THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

INTRODUCED BY BAKER, MICOZZIE, CLYMER, HESS, BOYD, CHRISTIANA, CUTLER, EVERETT, FARRY, GABLER, GEIST, GINGRICH, GOODMAN, GROVE, KAUFFMAN, KILLION, PICKETT, REESE, REICHLEY, ROAE, SAYLOR, SCHRODER, STERN, SWANGER, TALLMAN, J. TAYLOR, VULAKOVICH, WATSON, CAUSER AND BARRAR, JANUARY 19, 2011

REFERRED TO COMMITTEE ON INSURANCE, JANUARY 19, 2011  

AN ACT

Amending the act of May 17, 1921 (P.L.682, No.284), entitled "An

act relating to insurance; amending, revising, and

consolidating the law providing for the incorporation of

insurance companies, and the regulation, supervision, and

protection of home and foreign insurance companies, Lloyds

associations, reciprocal and inter-insurance exchanges, and

fire insurance rating bureaus, and the regulation and

supervision of insurance carried by such companies,

associations, and exchanges, including insurance carried by

the State Workmen's Insurance Fund; providing penalties; and

repealing existing laws," providing for foreign health

insurance.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1.  The act of May 17, 1921 (P.L.682, No.284), known

as The Insurance Company Law of 1921, is amended by adding an

article to read:

ARTICLE XXVI

FOREIGN HEALTH INSURANCE

Section 2601.  Definitions.

The following words and phrases when used in this article

shall have the meanings given to them in this section unless the

context clearly indicates otherwise:

"Commissioner."  The Insurance Commissioner of the

Commonwealth.

"Covered person."  An individual who is entitled to health

care services provided, arranged for, paid for or reimbursed

under a health benefits plan.

"Domestic health insurer."  An insurer licensed to sell,

offer or provide health benefits plans in this Commonwealth. 

"Foreign health insurer."  An insurer licensed to sell, offer

or provide health benefits plans in any other state.

"Hazardous financial condition."  A condition in which a

foreign health insurer is unlikely to be able to meet

obligations to policyholders with respect to known claims or to

any other obligations in the normal course of business, based on

its present or reasonably anticipated financial status.

"Health benefits plan."  An arrangement for the delivery of

health care, on an individual or group basis, in which a health

carrier undertakes to provide, arrange for, pay for or reimburse

any of the costs of health care services for a covered person

that is offered in accordance with the laws of any state. The

term does not include any of the following:

(1)  Short-term travel, accident only, limited or

specified disease or individual conversion policies or

contracts.

(2)  Policies or contracts designed for issuance to

persons eligible for coverage under Title XVIII of the Social

Security Act (49 Stat. 620, 42 U.S.C. § 1395 et seq.).

(3)  Any other coverage, similar to that listed under

paragraph (1) or (2), under Federal or State governmental

plans.

"Provider" or "health care provider."  Any hospital,

physician, or other person authorized by statute, licensed or

certified to furnish health care services.

"Resident."  An individual whose primary residence is in this

Commonwealth and who is present in this Commonwealth for at

least six months of the calendar year.

Section 2602.  Out-of-State carriers' provision of coverage.

Notwithstanding any other law or regulation, a foreign health

insurer may sell, offer and provide a health benefits plan to

residents in this Commonwealth if that insurer does all of the

following:

(1)  Offers the health benefit plan in its domiciliary

state and is in compliance with all applicable laws,

regulations and requirements of its domiciliary state.

(2)  Obtains a certificate of authority to do business as

a foreign health insurer in this Commonwealth.

(3)  Complies with all laws and regulations of this

Commonwealth enacted for the benefit of health insurance

consumers.

(4)  Is not required to offer the health benefits

mandated by the laws or regulations of this Commonwealth, or

comply with any law regarding rate regulation.

Section 2603.  Certificate of authority.

(a)  Application.--A foreign health insurer may apply for a

certificate that authorizes the foreign health insurer to do

business as a foreign health insurer in this Commonwealth using

a form prescribed by the commissioner. Upon application, the

commissioner shall issue a certificate to the foreign health

insurer unless the commissioner determines that the foreign

health insurer meets any of the following:

(1)  Will not provide a health benefits plan in

compliance with the provisions of this article.

(2)  Is in a hazardous financial condition, as determined

by an examination by the commissioner conducted in accordance

with the Financial Analysis Handbook of the National

Association of Insurance Commissioners.

(3)  Has not adopted procedures to ensure compliance with

all applicable laws governing the confidentiality of its

records with respect to providers and covered persons.

(b)  Validity.--A certificate of authority issued under this

section shall be valid for three years from the date of issuance

by the commissioner. The commissioner shall, by regulation,

establish all of the following:

(1)  Procedures for a foreign health insurer to renew a

certificate of authority under this article.

(2)  Certificate of authority application and renewal

fees, the amount of which shall be no greater than is

reasonably necessary to enable the commissioner to carry out

the provisions of this article.

Section 2604.  Required disclosures.

Each health benefits plan and each application for a health

benefits plan provided by a foreign health insurer to a resident

shall disclose all of the following in plain language:

(1)  The differences between the benefits of the health

benefits plan issued by the foreign health insurer and a

health benefits plan issued under the laws of this

Commonwealth.

(2)  The differences that relate to mandated health

benefits, underwriting standards, premium rating, preexisting

conditions, renewability, portability and cancellation.

(3)  That the health benefits plan is primarily governed

by the laws of the foreign health insurer's domicile and

therefore all of the rating laws applicable to individual or

group accident and health insurance filed in this

Commonwealth do not apply to the health benefits plan, which

may result in increases to the insurance premium at the time

of renewal that would not be permissible with a health

benefits plan governed by the laws of this Commonwealth.

(4)  That any purchase of health insurance should be

considered carefully since future medical conditions may make

it impossible to qualify for another health benefits plan.

(5)  That although the health benefits plan may provide

more affordable health coverage, the following apply:

(i)  The health benefits plan may also provide fewer

health benefits than those normally included as State-

mandated health insurance policies issued by domestic

health insurers.

(ii)  The insured's insurance agent should be

consulted to determine which State-mandated health

benefits are excluded under the policy.

Section 2605.  Powers and duties of the commissioner.

(a)  Powers.--The commissioner may do all of the following:

(1)  After notice and opportunity to be heard, deny,

revoke or suspend a certificate of authority issued to a

foreign health insurer for any violation of this article. The

commissioner shall provide for an appropriate and timely

right of appeal for a foreign health insurer whose

certificate of authority is denied, revoked or suspended.

(2)  Conduct market conduct and solvency examinations of

an existing or prospective foreign health insurer. The market

conduct and solvency examinations shall be conducted in the

same manner and under the same terms and conditions as an

examination of an insurer located in this State.

(b)  Duties.--

(1)  The commissioner shall establish procedures for the

review of claims and grievances filed by a health care

provider or a covered individual, marketing materials

proposed by a foreign health insurer to market a health

benefit plan to residents or employers in this State and the

application and health benefit plan of a prospective foreign

health insurer.

(2)  The commissioner shall adopt rules to administer

this article. The rules shall not do any of the following:

(i)  Require the foreign health insurer to modify

coverage or benefit requirements or restrict underwriting

requirements or premium ratings in a manner that

conflicts with the laws or regulations of a foreign

health insurer's domiciliary state.

(ii)  Provide for an expansion of the commissioner's

authority over foreign health insurers in a way that

conflicts with this article.

Section 2.  This act shall take effect in 60 days.