PRINTER'S NO. 2837
No. 2005 Session of 2007
INTRODUCED BY DeLUCA, CALTAGIRONE, GEORGE, M. O'BRIEN, MACKERETH, SOLOBAY, HARKINS, BELFANTI AND MUSTIO, NOVEMBER 14, 2007
REFERRED TO COMMITTEE ON INSURANCE, NOVEMBER 14, 2007
AN ACT 1 Amending the act of May 17, 1921 (P.L.682, No.284), entitled "An 2 act relating to insurance; amending, revising, and 3 consolidating the law providing for the incorporation of 4 insurance companies, and the regulation, supervision, and 5 protection of home and foreign insurance companies, Lloyds 6 associations, reciprocal and inter-insurance exchanges, and 7 fire insurance rating bureaus, and the regulation and 8 supervision of insurance carried by such companies, 9 associations, and exchanges, including insurance carried by 10 the State Workmen's Insurance Fund; providing penalties; and 11 repealing existing laws," further providing for conditions 12 subject to which policies are to be issued; and providing for 13 health insurance coverage for certain children of insured 14 parents and for affordable small group health care coverage. 15 The General Assembly of the Commonwealth of Pennsylvania 16 hereby enacts as follows: 17 Section 1. Section 617(A)(3) and (9) of the act of May 17, 18 1921 (P.L.682, No.284), known as The Insurance Company Law of 19 1921, repealed and added May 25, 1951 (P.L.417, No.99) and 20 January 18, 1968 (1967 P.L.969, No.433), are amended to read: 21 Section 617. Conditions Subject to Which Policies Are to Be 22 Issued.--(A) No such policy shall be delivered or issued for 23 delivery to any person in this Commonwealth unless:
1 * * * 2 (3) it purports to insure only one person, except that a 3 policy may insure, originally or by subsequent amendment, upon 4 the application of an adult head of a family who shall be deemed 5 the policyholder, any two or more eligible members of that 6 family, including husband, wife, dependent children or any 7 children under a specified age which, except as provided under 8 section 617.1, shall not exceed nineteen years and any other 9 person dependent upon the policyholder; and 10 * * * 11 (9) A policy delivered or issued for delivery after January 12 1, 1968, under which coverage of a dependent of a policyholder 13 terminates at a specified age shall, with respect to an 14 unmarried child covered by the policy prior to the attainment of 15 the age of nineteen or except as provided under section 617.1, 16 the age of thirty, who is incapable of self-sustaining 17 employment by reason of mental retardation or physical handicap 18 and who became so incapable prior to attainment of age nineteen 19 and who is chiefly dependent upon such policyholder for support 20 and maintenance, not so terminate while the policy remains in 21 force and the dependent remains in such condition, if the 22 policyholder has within thirty-one days of such dependent's 23 attainment of the limiting age submitted proof of such 24 dependent's incapacity as described herein. The foregoing 25 provisions of this paragraph shall not require an insurer to 26 insure a dependent who is a mentally retarded or physically 27 handicapped child where the policy is underwritten on evidence 28 of insurability based on health factors set forth in the 29 application or where such dependent does not satisfy the 30 conditions of the policy as to any requirement for evidence of 20070H2005B2837 - 2 -
1 insurability or other provisions of the policy, satisfaction of 2 which is required for coverage thereunder to take effect. In any 3 such case the terms of the policy shall apply with regard to the 4 coverage or exclusion from coverage of such dependent. 5 * * * 6 Section 2. The act is amended by adding a section to read: 7 Section 617.1. Health Insurance Coverage for Certain 8 Children of Insured Parents.--(A) An insurer that issues, 9 delivers, executes or renews health care insurance in this 10 Commonwealth, under which coverage of a child would otherwise 11 terminate at a specified age, shall, at the option of the 12 child's parent or guardian, provide coverage to a child of the 13 insured beyond that specified age, up through the age of twenty- 14 nine, provided that the child meet all of the following 15 requirements: 16 (1) Is not married. 17 (2) Has no dependents. 18 (3) Is a resident of this Commonwealth or is enrolled as a 19 full-time student at an institution of higher education in this 20 Commonwealth. 21 (4) Is not covered by another health insurance policy. 22 (B) An insured may exercise the option provided under 23 subsection (A) at any time during the term of the policy by 24 notice to the insurer. 25 (C) Employers shall not be required to contribute to any 26 increased premium charged by the insurer for the exercise of the 27 option provided under subsection (A), but the contributions may 28 be agreed to by the employer. 29 (D) This section shall not include the following types of 30 insurance or any combination thereof: 20070H2005B2837 - 3 -
