Association of Insurance Compliance Professionals

Transcription

1 Association of Insurance Compliance Professionals Compliance Issues for Niche 2010 ANNUAL CONFERENCE Dallas, Texas Session 8 October 4, 2010 AICP Dallas 2010 Session #8 1

2 Presenters Cindy Carpenter Texas Department of Insurance Ginny McHugh McHugh Consulting Resources Theresa Shackelford North Carolina Department of Insurance David Simon Compliance Research Services, LLC AICP Dallas Session #8 2

3 IMPORTANT NOTICE The information presented is intended to provide general information and discussion only. Nothing presented should be relied upon without independent research, application to specific facts, and/or consultation with legal counsel. The opinions and positions discussed do not necessarily represent common agreement or position of the Association of Insurance Compliance Professionals or its members, Compliance Research Services, McHugh Consulting Resources, or even the presenters. AICP Dallas 2010 Session #8 3

4 Overview Scope of this Presentation Limited Benefit Plans Student A&H Plans Associations PPACA Impact Q&A AICP Dallas 2010 Session #8 4

5 Scope of Presentation Industry and Regulator perspectives on Limited Benefit plans Student plans Association business How they are defined How they are filed Challenges and compliance experiences AICP Dallas 2010 Session #8 5

6 Limited Benefit plans - Common Definitions North Carolina perspective Texas perspective Compliance experiences & challenges AICP Dallas 2010 Session #8 6

7 Limited Benefit Plans definitions Mini Med expense incurred plans with low or restricted benefits Fixed payment plans covering hospital, surgery, doctor visits, etc. AICP Dallas 2010 Session #8 7

8 How do states define limited benefit insurance? Connecticut Bulletin HC-70/ PA) (b) For the purposes of this section, " limited coverage " means an insurance policy providing coverage of the type specified in subdivisions (1), (2), (4), (11) and (12) of section 38a-469 of the general statutes that contains an annual maximum benefit of less than one hundred thousand dollars or a per service or per condition benefit limit of less than twenty thousand dollars. Florida Rule 69O (8), F.A.C. defines limited benefit insurance as a form of policy which provides coverage for each person insured under the policy for a specifically named disease, specifically named accident, or specifically named limited market fulfilling an experimental of reasonable need. Kansas : A limited policy is one that provides long-term care coverage, accident only coverage, specified disease coverage, specific accident coverage, or one that contains unusual exclusions, limitations, reductions or conditions of such a restrictive nature that the benefits under the policy are limited in frequency or in amounts. AICP Dallas- Session #8 8

9 Louisiana-Limited benefit. Health and accident insurance policy designed, advertised, and marketed to supplement major medical insurance that includes accident-only, the Civilian Health and Medical Program of the Uniformed Services (CHAMPUS), dental, disability income, fixed indemnity, long-term care, Medicare supplement, specified disease, vision, and any other health and accident insurance, other than basic hospital expense, basic medical-surgical expense, or other major medical insurance. A limited benefit plan can be group or individual. AICP Dallas- Session #8 9

10 What are mini-meds? Term created by industry to describe limited benefit or some limited level of major medical plan; Pay for a limited number of services; Not required to offer all mandated benefits; Cost less than traditional major medical; Include an annual cap; Pay basic expenses. They are NOT short term medical: a non-renewable health product designed for terms of 12 months or less. They are NOT typically straight hospital indemnity where only a flat per diem is paid for hospital stays. They are NOT typically supplemental to a major medical plan AICP Dallas Session #8 3/2/

11 What are other state perspectives on mini-med? Most states do not refer to the plan as a Mini- Med. This is largely an industry term. Typically referred to as limited benefit or supplemental health policies. Mini-Med is not a recognized product type on the Uniform Coding Matrix. AICP Dallas Session #8 11

12 Fixed Indemnity plans Can be for all kinds of plans not just traditional HIP Critical Illness Accident Only Dental A Fixed Indemnity Plan can also be a Limited Benefit Plan AICP Dallas Session #8 12

13 NC Department of Insurance Compliance Issues for Niche When a Limited Benefit plan uses a percentage of any indemnity dollar amount or percentage of any fixed dollar amount in paying claims it is considered a health benefit plan and subject to all state / federal mandates. AICP Dallas 2010 Session #8 13

14 Texas Department of Insurance Compliance Issues for Niche Limited Benefit plans Categories of coverage were adopted in 1976 under , Texas Insurance Code (TIC) Rules adopted in 1976 under Subchapter S, Texas Administrative Code (TAC) provided minimum standards Limited benefit listed as a category of coverage Guaranteed renewable Discontinue with 90 days and replace Insurer elects to renew must give 180 days notice AICP Dallas 2010 Session #8 14

