SB 204--Am. by HCW
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[As Amended by House Committee of the
Whole]
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As Amended by House Committee
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As Amended by Senate Committee
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Session of 1997
SENATE BILL No. 204
By Committee on Financial Institutions and
Insurance
2-4
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14 AN ACT relating to accident and health insurance; group and individual
15 policies of insurance; amending K.S.A. 40-2118 and 40-2228 and
16 K.S.A. 1996 Supp. 40-1909, 40-19a10, 40-19b10, 40-19c09, 40-
17 19d10, 40-2122, 40-2124, 40-2209, 40-2209d and, 40-2209f and 40-
18 3209 and repealing the existing sections; also repealing K.S.A. 1995
19 Supp. 40-19a10, as amended by section 111 of chapter 229 of
20 the 1996 Session Laws of Kansas, 40-19b10, as amended by sec-
21 tion 112 of chapter 229 of the 1996 Session Laws of Kansas, 40-
22 19c09, as amended by section 113 of chapter 229 of the 1996
23 Session Laws of Kansas and 40-19d10, as amended by section
24 114 of chapter 229 of the 1996 Session Laws of Kansas.
25
26 Be it enacted by the Legislature of the State of Kansas:
27 Section 1. K.S.A. 1996 Supp. 40-2209 is hereby amended to read as
28 follows: 40-2209. (A) (1) Group sickness and accident insurance is de-
29 clared to be that form of sickness and accident insurance covering groups
30 of persons, with or without one or more members of their families or one
31 or more dependents. Except at the option of the employee or member
32 and except employees or members enrolling in a group policy after the
33 close of an open enrollment opportunity, no individual employee or mem-
34 ber of an insured group and no individual dependent or family member
35 may be excluded from eligibility or coverage under a policy providing
36 hospital, medical or surgical expense benefits both with respect to policies
37 issued or renewed within this state and with respect to policies issued or
38 renewed outside this state covering persons residing in this state. For
39 purposes of this section, an open enrollment opportunity shall be deemed
40 to be a period no less favorable than a period beginning on the employee's
41 or member's date of initial eligibility and ending 31 days thereafter.
42 (2) An eligible employee, member or dependent who requests en-
43 rollment following the open enrollment opportunity or any special en-
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1 rollment period for dependents as specified in subsection (3) shall be con-
2 sidered a late enrollee. However, an eligible employee, member or
3 dependent shall not be considered a late enrollee if:
4 (1) (a) The individual:
5 (a) (i) Was covered under another group policy which provided hos-
6 pital, medical or surgical expense benefits or was covered under section
7 607(1) of the employee retirement income security act of 1974 (ERISA)
8 at the time the individual was eligible to enroll;
9 (b) (ii) states in writing, at the time of the open enrollment period,
10 that coverage under another group policy which provided hospital, med-
11 ical or surgical expense benefits was the reason for declining enrollment,
12 but only if the group policyholder or certificateholder or the accident and
13 sickness insurer required such a written statement and provided the in-
14 dividual with notice of the requirement for a written statement and the
15 consequences of such written statement;
16 (c) (iii) has lost coverage under another group policy providing hos-
17 pital, medical or surgical expense benefits or under section 607(1) of the
18 employee retirement income security act of 1974 (ERISA) as a result of
19 the termination of employment, reduction in the number of hours of
20 employment, termination of employer contributions toward such
21 coverage, the termination of the other policy's coverage, death of a
22 spouse or divorce or legal separation or was under a COBRA contin-
23 uation provision and the coverage under such provision was exhausted;
24 and
25 (d) iv requests enrollment within 31 30 days after the termination of
26 coverage under the other policy; or
27 (2) (b) a court has ordered coverage to be provided for a spouse or
28 minor child under a covered employee's or member's policy.
29 (3) (a) If an accident and sickness insurer issues a group policy pro-
30 viding hospital, medical or surgical benefits and makes coverage available
31 to a dependent of an eligible employee or member and such dependent
32 becomes a dependent of the employee or member through marriage, birth,
33 adoption or placement for adoption, then such group policy shall provide
34 for a dependent special enrollment period as described in subsection (3)(b)
35 of this section during which the dependent may be enrolled under the
36 policy and in the case of the birth or adoption of a child, the spouse of an
37 eligible employee or member may be enrolled if otherwise eligible for
38 coverage.
39 (b) A dependent special enrollment period under this subsection shall
40 be a period of not less than 30 days and shall begin on the later of (i) the
41 date such dependent coverage is made available, or (ii) the date of the
42 marriage, birth or adoption or placement for adoption.
43 (c) If an eligible employee or member seeks to enroll a dependent
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1 during the first 30 days of such a dependent special enrollment period,
2 the coverage of the dependent shall become effective: (i) in the case of
3 marriage, not later than the first day of the first month beginning after
4 the date the completed request for enrollment is received; (ii) in the case
5 of the birth of a dependent, as of the date of such birth; or (iii) in the case
6 of a dependent's adoption or placement for adoption, the date of such
7 adoption or placement for adoption.
8 (4) (a) No group policy providing hospital, medical or surgical ex-
9 pense benefits issued or renewed within this state or issued or renewed
10 outside this state covering residents within this state shall limit or exclude
11 benefits for specific conditions existing at or prior to the effective date of
12 coverage thereunder. Such policy may impose a preexisting conditions
13 waiting period exclusion, not to exceed 90 days following enrollment
14 for benefits for conditions, including related conditions, for which diag-
15 nosis, treatment or advice was sought or received in the 90 days prior to
16 the effective date of coverage. (whether mental or physical), regardless
17 of the cause of the condition for which medical advice, diagnosis, care or
18 treatment was recommended or received in the 90 days prior to the ef-
19 fective date of coverage. For the purposes of this section, the term ``pre-
20 existing conditions waiting period exclusion'' shall mean, with respect to
21 coverage, a limitation or exclusion of benefits relating to a condition based
22 on the fact that the condition was present before the date of enrollment
23 for such coverage whether or not any medical advice, diagnosis, care or
24 treatment was recommended or received before such date. Any preex-
25 isting conditions exclusion shall run concurrently with any waiting
26 period.
27 (b) Such policy may impose a waiting period after full-time em-
28 ployment starts before an employee is first eligible to enroll in any
29 applicable group policy.
30 (c) A health maintenance organization which offers such policy
31 which does not impose any preexisting conditions exclusion may
32 impose an affiliation period for such coverage, provided that: (i)
33 such application period is applied uniformly without regard to any
34 health status related factors and (ii) such affiliation period does
35 not exceed two months. The affiliation period shall run concur-
36 rently with any waiting period under the plan.
37 (d) A health maintenance organization may use alternative
38 methods from those described in this subsection to address ad-
39 verse selection if approved by the commissioner.
40 (5) Genetic information shall not be treated as a preexisting condition
41 in the absence of a diagnosis of the condition related to such information.
42 (6) A group policy providing hospital, medical or surgical expense
43 benefits may not impose any preexisting condition waiting period exclu-
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1 sion relating to pregnancy as a preexisting condition.
2 (7) A group policy providing hospital, medical or surgical expense
3 benefits may not impose any preexisting condition waiting period in the
4 case of a child who is adopted or place placed for adoption before at-
5 taining 18 years of age and who, as of the last day of a 30-day period
6 beginning on the date of the adoption or placement for adoption, is cov-
7 ered by a policy specified in subsection (A)(7). This subsection shall not
8 apply to coverage before the date of such adoption or placement for adop-
9 tion.
10 (8) Such policy shall waive such a preexisting conditions waiting pe-
11 riod exclusion to the extent the employee or member or individual de-
12 pendent or family member was covered by (a) a group or individual sick-
13 ness and accident policy, (b) coverage under section 607(1) of the
14 employees retirement income security act of 1974 (ERISA), (c) a group
15 specified in K.S.A. 40-2222 and amendments thereto, (d) part A or part
16 B of title XVIII of the social security act, (e) title XIX of the social security
17 act, other than coverage consisting solely of benefits under section 1928,
18 (f) chapter 55 of title 10 United States code, (g) a medical care program
19 of the indian health service or of a tribal organization, (h) the Kansas
20 uninsurable health plan act pursuant to K.S.A. 40-2217 et seq. and amend-
21 ments thereto or a similar health benefits risk pool of another state, (i) a
22 health plan offered under chapter 89 of title 5, United States code, (j) a
23 health benefit plan under section 5(e) of the peace corps act (22 U.S.C.
24 2504(e), or (k) a group subject to K.S.A. 12-2616 et seq. and amendments
25 thereto which provided hospital, medical and surgical expense benefits
26 within 31 63 days prior to the effective date of coverage with no gap in
27 coverage. A group policy shall credit the periods of prior coverage spec-
28 ified in subsection (A)(7) without regard to the specific benefits covered
29 during the period of prior coverage. Any period that the employee or
30 member is in a waiting period for any coverage under a group health plan
31 or is in an affiliation period shall not be taken into account in determining
32 the continuous period under this subsection.
33 (B) (1) An accident and sickness insurer which offers group policies
34 providing hospital, medical or surgical expense benefits shall provide a
35 certification as described in subsection (B)(2): (a) At the time an eligible
36 employee, member or dependent ceases to be covered under such policy
37 or otherwise becomes covered under a COBRA continuation provision;
38 (b) in the case of an eligible employee, member or dependent being covered
39 under a COBRA continuation provision, at the time such eligible em-
40 ployee, member or dependent ceases to be covered under a COBRA con-
41 tinuation provision; and (c) on the request on behalf of such eligible em-
42 ployee, member or dependent made not later than 24 months after the
43 date of the cessation of the coverage described in subsection (B)(1)(a) or
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1 (B)(1)(b), whichever is later.
2 (2) The certification described in this subsection is a written certifi-
3 cation of (a) the period of coverage under a policy specified in subsection
4 (A)(7) and any coverage under such COBRA continuation provision, and
5 (b) any waiting period imposed with respect to the eligible employee,
6 member or dependent for any coverage under such policy.
7 (C) Any group policy may impose participation requirements, define
8 full-time employees or members and otherwise be designed for the group
9 as a whole through negotiations between the group sponsor and the in-
10 surer to the extent such design is not contrary to or inconsistent with this
11 act and may be issued to such group upon the following basis:.
12 (D) (1) An accident and sickness insurer offering a group policy pro-
13 viding hospital, medical or surgical expense benefits must renew or con-
14 tinue in force such coverage at the option of the policyholder or certifi-
15 cateholder except as provided in subsection (2).
16 (2) An accident and sickness insurer may nonrenew or discontinue
17 coverage under a group policy providing hospital, medical or surgical
18 expense benefits based only on one or more of the following circumstances:
19 (a) If the policyholder or certificateholder has failed to pay any pre-
20 mium or contributions in accordance with the terms of the group policy
21 providing hospital, medical or surgical expense benefits or the accident
22 and sickness insurer has not received timely premium payments;
23 (b) if the policyholder or certificateholder has performed an act or
24 practice that constitutes fraud or made an intentional misrepresentation
25 of material fact under the terms of such coverage;
26 (c) if the policyholder or certificateholder has failed to comply with
27 a material plan provision relating to employer contribution or group par-
28 ticipation rules;
29 (d) if the accident and sickness insurer is ceasing to offer coverage in
30 such group market in accordance with subsection (b)(3) subsections
31 (D)(3) or (D)(4);
32 (e) in the case of accident and sickness insurer that offers coverage
33 under a policy providing hospital, medical or surgical expense benefits
34 through a medical service an enrollment area, there is no longer any
35 eligible employee, member or dependent in connection with such policy
36 who lives, resides or works in the medical service enrollment area of the
37 accident and sickness insurer (or in the area for which the accident and
38 sickness insurer is authorized to do business); or
39 (f) in the case of a group policy providing hospital, medical or surgical
40 expense benefits which is offered through an association or trust pursuant
41 to subsections (D)(3) or (D)(5) (F)(3) or (F)(5), the membership of the
42 employer in such association or trust ceases but only if such coverage is
43 terminated uniformly without regard to any health status related factor
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1 relating to any eligible employee, member or dependent.
2 (3) In any case in which an accident and sickness insurer which offers
3 a group policy providing hospital, medical or surgical expense benefits
4 decides to discontinue offering a particular such type of group policy,
5 such coverage may be discontinued only if:
6 (a) The accident and sickness insurer notifies all policyholders and
7 certificateholders and all eligible employees or members of such discon-
8 tinuation at least 90 days prior to the date of the discontinuation of such
9 coverage;
10 (b) the accident and sickness insurer offers to each policyholder who
11 is provided the type of such group policy providing hospital, medical or
12 surgical expense benefits which is being discontinued the option to pur-
13 chase any other group policy providing hospital, medical or surgical ex-
14 pense benefits currently being offered by such accident and sickness in-
15 surer; and
16 (c) in exercising the option to discontinue coverage and in offering
17 the option of coverage under paragraph (b), the accident and sickness
18 insurer acts uniformly without regard to the claims experience of those
19 policyholders or certificateholders or any health status related factors re-
20 lating to any eligible employee, member or dependent covered by such
21 group policy or new employees or members who may become eligible for
22 such coverage.
23 (4) If the accident and sickness insurer elects to discontinue offering
24 group policies providing hospital, medical or surgical expense benefits or
25 group coverage to a small employer pursuant to K.S.A. 40-2209f and
26 amendments thereto, such coverage may be discontinued only if:
27 (a) The accident and sickness insurer provides notice to the insurance
28 commissioner, to all policyholders or certificateholders and to all eligible
29 employees and members covered by such group policy providing hospital,
30 medical or surgical expense benefits at least 180 days prior to the date of
31 the discontinuation of such coverage;
32 (b) all group policies providing hospital, medical or surgical expense
33 benefits offered by such accident and sickness insurer are discontinued
34 and coverage under such policies are not renewed; and
35 (c) the accident and sickness insurer may not provide for the issuance
36 of any group policies providing hospital, medical or surgical expense ben-
37 efits in the discontinued market during a five year period beginning on
38 the date of the discontinuation of the last such group policy which is
39 nonrenewed.