1 (1) Hospital indemnity. 2 (2) Accident. 3 (3) Specified disease. 4 (4) Disability income. 5 (5) Dental. 6 (6) Vision. 7 (7) Civilian Health and Medical Program of the Uniformed 8 Services (CHAMPUS) supplement. 9 (8) Medicare supplement. 10 (9) Long-term care. 11 (10) Other limited benefit plans. 12 Section 3. The act is amended by adding an article to read: 13 ARTICLE XLII 14 AFFORDABLE SMALL GROUP HEALTH CARE COVERAGE 15 Section 4201. Scope of article. 16 This article relates to health care reform. 17 Section 4202. Definitions. 18 The following words and phrases when used in this article 19 shall have the meanings given to them in this section unless the 20 context clearly indicates otherwise: 21 "Accident and Health Filing Reform Act." The act of December 22 18, 1996 (P.L.1066, No.159), known as the Accident and Health 23 Filing Reform Act. 24 "Commissioner." The Insurance Commissioner of the 25 Commonwealth. 26 "Commonwealth Attorneys Act." The act of October 15, 1980 27 (P.L.950, No.164), known as the Commonwealth Attorneys Act. 28 "Commonwealth Documents Law." The act of July 31, 1968 29 (P.L.769, No.240), referred to as the Commonwealth Documents 30 Law. 20070H2005B2837 - 4 -
1 "Department." The Insurance Department of the Commonwealth 2 of Pennsylvania. 3 "Health benefit plan." Any individual or group health 4 insurance policy, subscriber contract, certificate or plan which 5 provides health or sickness and accident coverage which is 6 offered by an insurer. The term shall not include any of the 7 following: 8 (1) An accident only policy. 9 (2) A credit only policy. 10 (3) A long-term or disability income policy. 11 (4) A specified disease policy. 12 (5) A Medicare supplement policy. 13 (6) A Civilian Health and Medical Program of the 14 Uniformed Services (CHAMPUS) supplement policy. 15 (7) A fixed indemnity policy. 16 (8) A dental only policy. 17 (9) A vision only policy. 18 (10) A workers' compensation policy. 19 (11) An automobile medical payment policy under 75 20 Pa.C.S. (relating to vehicles). 21 (12) Any other similar policies providing for limited 22 benefits. 23 "Health care-associated infection." A localized or systemic 24 condition that results from an adverse reaction to the presence 25 of an infectious agent or its toxins and meets all of the 26 following: 27 (1) Occurs in a patient in a health care setting. 28 (2) Was not present or incubating at the time of 29 admission, unless the infection was related to a previous 30 admission to the same setting. 20070H2005B2837 - 5 -
1 (3) If occurring in a hospital setting, meets the 2 criteria for a specific infection site as defined by the 3 Centers for Disease Control and Prevention and its National 4 Health Care Safety Network. 5 "Health insurance region." Any of the following: 6 (1) "Region I." The geographic area covered by the 7 counties of Bucks, Chester, Delaware, Montgomery and 8 Philadelphia. 9 (2) "Region II." The geographic area covered by the 10 counties of Adams, Berks, Cumberland, Dauphin, Franklin, 11 Fulton, Lancaster, Lebanon, Lehigh, Northampton, Perry, 12 Schuylkill and York. 13 (3) "Region III." The geographic area covered by the 14 counties of Bradford, Carbon, Clinton, Lackawanna, Luzerne, 15 Lycoming, Monroe, Pike, Sullivan, Susquehanna, Tioga, Wayne 16 and Wyoming. 17 (4) "Region IV." The geographic area covered by the 18 counties of Centre, Columbia, Juniata, Mifflin, Montour, 19 Northumberland, Synder and Union. 20 (5) "Region V." The geographic area covered by the 21 counties of Bedford, Blair, Cambria, Clearfield, Huntingdon, 22 Jefferson and Somerset. 23 (6) "Region VI." The geographic area covered by the 24 counties of Allegheny, Armstrong, Beaver, Butler, Fayette, 25 Greene, Indiana, Lawrence, Washington and Westmoreland. 26 (7) "Region VII." The geographic area covered by the 27 counties of Cameron, Clarion, Crawford, Elk, Erie, Forest, 28 McKean, Mercer, Potter, Venango and Warren. 29 "Individual market." The health insurance market for 30 individuals as defined under section 2791 of the Health 20070H2005B2837 - 6 -