15 Texas Department of Insurance Compliance Issues for Niche Limited Benefit plans , TAC, limited benefit coverage is a policy that provides basic hospital expense or basic medical-surgical expense coverage but the benefit amounts are less than minimum standards for each of these types of coverage Limited benefit notice must prominently display at the top of the outline of coverage and face page of the policy Applicable mandated benefits apply Does not apply to group coverage AICP Dallas 2010 Session #8 15

16 Student A&H plans Common Definition Student as Blanket coverage Compliance experiences & challenges North Carolina perspective Texas perspective AICP Dallas 2010 Session #8 16

17 Student business can be written on a group basis or a blanket basis. Common Definition of Blanket Blanket health insurance is declared to be that form of health insurance covering groups of persons as enumerated in one of the following subdivisions: (3) under a policy or contract issued to a college, school, or other institution of learning, a school district or districts, or school jurisdictional unit, or to the head, principal, or governing board of an educational unit, who or which shall be considered the policyholder covering students, teachers, or employees; AICP Dallas Session #8 17

18 Student plans: Typically issued direct to the school, university, or educational facility Can be contributory or non-contributory Group plans have certificates of coverage provided to the students Blanket coverage no certificates but a brochure or EOC. Some states require a certificate for student business even if not required for other blanket groups. General push to have approvals well in advance of the start of the school year or semester. Subject to all medical mandates if benefits are expense incurred Subject to managed care requirements if PPO involved. Dependent coverage may be available Could be for study abroad programs only AICP Dallas Session #8 18

19 Student plans- State law examples: MA requires students to have insurance (114.6 CMR 3:00; Bulletin 09-12) NH carved out student coverage from blanket and defined as large group & only major medical can be issued. SB :2 New Section; Student Insurance Policies. Amend RSA 415 by inserting after section 19 the following new section: 415:19-a Student Insurance Policies. Student major medical expense coverage is hereby declared to be that form of accident and health insurance issued as large group coverage to enrolled students at an accredited college, university, or other educational institution. No coverage other than student major medical expense coverage shall be issued as student large group coverage. Student major medical expense plan coverage shall: I. Provide the same form of major medical expense coverage under an arrangement whereby the premiums for such policies are paid to the insurer by the college, the university, or other educational institution. II. Not include a pre-existing condition exclusion period. III. Be considered large group coverage, subject to all applicable laws and rules that generally apply to large group accident and health insurance coverage, except those set forth in RSA 420-G and RSA 415:18, VII, VII-a, VII-b, XVI, and XVII AICP Dallas Session #8 19

20 NC Department of Insurance Compliance Issues for Niche Student Blanket is a North Carolina delivered policy defines the group of individuals that qualify for blanket accident and health insurance. AICP Dallas 2010 Session #8 20

21 Texas Department of Insurance Compliance Issues for Niche Student A&H plan Subchapter H, , TIC Issued to college, school or school district Provides benefits for an accident or sickness on an expense incurred basis, must contain all of the applicable mandates AICP Dallas 2010 Session #8 21

22 Texas Department of Insurance Compliance Issues for Niche Student A&H plan Certification of coverage Blanket coverage is recognized as creditable coverage; however, not required to accept creditable coverage towards the satisfaction of any pre-existing limitation or exclusion AICP Dallas 2010 Session #8 22

23 Association plans Selling Limited Benefit plans through associations Selling Student Plans through associations Compliance experiences & challenges North Carolina perspective Texas perspective AICP Dallas Session #8 23

24 Associations Typical state requirements: - Not controlled by the insurer - Not formed to provide insurance - Minimum number of members - Bylaws and constitution - Meet at least once a year - In active existence for 1 5 years AICP Dallas Session #8 24

25 Types of associations state recognition - Widely recognized - Professional Associations - Those available to the public AICP Dallas Session #8 25

26 Compliance issues with association group - Where to file - What to file Certificate forms must comply with ET mandates Bylaws Financial information Marketing material Biographical information AICP Dallas Session #8 26

27 Student Plan Association Coverage Not typically filed as association programs- but many do exist Student needs to join association Would no longer be an eligible blanket group Association would need to meet eligible group criteria Membership benefits may include: Student employment assistance Tuition protection programs Discount on hardware & software Travel and Study Abroad programs Career coaching Credit cards and financial info AICP Dallas Session #8 27