40 (E) (1) An accident and sickness insurer offering a group policy pro-
41 viding hospital, medical or surgical expense benefits may not establish
42 rules for eligibility (including continued eligibility) of any employee, mem-
43 ber or dependent to enroll under the terms of the group policy based on
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1 any of the following health status related factors in relation to the eligible
2 employee, member or dependent: (a) Health status, (b) medical condition
3 (including both physical and mental illness), (c) claims experience, (d)
4 receipt of health care, (e) medical history, (f) genetic information, (g)
5 evidence of insurability (including conditions arising out of acts of do-
6 mestic violence), or (h) disability. This subsection shall ot be construed to
7 require a policy providing hospital, medical or surgical expense benefits
8 to provide particular benefits other than those provided under the terms
9 of such group policy or to prevent a group policy providing hospital,
10 medical or surgical expense benefits from establishing limitations or re-
11 strictions on the amount, level, extent or nature of the benefits or coverage
12 for similarly situated individuals enrolled under the group policy.
13 (F) Group accident and health insurance may be offered to a group
14 under the following basis:
15 (1) Under a policy issued to an employer or trustees of a fund estab-
16 lished by an employer, who is the policyholder, insuring at least three
17 two employees of such employer, for the benefit of persons other than
18 the employer. The term ``employees'' shall include the officers, managers,
19 employees and retired employees of the employer, the partners, if the
20 employer is a partnership, the proprietor, if the employer is an individual
21 proprietorship, the officers, managers and employees and retired em-
22 ployees of subsidiary or affiliated corporations of a corporation employer,
23 and the individual proprietors, partners, employees and retired employ-
24 ees of individuals and firms, the business of which and of the insured
25 employer is under common control through stock ownership contract, or
26 otherwise. The policy may provide that the term ``employees'' may include
27 the trustees or their employees, or both, if their duties are principally
28 connected with such trusteeship. A policy issued to insure the employees
29 of a public body may provide that the term ``employees'' shall include
30 elected or appointed officials.
31 (2) Under a policy issued to a labor union which shall have a consti-
32 tution and bylaws insuring at least 25 members of such union.
33 (3) Under a policy issued to the trustees of a fund established by two
34 or more employers or business associations or by one or more labor un-
35 ions or by one or more employers and one or more labor unions, which
36 trustees shall be the policyholder, to insure employees of the employers
37 or members of the union or members of the association for the benefit
38 of persons other than the employers or the unions or the associations.
39 The term ``employees'' shall include the officers, managers, employees
40 and retired employees of the employer and the individual proprietor or
41 partners if the employer is an individual proprietor or partnership. The
42 policy may provide that the term ``employees'' shall include the trustees
43 or their employees, or both, if their duties are principally connected with
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1 such trusteeship.
2 (4) A policy issued to a creditor, who shall be deemed the policyhol-
3 der, to insure debtors of the creditor, subject to the following require-
4 ments: (a) The debtors eligible for insurance under the policy shall be all
5 of the debtors of the creditor whose indebtedness is repayable in install-
6 ments, or all of any class or classes determined by conditions pertaining
7 to the indebtedness or to the purchase giving rise to the indebtedness.
8 (b) The premium for the policy shall be paid by the policyholder, either
9 from the creditor's funds or from charges collected from the insured
10 debtors, or from both.
11 (5) A policy issued to an association which has been organized and is
12 maintained for the purposes other than that of obtaining insurance, in-
13 suring at least 25 members, employees, or employees of members of the
14 association for the benefit of persons other than the association or its
15 officers. The term ``employees'' shall include retired employees. The pre-
16 miums for the policies shall be paid by the policyholder, either wholly
17 from association funds, or funds contributed by the members of such
18 association or by employees of such members or any combination thereof.
19 (6) Under a policy issued to any other type of group which the com-
20 missioner of insurance may find is properly subject to the issuance of a
21 group sickness and accident policy or contract.
22 (B) (G) Each such policy shall contain in substance: (1) A provision
23 that a copy of the application, if any, of the policyholder shall be attached
24 to the policy when issued, that all statements made by the policyholder
25 or by the persons insured shall be deemed representations and not war-
26 ranties, and that no statement made by any person insured shall be used
27 in any contest unless a copy of the instrument containing the statement
28 is or has been furnished to such person or the insured's beneficiary.
29 (2) A provision setting forth the conditions under which an indivi-
30 dual's coverage terminates under the policy, including the age, if any, to
31 which an individual's coverage under the policy shall be limited, or, the
32 age, if any, at which any additional limitations or restrictions are placed
33 upon an individual's coverage under the policy.
34 (3) Provisions setting forth the notice of claim, proofs of loss and
35 claim forms, physical examination and autopsy, time of payment of claims,
36 to whom benefits are payable, payment of claims, change of beneficiary,
37 and legal action requirements. Such provisions shall not be less favorable
38 to the individual insured or the insured's beneficiary than those corre-
39 sponding policy provisions required to be contained in individual accident
40 and sickness policies.
41 (4) A provision that the insurer will furnish to the policyholder, for
42 the delivery to each employee or member of the insured group, an in-
43 dividual certificate approved by the commissioner of insurance setting
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1 forth in summary form a statement of the essential features of the insur-
2 ance coverage of such employee or member, the procedure to be followed
3 in making claim under the policy and to whom benefits are payable. Such
4 certificate shall also contain a summary of those provisions required under
5 paragraphs (2) and (3) of this subsection in addition to the other essential
6 features of the insurance coverage. If dependents are included in the
7 coverage, only one certificate need be issued for each family unit.
8 (C) (H) No group disability income policy which integrates benefits
9 with social security benefits, shall provide that the amount of any disability
10 benefit actually being paid to the disabled person shall be reduced by
11 changes in the level of social security benefits resulting either from
12 changes in the social security law or due to cost of living adjustments
13 which become effective after the first day for which disability benefits
14 become payable.
15 (D) (I) A group policy of insurance delivered or issued for delivery
16 or renewed which provides hospital, surgical or major medical expense
17 insurance, or any combination of these coverages, on an expense incurred
18 basis, shall provide that an employee or member or such employee's or
19 member's covered dependents whose insurance under the group policy
20 has been terminated for any reason, including discontinuance of the
21 group policy in its entirety or with respect to an insured class, and who
22 has been continuously insured under the group policy or under any group
23 policy providing similar benefits which it replaces for at least three
24 months immediately prior to termination, shall be entitled to have such
25 coverage nonetheless continued under the group policy for a period of
26 six months and have issued to the employee or member or such employ-
27 ee's or member's covered dependents by the insurer, at the end of such
28 six-month period of continuation, a policy of health insurance which con-
29 forms to the applicable requirements specified in this subsection. This
30 requirement shall not apply to a group policy which provides benefits for
31 specific diseases or for accidental injuries only or a group policy issued to
32 an employer subject to the continuation and conversion obligations set
33 forth at title I, subtitle B, part 6 of the employee retirement income
34 security act of 1974 or at title XXII of the public health service act, as
35 each act was in effect on January 1, 1987 to the extent federal law provides
36 the employee or member or such employee's or member's covered de-
37 pendents with equal or greater continuation or conversion rights; or an
38 employee or member or such employee's or member's covered depend-
39 ents shall not be entitled to have such coverage continued or a converted
40 policy issued to the employee or member or such employee's or member's
41 covered dependents if termination of the insurance under the group pol-
42 icy occurred because: (a) The employee or member or such employee's
43 or member's covered dependents failed to pay any required contribution
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1 after receiving reasonable notice of such required contribution from the
2 insurer in accordance with rules and regulations adopted by the commis-
3 sioner of insurance; (b) any discontinued group coverage was replaced by
4 similar group coverage within 31 days; (c) the employee or member is or
5 could be covered by medicare (title XVIII of the United States social
6 security act as added by the social security amendments of 1965 or as
7 later amended or superseded); or (d) the employee or member is or could
8 be covered to the same extent by any other insured or lawful self-insured
9 arrangement which provides expense incurred hospital, surgical or med-
10 ical coverage and benefits for individuals in a group under which the
11 person was not covered prior to such termination. In the event the group
12 policy is terminated and not replaced the insurer may issue an individual
13 policy or certificate in lieu of a conversion policy or the continuation of
14 group coverage required herein if the individual policy or certificate pro-
15 vides substantially similar coverage for the same or less premium as the
16 group policy. In any event, the employee or member shall have the option
17 to be issued a conversion policy which meets the requirements set forth
18 in this subsection (D) (H) (I) in lieu of the right to continue group cov-
19 erage.
20 The continued coverage and the issuance of a converted policy shall
21 be subject to the following conditions:
22 (1) Written application for the converted policy shall be made and
23 the first premium paid to the insurer not later than 31 days after termi-
24 nation of coverage under the group policy or not later than 31 days after
25 notice is received pursuant to subsection (D)(21)(b)(ii) (H)(21)(b)(ii)
26 (I)(21)(b)(ii).
27 (2) The converted policy shall be issued without evidence of insura-
28 bility.
29 (3) The terminated employee or member shall pay to the insurer the
30 premium for the six-month continuation of coverage and such premium
31 shall be the same as that applicable to members or employees remaining
32 in the group. Failure to pay such premium shall terminate coverage under
33 the group policy at the end of the period for which the premium has been
34 paid. The premium rate charged for converted policies issued subsequent
35 to the period of continued coverage shall be such that can be expected
36 to produce an anticipated loss ratio of not less than 80% based upon
37 conversion, morbidity and reasonable assumptions for expected trends in
38 medical care costs. In the event the group policy is terminated and is not
39 replaced, converted policies may be issued at self-sustaining rates that
40 are not unreasonable in relation to the coverage provided based on con-
41 version, morbidity and reasonable assumptions for expected trends in
42 medical care costs. The frequency of premium payment shall be the fre-
43 quency customarily required by the insurer for the policy form and plan
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1 selected, provided that the insurer shall not require premium payments
2 less frequently than quarterly.
3 (4) The effective date of the converted policy shall be the day follow-
4 ing the termination of insurance under the group policy.
5 (5) The converted policy shall cover the employee or member and
6 the employee's or member's dependents who were covered by the group
7 policy on the date of termination of insurance. At the option of the in-
8 surer, a separate converted policy may be issued to cover any dependent.
9 (6) The insurer shall not be required to issue a converted policy cov-
10 ering any person if such person is or could be covered by medicare (title
11 XVIII of the United States social security act as added by the social se-
12 curity amendments of 1965 or as later amended or superseded). Fur-
13 thermore, the insurer shall not be required to issue a converted policy
14 covering any person if:
15 (a) (i) Such person is covered for similar benefits by another hospital,
16 surgical, medical or major medical expense insurance policy or hospital
17 or medical service subscriber contract or medical practice or other pre-
18 payment plan or by any other plan or program, or
19 (ii) such person is eligible for similar benefits (whether or not covered
20 therefor) under any arrangement of coverage for individuals in a group,
21 whether on an insured or uninsured basis, or
22 (iii) similar benefits are provided for or available to such person, pur-
23 suant to or in accordance with the requirements of any state or federal
24 law, and
25 (b) the benefits provided under the sources referred to in paragraph
26 (i) above for such person or benefits provided or available under the
27 sources referred to in paragraphs (ii) and (iii) above for such person,
28 together with the benefits provided by the converted policy, would result
29 in over-insurance according to the insurer's standards. The insurer's stan-
30 dards must bear some reasonable relationship to actual health care costs
31 in the area in which the insured lives at the time of conversion and must
32 be filed with the commissioner of insurance prior to their use in denying
33 coverage.
34 (7) A converted policy may include a provision whereby the insurer
35 may request information in advance of any premium due date of such
36 policy of any person covered as to whether:
37 (a) Such person is covered for similar benefits by another hospital,
38 surgical, medical or major medical expense insurance policy or hospital
39 or medical service subscriber contract or medical practice or other pre-
40 payment plan or by any other plan or program;
41 (b) such person is covered for similar benefits under any arrangement
42 of coverage for individuals in a group, whether on an insured or uninsured
43 basis; or
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1 (c) similar benefits are provided for or available to such person, pur-
2 suant to or in accordance with the requirements of any state or federal
3 law.
4 The converted policy may provide that the insurer may refuse to renew
5 the policy and the coverage of any person insured for the following rea-
6 sons only:
7 (a) Either the benefits provided under the sources referred to in par-
8 agraphs (i) and (ii) above for such person or benefits provided or available
9 under the sources referred to in paragraph (iii) above for such person,
10 together with the benefits provided by the converted policy, would result
11 in over-insurance according to the insurer's standards on file with the
12 commissioner of insurance, or the converted policyholder fails to provide
13 the requested information;
14 (b) fraud or material misrepresentation in applying for any benefits
15 under the converted policy;
16 (c) eligibility of the insured person for coverage under medicare (title
17 XVIII of the United States social security act as added by the social se-
18 curity amendments of 1965 or as later amended or superseded) or under
19 any other state or federal law (except title XIX of the social security act
20 of 1965) providing for benefits similar to those provided by the converted
21 policy; or
22 (d) other reasons approved by the commissioner of insurance.
23 (8) An insurer shall not be required to issue a converted policy which
24 provides coverage and benefits in excess of those provided under the
25 group policy from which conversion is made.
26 (9) If the converted policy provides that any hospital, surgical or med-
27 ical benefits payable may be reduced by the amount of any such benefits
28 payable under the group policy after the termination of the individual's
29 insurance or the converted policy includes provisions so that during the
30 first policy year the benefits payable under the converted policy, together
31 with the benefits payable under the group policy, shall not exceed those
32 that would have been payable had the individual's insurance under the
33 group policy remained in force and effect, the converted policy shall pro-
34 vide credit for deductibles, copayments and other conditions satisfied
35 under the group policy.
