HOUSE BILL No. 6036

 

 

April 13, 2010, Introduced by Reps. Roy Schmidt, Ball, Johnson and Corriveau and referred to the Committee on Health Policy.

 

     A bill to amend 1956 PA 218, entitled

 

"The insurance code of 1956,"

 

by amending sections 2213b, 3406f, and 3711 (MCL 500.2213b,

 

500.3406f, and 500.3711), section 2213b as amended by 1998 PA 457,

 

section 3406f as added by 1996 PA 517, and section 3711 as added by

 

2003 PA 88, and by adding sections 2264b and 3710.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 2213b. (1) Except as provided in this section, an insurer

 

that delivers, issues for delivery, or renews in this state an

 

expense-incurred hospital, medical, or surgical individual policy

 

under chapter 34 shall renew or continue in force the policy at the

 

option of the individual. This subsection does not apply to a

 

health benefit plan as defined in section 3751.

 

     (2) Except as provided in this section and section 3711, an

 

insurer that delivers, issues for delivery, or renews in this state

 


an expense-incurred hospital, medical, or surgical group policy or

 

certificate under chapter 36 shall renew or continue in force the

 

policy or certificate at the option of the sponsor of the plan.

 

     (3) Guaranteed renewal is not required in cases of fraud,

 

intentional misrepresentation of material fact, lack of payment, if

 

the insurer no longer offers that particular type of coverage in

 

the market, or if the individual or group moves outside the service

 

area.

 

     (4) Subsections (1), (2), and (3) do not apply to a short-term

 

or 1-time limited duration policy or certificate of no longer than

 

6 months.

 

     (5) For the purposes of this section and section 3406f, a

 

short-term or 1-time limited duration policy or certificate of no

 

longer than 6 months is an individual health policy that meets all

 

of the following:

 

     (a) Is issued to provide coverage for a period of 185 days or

 

less, except that the health policy may permit a limited extension

 

of benefits after the date the policy ended solely for expenses

 

attributable to a condition for which a covered person incurred

 

expenses during the term of the policy.

 

     (b) Is nonrenewable, provided that the health insurer may

 

provide coverage for 1 or more subsequent periods that satisfy

 

subdivision (a), if the total of the periods of coverage do not

 

exceed a total of 185 days out of any 365-day period, plus any

 

additional days permitted by the policy for a condition for which a

 

covered person incurred expenses during the term of the policy.

 

     (c) Does not cover any preexisting conditions.

 


     (d) Is available with an immediate effective date, without

 

underwriting, upon receipt by the insurer of a completed

 

application indicating eligibility under the health insurer's

 

eligibility requirements, except that coverage that includes

 

optional benefits may be offered on a basis that does not meet this

 

requirement.

 

     (6) An insurer that delivers, issues for delivery, or renews

 

in this state a short-term or 1-time limited duration policy or

 

certificate of no longer than 6 months shall provide the following

 

to the commissioner:

 

     (a) By no later than February 1, 1999, a written report that

 

discloses both of the following:

 

     (i) The gross written premium for short-term or 1-time limited

 

duration policies or certificates of no longer than 6 months issued

 

in this state during the 1996 calendar year.

 

     (ii) The gross written premium for all individual expense-

 

incurred hospital, medical, or surgical policies or certificates

 

issued or delivered in this state during the 1996 calendar year

 

other than policies or certificates described in subparagraph (i).

 

     (b) By by no later than March 31, 1999 and annually thereafter

 

, a written annual report to the commissioner that discloses both

 

of the following:

 

     (a) (i) The gross written premium for short-term or 1-time

 

limited duration policies or certificates issued in this state

 

during the preceding calendar year.

 

     (b) (ii) The gross written premium for all individual expense-

 

incurred hospital, medical, or surgical policies or certificates

 


issued or delivered in this state during the preceding calendar

 

year other than policies or certificates described in subparagraph

 

(i) subdivision (a).

