Bill Text: OR HB2240 | 2013 | Regular Session | Engrossed

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Relating to coverage of health care services; declaring an emergency.

Spectrum: Unknown

Status: (Passed) 2013-07-29 - Chapter 681, (2013 Laws): Effective date July 29, 2013. [HB2240 Detail]

Download: Oregon-2013-HB2240-Engrossed.html

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     77th OREGON LEGISLATIVE ASSEMBLY--2013 Regular Session

HA to A-Eng. HB 2240

LC 326 /HB 2240-A6

                       HOUSE AMENDMENTS TO
                   A-ENGROSSED HOUSE BILL 2240

              By JOINT COMMITTEE ON WAYS AND MEANS

                             May 22

  On page 1 of the printed A-engrossed bill, line 6, after '
743.777,' insert '743.801,'.
  In line 16, delete 'and 6' and insert ', 6 and 7'.
  On page 3, delete line 7 and insert:
  '  { +  SECTION 7. + }  { +  'Group health insurance' means
that form of health insurance covering groups of persons
described in this section, with or without one or more members of
their families or one or more of their dependents, or covering
one or more members of the families or one or more dependents of
such groups of persons, and issued upon one of the following
bases:
  ' (1) Under a policy issued to an employer or trustees of a
fund established by an employer, who shall be deemed the
policyholder, insuring employees of such employer for the benefit
of persons other than the employer. As used in this subsection, '
employees' includes:
  ' (a) The officers, managers and employees of the employer;
  ' (b) The individual proprietor or partners if the employer is
an individual proprietor or partnership;
  ' (c) The officers, managers and employees of subsidiary or
affiliated corporations;
  ' (d) The individual proprietors, partners and employees of
individuals and firms, if the business of the employer and such
individual or firm is under common control through stock
ownership, contract or otherwise;
  ' (e) The trustees or their employees, or both, if their duties
are principally connected with such trusteeship;
  ' (f) The leased workers of a client employer; and
  ' (g) Elected or appointed officials if a policy issued to
insure employees of a public body provides that the term '
employees' includes elected or appointed officials.
  ' (2) Under a policy issued to an association, including a
labor union, that has an active existence for at least one year,
that has a constitution and bylaws and that has been organized
and is maintained in good faith primarily for purposes other than
that of obtaining insurance, which shall be deemed the
policyholder, insuring members, employees or employees of members
of the association for the benefit of persons other than the
association or its officers or trustees.
  ' (3) Under a policy issued to the trustees of a fund
established by two or more employers in the same or related
industry or by one or more labor unions or by one or more
employers and one or more labor unions or by an association as
described in subsection (2) of this section, insuring employees
of the employers or members of the unions or of such association,
or employees of members of such association for the benefit of
persons other than the employers or the unions or such
association. As used in this subsection, 'employees' may include
the officers, managers and employees of the employer, and the
individual proprietor or partners if the employer is an
individual proprietor or partnership. The policy may provide that
the term ' employees' includes the trustees or their employees,
or both, if their duties are principally connected with such
trusteeship.
  ' (4) Under a policy issued to any person or organization to
which a policy of group life insurance may be issued or delivered
in this state, to insure any class or classes of individuals that
could be insured under such group life policy. + }
  '  { +  NOTE: + } Section 8 was deleted by amendment.
Subsequent sections were not renumbered.'.
  On page 6, line 1, delete 'ORS 743.522 (3)' and insert '
section 7 of this 2013 Act'.
  On page 7, delete lines 15 through 45 and delete page 8.
