H 3239 Session 124 (2021-2022) Summary: health benefit plan
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H 3239 General Bill, By Garvin and Robinson A BILL TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING SECTION 38-71-295 SO AS TO PROHIBIT PREEXISTING CONDITION EXCLUSIONS IN INDIVIDUAL, GROUP, AND SMALL EMPLOYER HEALTH BENEFIT PLANS; TO AMEND SECTION 38-71-143, RELATING TO HEALTH PLAN COVERAGE FOR CHILDREN PLACED FOR ADOPTION, SO AS TO MAKE CONFORMING CHANGES; TO AMEND SECTION 38-71-340, RELATING TO REQUIRED PROVISIONS IN INSURANCE POLICIES, SO AS TO MAKE CONFORMING CHANGES; TO AMEND SECTION 38-71-530, RELATING TO SPECIFIC STANDARDS REQUIRED FOR THE SALE OF INSURANCE POLICIES, SO AS TO MAKE CONFORMING CHANGES; TO AMEND SECTION 38-71-650, RELATING TO THE RIGHT TO TRANSFER A POLICY OF EQUAL OR LESSER BENEFITS WITH THE SAME INSURER, SO AS TO MAKE CONFORMING CHANGES; TO AMEND SECTION 38-71-730, RELATING TO REQUIREMENTS FOR GROUP ACCIDENT AND GROUP HEALTH POLICIES, SO AS TO MAKE CONFORMING CHANGES; TO AMEND SECTION 38-71-760, RELATING TO STANDARDS FOR GROUP ACCIDENT AND HEALTH INSURANCE COVERAGE, SO AS TO MAKE CONFORMING CHANGES; TO AMEND SECTION 38-71-1360, RELATING TO THE REQUIREMENT FOR INSURERS TO OFFER ALL PLANS ACTIVELY MARKETED TO SMALL EMPLOYERS, SO AS TO MAKE CONFORMING CHANGES; TO REPEAL SECTION 38-71-560 RELATING TO THE USE OF SIMPLIFIED APPLICATION FORMS; AND TO REPEAL SECTION 38-71-850 RELATING TO PREEXISTING CONDITIONS.
TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING SECTION 38-71-295 SO AS TO PROHIBIT PREEXISTING CONDITION EXCLUSIONS IN INDIVIDUAL, GROUP, AND SMALL EMPLOYER HEALTH BENEFIT PLANS; TO AMEND SECTION 38-71-143, RELATING TO HEALTH PLAN COVERAGE FOR CHILDREN PLACED FOR ADOPTION, SO AS TO MAKE CONFORMING CHANGES; TO AMEND SECTION 38-71-340, RELATING TO REQUIRED PROVISIONS IN INSURANCE POLICIES, SO AS TO MAKE CONFORMING CHANGES; TO AMEND SECTION 38-71-530, RELATING TO SPECIFIC STANDARDS REQUIRED FOR THE SALE OF INSURANCE POLICIES, SO AS TO MAKE CONFORMING CHANGES; TO AMEND SECTION 38-71-650, RELATING TO THE RIGHT TO TRANSFER A POLICY OF EQUAL OR LESSER BENEFITS WITH THE SAME INSURER, SO AS TO MAKE CONFORMING CHANGES; TO AMEND SECTION 38-71-730, RELATING TO REQUIREMENTS FOR GROUP ACCIDENT AND GROUP HEALTH POLICIES, SO AS TO MAKE CONFORMING CHANGES; TO AMEND SECTION 38-71-760, RELATING TO STANDARDS FOR GROUP ACCIDENT AND HEALTH INSURANCE COVERAGE, SO AS TO MAKE CONFORMING CHANGES; TO AMEND SECTION 38-71-1360, RELATING TO THE REQUIREMENT FOR INSURERS TO OFFER ALL PLANS ACTIVELY MARKETED TO SMALL EMPLOYERS, SO AS TO MAKE CONFORMING CHANGES; TO REPEAL SECTION 38-71-560 RELATING TO THE USE OF SIMPLIFIED APPLICATION FORMS; AND TO REPEAL SECTION 38-71-850 RELATING TO PREEXISTING CONDITIONS. Be it enacted by the General Assembly of the State of South Carolina: SECTION 1. Article 1, Chapter 71, Title 38 of the 1976 Code is amended by adding: "Section 38-71-295. (A) No individual, group or small employer health benefit plans, including the State Health Plan and health maintenance organizations in this State may impose preexisting condition exclusions with respect to coverage under the plan. (B) 'Preexisting condition exclusion' means a limitation or an exclusion or denial of benefits due to a condition that was present before the effective date of coverage under a group health plan or individual health insurance plan, whether or not any medical diagnosis, care, or treatment was recommended or received before that day. (C) Every insurer that offers health insurance coverage in this State must accept every employer and individual of this State that applies for coverage who is eligible to apply. (D) With respect to premium rates charged by an insurer offering an individual or small employer health benefit plan, the insurer must base its premium rates on, and vary the premium rates with respect to the particular plan or coverage, only by the following case characteristics: (1) whether the plan or coverage covers an individual or family; (2) geographic rating area, established