HB 229 -- HEALTH INSURANCE (Ervin)

COMMITTEE OF ORIGIN:  Special Committee on Health Insurance

This bill changes the laws regarding health insurance.

INCOME TAX DEDUCTIONS

The bill removes the deduction for a self-employed, Missouri
resident's individual health insurance premiums from his or her
adjusted gross income when computing his or her Missouri taxable
income (Section 143.111, RSMo).

HEALTH MAINTENANCE ORGANIZATIONS (HMOs)

The bill requires proof that a dependent child is incapable of
maintaining employment due to a mental or physical handicap and
is dependent upon the policy holder for support and maintenance
to be submitted to the insured's HMO within 31 days after the
child has attained the age when the child's coverage is to be
terminated instead of the current at least 31 days (Section
354.536).

GROUP HEALTH INSURANCE POLICIES

Currently, group health insurance policies must contain a
provision that specifies any exclusions and limitations to the
policy in regard to a disease or physical condition that an
individual was treated for during the 12 months prior to the
enrollment date of an individual's policy.  The bill limits the
exclusions and limitations to the prior six months before an
individual becomes covered under the policy.  Exclusions and
limitations cannot apply to a loss or disability that occurred
after the enrollment date or during the 18-month period
thereafter in the case of a late enrollee (Section 376.426).

The bill requires proof that a dependent child is incapable of
maintaining employment due to a mental or physical handicap and
is dependent upon the policy holder for support and maintenance
to be submitted to the health insurer within 31 days after the
dependent child has attained the age when coverage is to be
terminated in order to sustain coverage instead of the current at
least 31 days (Section 376.426).

MISSOURI HEALTH INSURANCE PORTABILITY AND ACCOUNTABILITY ACT

The State Children's Health Insurance Program (SCHIP) coverage is
added to the list of credible coverages for individuals (Section
376.450.1).

The definition for "waiting period" as it relates to the Missouri
Health Insurance Portability and Accountability Act is revised to
be a time period that must pass before coverage for an employee
or dependent who is otherwise eligible to enroll in a group
health plan becomes effective.  Any time period before late or
special enrollment is not considered a waiting period for late or
special enrollees.  A waiting period begins on the date an
individual submits an application for coverage and ends when the
application for coverage is approved, denied, or lapses (Section
376.450.1).

Health insurance issuers offering group coverage will be required
to provide a special enrollment period for a dependent in the
case of a placement for adoption (Section 376.450.6).

EMPLOYER REQUIREMENTS

If an employer provides health insurance to an employee and the
employee pays any portion of the cost of the premium, the
employer must also provide a premium-only cafeteria plan or a
health reimbursement arrangement (Section 376.453).

Employees are allowed to use funds from one or more employer
health reimbursement arrangement (HRA) only plans to help pay for
individual health insurance coverage.  HRAs are employee benefit
plans provided by an employer which establish an account funded
solely by the employer to reimburse the employee for qualified
medical expenses incurred by the employee or his or her family.
The HRA establishes a maximum defined coverage amount for a
defined coverage period and carries forward any unused funds at
the end of the coverage period to subsequent coverage periods
(Section 376.1600).

DEPARTMENT REPORTING

By January 1, 2010, the Director of the Department of Insurance,
Financial Institutions and Professional Registration must provide
recommendations to the General Assembly of changes to remove any
unnecessary barriers that limit the entry of new health insurance
products into the Missouri insurance market.  The director must
also examine proposals adopted in other states that streamline
the regulatory processes to allow insurance companies to market
new and existing products more easily (Section 376.1618).

INDIVIDUAL HEALTH INSURANCE POLICIES

The bill requires proof that a dependent child is incapable of
maintaining employment due to a mental or physical handicap and
is dependent upon the policy holder for support and maintenance
to be submitted to the health insurer within 31 days after the
dependent child has attained the age when coverage is to be
terminated in order to sustain coverage instead of the current at
least 31 days (Section 376.776).

SMALL EMPLOYER HEALTH INSURANCE AVAILABILITY ACT

The definition of "dependent" is revised as it relates to
insurance coverage to be a person that is a spouse, an unmarried
child who resides in Missouri and is younger than 25 years of age
and is not covered by any group or individual health benefit plan
or entitled to federal Social Security assistance benefits, or an
unmarried child of any age who is disabled and dependent upon his
or her parent (Section 379.930.2).

A small employer insurance carrier must reasonably compensate an
agent or broker for the sale of any small employer health benefit
plan, and a small employer carrier must maintain and issue all
health benefit plans it actively markets to small employers in
the state (Section 379.940.2).

Currently, a small employer insurance carrier will not be in
violation of any unfair trade practice if the small employer
charges a lesser premium or deductible for employees who do not
use tobacco products.  The bill revises the definition of "unfair
trade practice" by using the provisions that apply to all
insurance carriers in Missouri instead of only health and
accident insurance companies (Section 379.952.6).

FISCAL NOTE:  No impact on state funds in FY 2010, FY 2011, and
FY 2012.

Missouri House of Representatives
95th General Assembly, 1st Regular Session
Last Updated November 17, 2009 at 9:24 am