  On page 9, delete lines 1 through 20 and insert:
  '  { +  SECTION 14. + } ORS 743.522 is amended to read:
  ' 743.522.   { - (1) 'Group health insurance' means that form
of health insurance covering groups of persons described in this
section, with or without one or more members of their families or
one or more of their dependents, or covering one or more members
of the families or one or more dependents of such groups of
persons, and issued upon one of the following bases: - }
  '  { - (a) Under a policy issued to an employer or trustees of
a fund established by an employer, who shall be deemed the
policyholder, insuring employees of such employer for the benefit
of persons other than the employer. As used in this paragraph, '
employees' includes: - }
  '  { - (A) The officers, managers and employees of the
employer; - }
  '  { - (B) The individual proprietor or partners if the
employer is an individual proprietor or partnership; - }
  '  { - (C) The officers, managers and employees of subsidiary
or affiliated corporations; - }
  '  { - (D) The individual proprietors, partners and employees
of individuals and firms, if the business of the employer and
such individual or firm is under common control through stock
ownership, contract or otherwise; - }
  '  { - (E) The trustees or their employees, or both, if their
duties are principally connected with such trusteeship; - }
  '  { - (F) The leased workers of a client employer; and - }
  '  { - (G) Elected or appointed officials if a policy issued to
insure employees of a public body provides that the term '
employees' includes elected or appointed officials. - }
  '  { - (b) Under a policy issued to an association, including a
labor union, that has an active existence for at least one year,
that has a constitution and bylaws and that has been organized
and is maintained in good faith primarily for purposes other than
that of obtaining insurance, which shall be deemed the
policyholder, insuring members, employees or employees of members
of the association for the benefit of persons other than the
association or its officers or trustees. - }
  '  { - (c) Under a policy issued to the trustees of a fund
established by two or more employers in the same or related
industry or by one or more labor unions or by one or more
employers and one or more labor unions or by an association as
described in paragraph (b) of this subsection, insuring employees
of the employers or members of the unions or of such association,
or employees of members of such association for the benefit of
persons other than the employers or the unions or such
association. As used in this paragraph, 'employees' may include
the officers, managers and employees of the employer, and the
individual proprietor or partners if the employer is an
individual proprietor or partnership. The policy may provide that
the term ' employees' includes the trustees or their employees,
or both, if their duties are principally connected with such
trusteeship. - }
  '  { - (d) Under a policy issued to any person or organization
to which a policy of group life insurance may be issued or
delivered in this state, to insure any class or classes of
individuals that could be insured under such group life
policy. - }
  '  { +  (1) As used in this section and ORS 743.533:
  ' (a) 'Client employer' means an employer to whom workers are
provided under contract and for a fee on a leased basis by a
worker leasing company licensed under ORS 656.850.
  ' (b) 'Employee' may include a retired employee.
  ' (c) 'Leased worker' means a worker provided by a worker
leasing company licensed under ORS 656.850. + }
  ' (2) Group health insurance  { + may be + } offered to a
resident of this state under a group health insurance policy
issued to a group other than one  { + of the groups + } described
in   { - subsection (1) of this section may be delivered - }
 { +  section 7 of this 2013 Act + } if:
  ' (a) The Director of the Department of Consumer and Business
Services finds that:
  ' (A) The issuance of the policy is in the best interest of the
public;
  ' (B) The issuance of the policy would result in economies of
acquisition or administration; and
  ' (C) The benefits are reasonable in relation to the premiums
charged; and
  ' (b) The premium for the policy is paid either from funds of a
policyholder, from funds contributed by a covered person or from
both.
  '  { - (3) As used in this section and ORS 743.533: - }
  '  { - (a) 'Client employer' means an employer to whom workers
are provided under contract and for a fee on a leased basis by a
worker leasing company licensed under ORS 656.850. - }
  '  { - (b) 'Employee' may include a retired employee. - }
  '  { - (c) 'Leased worker' means a worker provided by a worker
leasing company licensed under ORS 656.850. - } '.
  In line 25, delete 'ORS 743.522 (3)(b)' and insert ' section 7
(2) of this 2013 Act'.
  In line 27, delete 'ORS 743.522 (3)(b)' and insert ' section 7
(2) of this 2013 Act'.
  In line 32, delete 'ORS 743.522'.
  In line 33, delete '(3)(b)' and insert 'section 7 (2) of this
2013 Act'.
  On page 11, delete lines 6 through 45.
  On page 12, delete lines 1 through 38 and insert:
  '  { +  SECTION 16. + } ORS 743.610, as amended by section 3,
chapter 24, Oregon Laws 2012, is amended to read:
  ' 743.610. (1) As used in this section:
  ' (a) 'Covered person' means an individual who was a
certificate holder under a group health insurance policy:
  ' (A) On the day before a qualifying event; and
  ' (B) During the three-month period ending on the date of the
qualifying event.
  ' (b) 'Qualified beneficiary' means:
  ' (A) A spouse or dependent child of a covered person who, on
the day before a qualifying event, was insured under the covered
person's group health insurance policy; or
  ' (B) A child born to or adopted by a covered person during the
period of the continuation of coverage under this section who
would have been insured under the covered person's policy if the
child had been born or adopted on the day before the qualifying
event.
  ' (c) 'Qualifying event' means the loss of membership in a
group health insurance policy caused by:
  ' (A) Voluntary or involuntary termination of the employment of
a covered person;
  ' (B) A reduction in hours worked by a covered person;
  ' (C) A covered person becoming eligible for Medicare;
  ' (D) A qualified beneficiary losing dependent child status
under a covered person's group health insurance policy;
  ' (E) Termination of membership in the group covered by the
group health insurance policy; or
  ' (F) The death of a covered person.
