HCS HB 818 -- MISSOURI HEALTH INSURANCE PORTABILITY AND
ACCOUNTABILITY ACT

SPONSOR:  Wilson, 130 (Ervin)

COMMITTEE ACTION:  Voted "do pass" by the Special Committee on
Health Insurance by a vote of 6 to 1.

This substitute establishes the Missouri Health Insurance
Portability and Accountability Act and changes the laws regarding
the Missouri Health Insurance Pool and small employer insurance
availability.

MISSOURI HEALTH INSURANCE PORTABILITY AND ACCOUNTABILITY ACT

The substitute:

(1)  Establishes the Missouri Health Insurance Portability and
Accountability Act with provisions that will apply to small,
large, and individual group health insurance markets which:

(a)  Bring the Missouri Health Insurance Pool into compliance
with the federal Health Insurance Portability and Accountability
Act (HIPPA);

(b)  Defines the terms needed to carry out the provisions of the
substitute;

(c)  Allow an entity providing a group health plan to exclude or
limit plan benefits, for no more than 18 months, if a medical
condition received medical consideration within six months of
enrolling into the plan;

(d)  Allow an entity providing a group health plan to reduce
pre-existing condition exclusions by the amount of creditable
coverage a participant has accrued, subject to restrictions;

(e)  Prohibit an entity providing group health insurance coverage
from applying pre-existing conditions when creditable coverage
applies;

(f)  Require carriers to provide a certification of creditable
coverage;

(g)  Require a health insurance issuer to provide special
enrollment periods when a health insurance issuer permits an
employee or a dependent who is eligible but not enrolled for
coverage, subject to restrictions; and

(h)  Allow a health management organization to provide an
affiliation period for coverage if no pre-existing condition
exclusions are imposed, the period is applied uniformly and does
not exceed three months or the period starts on the enrollment
date and runs concurrently with waiting periods;

(2)  Requires an entity offering group health insurance coverage
to follow standards prohibiting discrimination of eligible
individuals based on physical or mental health, claims
experience, medical history, genetics, insurability, or
disability and premiums based on health status; however, there
will be no restrictions on employer contributions or from
offering discounts or rebates for adherence to health programs;

(3)  Requires the health insurance issuer to renew or continue
coverage if opted by a health plan sponsor or individual, subject
to restrictions;

(4)  Prohibits an issuer from discontinuing a type of coverage or
all health insurance coverage offered in the market subject to
some exceptions, but allows modifications to the coverage;

(5)  Prohibits a renewal from being denied to the employer unless
it is denied to all employers in the association;

(6)  Requires a premium-only cafeteria plan be provided by a
carrier when employers contribute to a health plan for an
employee.  Currently, there are premium only, child care, and
reimbursed medical expenses parts of a cafeteria plan;

(7)  Allows an employer the ability to pursue a
define-contribution model without a group plan;

(8)  Allows an issuer to discontinue or not renew a type of
coverage or all health insurance coverage offered in the market,
subject to specified exceptions;

(9)  Requires a health insurance issuer electing to discontinue
offering all coverage in a defined market to provide notice and
discontinue or not renew all health insurance coverage in the
market.  The issuer cannot re-enter the market for five years;

(10)  Allows a health insurance issuer offering coverage in the
individual market to modify coverage at the time of renewal only
if the change is applied uniformly among all individual policies;

(11)  Prohibits an association from denying coverage renewal to
an individual unless the association doesn't renew all coverage;

(12)  Requires an insurer to provide a certification of coverage
to the insured;

(13)  Requires small employer health plans to comply with the
requirements used by small employer carriers when determining
whether to provide coverage to an employer.  A carrier is
prohibited from requiring minimum participation by greater than
100% of groups of three or less eligible employees or greater
than 75% of groups of three or more employees;

(14)  Allows a small employer carrier to not offer coverage to an
employer or employee if the employer or employee is not
physically located in the carrier's established geographic
service area or there is no capability to deliver services
adequately; and

(15)  Requires each small employer carrier to actively market all
plans sold in the small group market to eligible small employers.