36 (10) Subject to the provisions and conditions of this act, if the group
37 insurance policy from which conversion is made insures the employee or
38 member for basic hospital or surgical expense insurance, the employee
39 or member shall be entitled to obtain a converted policy providing, at the
40 insured's option, coverage on an expense incurred basis under any one of
41 the plans meeting the following requirements:
42 Plan A
43 (a) hospital room and board daily expense benefits in a maximum
SB 204--Am. by HCW
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1 dollar amount approximating the average semiprivate rate charged in
2 metropolitan areas of this state, for a maximum duration of 70 days,
3 (b) miscellaneous hospital expense benefits of a maximum amount of
4 10 times the hospital room and board daily expense benefits, and
5 (c) surgical operation expense benefits according to a surgical sched-
6 ule consistent with those customarily offered by the insurer under group
7 or individual health insurance policies and providing a maximum benefit
8 of $800, or
9 Plan B
10 (a) hospital room and board daily expense benefits in a maximum
11 dollar amount equal to 75% of the maximum dollar amount determined
12 for plan A, for a maximum duration of 70 days,
13 (b) miscellaneous hospital expense benefits of a maximum amount of
14 10 times the hospital room and board daily expense benefits, and
15 (c) surgical operation expense benefits according to a surgical sched-
16 ule consistent with those customarily offered by the insurer under group
17 or individual health insurance policies and providing a maximum benefit
18 of $600, or
19 Plan C
20 (a) hospital room and board daily expense benefits in a maximum
21 dollar amount equal to 50% of the maximum dollar amount determined
22 for plan A, for a maximum duration of 70 days,
23 (b) miscellaneous hospital benefits of a maximum amount of 10 times
24 the hospital room and board daily expense benefits, and
25 (c) surgical operation expense benefits according to a surgical sched-
26 ule consistent with those customarily offered by the insurer under group
27 or individual health insurance policies and providing a maximum benefit
28 of $400.
29 The maximum dollar amounts of plan A shall be determined by the
30 commissioner of insurance and may be redetermined by such official from
31 time to time as to converted policies issued as new policies subsequent
32 to such redetermination. At the request of the insured, such redetermi-
33 ned amounts shall, subject to the provisions of condition (17) and sub-
34 mission of reasonable evidence of insurability, be made available to the
35 holders of converted policies which have been in effect at least three years
36 on the date the redetermined amounts become effective. At the option
37 of the insurer, any such requested increase or decrease in coverage on
38 outstanding policies or any renewal thereof need not be made effective
39 until the first policy anniversary date following the insured's request. Such
40 redetermination shall not be made more often than once in three years.
41 The maximum dollar amounts in plans A, B and C shall be rounded to
42 the nearest multiple of $10.
43 (11) (10) Subject to the provisions and conditions of this act, if the
SB 204--Am. by HCW
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1 group insurance policy from which conversion is made insures the em-
2 ployee or member for major medical expense insurance, the employee
3 or member shall be entitled to obtain a converted policy providing cata-
4 strophic or major medical coverage under a plan meeting the following
5 requirements:
6 (a) A maximum benefit at least equal to either, at the option of the
7 insurer, paragraphs (i) or (ii) below:
8 (i) The smaller of the following amounts:
9 1. The maximum benefit provided under the group policy.
10 2. A maximum payment of $250,000 per covered person for all cov-
11 ered medical expenses incurred during the covered person's lifetime.
12 (ii) The smaller of the following amounts:
13 1. The maximum benefit provided under the group policy.
14 2. A maximum payment of $250,000 for each unrelated injury or sick-
15 ness.
16 (b) Payment of benefits at the rate of 80% of covered medical ex-
17 penses which are in excess of the deductible, until 20% of such expenses
18 in a benefit period reaches $1,000, after which benefits will be paid at
19 the rate of 100% during the remainder of such benefit period. Payment
20 of benefits for outpatient treatment of mental illness, if provided in the
21 converted policy, may be at a lesser rate but not less than 50%.
22 (c) A deductible for each benefit period which, at the option of the
23 insurer, shall be (a) the sum of the benefits deductible and $100, or (b)
24 the corresponding deductible in the group policy. The term ``benefits
25 deductible,'' as used herein, means the value of any benefits provided on
26 an expense incurred basis which are provided with respect to covered
27 medical expenses by any other hospital, surgical, or medical insurance
28 policy or hospital or medical service subscriber contract or medical prac-
29 tice or other prepayment plan, or any other plan or program whether on
30 an insured or uninsured basis, or in accordance with the requirements of
31 any state or federal law and, if pursuant to condition (12), the converted
32 policy provides both basic hospital or surgical coverage and major medical
33 coverage, the value of such basic benefits.
34 If the maximum benefit is determined by paragraph (a)(ii) above, the
35 insurer may require that the deductible be satisfied during a period of
36 not less than three months if the deductible is $100 or less, and not less
37 than six months if the deductible exceeds $100.
38 (d) The benefit period shall be each calendar year when the maxi-
39 mum benefit is determined by paragraph (a)(i) above or 24 months when
40 the maximum benefit is determined by paragraph (a)(ii) above.
41 (e) The term ``covered medical expenses,'' as used above, shall in-
42 clude at least, in the case of hospital room and board charges 80% of the
43 average semiprivate room and board rate for the hospital in which the
SB 204--Am. by HCW
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1 individual is confined and twice such amount for charges in an intensive
2 care unit. Any surgical schedule shall be consistent with those customarily
3 offered by the insurer under group or individual health insurance policies
4 and must provide at least a $1,200 maximum benefit.
5 (12) (11) The conversion privilege required by this act shall, if the
6 group insurance policy insures the employee or member for basic hospital
7 or surgical expense insurance as well as major medical expense insurance,
8 make available the plans of benefits set forth in conditions (10) and (11)
9 condition 10. At the option of the insurer, such plans of benefits may be
10 provided under one policy.
11 The insurer may also, in lieu of the plans of benefits set forth in con-
12 ditions (10) and (11) condition 10, provide a policy of comprehensive
13 medical expense benefits without first dollar coverage. The policy shall
14 conform to the requirements of condition (11) (10). An insurer electing
15 to provide such a policy shall make available a low deductible option, not
16 to exceed $100, a high deductible option between $500 and $1,000, and
17 a third deductible option midway between the high and low deductible
18 options.
19 (13) (12) The insurer, at its option, may also offer alternative plans
20 for group health conversion in addition to those required by this act.
21 (14) (13) In the event coverage would be continued under the group
22 policy on an employee following the employee's retirement prior to the
23 time the employee is or could be covered by medicare, the employee may
24 elect, in lieu of such continuation of group insurance, to have the same
25 conversion rights as would apply had such person's insurance terminated
26 at retirement by reason of termination of employment or membership.
27 (15) (14) The converted policy may provide for reduction of coverage
28 on any person upon such person's eligibility for coverage under medicare
29 (title XVIII of the United States social security act as added by the social
30 security amendments of 1965 or as later amended or superseded) or un-
31 der any other state or federal law providing for benefits similar to those
32 provided by the converted policy.
33 (16) (15) Subject to the conditions set forth above, the continuation
34 and conversion privileges shall also be available:
35 (a) To the surviving spouse, if any, at the death of the employee or
36 member, with respect to the spouse and such children whose coverage
37 under the group policy terminates by reason of such death, otherwise to
38 each surviving child whose coverage under the group policy terminates
39 by reason of such death, or, if the group policy provides for continuation
40 of dependents' coverage following the employee's or member's death, at
41 the end of such continuation;
42 (b) to the spouse of the employee or member upon termination of
43 coverage of the spouse, while the employee or member remains insured
SB 204--Am. by HCW
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1 under the group policy, by reason of ceasing to be a qualified family
2 member under the group policy, with respect to the spouse and such
3 children whose coverage under the group policy terminates at the same
4 time; or
5 (c) to a child solely with respect to such child upon termination of
6 such coverage by reason of ceasing to be a qualified family member under
7 the group policy, if a conversion privilege is not otherwise provided above
8 with respect to such termination.
9 (17) If the benefit levels required in condition (10) exceed the benefit
10 levels provided under the group policy, the conversion policy may offer
11 benefits which are substantially similar to those provided under the group
12 policy either at the time the group policy was discontinued in its entirety
13 and not replaced or as the group policy is in effect at the time the benefits
14 under the converted policies are determined or redetermined in lieu of
15 those required in condition (10).
16 (18) (16) The insurer may elect to provide group insurance coverage
17 which complies with this act in lieu of the issuance of a converted indi-
18 vidual policy.
19 (19) (17) A notification of the conversion privilege shall be included
20 in each certificate of coverage.
21 (20) (18) A converted policy which is delivered outside this state must
22 be on a form which could be delivered in such other jurisdiction as a
23 converted policy had the group policy been issued in that jurisdiction.
24 (21) (19) The insurer shall give the employee or member and such
25 employee's or member's covered dependents: (a) Reasonable notice of
26 the right to convert at least once during the six-month continuation pe-
27 riod; or (b) for persons covered under 29 U.S.C. 1161 et seq., notice of
28 the right to a conversion policy required by this subsection (D) shall be
29 given at least 30 days: (i) Prior to the end of the continuation period
30 provided by 29 U.S.C. 1161 et seq., or (ii) from the date the employer
31 ceases to provide any similar group health plan to any employee. Such
32 notices shall be provided in accordance with rules and regulations
33 adopted by the commissioner of insurance.
34 (E) (I) (J) (1) No policy issued by an insurer to which this section
35 applies shall contain a provision which excludes, limits or otherwise re-
36 stricts coverage because medicaid benefits as permitted by title XIX of
37 the social security act of 1965 are or may be available for the same acci-
38 dent or illness.
39 (2) Violation of this subsection shall be subject to the penalties pre-
40 scribed by K.S.A. 40-2407 and 40-2411, and amendments thereto.
41 (J) (K) The commissioner may promulgate rules and regulations nec-
42 essary to carry out the intent of this section is hereby authorized to
43 adopt such rules and regulations as may be necessary to carry out
SB 204--Am. by HCW
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1 the provisions of this section.
2 Sec. 2. K.S.A. 1996 Supp. 40-2209d is hereby amended to read as
3 follows: 40-2209d. As used in this act:
4 (a) ``Actuarial certification'' means a written statement by a member
5 of the American academy of actuaries or other individual acceptable to
6 the commissioner that a small employer carrier is in compliance with the
7 provisions of K.S.A. 40-2209h and amendments thereto, based upon the
8 person's examination, including a review of the appropriate records and
9 of the actuarial assumptions and methods used by the small employer
10 carrier in establishing premium rates for applicable health benefit plans.
11 (b) ``Approved service area'' means a geographical area, as approved
12 by the commissioner to transact insurance in this state, within which the
13 carrier is authorized to provide coverage.
14 (c) ``Base premium rate'' means, for each class of business as to a
15 rating period, the lowest premium rate charged or that could have been
16 charged under the rating system for that class of business, by the small
17 employer carrier to small employers with similar case characteristics for
18 health benefit plans with the same or similar coverage.
19 (d) ``Basic small employer health care plan'' means a health benefit
20 plan developed by the board pursuant to K.S.A. 40-2209k and amend-
21 ments thereto.
22 (e) ``Board'' means the board of directors of the program.
23 (f) ``Carrier'' or ``small employer carrier'' means any insurance com-
24 pany, nonprofit medical and hospital service corporation, nonprofit op-
25 tometric, dental, and pharmacy service corporations, municipal group-
26 funded pool, fraternal benefit society or health maintenance organization,
27 as these terms are defined by the Kansas Statutes Annotated, that offers
28 health benefit plans covering eligible employees of one or more small
29 employers in this state.
30 (g) ``Case characteristics'' means, with respect to a small employer,
31 the geographic area in which the employees reside; the age and sex of
32 the individual employees and their dependents; the appropriate industry
33 classification as determined by the carrier, and the number of employees
34 and dependents and such other objective criteria as may be approved
35 family composition by the commissioner. ``Case characteristics'' shall not
36 include claim experience, health status and duration of coverage since
37 issue.
38 (h) ``Class of business'' means all or a separate grouping of small em-
39 ployers established pursuant to K.S.A. 40-2209g and amendments
40 thereto.
41 (i) ``Commissioner'' means the commissioner of insurance.
42 (j) ``Department'' means the insurance department.
43 (k) ``Dependent'' means the spouse or child of an eligible employee,
SB 204--Am. by HCW
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1 subject to applicable terms of the health benefits plan covering such em-
2 ployee and the dependent eligibility standards established by the board.
3 (l) ``Eligible employee'' means an employee who works on a full-time
4 basis, with a normal work week of 30 or more hours, and includes a sole
5 proprietor, a partner of a partnership or an independent contractor, pro-
6 vided such sole proprietor, partner or independent contractor is included
7 as an employee under a health benefit plan of a small employer but does
8 not include an employee who works on a part-time, temporary or substi-
9 tute basis.
10 (m) ``Financially impaired'' means a member which, after the effec-
11 tive date of this act, is not insolvent but is:
12 (1) Deemed by the commissioner to be in a hazardous financial con-
13 dition pursuant to K.S.A. 40-222d and amendments thereto; or
14 (2) placed under an order of rehabilitation or conservation by a court
15 of competent jurisdiction.
16 (n) ``Health benefit plan'' means any hospital or medical expense pol-
17 icy, health, hospital or medical service corporation contract, and a plan
18 provided by a municipal group-funded pool, or a health maintenance
19 organization contract offered by an employer or any certificate issued
20 under any such policies, contracts or plans. ``Health benefit plan'' does
21 not include policies or certificates covering only accident, credit, dental,
22 disability income, long-term care, hospital indemnity, medicare supple-
23 ment, specified disease, vision care, coverage issued as a supplement to
24 liability insurance, insurance arising out of a workers compensation or
25 similar law, automobile medical-paymeefits are payable with or without
26 regard to fault and w025/t of a workers compensation or similar lhich is
27 statutorily required to be contained in any liability insurance policy or
28 equivalent self-insurance.