  ' (2) { + (a) + } A   { - group health insurance policy - }
 { + grandfathered health plan, as defined in ORS 743.730, + }
providing coverage { +  under a group health insurance policy + }
for hospital or medical expenses, other than coverage limited to
expenses from accidents or specific diseases, must contain a
provision that a covered person and any qualified beneficiary may
continue coverage under the policy as provided in this section.
 { +
  ' (b) A group health insurance policy that provides coverage
for one or more of the essential health benefits, other than a
grandfathered health plan, must contain a provision that a
covered person and any qualified beneficiary may continue
coverage under the policy as provided in this section. + }
  ' (3) Continuation of coverage is not available to a covered
person or qualified beneficiary who is eligible for:
  ' (a) Medicare; or
  ' (b)  { + The same + } coverage   { - for hospital or medical
expenses - } under any other program that was not covering the
covered person or qualified beneficiary on the day before a
qualifying event.
  ' (4) The continued coverage   { - need not include benefits
for dental, vision care or prescription drug expense, or any
other benefits under the policy other than hospital and medical
expense benefits - }  { +  must be offered in the same manner as
it is provided to other certificate holders under the group
health insurance policy + }.
  ' (5) A covered person or qualified beneficiary   { - who
wishes to continue coverage must provide the insurer with a
written request for continuation no later than 10 days after the
later of the date of a qualifying event or - }  { +  must submit
a written request for continuation of coverage to the insurer
within the time prescribed by the insurer, except that an insurer
may not require a request to be submitted less than 10 days after
the later of:
  ' (a) The date of a qualifying event; or
  ' (b) + } The date the insurer provides the notice required by
subsection (10) of this section.
  ' (6) A covered person or qualified beneficiary who requests
continuation of coverage shall pay the premium on a monthly basis
and in advance to the insurer or to the employer or policyholder,
whichever the group policy provides. The required premium payment
may not exceed the group premium rate for the insurance being
continued under the group policy as of the date the premium
payment is due.
  ' (7) Continuation of coverage as provided under this section
ends on the earliest of the following dates:
  ' (a) Nine months after the date of the qualifying event that
was the basis for the continuation of coverage.
  ' (b) The end of the period for which the last timely premium
payment for the coverage is received by the insurer.
  ' (c) The premium payment due date coinciding with or next
following the date that continuation of coverage ceases to be
available in accordance with subsection (3) of this section.
  ' (d) The date that the policy is terminated. However, if the
policyholder replaces the terminated policy with similar coverage
under another group health insurance policy:
  ' (A) The covered person and qualified beneficiaries may obtain
coverage under the replacement policy for the balance of the
period that the covered person or qualified beneficiary would

have remained covered under the terminated policy in accordance
with this section; and
  ' (B) The terminated policy must continue to provide benefits
to the covered person and qualified beneficiaries to the extent
of that policy's accrued liabilities and extensions of benefits
as if the replacement had not occurred.
  ' (8) A qualified beneficiary who is not eligible for
continuation of coverage under ORS 743.600 may continue coverage
under this section upon the dissolution of marriage with or the
death of the covered person in the same manner that a covered
person may exercise the right to continue coverage under this
section.
  ' (9) A covered person rehired by an employer no later than
nine months after the layoff of the covered person by the
employer may not be subjected to a waiting period for coverage
under the employer's group health insurance policy if the covered
person was eligible for coverage at the time of the layoff,
regardless of whether the covered person continued coverage
during the layoff.
  ' (10) If an insurer terminates the group health insurance
coverage of a covered person or qualified beneficiary without
providing replacement coverage that meets the criteria in
subsection (7)(d) of this section, the insurer shall provide
written notice to the covered person and any qualified
beneficiary no later than 10 days after the insurer is notified
of the qualifying event under subsection (5) of this section. The
notice shall include information prescribed by the Director of
the Department of Consumer and Business Services.
  ' (11) This section applies only to employers who are not
required to make available continuation of health insurance
benefits under Titles X and XXII of the Consolidated Omnibus
Budget Reconciliation Act of 1985, as amended, P.L. 99-272, April
7, 1986.'.
  On page 18, line 45, delete 'with no more than 25 eligible
employees'.
  On page 20, line 27, delete '(3)(c)' and insert '(3)(e)'.
  In line 30, delete '(3)(c)' and insert '(3)(e)'.
  Delete lines 38 through 45 and delete pages 21 through 25.
