Citations Affected: IC 27-8.
Synopsis: Waiver of preexisting conditions. Provides that an
individual policy of accident and sickness insurance or a group policy
of accident and sickness insurance under which a certificate of
coverage is issued to an individual member of a nonemployer based
association or discretionary group may contain a waiver of coverage for
a specified condition under certain circumstances. Specifies that an
offer of coverage under a policy that includes a waiver does not
preclude eligibility for a comprehensive health insurance association
policy.
Effective: July 1, 2003.
January 9, 2003, read first time and referred to Committee on Health and Provider
Services.
A BILL FOR AN ACT to amend the Indiana Code concerning
insurance.
SECTION 1.
IC 27-8-5-1
IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2003]: Sec. 1. (a) The term "policy of accident
and sickness insurance", as used in this chapter, includes any policy or
contract covering one (1) or more of the kinds of insurance described
in Class 1(b) or 2(a) of
IC 27-1-5-1.
Such policies may be on the
individual basis under this section and sections 2 through 9 of this
chapter, on the group basis under this section and sections 16 through
19 19.2 of this chapter, on the franchise basis under this section and
section 11 of this chapter, or on a blanket basis under section 15 of this
chapter and (except as otherwise expressly provided in this chapter)
shall be exclusively governed by this chapter.
(b) No policy of accident and sickness insurance may be issued or
delivered to any person in this state, nor may any application, rider, or
endorsement be used in connection with an accident and sickness
insurance policy until a copy of the form of the policy and of the
classification of risks and the premium rates, or, in the case of
assessment companies, the estimated cost pertaining thereto, have been
filed with the commissioner. This section is applicable also to
assessment companies and fraternal benefit associations or societies.
(c) No policy of accident and sickness insurance may be issued, nor
may any application, rider, or endorsement be used in connection with
a policy of accident and sickness insurance, until the expiration of
thirty (30) days after it has been filed under subsection (b), unless the
commissioner gives his written approval to it before the expiration of
the thirty (30) day period.
(d) The commissioner may, within thirty (30) days after the filing of
any form under subsection (b), disapprove the form:
(1) if, in the case of an individual accident and sickness form, the
benefits provided therein are unreasonable in relation to the
premium charged; or
(2) if, in the case of an individual, blanket, or group accident and
sickness form, it contains a provision or provisions that are unjust,
unfair, inequitable, misleading, or deceptive or that encourage
misrepresentation of the policy.
(e) If the commissioner notifies the insurer that filed a form that the
form does not comply with this section, it is unlawful thereafter for the
insurer to issue the form or use it in connection with any policy. In the
notice given under this subsection, the commissioner shall specify the
reasons for his disapproval and state that a hearing will be granted
within twenty (20) days after request in writing by the insurer.
(f) The commissioner may at any time, after a hearing of which not
less than twenty (20) days written notice has been given to the insurer,
withdraw his approval of any form filed under subsection (b) on any of
the grounds stated in this section. It is unlawful for the insurer to issue
the form or use it in connection with any policy after the effective date
of the withdrawal of approval. The notice of any hearing called under
this subsection must specify the matters to be considered at the hearing,
and any decision affirming disapproval or directing withdrawal of
approval under this section must be in writing and must specify the
reasons for the decision.
(g) Any order or decision of the commissioner under this section is
subject to review under IC 4-21.5.
SECTION 2.
IC 27-8-5-2.5
IS AMENDED TO READ AS
FOLLOWS [EFFECTIVE JULY 1, 2003]: Sec. 2.5. (a) As used in this
section, the term "policy of accident and sickness insurance" does not
include the following:
(1) Accident only, credit, dental, vision, Medicare supplement,
long term care, or disability income insurance.
(2) Coverage issued as a supplement to liability insurance.
coverage waived.
(c) If a waiver is required as a condition of issuance of a
certificate of coverage, the applicant shall provide signed
acceptance of the waiver. The applicant shall provide the signed
acceptance to the insurer not more than thirty (30) days after the
policy is delivered.
(d) An insurer shall not, on the basis of a waiver contained in a
policy as provided in this section, deny coverage for any condition,
complication, service, or treatment that does not arise directly
from the specified condition for which coverage is waived.
(e) An individual who is covered under a policy that includes a
waiver under this section may directly appeal a denial of coverage
based on the waiver by filing a request for an external grievance
review under
IC 27-8-29
without pursuing a grievance under
IC 27-8-28.