28 NC Department of Insurance Compliance Issues for Niche Why is North Carolina chilling the Association market..? It is important to understand that North Carolina insurance law specifies the definition of an association group under North Carolina General Statute (b)(1a). The Department relies upon this definition for purposes of determining that an insurer licensed in North Carolina which has issued an association group policy in another state and for which certificates thereunder have been submitted for use in North Carolina pursuant to N.C.G.S ((b) that such association group meets the eligible group definition in North Carolina. AICP Dallas Session #8 28

29 NC Department of Insurance Compliance Issues for Niche Association Questionnaire Association Questionnaire Results: Virtually all Association members are enrolled in insurance coverage. Virtually all Association member enrollments are made through Insurer s marketing activities. Association membership appears to be secondary to the offering / marketing of insurance. Insurer has not demonstrated that the Association is formed for purposes other than primarily to market insurance. AICP Dallas Session #8 29

30 Texas Department of Insurance Compliance Issues for Niche Association Plans Considered group coverage under , TIC Member only or employer based Formed for the purposes other than insurance Cover students considered blanket coverage Coverage Major medical Limited benefit coverage not recognized in group, only individual AICP Dallas 2010 Session #8 30

31 PPACA Considerations - Benefit Requirements - Plans subject to PPACA - Exempt plans AICP Dallas Session #8 31

32 BENEFITS NOT SUBJECT TO PPACA REQUIREMENTS If Offered Separately: Limited scope dental or vision benefits Long term care, nursing home care, community-based care, or any combination Coverage for accident, or disability income insurance If Offered as Independent, Non-coordinated Benefits: Coverage for specified disease or illness Hospital indemnity or other fixed indemnity insurance Other excepted benefits Coverage as a supplement to liability insurance Workers compensation Automobile medical payment insurance Credit-only insurance Coverage for on-site medical clinics Other similar coverage, specified in regulations, under which benefits for medical care are secondary or incidental to other insurance benefits If Offered as Separate Insurance Policy Medicare supplement, and similar supplemental coverage provided to coverage under a group health plan 32 AICP Dallas Session #8

33 PPACA Considerations In general any Limited benefit plan, student plan or association plan that offers major medical expense incurred benefits will be subject to PPACA. Fixed Indemnity products would be exempt Student Plans and new PPACA dependent age 26 mandate PPACA Compliance Summary required for filing by most states. PPACA TOI s for Limited Benefit and Student plans: AICP Dallas Session #8 33

34 Typical NAIC Coding: H Blanket Student ( PPACA Eligible TOI) H07 (G or I) Health- Specified Disease Limited Benefit: Pays for diagnosis and treatment of a specifically named disease, Benefits can be paid as expense incurred,per diem, or as a principal sum. H Critical Illness; 002 Dread disease,.002a Dread Disease- Cancer only; 003 HIV Indemnity H14 (G or I) Health- Hospital Indemnity: Pays a fixed $ without regard to actual expense for each day the covered person is confined. H15 (G or I) Hosp/Surgical/Medical Expense: Reimbursed covered person for hosp/surgical/medical expense as a result of injury, sickness or medical condition. ( PPACA Eligible TOI) H 18 (G or I) Health Sickness: Limited benefit expense polices that pay for sickness only. Benefits not to exceed a stated dollar amount. ( PPACA Eligible TOI) H 21 Health Other: Not specifically described. ( PPACA Eligible TOI) AICP Dallas Session #8 34

35 NC Department of Insurance Compliance Issues for Niche SERFF Quick Text: Your submission indicates that you have submitted a PPACA related filing which has the Grandfathered Immediate Reforms tag. Your filing also indicates that this rate filing is for new issue business only on the rate schedule tab. Grandfathered plans by definition in the federal law refer to plans that covered individuals as of March 23, Therefore, there is never an instance when a grandfathered plan will be newly issued. Therefore you must amend your rate schedule to reflect the submission of a request for a change in rates. Please be sure to complete all required information related to the percentage change in premium rates you are requested, etc. AICP Dallas Session #8 35

36 Texas Department of Insurance Compliance Issues for Niche Limited Benefit plans Federal Health Reform As defined in , TAC, provides coverage for an accident or sickness on an expense incurred basis, and all applicable mandated benefits apply, we have determined must comply with Patient Protection and Affordable Care Act (PPACA) AICP Dallas 2010 Session #8 36

37 Association of Insurance Compliance Professionals Compliance Issues for Niche Session 8 Questions Answers AICP Dallas Session #8 37

38 Association of Insurance Compliance Professionals Compliance Issues for Niche THANK YOU! AICP Dallas Session #8 38