  On page 26, delete line 1 and insert:
  '  { +  SECTION 22. + } ORS 743.737 is amended to read:
  ' 743.737.   { - (1) A preexisting condition exclusion in a
small employer health benefit plan shall apply only to a
condition for which medical advice, diagnosis, care or treatment
was recommended or received during the six-month period
immediately preceding the enrollment date of an enrollee or late
enrollee. As used in this section, the enrollment date of an
enrollee shall be the earlier of the effective date of coverage
or the first day of any required group eligibility waiting period
and the enrollment date of a late enrollee shall be the effective
date of coverage. - }
  '  { - (2) A preexisting condition exclusion in a small
employer health benefit plan shall expire as follows: - }
  '  { - (a) For an enrollee, on the earlier of the following
dates: - }
  '  { - (A) Six months after the enrollee's effective date of
coverage; or - }
  '  { - (B) Ten months after the start of any required group
eligibility waiting period. - }
  '  { - (b) For a late enrollee, not later than 12 months after
the late enrollee's effective date of coverage. - }
  '  { - (3) In applying a preexisting condition exclusion to an
enrollee or late enrollee, except as provided in this subsection,
all small employer health benefit plans shall reduce the duration
of the provision by an amount equal to the enrollee's or late
enrollee's aggregate periods of creditable coverage if the most
recent period of creditable coverage is ongoing or ended within
63 days after the enrollment date in the new small employer
health benefit plan. The crediting of prior coverage in
accordance with this subsection shall be applied without regard
to the specific benefits covered during the prior period. This
subsection does not preclude, within a small employer health
benefit plan, application of: - }
  '  { +  (1) A health benefit plan issued to a small employer:
  ' (a) Must cover essential health benefits consistent with 42
U.S.C. 300gg-11.
  ' (b) May: + }
  '  { - (a) - }   { + (A) Require + } an affiliation period that
does not exceed two months for an enrollee or   { - three
months - }   { + 90 days + } for a late enrollee;   { - or - }
  '  { - (b) - }  { +  (B) + }  { + Impose + } an exclusion
period for specified covered services, as established under ORS
743.745, applicable to all individuals enrolling for the first
time in the small employer health benefit plan  { - . - }  { + ;
or + }
  '  { - (4) - }  { +  (C) + }   { - A health benefit plan issued
to a small employer may - }  Not apply a preexisting condition
exclusion to   { - a person under 19 years of age - }  { +  any
enrollee + }.
  '  { - (5) - }  { +  (2) + } Late enrollees in a small employer
health benefit plan may be subjected to a group eligibility
waiting period   { - of up to 12 months or, if 19 years of age or
older, may be subjected to a preexisting condition exclusion for
up to 12 months. If both a waiting period and a preexisting
condition exclusion are applicable to a late enrollee, the
combined period shall not exceed 12 months - }  { +  that does
not exceed 90 days + }.
  '  { - (6) - }  { +  (3) + } Each small employer health benefit
plan shall be renewable with respect to all eligible enrollees at
the option of the policyholder, small employer or contract holder
unless:
  ' (a) The policyholder, small employer or contract holder fails
to pay the required premiums.
  ' (b) The policyholder, small employer or contract holder or,
with respect to coverage of individual enrollees, an enrollee or
a representative of an enrollee engages in fraud or makes an
intentional misrepresentation of a material fact as prohibited by
the terms of the plan.
  ' (c) The number of enrollees covered under the plan is less
than the number or percentage of enrollees required by
participation requirements under the plan.
  ' (d) The small employer fails to comply with the contribution
requirements under the health benefit plan.
  ' (e) The carrier discontinues offering or renewing, or
offering and renewing, all of its small employer health benefit
plans in this state or in a specified service area within this
state. In order to discontinue plans under this paragraph, the
carrier:
  ' (A) Must give notice of the decision to the Department of
Consumer and Business Services and to all policyholders covered
by the plans;
  ' (B) May not cancel coverage under the plans for 180 days
after the date of the notice required under subparagraph (A) of
this paragraph if coverage is discontinued in the entire state
or, except as provided in subparagraph (C) of this paragraph, in
a specified service area;
  ' (C) May not cancel coverage under the plans for 90 days after
the date of the notice required under subparagraph (A) of this
paragraph if coverage is discontinued in a specified service area
because of an inability to reach an agreement with the health
care providers or organization of health care providers to
provide services under the plans within the service area; and

  ' (D) Must discontinue offering or renewing, or offering and
renewing, all health benefit plans issued by the carrier in the
small employer market in this state or in the specified service
area.
  ' (f) The carrier discontinues offering and renewing a small
employer health benefit plan in a specified service area within
this state because of an inability to reach an agreement with the
health care providers or organization of health care providers to
provide services under the plan within the service area. In order
to discontinue a plan under this paragraph, the carrier:
  ' (A) Must give notice to the department and to all
policyholders covered by the plan;
  ' (B) May not cancel coverage under the plan for 90 days after
the date of the notice required under subparagraph (A) of this
paragraph; and
  ' (C) Must offer in writing to each small employer covered by
the plan, all other small employer health benefit plans that the
carrier offers to small employers in the specified service
area. The carrier shall issue any such plans pursuant to the
provisions of ORS 743.733 to 743.737. The carrier shall offer the
plans at least 90 days prior to discontinuation.