(f) An offer of coverage under a policy that includes a waiver
under this section does not preclude eligibility for an Indiana
comprehensive health insurance association policy under
IC 27-8-10-5.1.
(g) Notwithstanding subsection (b), a policy described in
subsection (a) may not contain a waiver of coverage for treatment
of a developmental disability.
(h) A policy that contains a waiver under this section is
presumed to provide coverage for a condition, complication,
service, or treatment for which coverage is not specifically
excluded under:
(1) a waiver under this section; or
(2) the terms of the policy.
(i) A waiver under this section may only be applied to a
certificate of coverage of accident and sickness insurance at the
time the certificate is issued.
SECTION 4.
IC 27-8-10-5.1
, AS AMENDED BY P.L.233-1999,
SECTION 11, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2003]: Sec. 5.1. (a) Except as provided in subsections (b) and
(c), a person is not eligible for an association policy if, at the effective
date of coverage, the person has or is eligible for coverage under any
insurance plan that equals or exceeds the minimum requirements for
accident and sickness insurance policies issued in Indiana as set forth
in IC 27. However, an offer of coverage described in
IC 27-8-5-2.5
(e) or
IC 27-8-5-19.2
(b) does not affect an individual's
eligibility for an association policy under this subsection. Coverage
under any association policy is in excess of, and may not duplicate,
coverage under any other form of health insurance.
(b) Except as provided in
IC 27-13-16-4
, a person is eligible for an
association policy upon a showing that:
(1) the person has been rejected by one (1) carrier for coverage
under any insurance plan that equals or exceeds the minimum
requirements for accident and sickness insurance policies issued
in Indiana, as set forth in IC 27, without material underwriting
restrictions;
(2) an insurer has refused to issue insurance except at a rate
exceeding the association plan rate; or
(3) the person is a federally eligible individual.
For the purposes of this subsection, eligibility for Medicare coverage
does not disqualify a person who is less than sixty-five (65) years of
age from eligibility for an association policy.
(c) The board of directors may establish procedures that would
permit:
(1) an association policy to be issued to persons who are covered
by a group insurance arrangement when that person or a
dependent's health condition is such that the group's coverage is
in jeopardy of termination or material rate increases because of
that person's or dependent's medical claims experience; and
(2) an association policy to be issued without any limitation on
preexisting conditions to a person who is covered by a health
insurance arrangement when that person's coverage is scheduled
to terminate for any reason beyond the person's control.
(d) An association policy must provide that coverage of a dependent
unmarried child terminates when the child becomes nineteen (19) years
of age (or twenty-five (25) years of age if the child is enrolled full-time
in an accredited educational institution). The policy must also provide
in substance that attainment of the limiting age does not operate to
terminate a dependent unmarried child's coverage while the dependent
is and continues to be both:
(1) incapable of self-sustaining employment by reason of mental
retardation or mental or physical disability; and
(2) chiefly dependent upon the person in whose name the contract
is issued for support and maintenance.
However, proof of such incapacity and dependency must be furnished
to the carrier within one hundred twenty (120) days of the child's
attainment of the limiting age, and subsequently as may be required by
the carrier, but not more frequently than annually after the two (2) year
period following the child's attainment of the limiting age.
(e) An association policy that provides coverage for a family
member of the person in whose name the contract is issued must, as to
the family member's coverage, also provide that the health insurance
benefits applicable for children are payable with respect to a newly
born child of the person in whose name the contract is issued from the
moment of birth. The coverage for newly born children must consist of
coverage of injury or illness, including the necessary care and treatment
of medically diagnosed congenital defects and birth abnormalities. If
payment of a specific premium is required to provide coverage for the
child, the contract may require that notification of the birth of a child
and payment of the required premium must be furnished to the carrier
within thirty-one (31) days after the date of birth in order to have the
coverage continued beyond the thirty-one (31) day period.
(f) Except as provided in subsection (g), an association policy may
contain provisions under which coverage is excluded during a period
of three (3) months following the effective date of coverage as to a
given covered individual for preexisting conditions, as long as medical
advice or treatment was recommended or received within a period of
three (3) months before the effective date of coverage. This subsection
may not be construed to prohibit preexisting condition provisions in an
insurance policy that are more favorable to the insured.
