Ch. 190             1997 Session Laws of Kansas             1549

An Act relating to health care; relating to accident and health insurance; group and indi-
vidual policies of insurance; patient protection; women's-right-to-know; amending K.S.A.
40-2118, 40-2201, 40-2228 and 65-6701 and K.S.A. 1996 Supp. 40-2,105, 40-2119, 40-
2121, 40-2122, 40-2124, 40-2209, 40-2209d, 40-2209f and 40-3209 and repealing the
existing sections; also repealing K.S.A. 65-6706.

Be it enacted by the Legislature of the State of Kansas:

Section 1. K.S.A. 1996 Supp. 40-2209 is hereby amended to read as
follows: 40-2209. (A) (1) Group sickness and accident insurance is de-
clared to be that form of sickness and accident insurance covering groups
of persons, with or without one or more members of their families or one
or more dependents. Except at the option of the employee or member
and except employees or members enrolling in a group policy after the
close of an open enrollment opportunity, no individual employee or mem-
ber of an insured group and no individual dependent or family member
may be excluded from eligibility or coverage under a policy providing
hospital, medical or surgical expense benefits both with respect to policies
issued or renewed within this state and with respect to policies issued or
renewed outside this state covering persons residing in this state. For
purposes of this section, an open enrollment opportunity shall be deemed
to be a period no less favorable than a period beginning on the employee's
or member's date of initial eligibility and ending 31 days thereafter.

(2) An eligible employee, member or dependent who requests en-
rollment following the open enrollment opportunity or any special en-
rollment period for dependents as specified in subsection (3) shall be con-

1550             1997 Session Laws of Kansas             Ch. 190

sidered a late enrollee. An accident and sickness insurer may exclude a
late enrollee, except during an open enrollment period. However, an eli-
gible employee, member or dependent shall not be considered a late
enrollee if:

(1) (a) The individual:

(a) (i) Was covered under another group policy which provided hos-
pital, medical or surgical expense benefits or was covered under section
607(1) of the employee retirement income security act of 1974 (ERISA)
at the time the individual was eligible to enroll;

(b) (ii) states in writing, at the time of the open enrollment period,
that coverage under another group policy which provided hospital, med-
ical or surgical expense benefits was the reason for declining enrollment,
but only if the group policyholder or the accident and sickness insurer
required such a written statement and provided the individual with notice
of the requirement for a written statement and the consequences of such
written statement;

(c) (iii) has lost coverage under another group policy providing hos-
pital, medical or surgical expense benefits or under section 607(1) of the
employee retirement income security act of 1974 (ERISA) as a result of
the termination of employment, reduction in the number of hours of em-
ployment, termination of employer contributions toward such coverage,
the termination of the other policy's coverage, death of a spouse or di-
vorce or legal separation or was under a COBRA continuation provision
and the coverage under such provision was exhausted; and

(d) iv requests enrollment within 31 30 days after the termination of
coverage under the other policy; or

(2) (b) a court has ordered coverage to be provided for a spouse or
minor child under a covered employee's or member's policy.

(3) (a) If an accident and sickness insurer issues a group policy pro-
viding hospital, medical or surgical expenses and makes coverage available
to a dependent of an eligible employee or member and such dependent
becomes a dependent of the employee or member through marriage, birth,
adoption or placement for adoption, then such group policy shall provide
for a dependent special enrollment period as described in subsection (3)(b)
of this section during which the dependent may be enrolled under the
policy and in the case of the birth or adoption of a child, the spouse of an
eligible employee or member may be enrolled if otherwise eligible for
coverage.

(b) A dependent special enrollment period under this subsection shall
be a period of not less than 30 days and shall begin on the later of (i) the
date such dependent coverage is made available, or (ii) the date of the
marriage, birth or adoption or placement for adoption.