29 (o) ``Index rate'' means, for each class of business as to a rating period
30 for small employers with similar case characteristics, the arithmetic av-
31 erage of the applicable base premium rate and the corresponding highest
32 premium rate.
33 (p) ``Initial enrollment period'' means the period of time specified in
34 the health benefit plan during which an individual is first eligible to enroll
35 in a small employer health benefit plan. Such period shall be no less
36 favorable than a period beginning on the employee's or member's date
37 of initial eligibility and ending 31 days thereafter.
38 (q) ``Late enrollee'' means an eligible employee or dependent who
39 requests enrollment in a small employer's health benefit plan following
40 the initial enrollment period provided under the terms of the first plan
41 for which such employee or dependent was eligible through such small
42 employer, however an eligible employee or dependent shall not be con-
43 sidered a late enrollee if:
SB 204--Am. by HCW
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1 (1) the individual:
2 (A) Was covered under another employer-provided health benefit
3 plan or was covered under section 607(1) of the employee retirement in-
4 come security act of 1974 (ERISA) at the time the individual was eligible
5 to enroll;
6 (B) states in writing, at the time of the initial eligibility, that coverage
7 under another employer health benefit plan was the reason for declining
8 enrollment but only if the group policyholder or certificateholder or the
9 accident and sickness issuer required such a written statement and pro-
10 vided the individual with notice of the requirement for a written statement
11 and the consequences of such written statement;
12 (C) has lost coverage under another employer health benefit plan or
13 under section 607(1) of the employee retirement income security act of
14 1974 (ERISA) as a result of the termination of employment, reduction
15 in the number of hours of employment, termination of employer
16 contributions toward such coverage, the termination of the other
17 plan's coverage, death of a spouse, or divorce or legal separation; and
18 (D) requests enrollment within 31 63 days after the termination of
19 coverage under another employer health benefit plan; or
20 (2) the individual is employed by an employer who offers multiple
21 health benefit plans and the individual elects a different health benefit
22 plan during an open enrollment period; or
23 (3) a court has ordered coverage to be provided for a spouse or minor
24 child under a covered employee's plan.
25 (r) ``New business premium rate'' means, for each class of business
26 as to a rating period, the lowest premium rate charged or offered, or
27 which could have been charged or offered, by the small employer carrier
28 to small employers with similar case characteristics for newly issued health
29 benefit plans with the same or similar coverage.
30 (s) ``Plan of operation'' means the articles, bylaws and operating rules
31 of the program adopted by the board pursuant to K.S.A. 40-2209l and
32 amendments thereto.
33 (t) ``Preexisting conditions provision'' exclusion'' means a policy pro-
34 vision which excludes or limits coverage for charges or expenses incurred
35 during a specified period not to exceed 90 days following the insured's
36 effective date of coverage as to a condition or related conditions (whether
37 physical or mental), regardless of the cause of the condition for which
38 medical advice, diagnosis, care or treatment or advice was sought was
39 recommended or received in the six months immediately preceding the
40 effective date of coverage.
41 (u) ``Premium'' means moneys paid by a small employer or eligible
42 employees or both as a condition of receiving coverage from a small em-
43 ployer carrier, including any fees or other contributions associated with
SB 204--Am. by HCW
20
1 the health benefit plan.
2 (v) ``Program'' means the Kansas small employer health reinsurance
3 program, established under K.S.A. 40-2209l and amendments thereto.
4 (w) ``Rating period'' means the calendar period for which premium
5 rates established by a small employer carrier are assumed to be in effect
6 but any period of less than one year shall be considered as a full year.
7 (x) ``SEHC plan'' means the Kansas small employer health care plan
8 which shall be a health benefit plan for small employers established by
9 the board in accordance with K.S.A. 40-2209k and amendments thereto.
10 (y) ``Service waiting period'' ``Waiting period'' means a period of
11 time after full-time employment begins before an employee is first eli-
12 gible to enroll in any applicable health benefit plan offered by the small
13 employer.
14 (z) ``Small employer'' means any person, firm, corporation, partner-
15 ship or association eligible for group sickness and accident insurance pur-
16 suant to subsection (A) of K.S.A. 40-2209 and amendments thereto ac-
17 tively engaged in business whose total employed work force consisted of,
18 on at least 50% of its working days during the preceding year, of at least
19 one two and no more than 50 eligible employees, the majority of whom
20 were employed within the state. In determining the number of eligible
21 employees, companies which are affiliated companies or which are eli-
22 gible to file a combined tax return for purposes of state taxation, shall be
23 considered one employer. Except as otherwise specifically provided, pro-
24 visions of this act which apply to a small employer which has a health
25 benefit plan shall continue to apply until the plan anniversary following
26 the date the employer no longer meets the requirements of this defini-
27 tion.
28 (aa) ``Standard small employer health care plan'' means a basic SEHC
29 plan with specified benefit enhancements and such deductible and co-
30 insurance provisions as may be developed by the board pursuant to K.S.A.
31 40-2209k and amendments thereto.
32 (bb) ``Affiliate'' or ``affiliated'' means an entity or person who directly
33 or indirectly through one or more intermediaries, controls or is controlled
34 by, or is under common control with, a specified entity or person.
35 Sec. 3. K.S.A. 1996 Supp. 40-2209f is hereby amended to read as
36 follows: 40-2209f. Health benefit plans covering small employers that are
37 issued or renewed within this state or outside this state covering persons
38 residing in this state shall be subject to the following provisions, as ap-
39 plicable:
40 (a) Provisions of preexisting conditions shall not exclude or limit cov-
41 erage for a period beyond 90 days following the individual's effective date
42 of coverage and may only relate to conditions or related conditions for
43 which diagnosis, advice or treatment was sought (whether physical or
SB 204--Am. by HCW
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1 mental) regardless of the cause of the condition for which medical advice,
2 diagnosis, care or treatment was recommended or received, during the six
3 months immediately preceding the effective date of coverage. Any pre-
4 existing conditions exclusion shall run concurrently with any wait-
5 ing period.
6 (b) Such policy may impose a preexisting conditions waiting period
7 exclusion, not to exceed 90 days for benefits for conditions, including
8 related conditions, for which diagnosis, treatment or advice was sought
9 (whether physical or mental), regardless of the cause of the condition for
10 which medical advice, diagnosis, care or treatment was recommended or
11 received in the six months prior to the effective date of coverage. On and
12 after May 1, 1994, Such policy shall waive such a waiting period preex-
13 isting conditions exclusion to the extent the employee or member or
14 individual dependent or family member was covered by (1) a group or
15 individual sickness and accident policy, (2) coverage under section 607(1)
16 of the employees retirement income security act of 1974 (ERISA), (3) a
17 group specified in K.S.A. 40-2222 and amendments thereto or (4) part A
18 or part B of title XVIII of the social security act, title XIX of the social
19 security act, other than coverage consisting solely of benefits under section
20 1928, chapter 55 of title 10 United States code, (5) medical care program
21 of the indian health service or of a tribal organization, (6) the Kansas
22 uninsurable health plan act pursuant to K.S.A. 40-2217 et seq. and amend-
23 ments thereto or similar health benefits risk pool of another state, (7) a
24 health plan offered under chapter 89 of title 5, United States code, (8) a
25 health benefit plan under section 5(e) of the peace corps act (22 U.S.C.
26 2504 (e) or (9) a group subject to K.S.A. 12-2616 et seq. and amendments
27 thereto which provided hospital, medical and surgical expense benefits
28 within 31 63 days prior to the effective date of coverage under a health
29 benefit plan with no gap in coverage. A group policy shall credit the
30 periods of prior coverage specified in this subsection without regard to
31 the specific benefits covered during the period of prior coverage. Any
32 period that the employee or member is in a waiting period for any cov-
33 erage under a group health plan or is in an affiliation period shall not be
34 taken into account in determining the continuous period under this sub-
35 section.
36 (c) Any health benefit plan issued, delivered or renewed within this
37 state and subject to this act, shall be renewable with respect to all eligible
38 employees or dependents at the option of the policyholder, contract-
39 holder or small employer, except for:
40 (1) Nonpayment of the required premiums by the policyholder, con-
41 tractholder, or employer; or
42 (2) fraud or misrepresentation of the policyholder, contractholder, or
43 employer or, with respect to coverage of individual insureds, the insureds
SB 204--Am. by HCW
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1 or their representatives; or
2 (3) noncompliance with health benefit plan provisions; or
3 (4) when the total number of insured individuals covered under all
4 of the health benefit plans of any one employer is less than the total
5 number of individuals or percentage of individuals required by partici-
6 pation requirements under any specific health benefit plan of that em-
7 ployer; or
8 (5) when a material and significant change in the risk characteristics
9 of the group has occurred because the small employer is no longer actively
10 engaged in the business in which it was engaged on the policy's effective
11 date; or
12 (6) when the carrier ceases doing business in the small employer mar-
13 ket, if the following conditions are met:
14 (A) Notice of the decision to cease to do business in the small em-
15 ployer market is provided to the department, the board, to either the
16 policyholder or contractholder, and the employer;
17 (B) health benefit plans subject to this act shall not be canceled by
18 the carrier for one year after the date of the notice required under pro-
19 vision (A) unless the business has been sold to another carrier; and
20 (C) a carrier that ceases to do business in the small employer mar-
21 ketplace is prohibited from re-entering the small employer marketplace
22 for five years from the date of the notice required under provision (A).
23 (d) Notwithstanding subsection (c) pertaining to renewability, any
24 such health benefit plan or any coverage provided to any individual cov-
25 ered by such a plan subject to this act may be rescinded for fraud, material
26 misrepresentation or concealment by an applicant, employee, dependent
27 or small employer.
28 (e) (c) A carrier shall not exclude any employee or dependent, who
29 would otherwise be covered under a health benefit plan on the basis of
30 an actual or expected health condition of such person, but a carrier shall
31 be allowed to exclude a late enrollee.
32 (f) (d) (c) Except as expressly provided by this act, every carrier doing
33 business in the small employer market retains the authority to underwrite
34 and rate individual accident and sickness insurance policies, and to rate
35 small employer groups using generally accepted actuarial practices.
36 (g) (e) (d) No health benefit plan issued by a carrier may limit or
37 exclude, by use of a rider or amendment applicable to a specific individ-
38 ual, coverage by type of illness, treatment, medical condition or accident,
39 except for preexisting conditions as permitted under subsection (a).
40 (h) (f) (e) In the absence of the small employer's decision to the
41 contrary, all health benefit plans shall make coverage available to all the
42 eligible employees of a small employer without a waiting period. The
43 decision of whether to impose a waiting period for eligible employees of
SB 204--Am. by HCW
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1 a small employer shall be made by the small employer, who may only
2 choose from the waiting periods offered by the carrier. No waiting period
3 shall be greater than 90 days and shall permit coverage to become effec-
4 tive no later than the first day of the month immediately following com-
5 pletion of the waiting period.
6 (i) (g) (f) The benefit structure of any health benefit plan subject to
7 this act may be changed by the carrier to make it consistent with the
8 benefit structure contained in health benefit plans developed by the
9 board for marketing to new groups but this shall not preclude the devel-
10 opment and marketing of other health benefit plans to small employers.
11 (j) (h) (g) (1) Except as provided in subsection (h), requirements
12 used by a small employer carrier in determining whether to provide cov-
13 erage to a small employer, including requirements for minimum partici-
14 pation of eligible employees and minimum employer contributions, shall
15 be applied uniformly among all small employers with the same number
16 of eligible employees applying for coverage or receiving coverage from
17 the small employer carrier.
18 (2) A small employer carrier may vary application of minimum par-
19 ticipation requirements and minimum employer contribution require-
20 ments only by the size of the small employer group.
21 (3) (A) Except as provided in provision (B), in applying minimum
22 participation requirements with respect to a small employer, a small em-
23 ployer carrier shall not consider employees or dependents who have qual-
24 ifying existing coverage in a health benefit plan sponsored by another
25 employer in determining whether the applicable percentage of partici-
26 pation is met.
27 (B) With respect to a small employer, a small employer carrier may
28 consider employees or dependents who have coverage under another
29 health benefit plan sponsored by such small employer in applying mini-
30 mum participation requirements.
31 Sec. 4. K.S.A. 1996 Supp. 40-3209 is hereby amended to read
32 as follows: 40-3209. (a) All forms of group and individual certifi-
33 cates of coverage and contracts issued by the organization to en-
34 rollees or other marketing documents purporting to describe the
35 organization's health care services shall contain as a minimum:
36 (1) A complete description of the health care services and other
37 benefits to which the enrollee is entitled;
38 (2) the locations of all facilities, the hours of operation and the
39 services which are provided in each facility in the case of individual
40 practice associations or medical staff and group practices, and, in
41 all other cases, a list of providers by specialty with a list of addresses
42 and telephone numbers;
43 (3) the financial responsibilities of the enrollee and the amount
SB 204--Am. by HCW
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1 of any deductible, copayment or coinsurance required;
2 (4) all exclusions and limitations on services or any other ben-
3 efits to be provided including any deductible or copayment feature
4 and all restrictions relating to pre-existing conditions;
5 (5) all criteria by which an enrollee may be disenrolled or de-
6 nied reenrollment;
7 (6) service priorities in case of epidemic, or other emergency
8 conditions affecting demand for medical services;
9 (7) a provision that an enrollee or a covered dependent of an
10 enrollee whose coverage under a health maintenance organization
11 group contract has been terminated for any reason but who remains
12 in the service area and who has been continuously covered by the
13 health maintenance organization for at least three months shall be
14 entitled to obtain a converted contract or have such coverage con-
15 tinued under the group contract for a period of six months following
16 which such enrollee or dependent shall be entitled to obtain a con-
17 verted contract in accordance with the provisions of this section.