(g) If a person applies for an association policy within six (6)
months after termination of the person's coverage under a health
insurance arrangement and the person meets the eligibility
requirements of subsection (b), then an association policy may not
contain provisions under which:
(1) coverage as to a given individual is delayed to a date after the
effective date or excluded from the policy; or
(2) coverage as to a given condition is denied;
on the basis of a preexisting health condition. This subsection may not
be construed to prohibit preexisting condition provisions in an
insurance policy that are more favorable to the insured.
(h) For purposes of this section, coverage under a health insurance
arrangement includes, but is not limited to, coverage pursuant to the
Consolidated Omnibus Budget Reconciliation Act of 1985.
SECTION 5.
IC 27-8-29-6
, AS ADDED BY P.L.203-2001,
SECTION 14, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2003]: Sec. 6. As used in this chapter, "external grievance"
means the independent review under this chapter of a:
(1) grievance filed under
IC 27-8-28
; or
(2) denial of coverage based on a waiver described in
IC 27-8-5-2.5
or
IC 27-8-5-19.2.
SECTION 6.
IC 27-8-29-12
, AS ADDED BY P.L.203-2001,
SECTION 14, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE
JULY 1, 2003]: Sec. 12. An insurer shall establish and maintain an
external grievance procedure for the resolution of external grievances
regarding:
(1) an adverse determination of appropriateness;
(2) an adverse determination of medical necessity; or
(3) a determination that a proposed service is experimental or
investigational; or
(4) a denial of coverage based on a waiver described in
IC 27-8-5-2.5
or
IC 27-8-5-19.2
;
made by an insurer or an agent of an insurer regarding a service
proposed by the treating health care provider.
SECTION 7.
IC 27-8-29-13
, AS AMENDED BY P.L.1-2002,
SECTION 118, IS AMENDED TO READ AS FOLLOWS
[EFFECTIVE JULY 1, 2003]: Sec. 13. (a) An external grievance
procedure established under section 12 of this chapter must:
(1) allow a covered individual or a covered individual's
representative to file a written request with the insurer for an
external grievance review of the insurer's:
(A) appeal resolution under
IC 27-8-28-17
; or
(B) denial of coverage based on a waiver described in
IC 27-8-5-2.5
or
IC 27-8-5-19.2
;
not more than forty-five (45) days after the covered individual is
notified of the resolution; and
(2) provide for:
(A) an expedited external grievance review for a grievance
related to an illness, a disease, a condition, an injury, or a
disability if the time frame for a standard review would
seriously jeopardize the covered individual's:
(i) life or health; or
(ii) ability to reach and maintain maximum function; or
(B) a standard external grievance review for a grievance not
described in clause (A).
A covered individual may file not more than one (1) external grievance
of an insurer's appeal resolution under this chapter.
(b) Subject to the requirements of subsection (d), when a request is
filed under subsection (a), the insurer shall:
(1) select a different independent review organization for each
external grievance filed under this chapter from the list of
independent review organizations that are certified by the
department under section 19 of this chapter; and
(2) rotate the choice of an independent review organization
among all certified independent review organizations before
repeating a selection.
(c) The independent review organization chosen under subsection
(b) shall assign a medical review professional who is board certified in
the applicable specialty for resolution of an external grievance.
(d) The independent review organization and the medical review
professional conducting the external review under this chapter may not
have a material professional, familial, financial, or other affiliation with
any of the following:
(1) The insurer.
(2) Any officer, director, or management employee of the insurer.
(3) The health care provider or the health care provider's medical
group that is proposing the service.
(4) The facility at which the service would be provided.
(5) The development or manufacture of the principal drug, device,
procedure, or other therapy that is proposed for use by the treating
health care provider.
(6) The covered individual requesting the external grievance
review.
However, the medical review professional may have an affiliation
under which the medical review professional provides health care
services to covered individuals of the insurer and may have an
affiliation that is limited to staff privileges at the health facility, if the
affiliation is disclosed to the covered individual and the insurer before
commencing the review and neither the covered individual nor the
insurer objects.
(e) A covered individual may be required to pay not more than
twenty-five dollars ($25) of the costs associated with the services of an
independent review organization under this chapter. All additional
costs must be paid by the insurer.
SECTION 8. [EFFECTIVE JULY 1, 2003]
IC 27-8-5-2.5
, as
amended by this act, and
IC 27-8-5-19.2
, as added by this act, apply
to a policy of accident and sickness insurance that is issued,
delivered, amended, or renewed after June 30, 2003.