pursuant to federal law; (3) age, except that the rate must not vary by more than three to one for adults; and (4) tobacco use, except that the rate must not vary by more than one and one-fifteenth to one. (E) With respect to family coverage under an individual or small employer health benefit plan, the insurer must apply the rating variations permitted under this section based on the portion of the premium that is attributable to each family member covered under the plan in accordance with rules of the commissioner. (F) The insurer must not adjust the premium charged with respect to any particular individual or small employer health benefit plan more frequently than annually, except that the insurer may change the premium rates to reflect: (1) with respect to a small employer health benefit plan, changes to the enrollment of the small employer; (2) changes to the family composition of the policyholder or employee; (3) with respect to an individual health benefit plan, changes in geographic rating area of the policyholder or changes in tobacco use, as provided in subsection (D). (4) changes to the health benefit plan requested by the policyholder or small employer; or (5) other changes required by federal law or regulations or otherwise expressly permitted by state law or regulation. (G) The commissioner may adopt rules and regulations to implement and administer this section to assure that rating practices used by insurers are consistent with the purposes of this section." SECTION 2. Section 38-71-143 of the 1976 Code is amended to read:
"Section 38-71-143. (A) If an individual or group health plan provides coverage for dependent children of participants or beneficiaries, the plan
(B)
(1) 'child' means, in connection with an adoption or placement for adoption of the child, an individual who has not attained age eighteen as of the date of the adoption or placement for adoption; (2) 'placement for adoption' means the assumption and retention by a person of a legal obligation for total or partial support of a child in anticipation of the adoption of the child. The child's placement with a person terminates upon the termination of the legal obligations." SECTION 3. Section 38-71-340(2) of the 1976 Code is amended to read: "(2) A provision as follows: TIME LIMIT ON CERTAIN DEFENSES: After two years from the issue date only fraudulent misstatements in the application may be used to void the policy or deny any claim for loss incurred or disability that starts after the two-year period. A policy which the insured has the right to continue in force subject to its terms by the timely payment of premium (a) until at least age fifty or (b) in the case of a policy issued after age forty-four, for at least five years from its date of issue, may contain in lieu of the foregoing the following provision (from which the clause in parenthesis may be omitted at the insurer's option) 'INCONTESTABLE':
After this policy has been in force for two years during the insured's lifetime (excluding any period during which the insured is disabled), the company cannot contest the statements contained in the application.
SECTION 4. Section 38-71-530 of the 1976 Code is amended to read: "Section 38-71-530. (a) The department shall promulgate regulations to establish specific standards, including standards of full and fair disclosure, that set forth the manner, content, and required disclosure for the sale of individual policies of accident and health insurance or subscriber contracts of nonprofit hospital, medical, and dental service associations which must be in addition to and in accordance with applicable laws of this State and which may cover, but are not limited to, the following: (1) terms of renewability; (2) initial and subsequent conditions of eligibility; (3) nonduplication of coverage provisions; (4) coverage of dependents;
(5) (6) termination of insurance; (7) probationary periods; (8) limitations; (9) exceptions; (10) reductions; (11) elimination periods; (12) requirements for replacement; (13) recurrent conditions.