18 The converted contract shall provide coverage at least equal to the
19 conversion coverage options generally available from insurers or
20 mutual nonprofit hospital and medical service corporations in the
21 service area at the applicable premium cost. The group enrollee or
22 enrollees shall be solely responsible for paying the premiums for
23 the alternative coverage. The frequency of premium payment shall
24 be the frequency customarily required by the health maintenance
25 organization, mutual nonprofit hospital and medical service cor-
26 poration or insurer for the policy form and plan selected, except
27 that the insurer, mutual nonprofit hospital and medical service cor-
28 poration or health maintenance organization shall require premium
29 payments at least quarterly. The coverage shall be available to all
30 enrollees of any group without medical underwriting. The require-
31 ment imposed by this subsection shall not apply to a contract which
32 provides benefits for specific diseases or for accidental injuries
33 only, nor shall it apply to any employee or member or such em-
34 ployee's or member's covered dependents when:
35 (A) Such person was terminated for cause as permitted by the
36 group contract approved by the commissioner;
37 (B) any discontinued group coverage was replaced by similar
38 group coverage within 31 days; or
39 (C) the employee or member is or could be covered by any other
40 insured or noninsured arrangement which provides expense in-
41 curred hospital, surgical or medical coverage and benefits for in-
42 dividuals in a group under which the person was not covered prior
43 to such termination. Written application for the converted contract
SB 204--Am. by HCW
25
1 shall be made and the first premium paid not later than 31 days
2 after termination of the group coverage or receipt of notice of con-
3 version rights from the health maintenance organization, whichever
4 is later, and shall become effective the day following the termination
5 of coverage under the group contract. The health maintenance or-
6 ganization shall give the employee or member and such employee's
7 or member's covered dependents reasonable notice of the right to
8 convert at least once within 30 days of termination of coverage un-
9 der the group contract. The group contract and certificates may
10 include provisions necessary to identify or obtain identification of
11 persons and notification of events that would activate the notice
12 requirements and conversion rights created by this section but such
13 requirements and rights shall not be invalidated by failure of per-
14 sons other than the employee or member entitled to conversion to
15 comply with any such provisions. In addition, the converted con-
16 tract shall be subject to the provisions contained in paragraphs (2),
17 (4), (5), (6), (7), (8), (9), (12), (13), (14), (15), (16), and (18), (19)
18 and (20) of subsection (D) (I) of K.S.A. 40-2209, and amendments
19 thereto;
20 (8) (A) group contracts shall contain a provision extending pay-
21 ment of such benefits until discharged or for a period not less than
22 31 days following the expiration date of the contract, whichever is
23 earlier, for covered enrollees and dependents confined in a hospital
24 on the date of termination;
25 (B) a provision that coverage under any subsequent replace-
26 ment contract that is intended to afford continuous coverage will
27 commence immediately following expiration of any prior contract
28 with respect to covered services not provided pursuant to subpar-
29 agraph (8)(A); and
30 (9) an individual contract shall provide for a 10-day period for
31 the enrollee to examine and return the contract and have the pre-
32 mium refunded, but if services were received by the enrollee during
33 the 10-day period, and the enrollee returns the contract to receive
34 a refund of the premium paid, the enrollee must pay for such serv-
35 ices.
36 (b) No health maintenance organization authorized under this
37 act shall contract with any provider under provisions which require
38 enrollees to guarantee payment, other than copayments and deduc-
39 tibles, to such provider in the event of nonpayment by the health
40 maintenance organization for any services which have been per-
41 formed under contracts between such enrollees and the health main-
42 tenance organization. Further, any contract between a health main-
43 tenance organization and a provider shall provide that if the health
SB 204--Am. by HCW
26
1 maintenance organization fails to pay for covered health care serv-
2 ices as set forth in the contract between the health maintenance
3 organization and its enrollee, the enrollee or covered dependents
4 shall not be liable to any provider for any amounts owed by the
5 health maintenance organization. If there is no written contract be-
6 tween the health maintenance organization and the provider or if
7 the written contract fails to include the above provision, the en-
8 rollee and dependents are not liable to any provider for any
9 amounts owed by the health maintenance organization.
10 (c) No group or individual certificate of coverage or contract
11 form or amendment to an approved certificate of coverage or con-
12 tract form shall be issued unless it is filed with the commissioner.
13 Such contract form or amendment shall become effective within 30
14 days of such filing unless the commissioner finds that such contract
15 form or amendment does not comply with the requirements of this
16 section.
17 (d) Every contract shall include a clear and understandable de-
18 scription of the health maintenance organization's method for re-
19 solving enrollee grievances.
20 (e) The provisions of subsections (A), (B) and, (C), (D) and (E)
21 of K.S.A. 40-2209 and 40-2215 and amendments thereto shall apply
22 to all contracts issued under this section, and the provisions of such
23 sections shall apply to health maintenance organizations.
24 Sec. 5. K.S.A. 40-2228 is hereby amended to read as follows:
25 40-2228. (a) The commissioner may adopt reasonable rules and reg-
26 ulations:
27 (1) To establish specific standards for policy provisions of long-
28 term care insurance policies. Such standards shall be in addition to
29 and in accordance with applicable laws of this state, and shall ad-
30 dress terms of renewability, initial and subsequent conditions of
31 eligibility, nonduplication of coverage provisions, coverage of de-
32 pendents, preexisting conditions, termination of insurance, proba-
33 tionary periods, limitations, exceptions, reductions, elimination
34 periods, requirements for replacement, recurrent conditions and
35 definitions of terms; and
36 (2) to specify prohibited policy provisions not otherwise specif-
37 ically authorized by statute which, in the opinion of the commis-
38 sioner, are unjust, unfair or unfairly discriminatory to any person
39 insured under a long-term care insurance policy.
40 (b) Rules and regulations adopted by the commissioner shall:
41 (1) Recognize the unique, developing and experimental nature
42 of long-term care insurance; and
43 (2) recognize the appropriate distinctions necessary between
SB 204--Am. by HCW
27
1 group and individual long-term care insurance policies.
2 (c) The commissioner may adopt rules and regulations estab-
3 lishing loss-ratio standards for long-term care insurance policies if
4 a specific reference to long-term care insurance policies is contained
5 in the rules and regulations.
6 (d) No long-term care insurance policy may:
7 (1) Be canceled, nonrenewed, or otherwise terminated solely on
8 the grounds of the age or the deterioration of the mental or physical
9 health of the insured individual or certificateholder; or
10 (2) contain a provision establishing any new waiting period in
11 the event existing coverage is converted to or replaced by a new or
12 other form within the same company, except with respect to an in-
13 crease in benefits voluntarily selected by the insured individual or
14 group policyholder.
15 (e) (1) No long-term insurance policy or certificate shall use a
16 definition of preexisting condition which is more restrictive than the
17 following: ``Preexisting condition'' means the existence of symptoms
18 which would cause an ordinarily prudent person to seek diagnosis, care
19 or treatment, or a condition for which medical advice or treatment was
20 recommended by, or received from a provider of health care services,
21 within: a condition for which medical advice or treatment was recom-
22 mended by, or received from a provider of health care services, within six
23 months preceding the effective date of coverage of an insured person.
24 (A) Six months preceding the effective date of coverage of an insured
25 person who is 65 years of age or older on the effective date of coverage;
26 or
27 (B) twenty-four months preceding the effective date of coverage of
28 an insured person who is under age 65 on the effective date of coverage.
29 (2) No long-term care insurance policy shall exclude coverage
30 for a loss or confinement which is the result of a preexisting con-
31 dition unless such loss or confinement begins within: six months fol-
32 lowing the effective date of coverage of an insured person.
33 (A) Six months following the effective date of coverage of an insured
34 person who is 65 years of age or older on the effective date of coverage;
35 or
36 (B) twenty-four months following the effective date of coverage of an
37 insured person who is under age 65 on the effective date of coverage.
38 (3) The commissioner may extend the limitation periods set
39 forth in subsections (e)(1) and (e)(2) above as to specific age group
40 categories or specific policy forms upon finding that the extension
41 is not contrary to the best interest of the public.
42 (4) The definition of preexisting condition shall not prohibit an
43 insurer from using an application form designed to elicit the com-
SB 204--Am. by HCW
28
1 plete health history of an applicant, and, on the basis of the answers
2 on that application, from underwriting in accordance with that in-
3 surer's established underwriting standards.
4 (f) No long-term care insurance policy shall require prior insti-
5 tutionalization as a condition precedent to the payment of benefits.
6 (g) In order to provide for fair disclosure in the sale of long-
7 term care insurance policies:
8 (1) An outline of coverage shall be delivered to an applicant for
9 a long-term care insurance policy at the time of application. In the
10 case of direct response solicitations, the insurer shall deliver the
11 outline of coverage upon the applicant's request, but regardless of
12 request, shall make such delivery no later than at the time of policy
13 delivery. Such outline of coverage shall include:
14 (A) A description of the principal benefits and coverage pro-
15 vided in the policy;
16 (B) a statement of the principal exclusions, reductions and lim-
17 itations contained in the policy;
18 (C) a statement of the renewal provisions, including any reser-
19 vation in the policy of a right to change premiums; and
20 (D) a statement that the outline of coverage is a summary of the
21 policy issued or applied for, and that the policy should be consulted
22 to determine governing contractual provisions.
23 (2) A certificate issued pursuant to a group long-term care in-
24 surance policy which policy is delivered or issued for delivery in
25 this state shall include the information required by subsection
26 (B)(4) of K.S.A. 40-2209, and amendments thereto.
27 (h) No policy shall be advertised, marketed or offered as long-
28 term care insurance unless it complies with the provisions of this
29 act.
30 New Sec. 4 6. (a) On and after July 1, 1997, and subject to any ex-
31 clusions set out in subsections (b) through (e), each accident and sickness
32 insurer that offers or renews policies providing hospital, medical or sur-
33 gical expense benefits to a small employer must: (1) Accept every small
34 employer that applies for such coverage; and (2) accept for enrollment
35 all eligible employees or dependents under such policy who apply for
36 enrollment during the period in which the eligible employee or depend-
37 ent first becomes eligible to enroll under the terms of the policy.
38 (b) (1) In the case of an accident and health insurer that offers a
39 policy providing hospital, medical or surgical expense benefits to a small
40 employer through a medical service enrollment area the accident and
41 health insurer may:
42 (A) Limit the small employers that may apply for such coverage to
43 those with eligible employees or dependents who live, work or reside in
SB 204--Am. by HCW
29
1 the medical service enrollment area for such policy; and
2 (B) within the medical service enrollment area of such policy, deny
3 coverage to such small employer if the accident and sickness insurer has
4 demonstrated to the commissioner that: (i) It will not have the capacity
5 to deliver services adequately to small employees and dependents of any
6 additional small employers because of its obligations to existing small
7 employer group policyholders or certificateholders and to eligible em-
8 ployees and dependents; and (ii) it will apply this paragraph uniformly to
9 all small employers without regard to the claims experience of those small
10 employers and their employees and dependents and without regard to
11 the health status factors of any employees or dependents.
12 (2) An accident and sickness insurer which denies coverage to a small
13 employer under any policy providing hospital, medical or surgical expense
14 benefits in any medical service enrollment area in accordance with sub-
15 section (b)(1)(B) may not offer such policies to small employers within
16 such medical service enrollment area for a period of 180 days after cov-
17 erage is denied.
18 (c) (1) An accident and sickness insurer may deny coverage to a small
19 employer under a policy providing hospital, medical or surgical expense
20 benefits if the accident and sickness insurer has demonstrated to the
21 commissioner that:
22 (A) It does not have the financial reserves necessary to underwrite
23 additional coverage; and
24 (B) it is applying this paragraph uniformly to all small employers in
25 this state without regard to the claims experience of the small employers
26 and their employees and dependents and without regard to any health
27 status factors of any employees or dependents.
28 (2) An accident and health insurer upon denying coverage to small
29 employers under policies providing hospital, medical or surgical expense
30 benefits in accordance with subsection (c)(1) may not offer any policies
31 providing hospital, medical or surgical expense benefits to any small em-
32 ployer for a period of 180 days after the date such policies are denied or
33 until the accident and health insurer has demonstrated to the commis-
34 sioner that it has sufficient financial reserves to underwrite additional
35 coverage, whichever is later.
36 (d) The requirements of subsection (a) shall not be construed to pre-
37 clude an accident and health insurer from establishing employer contri-
38 bution rules or group participation rules for the offering of policies pro-
39 viding hospital, medical or surgical expense benefits to small employers.
40 (e) The requirements of subsection (a) shall not apply to small em-
41 ployer group policies offered by an accident and health insurer if such
42 coverage is made available only through one or more associations.
43 (f) As used in this subsection the following mean:
SB 204--Am. by HCW
30
1 (1) ``Dependent'' means those persons as defined in subsection (k) of
2 K.S.A. 40-2209d and amendments thereto;
3 (2) ``employee'' means those persons as defined in subsection (1) of
4 K.S.A. 40-2209d and amendments thereto;
5 (3) ``employer contribution rule'' means a requirement relating to the
6 minimum level or amount of employer contribution toward the premium
7 for enrollment of employees and dependents;
8 (4) ``group participation rule'' means a requirement relating to the
9 minimum number of employees and dependents that must be enrolled
10 in relation to a specified percentage or number of eligible employees or
11 dependents;
12 (5) ``health status related factors'' means: (A) a physical or mental
13 illness medical condition, (B) claims experience, (C) receipt of health
14 care, (D) medical history, (E) genetic information, (F) evidence of insur-
15 ability including conditions arising out of acts of domestic violence and
16 (H) disability; and
17 (6) ``small employer'' means those employers as defined by subsection
18 (z) of K.S.A. 40-2209d and amendments thereto.
19 New Sec. 5 7. (a) Each accident and sickness insurer that issues pol-
20 icies providing hospital, medical or surgical expense benefits on the in-
21 dividual market shall not, with respect to an eligible individual desiring
22 to enroll in such policy: (1) Decline to offer such coverage to, or deny
23 enrollment of such individual, or (2) impose any preexisting condition
24 waiting period with respect to such coverage.