 

     (7) The commissioner shall maintain copies of reports prepared

 

pursuant to subsection (6) on file with the annual statement of

 

each reporting insurer. The commissioner shall annually compile the

 

reports received under subsection (6). The commissioner shall

 

provide this annual compilation to the senate and house of

 

representatives standing committees on insurance issues no later

 

than the June 1 immediately following the February 1 or March 31

 

date for which the reports under subsection (6) are provided.

 

     (8) In each calendar year, a health insurer shall not continue

 

to issue short-term or 1-time limited duration policies or

 

certificates if to do so the collective gross written premiums on

 

those policies or certificates would total more than 10% of the

 

collective gross written premiums for all individual expense-

 

incurred hospital, medical, or surgical policies or certificates

 

issued or delivered in this state either directly by that insurer

 

or through a corporation that owns or is owned by that insurer.

 

     Sec. 2264b. (1) Any policy, certificate, or contract

 

delivered, issued for delivery, or renewed in this state that

 

provides for hospital or medical care coverage or reimbursement for

 

hospital or medical care for dependent children shall permit

 

continuation of that coverage for a child until that child attains

 

age 26 even if the child is no longer considered a dependent if the

 

child meets all of the following:

 

     (a) Is unmarried.

 


     (b) Has no dependents of his or her own.

 

     (c) Is a resident of this state or resides somewhere else

 

temporarily.

 

     (d) Is not eligible for a group health benefits or coverage

 

plan from his or her employer.

 

     (e) Is not provided coverage under any other group or

 

individual health benefits or coverage plan.

 

     (f) Has not accepted a financial incentive from his or her

 

employer or other source to decline any other group or individual

 

health benefits or coverage plan.

 

     (g) Was continuously covered prior to the application for

 

continuation coverage under 1 or more individual or group health

 

benefits or coverage plans with no break in coverage that exceeded

 

62 days.

 

     (2) A covered person's policy, certificate, or contract may

 

require payment of a premium by the covered person or child,

 

subject to the commissioner's approval, for any period of

 

continuation coverage elected under subsection (1). The premium

 

shall not exceed 102% of the applicable portion of the premium

 

previously paid for that dependent's coverage under the policy,

 

certificate, or contract before the termination of coverage at the

 

specific age provided for in the policy, certificate, or contract.

 

The applicable portion of the premium previously paid for that

 

dependent's coverage shall be determined pursuant to rules adopted

 

by the commissioner under the administrative procedures act of

 

1969, 1969 PA 306, MCL 24.201 to 24.328, based upon the difference

 

between the policy's, certificate's, or contract's rating tiers for

 


adult and dependent coverage or family coverage, as appropriate,

 

and single coverage, or based upon any other formula or dependent

 

rating tier that the commissioner considers appropriate and that

 

provides a substantially similar result.

 

     (3) This section does not prohibit an employer from requiring

 

an employee to pay all or part of the cost of coverage provided for

 

that employee's child under this section.

 

     Sec. 3406f. (1) An insurer may exclude or limit coverage for a

 

condition as follows:

 

     (a) For an individual covered under an individual policy or

 

certificate or any other policy or certificate not covered under

 

subdivision (b) or (c), only if the exclusion or limitation relates

 

to a condition for which medical advice, diagnosis, care, or

 

treatment was recommended or received within 6 months before

 

enrollment and the exclusion or limitation does not extend for more

 

than 12 months after the effective date of the policy or

 

certificate.

 

     (b) For an individual covered under a group policy or

 

certificate covering 2 to 50 individuals, only if the exclusion or

 

limitation relates to a condition for which medical advice,

 

diagnosis, care, or treatment was recommended or received within 6

 

months before enrollment and the exclusion or limitation does not

 

extend for more than 12 months after the effective date of the

 

policy or certificate.

 

     (c) For for an individual covered under a group policy or

 

certificate covering more than 50 individuals, only if the

 

exclusion or limitation relates to a condition for which medical

 


advice, diagnosis, care, or treatment was recommended or received

 

within 6 months before enrollment and the exclusion or limitation

 

does not extend for more than 6 months after the effective date of

 

the policy or certificate.

