HB 688 -- Health Insurance

Co-Sponsors:  Harlan, Shields

This bill makes several changes to health insurance laws.  In
its major provisions, the bill:

(1)  Establishes the Advisory Commission on Health Insurance
Mandates to be composed of the Director of the Department of
Insurance, the chairperson of the Insurance Committee of the
House of Representatives, one member of the minority party of
the House of Representatives, the chairperson of the Insurance
and Housing Committee of the Senate, and one member of the
minority party of the Senate.  The commission is charged with
studying the costs and benefits of each health insurance benefit
or offer mandated by Missouri law.  The commission must report
by January 1, 2002, the results of its study to the Governor,
the Speaker of the House of Representatives, and the President
Pro Tem of the Senate;

(2)  Allows individuals to be eligible for coverage through the
Missouri Health Insurance Pool (also referred to as the "high
risk pool") if they have been refused coverage, offered coverage
at a rate exceeding 135% of the standard rate, or had coverage
for not less than 12 months.  The rate for coverage under the
pool is 135% of the standard rate for individuals who had
continuous coverage through a date not less than 63 days prior
to the effective date of pool coverage or who enroll during the
open enrollment period.  The rate for other eligible individuals
is 200% of the standard rate;

(3)  Modifies the Small Employer Health Insurance Availability
Act so that it complies with the federal Health Insurance
Portability and Accountability Act of 1996 (P.L. 104-191).  A
small employer employs 2 to 50 employees under the bill's
revised provisions.  Small employer plans are allowed to apply
pre-existing condition exclusions during the first 12 months of
coverage but are required to waive the exclusions for the period
of time that an individual has coverage continuous to a date not
less than 63 days prior to obtaining the new coverage.  The
exclusion must also be waived if the individual's prior coverage
is for a period of 12 of the most recent 18 months.  Insurers
may discontinue offering a plan under certain conditions.  No
pre-existing condition exclusions are allowed relating to
pregnancy or a condition for which medical advice was received
during a period when the person had qualifying coverage.  The
bill also removes from the act language that requires a husband
and wife working for the same small employer to be considered
one eligible employee;

(4)  Requires the Department of Insurance to administer a grant
program to assist in the establishment of health insurance
purchasing cooperatives.  Each grant is limited to $25,000.
Funds for the grants must be appropriated from general revenue
and the total amount of grants may not exceed $400,000; and

(5)  Prohibits insurance companies from requiring the purchase
of life insurance as a condition of purchasing health insurance.

The bill also includes several provisions with an effective date
of July 1, 2002.  Those provisions:

(1)  Require insurers to issue individual policies of health
insurance without medical underwriting if the applicant had
prior creditable coverage which was terminated within 63 days
prior to the application, the period of creditable coverage is
not less than 12 months, and the individual has exhausted any
COBRA coverage.  An insurer is not required to issue individual
health benefit coverage without medical underwriting when the
plans constitute 2% or more of that insurer's earned premium on
an annual basis from individual health plans.  The bill also
includes several rating restrictions for individual health
insurance policies;

(2)  Establish an individual health benefit reinsurance
association and require all entities providing health insurance
or health benefits subject to state insurance regulation to be
members of the association.  Those entities that provide plans
only for Medicaid recipients are exempted from membership.  The
association's board is responsible for developing a plan to
provide for the sharing of losses related to individuals
enrolled in health plans without medical underwriting.  Board
members are immune from civil liability for performing duties
required by the bill's provisions;

(3)  Allow entities issuing individual health insurance policies
to apply pre-existing condition exclusions during the first 12
months of coverage but are required to waive the exclusions for
the period of time that an individual has coverage continuous to
a date not less than 63 days prior to obtaining new coverage; and

(4)  Require health insurers to follow certain procedures if
they close a block of business.

Missouri House of Representatives
Last Updated September 13, 2001 at 2:03 pm