1 Insurance Portability and Accountability Act of 1996 (Public Law 2 104-191, 110 Stat. 1936). 3 "Insurer." A company or health insurance entity licensed in 4 this Commonwealth to issue any individual or group health, 5 sickness or accident policy or subscriber contract or 6 certificate or plan that provides medical or health care 7 coverage by a health care facility or licensed health care 8 provider that is offered or governed under this act or any of 9 the following: 10 (1) The act of December 29, 1972 (P.L.1701, No.364), 11 known as the Health Maintenance Organization Act. 12 (2) The act of May 18, 1976 (P.L.123, No.54), known as 13 the Individual Accident and Sickness Insurance Minimum 14 Standards Act. 15 (3) 40 Pa.C.S. Ch. 61 (relating to hospital plan 16 corporations) or Ch. 63 (relating to professional health 17 services plan corporations). 18 "Insurer group." A group of insurers writing coverage in 19 this Commonwealth, including a parent insurer, its subsidiaries 20 and affiliates. 21 "Large group market." The health insurance market for the 22 large group market as defined under section 2791 of the Health 23 Insurance Portability and Accountability Act of 1996 (Public Law 24 104-191, 110 Stat. 1936). 25 "Licensee." An individual who is licensed by the Department 26 of State to provide professional health care services in this 27 Commonwealth. 28 "Medical loss ratio." The ratio of incurred medical claim 29 costs to earned premiums. 30 "Regulatory Review Act." The act of June 25, 1982 (P.L.633, 20070H2005B2837 - 7 -
1 No.181), known as the Regulatory Review Act. 2 "Small employer." In connection with a group health plan 3 with respect to a calendar year and a plan year, an employer who 4 employs an average of at least two but not more than 50 5 employees on business days during the preceding calendar year 6 and who employs at least two such employees on the first day of 7 the plan year. In the case of an employer which was not in 8 existence throughout the preceding calendar year, the 9 determination whether an employer is a small employer shall be 10 based on the average number of employees that it is reasonably 11 expected that the employer will employ on business days in the 12 current calendar year. 13 "Small group health benefit plan." A health benefit plan 14 offered to a small employer. 15 "Small group market." The health insurance market for the 16 small group market as defined in section 2791 of the Health 17 Insurance Portability and Accountability Act of 1996 (Public Law 18 104-191, 110 Stat. 1936). 19 "Standard plan." One of the health benefit packages 20 established by the Insurance Department in accordance with 21 section 4203. 22 Section 4203. Standard plans. 23 (a) Applicability.--This section shall apply to all small 24 group health benefit plans issued, made effective, delivered or 25 renewed in this Commonwealth after the effective date of this 26 section. 27 (b) Standard plans required.-- 28 (1) An insurer shall not offer a plan that does not meet 29 the minimum benefits specified in one of the standard plans 30 developed by the department in accordance with the following 20070H2005B2837 - 8 -
1 criteria: 2 (i) The standard plans shall not include coverage 3 for behavioral health services except as required by 4 Federal law. 5 (ii) The standard plans may not contain any pre- 6 existing condition exclusions. 7 (2) Standard plans may include options for deductibles 8 and cost-sharing if the department determines that the 9 options: 10 (i) Do not dissuade consumers from seeking necessary 11 services. 12 (ii) Promote a balance of the impact of cost-sharing 13 in reducing premiums and in effecting utilization of 14 appropriate services. 15 (iii) Limit the total cost-sharing that may be 16 incurred by an individual in a year. 17 (3) The following apply: 18 (i) The department shall forward notice of the 19 elements of the standard plans to the Legislative 20 Reference Bureau for publication as a notice in the 21 Pennsylvania Bulletin. 22 (ii) An insurer subject to the provisions of this 23 section shall be required to begin offering its standard 24 plans as soon as practicable following the publication 25 but in no event later than 180 days following the 26 publication under subparagraph (i). 27 (c) Additional benefits.-- 28 (1) An insurer shall offer as an additional benefit to 29 every standard plan a behavioral health services benefit that 30 complies with the provisions of sections 601-A, 602-A, 603-A, 20070H2005B2837 - 9 -