  ' (g) The carrier discontinues offering or renewing, or
offering and renewing, a health benefit plan, other than a
grandfathered health plan, for all small employers in this state
or in a specified service area within this state, other than a
plan discontinued under paragraph (f) of this subsection.
  ' (h) The carrier discontinues renewing or offering and
renewing a grandfathered health plan for all small employers in
this state or in a specified service area within this state,
other than a plan discontinued under paragraph (f) of this
subsection.
  ' (i) With respect to plans that are being discontinued under
paragraph (g) or (h) of this subsection, the carrier must:
  ' (A) Offer in writing to each small employer covered by the
plan, all other health benefit plans that the carrier offers to
small employers in the specified service area.
  ' (B) Issue any such plans pursuant to the provisions of ORS
743.733 to 743.737.
  ' (C) Offer the plans at least 90 days prior to
discontinuation.
  ' (D) Act uniformly without regard to the claims experience of
the affected policyholders or the health status of any current or
prospective enrollee.
  ' (j) The Director of the Department of Consumer and Business
Services orders the carrier to discontinue coverage in accordance
with procedures specified or approved by the director upon
finding that the continuation of the coverage would:
  ' (A) Not be in the best interests of the enrollees; or
  ' (B) Impair the carrier's ability to meet contractual
obligations.
  ' (k) In the case of a small employer health benefit plan that
delivers covered services through a specified network of health
care providers, there is no longer any enrollee who lives,
resides or works in the service area of the provider network.
  ' (L) In the case of a health benefit plan that is offered in
the small employer market only   { - through - }   { + to + } one
or more bona fide associations, the membership of an employer in
the association ceases and the termination of coverage is not
related to the health status of any enrollee.
  '  { - (7) - }  { +  (4) + } A carrier may modify a small
employer health benefit plan at the time of coverage renewal. The
modification is not a discontinuation of the plan under
subsection   { - (6)(e) - }  { +  (3)(e) + }, (g) and (h) of this
section.
  '  { - (8) - }  { +  (5) + } Notwithstanding any provision of
subsection   { - (6) - }  { +  (3) + } of this section to the
contrary, a carrier may not rescind the coverage of an enrollee
in a small employer health benefit plan unless:
  ' (a) The enrollee or a person seeking coverage on behalf of
the enrollee:
  ' (A) Performs an act, practice or omission that constitutes
fraud; or
  ' (B) Makes an intentional misrepresentation of a material fact
as prohibited by the terms of the plan;
  ' (b) The carrier provides at least 30 days' advance written
notice, in the form and manner prescribed by the department, to
the enrollee; and
  ' (c) The carrier provides notice of the rescission to the
department in the form, manner and time frame prescribed by the
department by rule.
  '  { - (9) - }  { +  (6) + } Notwithstanding any provision of
subsection   { - (6) - }  { + (3) + } of this section to the
contrary, a carrier may not rescind a small employer health
benefit plan unless:
  ' (a) The small employer or a representative of the small
employer:
  ' (A) Performs an act, practice or omission that constitutes
fraud; or
  ' (B) Makes an intentional misrepresentation of a material fact
as prohibited by the terms of the plan;
  ' (b) The carrier provides at least 30 days' advance written
notice, in the form and manner prescribed by the department, to
each plan enrollee who would be affected by the rescission of
coverage; and
  ' (c) The carrier provides notice of the rescission to the
department in the form, manner and time frame prescribed by the
department by rule.
  '  { - (10) - }  { +  (7)(a) + } A carrier may continue to
enforce reasonable employer participation and contribution
requirements on small employers   { - applying for coverage - } .
However, participation and contribution requirements shall be
applied uniformly among all small employer groups with the same
number of eligible employees applying for coverage or receiving
coverage from the carrier. In determining minimum participation
requirements, a carrier shall count only those employees who are
not covered by an existing group health benefit plan, Medicaid,
Medicare, TRICARE, Indian Health Service or a publicly sponsored
or subsidized health plan, including but not limited to the
medical assistance program under ORS chapter 414.
  '  { +  (b) A carrier may not deny a small employer's
application for coverage under a health benefit plan based on
participation or contribution requirements but may require small
employers that do not meet participation or contribution
requirements to enroll during the open enrollment period
beginning November 15 and ending December 15. + }
  '  { - (11) - }  { +  (8) + } Premium rates for small employer
health benefit plans shall be subject to the following
provisions:
  ' (a) Each carrier must file with the department the initial
geographic average rate and any changes in the geographic average
rate with respect to each health benefit plan issued by the
carrier to small employers.