25 (b) As used in this section, ``eligible individual'' means an individual:
26 (1) (A) For whom, as of the date on which the individual seeks cov-
27 erage under this section, the aggregate of the periods of creditable cov-
28 erage is 18 or more months; and (B) whose most recent prior creditable
29 coverage was under either: (i) A group policy providing hospital, medical
30 or surgical expense benefits; (ii) a group policy under section 607(1) of
31 the employee retirement income security act of 1974; (iii) a church plan
32 under section 3(33) of the employee retirement income security act of
33 1974; (iv) a government plan under section 3(32) of the employee retire-
34 ment income security act of 1974; or (v) a health plan established or
35 maintained for its employees by the United States or by any agency or
36 instrumentality of such government or coverage offered in connection
37 with any such policy or plan;
38 (2) who is not eligible for coverage under: (A) A group health plan
39 or policy as defined in subsection (b)(1)(A), (B) part A or part B of title
40 XVIII of the social security act, or (C) a state plan under title XIX of such
41 act (or any successor program), and does not have other coverage under
42 a policy providing hospital, medical or surgical expense benefits;
43 (3) with respect to whom the most recent coverage within the cov-
SB 204--Am. by HCW
31
1 erage period described in paragraph (b)(1)(A) was not terminated because
2 of the nonpayment of premiums or fraud;
3 (4) if the individual had been offered the option of continuation cov-
4 erage under a COBRA continuation provision or under a similar state
5 program, who elected such coverage; and
6 (5) who, if the individual elected such continuation coverage, has ex-
7 hausted such continuation coverage under such provision or program.
8 (c) As used in this section, ``prior creditable coverage'' means cover-
9 age by: (1) A group or individual accident and sickness policy; (2) coverage
10 under section 607(1) of the employees retirement income security act of
11 1974 (ERISA); (3) a group specified in K.S.A. 40-2222 and amendments
12 thereto; (4) part A or part B of title XVIII of the social security act; (5)
13 title XIX of the social security act, other than coverage consisting solely
14 of benefits under section 1928; (6) chapter 55 of title 10 United States
15 code; (7) a medical care program of the indian health service or of a tribal
16 organization; (8) the Kansas uninsurable health plan act pursuant to
17 K.S.A. 40-2117 et seq. and amendments thereto or a similar health ben-
18 efits risk pool of another state; (9) a health plan offered under chapter 89
19 of title 5, United States code; (10) a health benefit plan under section
20 5(e) of the peace corps act (22 U.S.C. 2504(e); or (11) a group subject to
21 K.S.A. 12-2616 et seq. and amendments thereto.
22 (d) As used in this section ``preexisting condition'' means a condition
23 (whether physical or mental), regardless of the cause of the condition, for
24 which medical advice, diagnosis, care or treatment was recommended or
25 received prior to the effective date of coverage.
26 (e) As used in this section ``preexisting condition waiting period''
27 means, with respect to coverage, a limitation or exclusion of benefits re-
28 lating to a condition based on the fact that the condition was present
29 before the date of enrollment for such coverage whether or not any med-
30 ical advice, diagnosis, care or treatment was recommended or received
31 before such date.
32 (f) The requirement of this section is met, for a policy providing hos-
33 pital, medical or surgical expense benefits offered by an accident and
34 sickness insurer in the individual market, if the accident and sickness
35 insurer offers the policy forms for such individual coverage with the larg-
36 est, and the next to largest, premium volume of all such policy forms
37 offered by the insurer in this state or the applicable marketing or service
38 area by the accident and sickness insurer in the individual market in the
39 period involved.
40 (g) (1) The requirement of this section is met, for a policy providing
41 hospital, medical or surgical expense benefits offered by an accident and
42 sickness insurer in the individual market, if the accident and sickness
43 insurer offers a lower-level coverage policy form, as defined in subsection
SB 204--Am. by HCW
32
1 (g)(2), and a higher-level policy form, as defined in subsection (g)(3), each
2 of which includes benefits substantially similar to other individual health
3 insurance coverage offered by the accident and sickness insurer and each
4 of which is covered under a method which provides for risk adjustment,
5 risk spreading or a risk spreading mechanism (among accident and sick-
6 ness insurers in the individual market or individual policies providing
7 hospital, medical or surgical expense benefits) or otherwise provides for
8 some financial subsidization for eligible individuals, including through
9 assistance to participating accident and sickness insurers.
10 (2) A policy form provides a lower-level of coverage if the actuarial
11 value of the benefits under the coverage is at least 85% but not greater
12 than 100% of a weighted average as described in subsection (g)(4).
13 (3) A policy form provides a higher-level of coverage if:
14 (A) The actuarial value of the benefits under the coverage is at least
15 15% greater than the actuarial value of the coverage described in sub-
16 section (g)(4) offered by the accident and sickness insurer which offers
17 such coverage; and
18 (B) the actuarial value of the benefits under the coverage is at least
19 100% but not greater than 120% of a weighted average described in
20 subsection (g)(4).
21 (4) As used in this subsection, the weighted average is the average
22 actuarial value of the benefits provided by all policies providing hospital,
23 medical or surgical expense benefits issued (as elected by the accident
24 and sickness insurer) either by that accident and sickness insurer or by
25 all accident and sickness insurers which offered policies providing hos-
26 pital, medical or surgical expense benefits in the individual market during
27 the previous year (not including coverage issued under this subsection)
28 weighted by enrollment for the different coverage.
29 (h) The election by an accident and sickness insurer for coverage
30 under an individual policy providing hospital, medical or surgical expense
31 benefits shall apply uniformly to all eligible individuals in this state for
32 accident and health insurance. Such election shall be effective for policies
33 offered during a period of not shorter than 2 years after the date such
34 policies are approved by the commissioner.
35 (i) For the purposes of subsection (g), the actuarial value of benefits
36 provided under individual health insurance coverage shall be calculated
37 based on a standardized population and a set of standardized utilization
38 and cost factors.
39 (j) (1) In the case of an accident and sickness insurer that offers pol-
40 icies providing hospital, medical or surgical expense benefits in the indi-
41 vidual market through a medical service enrollment area, the accident
42 and sickness insurer may:
43 (A) Limit the individuals who may be enrolled under such coverage
SB 204--Am. by HCW
33
1 to those who live, reside or work within the medical service enrollment
2 area; and
3 (B) within the medical service enrollment area, deny such coverage
4 to such individuals if the accident and sickness insurer has demonstrh the
5 if required, to the commissioner that:
6 (i) It will not have the capacity to deliver services adequately to ad-
7 ditional eligible individuals because of its obligations to existing group
8 policyholders and certificateholders and group employees, members or
9 dependents and to eligible individuals; and
10 (ii) it is applying this subsection uniformly to individuals without re-
11 gard to any health status-related factor of such individuals and without
12 regard to whether the individuals are eligible individuals.
13 (2) An accident and sickness insurer, upon denying health insurance
14 coverage in any medical service enrollment area in accordance with sub-
15 section (j)(1)(B)(ii), may not offer coverage in the individual market
16 within such service area for a period of 180 days after such coverage is
17 denied.
18 (k) (1) An accident and sickness insurer may deny health insurance
19 coverage in the individual market to an eligible individual if the accident
20 and sickness insurer has demonstrated to the commissioner that:
21 (A) It does not have the financial reserves necessary to underwrite
22 additional coverage; and
23 (B) it is applying this subsection uniformly to all individuals in the
24 individual market in this state consistent with other provisions of this act
25 and without regard to any health status-related factor of such individuals
26 and without regard to whether the individuals are eligible individuals.
27 (2) An accident and sickness insurer upon denying individual health
28 insurance coverage in any medical service enrollment area in accordance
29 with subsection (k)(1) may not offer such coverage in the individual mar-
30 ket within such medical service enrollment area for a period of 180 days
31 after the date such coverage is denied or until the accident and sickness
32 insurer has demonstrated to the commissioner under the provisions of
33 the insurance code that such accident and sickness insurer has sufficient
34 reserves to underwrite additional coverage, whichever is later.
35 (l) The provisions of subsection (a) shall not be construed to require
36 that accident and sickness insurers which offer group policies providing
37 hospital, medical or surgical expense benefits pursuant to K.S.A. 40-2209
38 and amendments thereto, must also offer such policies providing hospital,
39 medical or surgical expense benefits in the individual market.
40 (m) An accident and sickness insurer offering policies providing hos-
41 pital, medical or surgical expense benefits through a conversion plan pur-
42 suant to K.S.A. 40-2209 and amendments thereto shall not be deemed to
43 be an accident and sickness insurer offering individual policies providing
SB 204--Am. by HCW
34
1 hospital, medical or surgical expense benefits solely because such accident
2 and sickness insurer offers a conversion policy.
3 (n) An accident and sickness insurer offering policies providing
4 hospital, medical or surgical expense benefits on the individual mar-
5 ket as provided in this section shall actively market such coverage
6 to eligible individuals in the state.
7 (1) Except as provided in subsection (j)(1)(B)(i) of this section,
8 no individual health insurance carrier, agent or broker shall, di-
9 rectly or indirectly, engage in the following activities:
10 (A) Encourage or direct individuals to refrain from filing an
11 application for coverage with the individual health insurance car-
12 rier because of the health status, claims experience, industry oc-
13 cupation or geographic location of the individual; or
14 (B) encourage or direct individuals to seek coverage from an-
15 other carrier because of the health status, claims experience, in-
16 dustry occupation or geographic location of the individual.
17 (2) The provisions of paragraph (1) of this subsection shall not
18 apply with respect to information provided by an individual health
19 insurance carrier to an individual regarding the established geo-
20 graphic service area or a restricted network provision of an indi-
21 vidual health insurance carrier.
22 (3) Except as provided in paragraph (2) of this subsection, no
23 individual health insurance carrier shall, directly or indirectly, en-
24 ter into any contract, agreement or arrangement with an agent or
25 broker that provides for or results in the compensation paid to such
26 person for the sale of a health benefit plan to be varied because of
27 the health status, claims experience, industry occupation or geo-
28 graphic location of the individual placed by the agent or broker
29 with the individual health insurance carrier.
30 (4) No individual health insurance carrier, agent or broker shall
31 induce or otherwise exclude an individual from health coverage or
32 benefits provided in connection with the individual's employment.
33 (5) Denial by an individual health insurance carrier of an ap-
34 plication for coverage from an individual shall be in writing and
35 shall state the reason or reasons for the denial.
36 (6) The commissioner may adopt rules and regulations setting
37 forth additional standards to provide for the fair marketing and
38 broad availability of health benefit plans to individuals in this state.
39 (7) If an individual health insurance carrier enters into a con-
40 tract, agreement or other arrangement with a third-party adminis-
41 trator to provide administrative, marketing or other services related
42 to the offering of health benefits plans to individuals in this state,
43 the third-party administrator shall be subject to this section as if it
SB 204--Am. by HCW
35
1 were an individual health insurance carrier.
2 (8) An accident and health insurer offering a policy providing
3 hospital, medical or surgical expense benefits in both the group and
4 individual markets shall notify in writing a covered person of such
5 insurer who is covered under a group policy under a COBRA con-
6 tinuation provision of the availability from such insurer of individ-
7 ual coverage not subject to underwriting or a new preexisting con-
8 dition waiting period upon exhaustion of such COBRA continuation
9 coverage.
10 (n) (o) Nothing in this section shall be construed:
11 (1) To restrict the amount of the premium rates that an accident and
12 sickness insurer may charge an individual for a policy providing hospital,
13 medical or surgical expense benefits in this state; or
14 (2) to prevent an accident and sickness insurer offering policies pro-
15 viding hospital, medical or surgical expense benefits in the individual mar-
16 ket from establishing premium discounts or rebates or modifying other-
17 wise applicable copayments or deductibles in return for adherence to
18 programs of health promotion and disease prevention.
19 (o) (p) As used in this section, ``health status-related factor'' means:
20 (1) A physical or mental illness medical condition; (2) claims experience;
21 (3) receipt of health care; (4) medical history; (5) genetic information; (6)
22 evidence of insurability including conditions arising out of acts of domes-
23 tic violence; and (7) disability.
24 Sec. 7. K.S.A. 40-2118 is hereby amended to read as follows:
25 40-2118. As used in this act, unless the context otherwise requires,
26 the following words and phrases shall have the meanings ascribed
27 to them in this section:
28 (a) ``Administering carrier'' means the insurer or third-party
29 administrator designated in K.S.A. 40-2120.
30 (b) ``Association'' means the Kansas health insurance associa-
31 tion established in K.S.A. 40-2119.
32 (c) ``Board'' means the board of directors of the association.
33 (d) ``Church plan'' means a plan as defined under section 3(33) of the
34 Employee Retirement Income Security Act of 1974.
35 (d) (e) ``Commissioner'' means the commissioner of insurance.
36 (f) ``Creditable coverage'' means with respect to an individual, cov-
37 erage of the individual under any of the following:
38 (1) A group health plan.
39 (2) health insurance coverage;
40 (3) part A or Part B of Title XVIII of the Social Security Act;
41 (4) title XIX of the Social Security Act, other than coverage consisting
42 solely of benefit under Section 1928;
43 (5) chapter 55 of Title 10, United States Code;
SB 204--Am. by HCW
36
1 (6) a medical care program of the Indian Health Service or of a tribal
2 organization;
3 (7) a state health benefit risk pool;
4 (8) a health plan offered under Chapter 89 of Title 5, United States
5 Code;
6 (9) a public health plan as defined under regulations promulgated by
7 the secretary of health and human services; and
8 (10) a health benefit plan under section 5(e) of the Peace Corps Act
9 (22 U.S.C. 2504(d)).
10 (g) ``Federally defined eligible individual'' means an individual:
11 (1) For whom, as of the date the individual seeks coverage under this
12 section, the aggregate of the periods of creditable coverage is 18 or more
13 months and whose most recent prior coverage was under a group health
14 plan, government plan or church plan;
15 (2) who is not eligible for coverage under a group health plan, Part
16 A or B of Title XVII of the Social Security Act, or a state plan under Title
17 XIX of the Social Security Act, or any successor program, and who does
18 not have any other health insurance coverage;
19 (3) with respect to whom the most recent coverage was not terminated
20 for factors relating to nonpayment of premiums or fraud; and
21 (4) who had been offered the option of continuation coverage under
22 COBRA or under a similar program, who elected such continuation cov-
23 erage, and who has exhausted such continuation coverage.