1 604-A, 605-A, 606-A, 607-A and 608-A. 2 (2) An insurer may offer benefits in addition to those 3 in any of its standard plans. 4 (3) Each additional benefit shall: 5 (i) Be offered and priced separately from benefits 6 specified in the standard plan with which the benefits 7 are being offered. 8 (ii) Not have the effect of duplicating any of the 9 benefits in the standard plan with which the benefits are 10 being offered. 11 (iii) Be clearly specified as additions to the 12 standard plan with which the benefits are being offered. 13 (4) The department may prohibit an insurer from offering 14 an additional benefit under this section if the department 15 finds that the additional benefit will be sold in conjunction 16 with one of the insurer's standard plans in a manner designed 17 to promote risk selection or underwriting practices otherwise 18 prohibited under this section or other State law. 19 Section 4204. Health insurance premium rates for dominant 20 insurers. 21 (a) Applicability.--This section shall apply to all small 22 group health benefit plans that are issued, made effective, 23 delivered or renewed in this Commonwealth after the effective 24 date of this section, by an insurer that is part of an insurer 25 group, if that insurer group insures 10% or more of the covered 26 lives in the health insurance region in which the plan is being 27 issued, made effective, delivered or renewed. 28 (b) Premium rates.-- 29 (1) An insurer shall establish a base rate for plans and 30 shall file the base rates with the department as required by 20070H2005B2837 - 10 -
1 law. An insurer may adjust its base rates for the following: 2 (i) Age. 3 (ii) Health insurance region. 4 (iii) Wellness incentives as determined by the 5 department. 6 (2) An insurer shall apply all risk adjustment factors 7 under paragraph (1) consistently with respect to all plans 8 subject to this section and consistently with department 9 regulatory authority. 10 (3) An insurer shall not charge a rate that is more than 11 33% above or below the community rate, as adjusted as 12 permitted under paragraph (1). Additional adjustments may be 13 made to reflect the inclusion of additional benefits as 14 specified under section 4203(c) and differences in family 15 composition. 16 (4) The premium for a small group health benefit plan 17 shall not be adjusted by an insurer more than once each year, 18 except that rates may be changed more frequently to reflect: 19 (i) Changes to the enrollment of the small employer 20 group. 21 (ii) Changes to a small group health benefit plan 22 that have been requested by the small employer. 23 (iii) Changes to the family composition of 24 employees. 25 (iv) Changes pursuant to a government order or 26 judicial proceeding. 27 (5) An insurer shall base its rating methods and 28 practices on commonly accepted actuarial assumptions and 29 sound actuarial principles. Rates shall not be excessive, 30 inadequate or unfairly discriminatory. 20070H2005B2837 - 11 -
1 (6) For purposes of this subsection, an insurer's "base 2 rate" for a plan shall refer to a rating methodology that is 3 based on the experience of all risks covered by the plan 4 without regard to health status, occupation or any other 5 factor. 6 (c) Additional rate review and prior approval.-- 7 (1) In conjunction with and in addition to the standards 8 set forth in the Accident and Health Filing Reform Act and 9 all other applicable statutory and regulatory requirements, 10 all rate filings shall be subject to prior approval by the 11 department within the 45-day period provided by section 3(f) 12 of the Accident and Health Filing Reform Act. 13 (2) In conjunction with and in addition to the standards 14 set forth under the Accident and Health Filing Reform Act and 15 all other applicable statutory and regulatory requirements, 16 the department may disapprove a rate filing based upon any of 17 the following: 18 (i) The rate is not actuarially sound. 19 (ii) The increase is requested because the insurer 20 has not operated efficiently or has factored in 21 experience that conflicts with recognized best practices 22 in the health care industry, including the allocation of 23 administrative expenses to the plan on a less favorable 24 basis than expenses are allocated to other health benefit 25 plans. 26 (iii) The increase is requested because the insurer 27 has incurred costs due to failure to follow best 28 practices for cost control, including costs due to 29 avoidable health care-associated infections and avoidable 30 hospitalizations due to ineffective chronic care 20070H2005B2837 - 12 -