  '  { - (b)(A) The premium rates charged during a rating period
for health benefit plans issued to small employers may not vary
from the geographic average rate by more than 50 percent on or
after January 1, 2008, except as provided in subparagraph (D) of
this paragraph - } .
  '  { - (B) - }  { +  (b)(A) + } The variations in premium rates
 { - described in subparagraph (A) of this paragraph - }  { +
charged during a rating period for health benefit plans issued to
small employers + } shall be based solely on the factors
specified in subparagraph   { - (C) - }  { +  (B) + } of this
paragraph. A carrier may elect which of the factors specified in
subparagraph   { - (C) - }  { +  (B) + } of this paragraph apply
to premium rates for health benefit plans for small employers.
 { - The factors that are based on contributions or participation
may vary with the size of the employer. - }  All other factors
must be applied in the same actuarially sound way to all small
employer health benefit plans.
  '  { - (C) - }  { +  (B) + } The variations in premium rates
described in subparagraph (A) of this paragraph may be based
 { + only + } on one or more of the following factors { +  as
prescribed by the department by rule + }:
  ' (i) The ages of enrolled employees and their dependents { + ,
except that the rate for adults may not vary by more than three
to one + };
  '  { - (ii) The level at which the small employer contributes
to the premiums payable for enrolled employees and their
dependents; - }
  '  { - (iii) The level at which eligible employees participate
in the health benefit plan; - }
  '  { - (iv) - }  { +  (ii) + } The level at which enrolled
employees and their dependents { +  18 years of age and older + }
engage in tobacco use  { - ; - }  { + , except that the rate may
not vary by more than 1.5 to one; + }  { +  and + }
  '  { - (v) The level at which enrolled employees and their
dependents engage in health promotion, disease prevention or
wellness programs; - }
  '  { - (vi) The period of time during which a small employer
retains uninterrupted coverage in force with the same carrier;
and - }
  '  { - (vii) - }  { +  (iii) + } Adjustments to reflect
 { - the provision of benefits not required to be covered by the
basic health benefit plan and - }  differences in family
composition.
  '  { - (D)(i) The premium rates determined in accordance with
this paragraph may be further adjusted by a carrier to reflect
the expected claims experience of the covered small employer, but
the extent of this adjustment may not exceed five percent of the
annual premium rate otherwise payable by the small employer. The
adjustment under this subparagraph may not be cumulative from
year to year. - }
  '  { - (ii) The premium rates adjusted under this subparagraph,
except rates for small employers with 25 or fewer employees, are
not subject to the provisions of subparagraph (A) of this
paragraph. - }
  '  { - (E) - }  { +  (C) + } A carrier shall apply the
carrier's schedule of premium rate variations as approved by the
department and in accordance with this paragraph. Except as
otherwise provided in this section, the premium rate established
by a carrier for a small employer health benefit plan shall apply
uniformly to all employees of the small employer enrolled in that
plan.
  ' (c) Except as provided in paragraph (b) of this subsection,
the variation in premium rates between different health benefit
plans offered by a carrier to small employers must be based
solely on objective differences in plan design or coverage { + ,
age, tobacco use and family composition + } and must not include
differences based on the risk characteristics of groups assumed
to select a particular health benefit plan.
  ' (d) A carrier may not increase the rates of a health benefit
plan issued to a small employer more than once in a 12-month
period. Annual rate increases shall be effective on the plan
anniversary date of the health benefit plan issued to a small
employer. The percentage increase in the premium rate charged to
a small employer for a new rating period may not exceed the sum
of the following:

  ' (A) The percentage change in the geographic average rate
measured from the first day of the prior rating period to the
first day of the new period; and
  ' (B) Any adjustment attributable to changes in age  { - ,
except an additional adjustment may be made to reflect the
provision of benefits not required to be covered by the basic
health benefit plan - }  and differences in family composition.
  ' (e) Premium rates for small employer health benefit plans
shall comply with the requirements of this section.
  '  { - (12) - }  { +  (9) + } In connection with the offering
for sale of any health benefit plan to a small employer, each
carrier shall make a reasonable disclosure as part of its
solicitation and sales materials of:
  ' (a) The full array of health benefit plans that are offered
to small employers by the carrier;
  ' (b) The authority of the carrier to adjust rates { +  and
premiums + }, and the extent to which the carrier will consider
age,  { +  tobacco use, + } family composition and geographic
factors in establishing and adjusting rates  { - ; - }   { + and
premiums; and
  ' (c) The benefits and premiums for all health insurance
coverage for which the employer is qualified. + }
  '  { - (c) Provisions relating to renewability of policies and
contracts; and - }
  '  { - (d) Provisions affecting any preexisting condition
exclusion. - }
  '  { - (13)(a) - }  { +  (10)(a) + } Each carrier shall
maintain at its principal place of business a complete and
detailed description of its rating practices and renewal
underwriting practices relating to its small employer health
benefit plans, including information and documentation that
demonstrate that its rating methods and practices are based upon
commonly accepted actuarial practices and are in accordance with
sound actuarial principles.