24 (h) ``Governmental plan'' means a plan as defined under section 3(32)
25 of the Employee Retirement Income Security Act of 1974 and any plan
26 maintained for its employees by the government of the United States or
27 by any agency or instrumentality of such government.
28 (i) ``Group health plan'' means an employee benefit plan as defined
29 by section 3(1) of the Employee Retirement Income Security Act of 1974
30 to the extent that the plan provides any hospital, surgical or medical ex-
31 pense benefits to employees or their dependents (as defined under the
32 terms of the plan) directly or through insurance, reimbursement or oth-
33 erwise.
34 (e) (j) ``Health insurance'' means any hospital or medical ex-
35 pense policy, health, hospital or medical service corporation con-
36 tract, and a plan provided by a municipal group-funded pool, or a
37 health maintenance organization contract offered by an employer
38 or any certificate issued under any such policies, contracts or
39 plans. ``Health insurance'' does not include policies or certificates
40 covering only accident, credit, dental, disability income, long-term
41 care, hospital indemnity, medicare supplement, specified disease,
42 vision care, coverage issued as a supplement to liability insurance,
43 insurance arising out of a workers compensation or similar law,
SB 204--Am. by HCW
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1 automobile medical-payment insurance, or insurance under which
2 benefits are payable with or without regard to fault and which is
3 statutorily required to be contained in any liability insurance pol-
4 icy or equivalent self-insurance.
5 (f) (k) ``Health maintenance organization'' means any organi-
6 zation granted a certificate of authority under the provisions of
7 the health maintenance organization act.
8 (g) (l) ``Insurance arrangement'' means any plan, program, con-
9 tract or any other arrangement under which one or more employ-
10 ers, unions or other organizations provide to their employees or
11 members, either directly or indirectly through a group-funded
12 pool, trust or third-party administrator, health care services or
13 benefits other than through an insurer.
14 (h) (m) ``Insurer'' means any insurance company, fraternal ben-
15 efit society, health maintenance organization and nonprofit hos-
16 pital and medical service corporation authorized to transact health
17 insurance business in this state.
18 (i) (n) ``Medicaid'' means the medical assistance program op-
19 erated by the state under title XIX of the federal social security
20 act.
21 (j) (o) ``Medicare'' means coverage under both parts A and B
22 of title XVIII of the federal social security act, 42 USC 1395.
23 (k) (p) ``Member'' means all insurers and insurance arrange-
24 ments participating in the association.
25 (l) (q) ``Plan'' means the Kansas uninsurable health insurance
26 plan created pursuant to this act.
27 (m) (r) ``Plan of operation'' means the plan to create and op-
28 erate the Kansas uninsurable health insurance plan, including ar-
29 ticles, bylaws and operating rules, adopted by the board pursuant
30 to K.S.A. 40-2119.
31 Sec. 8. K.S.A. 1996 Supp. 40-2122 is hereby amended to read
32 as follows: 40-2122. (a) Except for those persons who meet the
33 criteria set forth in subsection (b) of this section, any person who
34 has been a resident of this state for at least six months prior to
35 making application for coverage and any federally defined eligible
36 individual who is a legal domiciliary of this state, shall be eligible for
37 plan coverage if such person is able to provide evidence satisfac-
38 tory to the administering carrier that such person meets one of the
39 following criteria:
40 (1) Such person has had health insurance coverage involuntar-
41 ily terminated for any reason other than nonpayment of premium;
42 (2) such person has applied for health insurance and been re-
43 jected by two carriers because of health conditions;
SB 204--Am. by HCW
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1 (3) such person has applied for health insurance and has been
2 quoted a premium rate which:
3 (A) In the first two years of operation of the plan, is more than
4 150% of the premium rate available through the plan; or
5 (B) in succeeding years of operation of the plan, is in excess of
6 the premium rate established for plan coverage in an amount set
7 by the board; or
8 (4) such person has been accepted for health insurance subject
9 to a permanent exclusion of a preexisting disease or medical con-
10 dition.; or
11 (5) such person is a federally defined eligible individual.
12 (b) The following persons shall not be eligible for coverage un-
13 der the plan:
14 (1) Any person who is eligible for medicare or a recipient of
15 medicaid benefits;
16 (2) any person who has had coverage under the plan termi-
17 nated less than 12 months prior to the date of the current appli-
18 cation, except that this provision shall not apply with respect to an ap-
19 plicant who is a federally defined eligible individual;
20 (3) any person who has received accumulated benefits from the
21 plan equal to or in excess of the lifetime maximum benefits under
22 the plan prescribed by K.S.A. 40-2124 and amendments thereto;
23 (4) any person having access to accident and health insurance
24 through an employer-sponsored group or self-insured plan; or
25 (5) any person who is eligible for any other public or private
26 program that provides or indemnifies for health services.
27 (c) Any person who ceases to meet the eligibility requirements
28 of this section may be terminated at the end of a policy period.
29 (d) All plan members, insurers and insurance arrangements
30 shall notify in writing persons denied health insurance coverage,
31 for any reason, of the availability of coverage through the Kansas
32 health insurance association.
33 Sec. 9. K.S.A. 1996 Supp. 40-2124 is hereby amended to read
34 as follows: 40-2124. (a) Coverage under the plan shall be subject
35 to both deductible and coinsurance provisions set by the board.
36 The plan may offer applicants for coverage thereunder a choice
37 of deductible and copayment options or combinations thereof. At
38 least one option shall provide for a minimum annual deductible of
39 $5,000. Coverage shall contain a coinsurance provision for each
40 service covered by the plan, and such copayment requirement
41 shall not be subject to a stop-loss provision. Such coverage may
42 provide for a percentage or dollar amount of coinsurance reduc-
43 tion at specific thresholds of copayment expenditures by the in-
SB 204--Am. by HCW
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1 sured.
2 (b) Coverage under the plan shall be subject to a maximum
3 lifetime benefit of $500,000 $1,000,000 per covered individual.
4 (c) On and after May 1, 1994, coverage under the plan shall
5 exclude charges or expenses incurred during the first 90 days fol-
6 lowing the effective date of coverage as to any condition: (1) Which
7 manifested itself during the six-month period immediately prior to
8 the application for coverage in such manner as would cause an
9 ordinarily prudent person to seek diagnosis, care or treatment; or
10 (2) for which medical advice, care or treatment was recommended
11 or received in the six-month period immediately prior to the ap-
12 plication for coverage. In succeeding years of operation of the
13 plan, coverage of preexisting conditions may be excluded as de-
14 termined by the board, except that no such exclusion shall exceed
15 180 calendar days, and no exclusion shall be applied to a federally de-
16 fined eligible individual provided that application for coverage is made
17 not later than 63 days following the applicant's most recent prior cred-
18 itable coverage.
19 (d) (1) Benefits otherwise payable under plan coverage shall
20 be reduced by all amounts paid or payable through any other
21 health insurance, or insurance arrangement, and by all hospital
22 and medical expense benefits paid or payable under any workers
23 compensation coverage, automobile medical payment or liability
24 insurance whether provided on the basis of fault or nonfault, and
25 by any hospital or medical benefits paid or payable under or pro-
26 vided pursuant to any state or federal law or program.
27 (2) The association shall have a cause of action against an eli-
28 gible person for the recovery of the amount of benefits paid which
29 are not covered expenses. Benefits due from the plan may be re-
30 duced or refused as a set-off against any amount recoverable under
31 this section.
32 New Sec. 6. 8. 10. (a) Except as provided in this section, an accident
33 and sickness insurer which offers individual policies providing hospital,
34 medical or surgical expense benefits shall renew or continue in force such
35 coverage at the option of the individual.
36 (b) An accident and sickness insurer may nonrenew or discontinue
37 an individual policy providing hospital, medical or surgical expense ben-
38 efits based only on one or more of the following:
39 (1) If the individual has failed to pay premiums or contributions in
40 accordance with the terms of the health insurance coverage or the acci-
41 dent and sickness insurer has not received timely premium payments;
42 (2) if the individual has performed an act or practice that constitutes
43 fraud or made an intentional misrepresentation of material fact under the
SB 204--Am. by HCW
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1 terms of the coverage;
2 (3) if the accident and sickness insurer is ceasing to offer individual
3 policies providing hospital, medical or surgical expense benefits in accor-
4 dance with subsection (c);
5 (4) in the case of accident and sickness insurer which offers individual
6 policies providing hospital, medical or surgical expense benefits through
7 a medical service enrollment area, if the individual no longer resides, lives
8 or works in the medical service enrollment area (or in an area for which
9 the accident and sickness insurer is authorized to do business) but only
10 if such coverage is terminated under this paragraph uniformly without
11 regard to any health status-related factor of covered individuals; or
12 (5) if the case of a policy providing hospital, medical or surgical ex-
13 pense benefits that is made available to individuals only through one or
14 more bona fide associations, the membership of the individual in the
15 association (on the basis of which the coverage is provided) ceases but
16 only if such coverage is terminated under this paragraph uniformly with-
17 out regard to any health status-related factor of covered individuals.
18 (c) If the accident and sickness insurer decides to discontinue offer-
19 ing a particular individual policy providing hospital, medical or surgical
20 expense benefits such policy may only be discontinue if:
21 (1) The accident and sickness insurer provides notice to each covered
22 individual who is provided such policy providing hospital, medical or sur-
23 gical expense benefits at least 90 days prior to the date of the discontin-
24 uation of such coverage;
25 (2) the accident and sickness insurer offers to each covered individual
26 who is provided such policy providing hospital, medical or surgical ex-
27 pense benefits the option to purchase any other individual policy provid-
28 ing hospital, medical or surgical expense benefits which is being sold by
29 the accident and sickness insurer; and
30 (3) in exercising the option to discontinue coverage and in offering
31 the option of coverage under subsection (b), the accident and sickness
32 insurer acts uniformly without regard to any health status-related factor
33 of enrolled individuals or individuals who may become eligible for cov-
34 erage under the policy.
35 (d) Subject to subsection (c), if the accident and sickness insurer
36 elects to discontinue offering any individual policies providing hospital,
37 medical or surgical expense benefits in this state, such insurance coverage
38 may be discontinued only if:
39 (1) The accident and sickness insurer provides notice to the commis-
40 sioner and to each individual policyholder of such discontinuation at least
41 180 days prior to the date of the expiration of such coverage; and
42 (2) the accident and sickness insurer is prohibited from the issuance
43 of any individual policies providing hospital, medical or surgical expense
SB 204--Am. by HCW
41
1 benefits in the state during a five-year period beginning on the date of
2 the discontinuation of the last individual policy providing hospital, med-
3 ical or surgical expense benefits which is not renewed.
4 (e) An accident and sickness insurer may modify the terms and con-
5 ditions of the individual policy providing hospital, medical or surgical
6 expense benefits so long as such modification is consistent with other
7 provisions of the insurance code and is effective on a uniform basis among
8 all individuals who are covered by such policy.
9 (f) In applying this section in the case of individual policies providing
10 hospital, medical or surgical expense benefits that are made available by
11 accident and sickness insurer to individuals only through one or more
12 associations, a reference to an ``individual'' is deemed to include a ref-
13 erence to such an association of which the individual is a member.
14 (g) As used in this section, ``health status-related factor'' means: (1)
15 A physical or mental illness medical condition; (2) claims experience; (3)
16 receipt of health care; (4) medical history; (5) genetic information; (6)
17 evidence of insurability including conditions arising out of acts of domes-
18 tic violence; and (7) disability.
19 (h) As used in this section, ``policies providing hospital, medical
20 or surgical expense benefits'' does not include short term, limited
21 duration policies of insurance.
22 (i) The commissioner is hereby authorized to adopt such rules
23 and regulations as may be necessary to carry out the provisions of
24 this section.
25 New Sec. 7. 9. 11. (a) An accident and sickness insurer which offers
26 coverage through a group policy providing hospital, medical or surgical
27 expense benefits pursuant to K.S.A. 40-2209 and amendments thereto
28 which includes mental health benefits shall be subject to the following
29 requirements:
30 (1) If the policy does not include an aggregate lifetime limit on sub-
31 stantially all hospital, medical and surgical expense benefits, the policy
32 may not impose any aggregate lifetime limit on mental health benefits;
33 (2) if the policy includes an aggregate lifetime limit on substantially
34 all hospital, medical and surgical expense benefits the plan shall either:
35 (A) Apply the applicable lifetime limit both to the hospital, medical and
36 surgical expense benefits to which it otherwise would apply and to mental
37 health benefits and not distinguished in the application of such limit be-
38 tween such hospital, medical and surgical expense benefits and mental
39 health benefits; or (B) not include any aggregate lifetime limit on mental
40 health benefits that is less than the applicable lifetime limit on hospital,
41 medical and surgical expense benefits;
42 (3) if the policy does not include an annual limit on substantially all
43 hospital, medical and surgical expense benefits, the plan or coverage may
SB 204--Am. by HCW
42
1 not impose any annual limit on mental health benefits; and
2 (4) if the policy includes an annual limit on substantially all hospital,
3 medical and surgical expense benefits the policy shall either: (A) Apply
4 the applicable annual limit both to hospital, medical and surgical expense
5 benefits to which it otherwise would apply and to mental health benefits
6 and not distinguish in the application of such limit between such hospital,
7 medical and surgical expense benefits and mental health benefits; or (B)
8 not include any annual limit on mental health benefits that is less than
9 the applicable annual limit.
10 (b) If the group policy providing hospital, medical or surgical expense
11 benefits is not otherwise covered by subsection (a) and either does not
12 apply a lifetime or annual benefit or applies different lifetime or annual
13 benefits to different categories of hospital, medical and surgical expense
14 benefits, the commissioner may adopt rules and regulations under which
15 subsections (a)(2) and (a)(4) are applied to such policies with respect to
16 mental health benefits by substituting for the applicable lifetime or annual
17 limits an average limit that is computed taking into account the weighted
18 average of the lifetime or annual limits applicable to such categories.