1 management. 2 (iv) The medical loss ratio for a plan is less than 3 85%. 4 (3) In the event a plan has a medical loss ratio of less 5 than 85%, the department may, in addition to any other 6 remedies available under law, require the insurer to refund 7 the difference to policyholders on a pro rata basis as soon 8 as practicable following receipt of notice from the 9 department of the requirement but in no event later than 120 10 days following receipt of the notice. The department shall 11 establish procedures under which such refunds will be made. 12 (d) Procedures.--The filing and review procedures set forth 13 under the Accident and Health Filing Reform Act shall apply to 14 any filing conducted under this section, except that no filing 15 deemed to meet the requirements of this act shall take effect 16 unless the department receives written notice of the insurer's 17 intent to exercise the right granted under this section at least 18 ten calendar days prior to the effective date of this section. 19 Section 4205. Health insurance premium rates for nondominant 20 insurers. 21 (a) Applicability.--This section applies to all small group 22 health benefit plans that are issued, made effective, delivered 23 or renewed in this Commonwealth after the effective date of this 24 section, by an insurer that is part of an insurer group, if that 25 insurer group insures less than 10% of the covered lives in the 26 region in which the plan is being issued, made effective, 27 delivered or renewed. 28 (b) Premium rates.-- 29 (1) An insurer shall establish a base rate for plans and 30 shall file the base rates with the department as required by 20070H2005B2837 - 13 -
1 law. An insurer may modify its base rates only by the 2 following demographic factors: 3 (i) Age. 4 (ii) Health insurance region. 5 (iii) Industry or class of business. 6 (iv) Wellness incentives as determined by the 7 department. 8 (2) An insurer shall apply all risk adjustment factors 9 under paragraph (1) consistently with respect to all plans 10 subject to this section and consistently with department 11 regulatory authority. 12 (3) An insurer shall not charge a rate that is more than 13 50% above or below the base rate, as adjusted as permitted 14 under paragraph (1). Additional adjustments may be made to 15 reflect the inclusion of additional benefits as specified in 16 section 4203(c) and differences in family composition. 17 (4) The premium for a small group health benefit plan 18 shall not be adjusted by an insurer more than once each year, 19 except that rates may be changed more frequently to reflect: 20 (i) Changes to the enrollment of the small employer 21 group. 22 (ii) Changes to a small group health benefit plan 23 that have been requested by the small employer. 24 (iii) Changes to the family composition of 25 employees. 26 (iv) Changes pursuant to a government order or 27 judicial proceeding. 28 (5) An insurer shall base its rating methods and 29 practices on commonly accepted actuarial assumptions and 30 sound actuarial principles. Rates shall not be excessive, 20070H2005B2837 - 14 -
1 inadequate, or unfairly discriminatory. 2 (6) For purposes of this subsection, an insurer's "base 3 rate" for a plan shall refer to a rating methodology that is 4 based on the experience of all risks covered by the plan 5 without regard to health status, occupation or any other 6 factor. 7 (c) Additional rate review and prior approval.-- 8 (1) In conjunction with and in addition to the standards 9 set forth in the Accident and Health Filing Reform Act and 10 all other applicable statutory and regulatory requirements, 11 all rate filings shall be subject to prior approval by the 12 department within the 45-day period provided by section 3(f) 13 of the Accident and Health Filing Reform Act. 14 (2) In conjunction with and in addition to the standards 15 set forth in the Accident and Health Filing Reform Act and 16 all other applicable statutory and regulatory requirements, 17 the department may disapprove a rate filing based upon any of 18 the following: 19 (i) The rate is not actuarially sound. 