SECTION 5. Section 38-71-650 of the 1976 Code is amended to read:
"Section 38-71-650. Any person purchasing an individual accident, health, or accident and health insurance policy after July 1, 1991, SECTION 6. Section 38-71-730(4), (5), and (6) of the 1976 Code is amended to read:
"(4)
SECTION 7. Section 38-71-760(m) of the 1976 Code is amended to read: "(m) This subsection applies to all groups. (1) Each person who is eligible for coverage in accordance with the succeeding carrier's plan of benefits with respect to classes eligible and actively at work and nonconfinement rules must be covered by the succeeding carrier's plan of benefits. For health insurance coverage as defined in Section 38-71-840, nonconfinement rules are not permitted and absence from work due to any health status-related factor must be treated as being actively at work.
(2) Each person not covered under the succeeding carrier's plan of benefits in accordance with item (1) (A) The minimum level of benefits to be provided by the succeeding carrier must be the applicable level of benefits of the succeeding carrier's plan reduced by any benefits payable by the prior plan. (B) Coverage must be provided by the succeeding carrier until at least the earliest of the following dates:
(i) The date the individual becomes eligible under the succeeding carrier's plan as described in item (1) (ii) For each type of coverage, the date the individual's coverage would terminate in accordance with the succeeding carrier's plan provisions applicable to individual termination of coverage, such as at termination of employment or ceasing to be an eligible dependent, as the case may be.
(iii) In the case of an individual who was totally disabled, and in the case of a type of coverage for which subsections (f) through (j) (3) For health insurance coverage as defined in Section 38-71-840, in the case of an individual who was totally disabled at the time the prior plan was discontinued and replaced by a group health plan with similar benefits, and in the case in which subsection (1) requires an extension of benefits or accrued liability, the minimum level of benefits to be provided by the succeeding carrier must be the applicable level of benefits of the succeeding carrier's plan. This benefit may be reduced by any benefits paid by the prior plan.
(4)
SECTION 8. Section 38-71-1360(A) of the 1976 Code is amended to read: "(A)(1) Every small employer insurer shall, as a condition of transacting business in this State with small employers, actively offer to small employers all health insurance plans actively marketed to small employers in this State, including at least two health insurance plans. One health insurance plan offered by each small employer insurer must be a basic health insurance plan and one plan must be a standard health insurance plan.
(2) Coverage under such health insurance plan must be offered to every eligible employee of a small employer and his or her dependents who apply for enrollment during the period in which the employee first becomes eligible to enroll under the terms of the health insurance plan and may not place any restriction which is inconsistent with Section 38-71-860 on an eligible employee being a participant or beneficiary. A small employer insurer may not offer coverage only to certain individuals in a small employer group, or to only part of the group
(3) (4)(a) Except as provided in subsections (C) and (D), a small employer insurer shall issue these health insurance plans to any eligible small employer that applies for any such plan and agrees to make the required premium payments and to satisfy the other reasonable provisions of the health insurance plan relating to employer contribution rules and group participation rules and not inconsistent with this article. (b) In the case of a small employer insurer that establishes more than one class of business pursuant to Section 38-71-920, the small employer insurer shall maintain and issue to eligible small employers these health insurance plans in addition to at least one basic health insurance plan and at least one standard health insurance plan in each class of business so established. A small employer insurer may apply reasonable criteria in determining whether to accept a small employer into a class of business, provided that: (i) the criteria are not intended to discourage or prevent acceptance of small employers applying for a basic or standard health insurance plan; (ii) the criteria are not related to the health status or claim experience of the small employer; (iii) the criteria are applied consistently to all small employers applying for coverage in the class of business; and (iv) the small employer insurer provides for the acceptance of all eligible small employers into one or more classes of business. The requirement to offer these health insurance plans to small employers shall not apply to a class of business into which the small employer insurer is no longer enrolling new small businesses. (5) The provisions of this subsection (A) of this section shall be effective one hundred eighty days after the director's approval of the basic health insurance plan and the standard health insurance plan developed pursuant to Section 38-71-1420; provided that if the Small Employer Insurer Reinsurance Program created pursuant to Section 38-71-1410 is not yet operative on that date, the provisions of this paragraph shall be effective on the date that the program begins operation." SECTION 9. Section 38-71-560 of the 1976 Code is repealed. SECTION 10. Section 38-71-850 of the 1976 Code is repealed. SECTION 11. This act takes effect upon approval by the Governor.
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