  ' (b) A carrier offering a small employer health benefit plan
shall file with the department at least once every 12 months an
actuarial certification that the carrier is in compliance with
ORS 743.733 to 743.737 and that the rating methods of the carrier
are actuarially sound. Each certification shall be in a uniform
form and manner and shall contain such information as specified
by the department. A copy of each certification shall be retained
by the carrier at its principal place of business.  { + A carrier
is not required to file the actuarial certification under this
paragraph if the department has approved the carrier's rate
filing within the preceding 12-month period. + }
  ' (c) A carrier shall make the information and documentation
described in paragraph (a) of this subsection available to the
department upon request. Except as provided in ORS 743.018 and
except in cases of violations of ORS 743.733 to 743.737, the
information shall be considered proprietary and trade secret
information and shall not be subject to disclosure to persons
outside the department except as agreed to by the carrier or as
ordered by a court of competent jurisdiction.
  '  { - (14) - }  { +  (11) + } A carrier shall not provide any
financial or other incentive to any insurance producer that would
encourage the insurance producer to market and sell health
benefit plans of the carrier to small employer groups based on a
small employer group's anticipated claims experience.
  '  { - (15) - }  { +  (12) + } For purposes of this section,
the date a small employer health benefit plan is continued shall
be the anniversary date of the first issuance of the health
benefit plan.
  '  { - (16) - }  { +  (13) + } A carrier must include a
provision that offers coverage to all eligible employees of a
small employer and to all dependents of the eligible employees to
the extent the employer chooses to offer coverage to dependents.
  '  { - (17) - }  { +  (14) + } All small employer health
benefit plans shall contain special enrollment periods during
which eligible employees and dependents may enroll for coverage,
as provided   { - in 42 U.S.C.  300gg as amended and in effect on
February 17, 2009 - }  { +  by federal law and rules adopted by
the department + }.
  '  { - (18) - }  { +  (15) + } A small employer health benefit
plan may not impose annual or lifetime limits on the dollar
amount of   { - the - } essential health benefits
 { - prescribed by the United States Secretary of Health and
Human Services pursuant to 42 U.S.C.  300gg-11, except as
permitted by federal law - } .
  '  { - (19) - }  { +  (16) + } This section does not require a
carrier to actively market, offer, issue or accept applications
for a grandfathered health plan or from a small employer not
eligible for coverage under such a plan   { - as provided by the
Patient Protection and Affordable Care Act (P.L. 111-148) as
amended by the Health Care and Education Reconciliation Act (P.L.
111-152) - } .'.
  On page 27, line 43, delete 'individ-'.
  Delete lines 44 and 45 and insert 'applicant for individual or
small group health benefit plan coverage to provide
health-related information only for the purpose of health care
management and'.
  On page 28, delete lines 2 through 5 and insert:
  ' (2) Except for an individual grandfathered health plan, if a
carrier requires an applicant to provide health-related
information, the carrier must also notify the applicant, in the
form and manner prescribed by the Department of Consumer and
Business Services, that the information may not be used to deny
coverage.'.
  On page 43, line 41, delete '(3)(e)'.
  On page 62, line 20, delete 'ORS'.
  In line 21, delete '743.522 (3)(c)' and insert 'section 7 (3)
of this 2013 Act'.
  In line 23, delete 'ORS'.
  In line 24, delete '743.522 (3)(c)' and insert 'section 7 (3)
of this 2013 Act'.
  In line 37, delete 'ORS 743.522 (3)(c)' and insert ' section 7
(3) of this 2013 Act'.
  On page 67, line 37, delete 'ORS 743.522 (3)(b)' and insert '
section 7 (2) of this 2013 Act'.
  On page 68, after line 42, insert:
  '  { +  SECTION 61a. + } ORS 743.801, as amended by section 5,
chapter 24, Oregon Laws 2012, is amended to read:
  ' 743.801. As used in this section and ORS 743.803, 743.804,
743.806, 743.807, 743.808, 743.811, 743.814, 743.817, 743.819,
743.821, 743.823, 743.827, 743.829, 743.831, 743.834, 743.837,
743.839, 743.854, 743.856, 743.857, 743.858, 743.859, 743.861,
743.862, 743.863, 743.864, 743.894, 743.911, 743.912, 743.913,
743.917 and 743.918:
  ' (1) 'Adverse benefit determination' means an insurer's
denial, reduction or termination of a health care item or
service, or an insurer's failure or refusal to provide or to make
a payment in whole or in part for a health care item or service,
that is based on the insurer's:
  ' (a) Denial of eligibility for or termination of enrollment in
a health benefit plan;
  ' (b) Rescission or cancellation of a policy or certificate;
  ' (c) Imposition of a preexisting condition exclusion as
defined in ORS 743.730, source-of-injury exclusion, network
exclusion, annual benefit limit or other limitation on otherwise
covered items or services;
  ' (d) Determination that a health care item or service is
experimental, investigational or not medically necessary,
effective or appropriate; or
  ' (e) Determination that a course or plan of treatment that an
enrollee is undergoing is an active course of treatment for
purposes of continuity of care under ORS 743.854.
