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                                                      PRINTER'S NO. 2837

THE GENERAL ASSEMBLY OF PENNSYLVANIA


HOUSE BILL

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    19  1921, repealed and added May 25, 1951 (P.L.417, No.99) and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
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     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
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     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.
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     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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