 

     (2) As used in this section, "group" means a group health plan

 

as defined in section 2791(a)(1) and (2) of part C of title XXVII

 

of the public health service act, chapter 373, 110 Stat. 1972, 42

 

U.S.C. 300gg-91 42 USC 300gg-91, and includes government plans that

 

are not federal government plans.

 

     (3) This section applies only to an insurer that delivers,

 

issues for delivery, or renews in this state an expense-incurred

 

hospital, medical, or surgical policy or certificate. This section

 

does not apply to any policy or certificate that provides coverage

 

for specific diseases or accidents only, or to any hospital

 

indemnity, medicare supplement, long-term care, disability income,

 

or 1-time limited duration policy or certificate of no longer than

 

6 months.

 

     (4) The commissioner and the director of community health

 

shall examine the issue of crediting prior continuous health care

 

coverage to reduce the period of time imposed by preexisting

 

condition limitations or exclusions under subsection (1)(a), (b),

 

and (c) and shall report to the governor and the senate and the

 

house of representatives standing committees on insurance and

 

health policy issues by May 15, 1997. The report shall include the

 

commissioner's and director's findings and shall propose

 

alternative mechanisms or a combination of mechanisms to credit

 

prior continuous health care coverage towards the period of time

 


imposed by a preexisting condition limitation or exclusion. The

 

report shall address at a minimum all of the following:

 

     (a) Cost of crediting prior continuous health care coverages.

 

     (b) Period of lapse or break in coverage, if any, permitted in

 

a prior health care coverage.

 

     (c) Types and scope of prior health care coverages that are

 

permitted to be credited.

 

     (d) Any exceptions or exclusions to crediting prior health

 

care coverage.

 

     (e) Uniform method of certifying periods of prior creditable

 

coverage.

 

     Sec. 3710. Notwithstanding any other provision of this act, a

 

health benefit plan shall not be rescinded, canceled, or limited

 

due to the plan's failure to complete medical underwriting and

 

resolve all reasonable questions arising from the written

 

information submitted on or with an application before issuing the

 

plan's contract. This section does not limit a health benefit

 

plan's remedies upon a showing of intentional misrepresentation of

 

material fact.

 

     Sec. 3711. (1) Except as provided in this section, a small

 

employer carrier that offers health coverage in the small employer

 

group market in connection with a health benefit plan shall renew

 

or continue in force that plan at the option of the small employer

 

or sole proprietor at a premium rate that does not take into

 

account the claims experience or any change in the health status of

 

any covered person that occurred after the initial issuance of the

 

health benefit plan.

 


     (2) Guaranteed renewal under subsection (1) is not required in

 

cases of: fraud or intentional misrepresentation of the small

 

employer or, for coverage of an insured individual, fraud or

 

misrepresentation by the insured individual or the individual's

 

representative; lack of payment; noncompliance with minimum

 

participation requirements; if the small employer carrier no longer

 

offers that particular type of coverage in the market; or if the

 

sole proprietor or small employer moves outside the geographic

 

area.

 

     Enacting section 1. This amendatory act does not take effect

 

unless all of the following bills of the 95th Legislature are

 

enacted into law:

 

     (a) Senate Bill No.____ or House Bill No.____ (request no.

 

00083'09).

 

     (b) Senate Bill No.____ or House Bill No.____ (request no.

 

06174'10).

 

     (c) Senate Bill No.____ or House Bill No.____ (request no.

 

S06174'10 *).

 

     (d) Senate Bill No.____ or House Bill No.____ (request no.

 

06472'10).

 

     (e) Senate Bill No.____ or House Bill No.____ (request no.

 

H06472'10 *).

 

     (f) Senate Bill No.____ or House Bill No.____ (request no.

 

06473'10).

 

     (g) Senate Bill No.____ or House Bill No.____ (request no.

 

S06473'10 *).