20 (ii) The increase is requested because the insurer 21 has not operated efficiently or has factored in 22 experience that conflicts with recognized best practices 23 in the health care industry, including the allocation of 24 administrative expenses to the plan on a less favorable 25 basis than expenses are allocated to other health benefit 26 plans. 27 (iii) The increase is requested because the insurer 28 has incurred costs due to failure to follow best 29 practices for cost control, including costs due to 30 avoidable health care-associated infections and avoidable 20070H2005B2837 - 15 -
1 hospitalizations due to ineffective chronic care 2 management. 3 (d) Procedures.--The filing and review procedures set forth 4 in the Accident and Health Filing Reform Act shall apply to any 5 filing conducted under this section, except that no filing 6 deemed to meet the requirements of this act shall take effect 7 unless the department receives written notice of the insurer's 8 intent to exercise the right granted under this section at least 9 ten calendar days prior to the effective date of this section. 10 Section 4206. College student insurance requirements. 11 (a) Minimum health benefit package.--Within 90 days 12 following the effective date of this section, the commissioner 13 shall establish a minimum health benefit package for full-time 14 students enrolled in public or private baccalaureate and 15 postbaccalaureate programs in this Commonwealth and transmit a 16 description of the package to the Legislative Reference Bureau 17 for publication in the Pennsylvania Bulletin. As soon as 18 practicable after the date of publication of the package, but in 19 no event later than 120 days following the publication, all 20 insurers shall offer the package as individual coverage 21 available to students and as group coverage through the 22 institution. The commissioner may make revisions to the minimum 23 health benefit package periodically, but no more than one time 24 per 12-month period. Each revision shall be implemented by 25 insurers as soon as practicable following publication of the 26 revision in the Pennsylvania Bulletin, but in no event later 27 than 120 days following such publication. 28 (b) Required health insurance coverage.-- 29 (1) Every full-time student enrolled in a public or 30 private baccalaureate or postbaccalaureate program in this 20070H2005B2837 - 16 -
1 Commonwealth shall maintain health insurance coverage which 2 provides the minimum benefit package established under this 3 section. The coverage shall be maintained throughout the 4 period of the student's enrollment. 5 (2) Every student required to meet the mandatory 6 coverage under this section shall present evidence of such 7 coverage to the institution in which the student is enrolled 8 at least annually, in a manner prescribed by the institution. 9 (3) Every public or private college or university or 10 postbaccalaureate program in this Commonwealth shall make 11 available health insurance coverage on a group or individual 12 basis for purchase by students who are required to maintain 13 the coverage under this section. 14 (4) Notwithstanding paragraphs (1), (2) and (3), the 15 requirements of this section may be satisfied if the 16 baccalaureate or postbaccalaureate program provides on-campus 17 student health care coverage equivalent to the minimum 18 benefit package through its own clinics and health care 19 facilities and receives approval from the Department of 20 Education, in consultation with the department, that such 21 coverage is equivalent. The coverage shall provide that the 22 student is covered for hospital admissions and emergency 23 services at facilities throughout this Commonwealth. 24 (b) Effective date.--This section shall apply to every 25 public or private baccalaureate or postbaccalaureate program in 26 this Commonwealth beginning the first August 1 following 180 27 days after the publication of the notice of the elements of the 28 standard plans. 29 (c) Annual certification.--Every public or private 30 baccalaureate or postbaccalaureate program in this Commonwealth 20070H2005B2837 - 17 -
