benefit plan.
(5) Except in the case
of a late enrollee and as otherwise provided in this section, a small employer
carrier shall not impose different terms or conditions on the coverage,
premiums or contributions of any eligible employee in a small employer group
that are based on the actual or expected health status of any eligible employee.
(6) A small employer
carrier may provide different health benefit plans to different categories of
employees of a small employer when the employer has chosen to establish
different categories of employees in a manner that does not relate to the actual
or expected health status of such employees or their dependents. Except as
provided in ORS 743.736 (10):
(a) When a small
employer carrier offers coverage to a small employer, the small employer
carrier shall offer coverage to all eligible employees of the small employer,
without regard to the actual or expected health status of any eligible
employee.
(b) If the small
employer elects to offer coverage to dependents of eligible employees, the
small employer carrier shall offer coverage to all dependents of eligible
employees, without regard to the actual or expected health status of any
eligible dependent.
[(7) A health benefit plan issued to a small employer group through an
association health plan is exempt from subsection (1) of this section. For purposes
of this subsection, an association health plan is group health insurance
described in ORS 743.522 (2) or a health benefit plan that:]
[(a) Is delivered or issued for delivery to:]
[(A) An association or trust established in this state, that meets applicable
requirements of ORS 743.524 or 743.526, or to a multiple employer welfare
arrangement located inside this state, subject to ORS 750.301 to 750.341; or]
[(B) An association or trust established in another state, that is
approved by the director under ORS 731.486 (7), or a multiple employer welfare
arrangement located in another state that complies with ORS 750.311; and]
[(b) Satisfies all of the following:]
[(A) The initial premium rate for the
association health plan does not vary by more than 50 percent across the groups
of small employers under the plan.]
[(B) The association policyholder does not discriminate in membership
requirements based on actual or expected health status of individual enrollees
or prospective enrollees, in accordance with ORS 743.752 (5).]
[(C) Small employer groups that have two or more eligible employees and
that meet the membership requirements for the association are not excluded from
the association health plan.]
[(D) Except as provided in subsection (8) of this section, the
association health plan maintains a 95 percent retention rate.]
[(8)(a) The 95 percent retention rate in
subsection (7) of this section does not include employer groups that:]
[(A) Go out of business, whether through merger, acquisition or any
other reason;]
[(B) No longer meet eligibility requirements for membership in the
association;]
[(C) No longer meet participation requirements for employers that are
set forth in the plan documents; or]
[(D) Fail to pay premiums.]
[(b) An association health plan that fails to maintain the 95 percent
retention rate during any year may have 12 months to correct the retention
level before losing the exemption under subsection (7) of this section.]
SECTION 10. ORS 743.748, as amended by section 5 of this
2007 Act, is amended to read:
743.748. (1) Each carrier offering a health benefit plan shall submit to
the Director of the Department of Consumer and Business Services on or before
April 1 of each year a report that contains:
(a) The following
information for the preceding year that is derived from the exhibit of
premiums, enrollment and utilization included in the carrier’s annual report:
(A) The total number of
members;
(B) The total amount of
premiums;
(C) The total amount of
costs for claims;
(D) The medical loss
ratio;
(E) The average amount
of premiums per member per month; and
(F) The percentage
change in the average premium per member per month, measured from the previous
year.
(b) The following
aggregate financial information for the preceding year that is derived from the
carrier’s annual report:
(A) The total amount of
general administrative expenses, including identification of the five largest
nonmedical administrative expenses and the assessment against the carrier for
the Oregon Medical Insurance Pool;
(B) The total amount of
the surplus maintained;
(C) The total amount of
the reserves maintained for unpaid claims;
(D) The total net
underwriting gain or loss; and
(E) The carrier’s net
income after taxes.
[(c) The retention rate and claims experience of employer groups within
the plan for the preceding year for association health plans as described in
ORS 743.734 (7). This information is not subject to public disclosure under ORS
chapter 192.]
(2) A carrier shall
electronically submit the information described in subsection (1) of this
section in a format and according to instructions prescribed by the Department
of Consumer and Business Services by rule after obtaining a recommendation from
the Health Insurance Reform Advisory Committee.
(3) The advisory
committee shall evaluate the reporting requirements under subsection (1)(a) of this section by the following market segments:
(a) Individual health
benefit plans;
(b) Health benefit plans
for small employers;
(c) Health benefit plans
for employers described in ORS 743.733; and
(d) Health benefit plans
for employers with more than 50 employees. [; and]
[(e) Association health plans described in ORS 743.734 (7).]
(4) The department shall
make the information reported under this section available to the public
through a searchable public website on the Internet.
SECTION 11. (1) The Department of Consumer and Business
Services shall monitor, on a continuing basis, association health plans to
determine the degree to which the claims experience of nonretained association
groups exceeds the claims experience of the association’s member groups as a
whole.
(2) The Director of the
Department of Consumer and Business Services shall report to the Legislative
Assembly by February 1 of each odd-numbered year on the findings under
subsection (1) of this section and may recommend legislative changes based upon
the findings.
SECTION 12. (1) ORS 743.734, as amended by section 4 of
this 2007 Act, applies to health benefit plans issued or renewed on or after
the effective date of this 2007 Act and before January 2, 2014.
(2) An association
health plan issued to a group described in ORS 743.522 (2) prior to May 1,
2007, to an association or trust approved prior to May 1, 2007, or to a
multiple employer welfare arrangement authorized prior to May 1, 2007, is not
subject to the requirements of ORS 743.734 (7)(b)(C)
with respect to membership requirements in effect prior to May 1, 2007.
SECTION 13. The amendments to ORS 731.146, 731.484,
731.486, 743.734 and 743.748 by sections 6 to 10 of this 2007 Act become
operative on January 2, 2014.
SECTION 14. Sections 11 and 12 of this 2007 Act are
repealed on January 2, 2014.
SECTION 15. This 2007 Act being necessary for the
immediate preservation of the public peace, health and safety, an emergency is
declared to exist, and this 2007 Act takes effect July 1, 2007.
Approved by the Governor July 12, 2007
Filed in the office of Secretary of State July 16, 2007
Effective date July 12, 2007
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