19 (c) Nothing in this section shall be construed as either:
20 (1) Requiring an accident and sickness policy to offer mental health
21 benefits except as otherwise required by K.S.A. 40-2,105 and amend-
22 ments thereto; or
23 (2) affecting any terms and conditions of a policy which does include
24 mental health benefits including provisions regarding cost sharing, limits
25 on the number of visits or days of coverage, requirements relating to
26 medical necessity, requirements relating to the amount, duration or scope
27 of mental health benefits under the plan or coverage, except as specifically
28 provided in subsection (a).
29 (d) This section shall not apply to any group accident and health in-
30 surance policy which is sold to a small employer as defined in K.S.A. 40-
31 2209 and amendments thereto.
32 (e) This section shall not apply with respect to a group policy provid-
33 ing hospital, medical or surgical expense benefits if the application of this
34 section will result in an increase in the cost under the plan of at least 1%.
35 (f) In the case of a group policy providing hospital, medical or surgical
36 expense benefits that offers an eligible employee, member or dependent
37 two or more benefit package options under the policy, subsections (a)
38 and (b) shall be applied separately with respect to each such option.
39 (g) As used in this section:
40 (1) ``Aggregate lifetime limit'' means, with respect to benefits under
41 a group policy providing hospital, medical or surgical expense benefits, a
42 dollar limitation on the total amount that may be paid with respect to
43 such benefits under the policy with respect to an eligible employee, mem-
SB 204--Am. by HCW
43
1 ber or dependent;
2 (2) ``annual limit'' means, with respect to benefits under a group pol-
3 icy providing hospital, medical or surgical expense benefits, a dollar lim-
4 itation on the total amount of benefits that may be paid with respect to
5 such benefits in a 12-month period under the policy with respect to an
6 eligible employee, member or dependent;
7 (3) ``hospital, medical or surgical expense benefits'' means benefits
8 with respect to hospital, medical or surgical services, as defined under
9 the terms of the policy, but does not include mental health benefits;
10 (4) ``mental health benefits'' means benefits with respect to mental
11 health services, as defined under the terms of the policy, but does not
12 include benefits with respect to treatment of substance abuse or chemical
13 dependency.
14 (h) This section shall be effective for group policies providing hos-
15 pital, medical or surgical expense benefits which are entered into or re-
16 newed after January 1, 1998. This section shall not apply to benefits for
17 services furnished on or after September 30, 2001.
18 (i) The commissioner is hereby authorized to adopt such rules
19 and regulations as may be necessary to carry out the provisions of
20 this section.
21 New Sec. 10. (a) As used in this section, ``genetic screening or
22 testing'' means a laboratory test of a person's genes or chromo-
23 somes for abnormalities, defects or deficiencies, including carrier
24 status, that are linked to physical or mental disorders or impair-
25 ments, or that indicate a susceptibility to illness, disease or other
26 disorders, whether physical or mental, which test is a direct test
27 for abnormalities, defects or deficiencies, and not an indirect man-
28 ifestation of genetic disorders.
29 (b) An insurance company, health maintenance organization,
30 nonprofit medical and hospital, dental, optometric or pharmacy
31 corporations, or a group subject to K.S.A. 12-2616 et seq., and
32 amendments thereto, shall not:
33 (1) Require or request directly or indirectly any individual or
34 a member of the individual's family to obtain a genetic test;
35 (2) require or request directly or indirectly any individual to
36 reveal whether the individual or a member of the individual's fam-
37 ily has obtained a genetic test or the results of the test, if obtained
38 by the individual or a member of the individual's family;
39 (3) condition the provision of insurance coverage or health
40 care benefits on whether an individual or a member of the indi-
41 vidual's family has obtained a genetic test or the results of the test,
42 if obtained by the individual or a member of the individual's fam-
43 ily; or
SB 204--Am. by HCW
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1 (4) consider in the determination of rates or any other aspect
2 of insurance coverage or health care benefits provided to an in-
3 dividual whether an individual or a member of the individual's
4 family has obtained a genetic test or the results of the test, if ob-
5 tained by the individual or a member of the individual's family.
6 (c) Subsection (b) does not apply to an insurer writing life in-
7 surance[, disability income insurance or long-term care insurance]
8 coverage.
9 (d) An insurer writing life insurance[, disability income insur-
10 ance or long-term care insurance] coverage that obtains informa-
11 tion under paragraphs (1) or (2) of subsection (b), shall not:
12 (1) Use the information contrary to paragraphs (3) or (4) of
13 subsection (b) in writing a type of insurance coverage other than
14 life for the individual or a member of the individual's family; or
15 (2) provide for rates or any other aspect of coverage that is not
16 reasonably related to the risk involved.
17 Sec. 11. K.S.A. 1996 Supp. 40-1909 is hereby amended to read
18 as follows: 40-1909. (a) Such corporations shall be subject to the
19 provisions of the Kansas general corporation code, articles 60 to
20 74, inclusive, of chapter 17 of the Kansas Statutes Annotated, ap-
21 plicable to nonprofit corporations, to the provisions of K.S.A. 40-
22 214, 40-215, 40-216, 40-218, 40-219, 40-222, 40-223, 40-224, 40-
23 225, 40-226, 40-229, 40-230, 40-231, 40-235, 40-236, 40-237,
24 40-247, 40-248, 40-249, 40-250, 40-251, 40-252, 40-254, 40-2,100,
25 40-2,101, 40-2,102, 40-2,103, 40-2,104, 40-2,105, 40-2,114, 40-
26 2,116, 40-2,117, 40-2a01 to 40-2a19, inclusive, 40-2216 to 40-2221,
27 inclusive, 40-2229, 40-2230, 40-2250, 40-2251, 40-2253, 40-2254,
28 40-2401 to 40-2421, inclusive, 40-3301 to 40-3313, inclusive, and
29 amendments thereto, and to the provisions of K.S.A. 1996 Supp.
30 40-2,153 and, 40-2,154, 40-2,160 and 40-2,161, and amendments
31 thereto, and K.S.A. 1996 Supp. 40-2,160 section 1, except as the con-
32 text otherwise requires, and shall not be subject to any other pro-
33 visions of the insurance code except as expressly provided in this
34 act.
35 (b) No policy, agreement, contract or certificate issued by a
36 corporation to which this section applies shall contain a provision
37 which excludes, limits or otherwise restricts coverage because
38 medicaid benefits as permitted by title XIX of the social security
39 act of 1965 are or may be available for the same accident or illness.
40 (c) Violation of subsection (b) shall be subject to the penalties
41 prescribed by K.S.A. 40-2407 and 40-2411, and amendments
42 thereto.
43 Sec. 12. K.S.A. 1996 Supp. 40-19a10 is hereby amended to
SB 204--Am. by HCW
45
1 read as follows: 40-19a10. (a) Such corporations shall be subject to
2 the provisions of K.S.A. 40-214, 40-215, 40-216, 40-218, 40-219,
3 40-222, 40-223, 40-224, 40-225, 40-226, 40-229, 40-230, 40-231,
4 40-235, 40-236, 40-237, 40-247, 40-248, 40-249, 40-250, 40-251,
5 40-252, 40-254, 40-2,102, 40-2a01 et seq., 40-2215 to 40-2220,
6 inclusive, 40-2253, 40-2401 to 40-2421, inclusive, 40-3301 to 40-
7 3313, inclusive, and amendments thereto, and to the provisions of
8 K.S.A. 1996 Supp. 40-2,154 and 40-2,161, and amendments thereto,
9 and section 1, except as the context otherwise requires, and shall
10 not be subject to any other provisions of the insurance code except
11 as expressly provided in this act.
12 (b) No policy, agreement, contract or certificate issued by a
13 corporation to which this section applies shall contain a provision
14 which excludes, limits or otherwise restricts coverage because
15 medicaid benefits as permitted by title XIX of the social security
16 act of 1965 are or may be available for the same accident or illness.
17 (c) Violation of subsection (b) shall be subject to the penalties
18 prescribed by K.S.A. 40-2407 and 40-2411, and amendments
19 thereto.
20 Sec. 13. K.S.A. 1996 Supp. 40-19b10 is hereby amended to
21 read as follows: 40-19b10. (a) Such corporations shall be subject
22 to the provisions of K.S.A. 40-214, 40-215, 40-216, 40-218, 40-219,
23 40-222, 40-223, 40-224, 40-225, 40-226, 40-229, 40-230, 40-231,
24 40-235, 40-236, 40-237, 40-247, 40-248, 40-249, 40-250, 40-251,
25 40-252, 40-254, 40-2,102, 40-2a01 et seq., 40-2215, 40-2253,
26 40-2401 to 40-2421, inclusive, and 40-3301 to 40-3312, inclusive,
27 and amendments thereto, and to the provisions of K.S.A. 1996
28 Supp. 40-2,154 and 40-2,161, and amendments thereto, and section 1,
29 except as the context otherwise requires, and shall not be subject
30 to any other provisions of the insurance code except as expressly
31 provided in this act.
32 (b) No policy, agreement, contract or certificate issued by a
33 corporation to which this section applies shall contain a provision
34 which excludes, limits or otherwise restricts coverage because
35 medicaid benefits as permitted by title XIX of the social security
36 act of 1965 are or may be available for the same accident or illness.
37 (c) Violation of subsection (b) shall be subject to the penalties
38 prescribed by K.S.A. 40-2407 and 40-2411, and amendments
39 thereto.
40 Sec. 14. K.S.A. 1996 Supp. 40-19c09 is hereby amended to
41 read as follows: 40-19c09. (a) Corporations organized under the
42 nonprofit medical and hospital service corporation act shall be
43 subject to the provisions of the Kansas general corporation code,
SB 204--Am. by HCW
46
1 articles 60 to 74, inclusive, of chapter 17 of the Kansas Statutes
2 Annotated, applicable to nonprofit corporations, to the provisions
3 of K.S.A. 40-214, 40-215, 40-216, 40-218, 40-219, 40-222, 40-223,
4 40-224, 40-225, 40-226, 40-229, 40-230, 40-231, 40-235, 40-236,
5 40-237, 40-247, 40-248, 40-249, 40-250, 40-251, 40-252, 40-254,
6 40-2,100, 40-2,101, 40-2,102, 40-2,103, 40-2,104, 40-2,105, 40-
7 2,116, 40-2,117, 40-2a01 et seq., 40-2111 to 40-2116, inclusive,
8 40-2215 to 40-2220, inclusive, 40-2221a, 40-2221b, 40-2229, 40-
9 2230, 40-2250, 40-2251, 40-2253, 40-2254, 40-2401 to 40-2421, in-
10 clusive, and 40-3301 to 40-3313, inclusive, and amendments
11 thereto, and to the provisions of K.S.A. 1996 Supp. 40-2,153 and,
12 40-2,154, 40-2,160 and 40-2,161, and amendments thereto, and
13 K.S.A. 1996 Supp. 40-2,160 section 1, except as the context otherwise
14 requires, and shall not be subject to any other provisions of the
15 insurance code except as expressly provided in this act.
16 (b) No policy, agreement, contract or certificate issued by a
17 corporation to which this section applies shall contain a provision
18 which excludes, limits or otherwise restricts coverage because
19 medicaid benefits as permitted by title XIX of the social security
20 act of 1965 are or may be available for the same accident or illness.
21 (c) Violation of subsection (b) shall be subject to the penalties
22 prescribed by K.S.A. 40-2407 and 40-2411, and amendments
23 thereto.
24 Sec. 15. K.S.A. 1996 Supp. 40-19d10 is hereby amended to
25 read as follows: 40-19d10. (a) Such corporations shall be subject
26 to the provisions of K.S.A. 40-214, 40-215, 40-216, 40-218, 40-219,
27 40-222, 40-223, 40-224, 40-225, 40-226, 40-229, 40-230, 40-231,
28 40-235, 40-236, 40-237, 40-247, 40-248, 40-249, 40-250, 40-251,
29 40-252, 40-254, 40-2,102, 40-2a01 et seq., 40-2215 to 40-2220,
30 inclusive, 40-2253, 40-2401 to 40-2421, inclusive, 40-3301 to 40-
31 3313, inclusive, and amendments thereto, and to the provisions of
32 K.S.A. 1996 Supp. 40-2,154 and 40-2,161, and amendments thereto,
33 and section 1, except as the context otherwise requires, and shall
34 not be subject to any other provisions of the insurance code except
35 as expressly provided in this act.
36 (b) No policy, agreement, contract or certificate issued by a
37 corporation to which this section applies shall contain a provision
38 which excludes, limits or otherwise restricts coverage because
39 medicaid benefits as permitted by title XIX of the social security
40 act of 1965 are or may be available for the same accident or illness.
41 (c) Violation of subsection (b) shall be subject to the penalties
42 prescribed by K.S.A. 40-2407 and 40-2411, and amendments
43 thereto.
SB 204--Am. by HCW
47
1 Sec. 8. 10. 16. K.S.A. 40-2118 and 40-2228 and K.S.A. 1996 Supp.
2 40-1909, 40-19a10, 40-19b10, 40-19c09, 40-19d10, 40-2122, 40-
3 2124, 40-2209, 40-2209d and, 40-2209f and 40-3209 and K.S.A. 1995
4 Supp. 40-19a10, as amended by section 111 of chapter 229 of the
5 1996 Session Laws of Kansas, 40-19b10, as amended by section
6 112 of chapter 229 of the 1996 Session Laws of Kansas, 40-19c09,
7 as amended by section 113 of chapter 229 of the 1996 Session Laws
8 of Kansas and 40-19d10, as amended by section 114 of chapter 229
9 of the 1996 Session Laws of Kansas are hereby repealed.
10 Sec. 9. 11. 17. This act shall take effect and be in force from and
11 after its publication in the statute book.