1 shall certify to the Department of Education at least annually 2 that the requirements of this section have been met for all 3 periods of the preceding year. 4 (d) Penalty for failure to comply.--The Secretary of 5 Education may impose a fine of up to $500 per day for each day 6 that a public or private baccalaureate or postbaccalaureate 7 program fails to meet any of its obligations in this section. 8 The fine shall be due within 30 days following receipt by the 9 institution of notice of the violation. Funds collected under 10 this subsection and any returns on the funds shall be deposited 11 into the Tobacco Settlement Fund established under the act of 12 June 26, 2001 (P.L.755, No.77), known as the Tobacco Settlement 13 Act. 14 Section 4207. Fair marketing standards. 15 Every insurer and producer must meet the following standards, 16 as appropriate: 17 (1) An insurer that offers small group health benefit 18 plans shall offer to small employers all of the small group 19 health benefit plans that the insurer actively markets in 20 this Commonwealth. An insurer shall be considered to be 21 actively marketing a small group health benefit plan if it 22 offers that plan to any small group not currently covered by 23 that insurer. 24 (2) The following shall apply: 25 (i) Except as provided in subparagraph (ii), a 26 producer or an insurer that provides small group health 27 benefit plans shall not encourage or direct a small 28 employer to refrain from filing an application for 29 coverage with the insurer or seek coverage from another 30 insurer because of a health status-related factor or the 20070H2005B2837 - 18 -
1 nature of the industry, occupation or geographic location 2 of the small employer. 3 (ii) The provisions of subparagraph (i) shall not 4 apply with respect to information provided by an insurer 5 or producer to a small employer regarding an established 6 geographic service area or a restricted network provision 7 of an insurer. 8 (3) An insurer that provides small group health benefit 9 plans shall not enter into a contract, agreement or 10 arrangement that provides for or results in a producer's 11 compensation being varied because of a health status-related 12 factor or the nature of the industry or occupation of the 13 small employer. 14 (4) An insurer that provides small group health benefit 15 plans shall not terminate, fail to renew or limit its 16 contract or agreement with a producer for a reason related to 17 a health status-related factor or occupation of the small 18 employer. 19 (5) A producer or insurer that provides small group 20 health benefit plans shall not induce or encourage a small 21 employer to exclude an employee or the employee's dependents 22 from health coverage or benefits available under the plan. 23 Section 4208. Reporting requirements. 24 (a) Health insurance region market share.--Not less 25 frequently than March 1 of every calendar year, each insurer 26 group shall file a report with the department of the insurer 27 group's small group market share by health insurance region and 28 the small group market share of each insurer within the insurer 29 group by health insurance region, for the immediately preceding 30 calendar year. 20070H2005B2837 - 19 -
1 (b) Segregated report.--Not less frequently than March 1 of 2 every calendar year, each insurer and each insurer group shall 3 file a report with the department for the immediately preceding 4 calendar year. The report shall contain the following 5 information, both Statewide and by health insurance region, 6 segregated for the individual market, the small group market and 7 the large group market: 8 (1) The aggregate number of covered lives and the time 9 periods over which coverage was provided. 10 (2) The number of individuals and groups covered by 11 health benefit plans issued, made effective, delivered or 12 renewed. 13 (3) The aggregate loss ratio for all policies issued, 14 made effective, delivered or renewed. 15 (4) The average annual premium per insured life. 16 (5) The average claims cost per insured life. 17 (6) The range of administrative expenses, commissions 18 paid, profit load, and any other retention items. 19 (7) The average administrative expenses, commissions 20 paid and profit load and any other retention items. 21 (8) A description of each rating method used to 22 determine rates indicating the specific group size for which 23 each method was used. 24 (9) A listing of all factors used in the rating for each 25 market and the range of these factors. 26 (10) The number of groups, including the number of 27 employees and members in those groups, covered by entities 28 with administrative services contract or administrative 29 services only arrangements. 30 (c) Review of reports.--By July 1 of each year, the 20070H2005B2837 - 20 -