  ' (2) 'Authorized representative' means an individual who by
law or by the consent of a person may act on behalf of the
person.
  ' (3) 'Enrollee' has the meaning given that term in ORS
743.730.
  ' (4) 'Grievance' means:
  ' (a) A communication from an enrollee or an authorized
representative of an enrollee expressing dissatisfaction with an
adverse benefit determination, without specifically declining any
right to appeal or review, that is:
  ' (A) In writing, for an internal appeal or an external review;
or
  ' (B) In writing or orally, for an expedited response described
in ORS 743.804 (2)(d) or an expedited external review; or
  ' (b) A written complaint submitted by an enrollee or an
authorized representative of an enrollee regarding the:
  ' (A) Availability, delivery or quality of a health care
service;
  ' (B) Claims payment, handling or reimbursement for health care
services and, unless the enrollee has not submitted a request for
an internal appeal, the complaint is not disputing an adverse
benefit determination; or
  ' (C) Matters pertaining to the contractual relationship
between an enrollee and an insurer.
  ' (5) 'Health benefit plan' has the meaning given that term in
ORS 743.730.
  ' (6) 'Independent practice association' means a corporation
wholly owned by providers, or whose membership consists entirely
of providers, formed for the sole purpose of contracting with
insurers for the provision of health care services to enrollees,
or with employers for the provision of health care services to
employees, or with a group, as described in   { - ORS 743.522 - }
 { + section 7 of this 2013 Act + }, to provide health care
services to group members.
  ' (7) 'Insurer' includes a health care service contractor as
defined in ORS 750.005.
  ' (8) 'Internal appeal' means a review by an insurer of an
adverse benefit determination made by the insurer.
  ' (9) 'Managed health insurance' means any health benefit plan
that:
  ' (a) Requires an enrollee to use a specified network or
networks of providers managed, owned, under contract with or
employed by the insurer in order to receive benefits under the
plan, except for emergency or other specified limited service; or
  ' (b) In addition to the requirements of paragraph (a) of this
subsection, offers a point-of-service provision that allows an
enrollee to use providers outside of the specified network or
networks at the option of the enrollee and receive a reduced
level of benefits.
  ' (10) 'Medical services contract' means a contract between an
insurer and an independent practice association, between an
insurer and a provider, between an independent practice
association and a provider or organization of providers, between
medical or mental health clinics, and between a medical or mental
health clinic and a provider to provide medical or mental health
services. 'Medical services contract' does not include a contract
of employment or a contract creating legal entities and ownership
thereof that are authorized under ORS chapter 58, 60 or 70, or
other similar professional organizations permitted by statute.
  ' (11)(a) 'Preferred provider organization insurance' means any
health benefit plan that:
  ' (A) Specifies a preferred network of providers managed, owned
or under contract with or employed by an insurer;
  ' (B) Does not require an enrollee to use the preferred network
of providers in order to receive benefits under the plan; and
  ' (C) Creates financial incentives for an enrollee to use the
preferred network of providers by providing an increased level of
benefits.
  ' (b) 'Preferred provider organization insurance' does not mean
a health benefit plan that has as its sole financial incentive a
hold harmless provision under which providers in the preferred
network agree to accept as payment in full the maximum allowable
amounts that are specified in the medical services contracts.
  ' (12) 'Prior authorization' means a determination by an
insurer prior to provision of services that the insurer will
provide reimbursement for the services. 'Prior authorization'
does not include referral approval for evaluation and management
services between providers.
  ' (13) 'Provider' means a person licensed, certified or
otherwise authorized or permitted by laws of this state to
administer medical or mental health services in the ordinary
course of business or practice of a profession.
  ' (14) 'Utilization review' means a set of formal techniques
used by an insurer or delegated by the insurer designed to
monitor the use of or evaluate the medical necessity,
appropriateness, efficacy or efficiency of health care services,
procedures or settings.'.
  On page 71, line 41, after '743.777,' insert '743.801,'.
  In line 43, delete 'and 61' and insert ', 61 and 61a'.
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