MISSOURI HEALTH INSURANCE POOL

The substitute:

(1)  Provides additional reasons for removing board members from
the Missouri Health Insurance Pool Board;

(2)  Requires the pool to provide a revised business plan to the
Director of the Department of Insurance, Financial Institutions,
and Professional Registration;

(3)  Allows the board to administer separate accounting for
health coverage tax credit coverage;

(4)  Requires the board to file a report on the activities and
accounts of the risks ceded into the reinsurance pool;

(5)  Establishes criteria for determining the individuals
eligible for the high-risk pool and for determining when
notifications need to be provided to pool members regarding
underwriting, eligibility, premiums, and changes in coverage;

(6)  Provides application forms of health insurance plans and
insurance arrangements that provide coverage to individuals or
employers;

(7)  Gives pool members voting rights;

(8)  Allows pool members, excluding insurance arrangements, to
decide which individuals or groups may be ceded into the pool and
requires pool members ceding a risk to the pool to retain at
least 30% of the risk and to pay a premium as determined by the
rules governing the pool.  The premium must be at least the
amount charged to the insured.  Risks may be ceded to the pool
for as long as the insured is covered.  A pool member may cede
risk into the pool if any portion of the premium is paid by any
employer;

(9)  Allows pool members the option of providing coverage to any
person or group;

(10)  Allows pool members to request verification of employment
or residence for eligibility determination;

(11)  Allows the pool to terminate coverage for those individuals
who fail to meet eligibility requirements;

(12)  Requires rates charged to pool members to be between 125%
and 135% of the standard rate charge;

(13)  Requires pool coverage to exclude expenses for pre-existing
conditions;

(14)   Excludes individuals without significant gaps in coverage
from pre-existing condition exclusions; and

(15)  Exempts the pool board administrator or employees from
legal action pertaining to participation in the required duties
of the pool.

FISCAL NOTE:  Estimated Cost on General Revenue Fund of $0 in
FY 2008, Unknown could exceed $400,000,000 in FY 2009, and
Unknown could exceed $800,000,000 in FY 2010.  No impact on Other
State Funds in FY 2008, FY 2009, and FY 2010.

PROPONENTS:  Supporters say that the bill is a step toward
improving portability and accessibility of insurance by providing
equitable tax treatment for small businesses with the provision
for a premium-only cafeteria plan; allowing more portability of
insurance plans; promoting individual ownership of plans and
encouraging continuity of care; bringing the Missouri Health
Insurance Pool into HIPPA compliance which will open
opportunities for grants and allow employers to cede risk into
the high-risk pool; decreasing the cost of insurance; increasing
the number of small businesses that would offer health insurance;
empowering employees to make health care decisions; and taking
the burden off of employers.

Testifying for the bill were Representative Ervin; AETNA,
Incorporated; Missouri Hospital Association; James Henderson,
Dynamic Sales Company, Incorporated; National Federation of
Independent Business; Missouri Retailers Association; and Jack
Schroeder.

OPPONENTS:  Those who oppose the bill say that several items
still need to be considered including the necessity of subsides
and premium offset programs; the impact of the purposely
uninsured population; the transparency between health benefit
plans, markets, and carriers; mandatory participation
requirements; and how to properly cede risk into the high-risk
pool.

Testifying against the bill were Michael Abroe, America's Health
Insurance Plans; Blue Cross Blue Shield of Kansas City; James
Coyne, Coyne Agency, Incorporated; Coventry Health Care; Greater
Kansas City Chamber of Commerce; and United Healthcare.

OTHERS:  Others testifying on the bill say that the provisions in
the bill should always reflect the best interests of the consumer
and the individual market.

Testifying on the bill were Missouri Chamber of Commerce and
Industry; and Golden Rule Insurance Company.

Missouri House of Representatives
94th General Assembly, 1st Regular Session
Last Updated July 25, 2007 at 11:20 am