1 department shall review the reports provided for under 2 subsection (a) and shall transmit to the Legislative Reference 3 Bureau for publication in the Pennsylvania Bulletin a statement 4 of the status of each insurer within each region in which the 5 insurer provides coverage. 6 (d) Data calls.--The department may issue data calls as 7 necessary to fulfill the requirements of this chapter. Any data 8 calls issued under this section shall be published in the 9 Pennsylvania Bulletin. 10 (e) Limitation.--The commissioner shall have discretion to 11 modify the reporting requirements of this section by 12 transmitting notice to the Legislative Reference Bureau for 13 publication in the Pennsylvania Bulletin. 14 (f) Compliance.--For failure to comply with any reports or 15 data calls required under this section, the commissioner shall 16 impose an administrative penalty of $1,000 against each insurer 17 or $5,000 against each insurer group for every day that the 18 report or data is not provided in accordance with this section. 19 Section 4209. Regulations. 20 (a) Implementation and administration.--The department and 21 the Department of Education may promulgate regulations as 22 necessary for the implementation and administration of this 23 article. 24 (b) Exemption.--Except as may be otherwise provided in this 25 article, the promulgation of regulations under this chapter by 26 the department or the Department of Education shall, until three 27 years from the effective date of this section, be exempt from 28 the following: 29 (1) Sections 201 through 205 of the Commonwealth 30 Documents Law. 20070H2005B2837 - 21 -
1 (2) The Commonwealth Attorneys Act. 2 (3) The Regulatory Review Act. 3 Section 4210. Enforcement. 4 (a) Determination of violation.--Upon a determination that a 5 person licensed by the department has violated any provision of 6 this article, the department may, subject to 2 Pa.C.S. Chs. 5 7 Subch. A (relating to practice and procedure of Commonwealth 8 agencies) and 7 Subch. A (relating to judicial review of 9 Commonwealth agency action), do any of the following: 10 (1) Issue an order requiring the person to cease and 11 desist from engaging in the violation. 12 (2) Suspend or revoke or refuse to issue or renew the 13 certificate or license of the offending party or parties. 14 (3) Impose an administrative penalty of up to $5,000 for 15 each violation. 16 (4) Seek restitution. 17 (5) Impose any other penalty or pursue any other remedy 18 deemed appropriate by the commissioner. 19 (b) Other remedies.--The enforcement remedies imposed under 20 this section shall be in addition to any other remedies or 21 penalties that may be imposed by any other statute, including: 22 (1) The act of July 22, 1974 (P.L.589, No.205), known as 23 the Unfair Insurance Practices Act. A violation by any person 24 of this article is deemed an unfair method of competition and 25 an unfair or deceptive act or practice pursuant to the Unfair 26 Insurance Practices Act. 27 (2) The act of December 18, 1996 (P.L.1066, No.159), 28 known as the Accident and Health Filing Reform Act. 29 (c) Private cause of action.--Nothing in this chapter shall 30 be construed as to create or imply a private cause of action for 20070H2005B2837 - 22 -
1 violation of this article.
2 Section 4. Repeals are as follows:
3 (1) The General Assembly declares that the repeal under
4 paragraph (2) is necessary to effectuate the addition of
5 Article XLII of the act.
6 (2) Section 3(e)(2), (3), (4) and (5) of the act of
7 December 18, 1996 (P.L.1066, No.159), known as the Accident
8 and Health Filing Reform Act, are repealed insofar as they
9 apply to small group health benefit plan rates.
10 (3) All other acts and parts of acts are repealed
11 insofar as they are inconsistent with the addition of Article
12 XLII of the act.
13 Section 5. This act shall take effect as follows:
14 (1) The amendment or addition of sections 617(A)(3) and
15 (9) and 617.1 of the act shall take effect in 60 days.
16 (2) The remainder of this act shall take effect
17 immediately.
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