(c) If an eligible employee or member seeks to enroll a dependent
during the first 30 days of such a dependent special enrollment period,
the coverage of the dependent shall become effective: (i) in the case of

Ch. 190             1997 Session Laws of Kansas             1551

marriage, not later than the first day of the first month beginning after
the date the completed request for enrollment is received; (ii) in the case
of the birth of a dependent, as of the date of such birth; or (iii) in the case
of a dependent's adoption or placement for adoption, the date of such
adoption or placement for adoption.

(4) (a) No group policy providing hospital, medical or surgical ex-
pense benefits issued or renewed within this state or issued or renewed
outside this state covering residents within this state shall limit or exclude
benefits for specific conditions existing at or prior to the effective date of
coverage thereunder. Such policy may impose a preexisting conditions
waiting period exclusion, not to exceed 90 days following enrollment for
benefits for conditions, including related conditions, for which diagnosis,
treatment or advice was sought or received in the 90 days prior to the
effective date of coverage. (whether mental or physical), regardless of the
cause of the condition for which medical advice, diagnosis, care or treat-
ment was recommended or received in the 90 days prior to the effective
date of coverage. For the purposes of this section, the term ``preexisting
conditions exclusion'' shall mean, with respect to coverage, a limitation or
exclusion of benefits relating to a condition based on the fact that the
condition was present before the date of enrollment for such coverage
whether or not any medical advice, diagnosis, care or treatment was rec-
ommended or received before such date. Any preexisting conditions ex-
clusion shall run concurrently with any waiting period.

(b) Such policy may impose a waiting period after full-time employ-
ment starts before an employee is first eligible to enroll in any applicable
group policy.

(c) A health maintenance organization which offers such policy which
does not impose any preexisting conditions exclusion may impose an af-
filiation period for such coverage, provided that: (i) such application pe-
riod is applied uniformly without regard to any health status related fac-
tors and (ii) such affiliation period does not exceed two months. The
affiliation period shall run concurrently with any waiting period under
the plan.

(d) A health maintenance organization may use alternative methods
from those described in this subsection to address adverse selection if
approved by the commissioner.

(5) Genetic information shall not be treated as a preexisting condition
in the absence of a diagnosis of the condition related to such information.

(6) A group policy providing hospital, medical or surgical expense
benefits may not impose any preexisting condition exclusion relating to
pregnancy as a preexisting condition.

(7) A group policy providing hospital, medical or surgical expense
benefits may not impose any preexisting condition waiting period in the
case of a child who is adopted or placed for adoption before attaining 18
years of age and who, as of the last day of a 30-day period beginning on

1552             1997 Session Laws of Kansas             Ch. 190

the date of the adoption or placement for adoption, is covered by a policy
specified in subsection (A). This subsection shall not apply to coverage
before the date of such adoption or placement for adoption.

(8) Such policy shall waive such a preexisting conditions waiting pe-
riod exclusion to the extent the employee or member or individual de-
pendent or family member was covered by (a) a group or individual sick-
ness and accident policy, (b) coverage under section 607(1) of the
employees retirement income security act of 1974 (ERISA), (c) a group
specified in K.S.A. 40-2222 and amendments thereto, (d) part A or part
B of title XVIII of the social security act, (e) title XIX of the social security
act, other than coverage consisting solely of benefits under section 1928,
(f) chapter 55 of title 10 United States code, (g) a medical care program
of the indian health service or of a tribal organization, (h) the Kansas
uninsurable health plan act pursuant to K.S.A. 40-2217 et seq. and amend-
ments thereto or a similar health benefits risk pool of another state, (i) a
health plan offered under chapter 89 of title 5, United States code, (j) a
health benefit plan under section 5(e) of the peace corps act (22 U.S.C.
2504(e), or (k) a group subject to K.S.A. 12-2616 et seq. and amendments
thereto which provided hospital, medical and surgical expense benefits
within 31 63 days prior to the effective date of coverage with no gap in
coverage. A group policy shall credit the periods of prior coverage spec-
ified in subsection (A)(7) without regard to the specific benefits covered
during the period of prior coverage. Any period that the employee or
member is in a waiting period for any coverage under a group health plan
or is in an affiliation period shall not be taken into account in determining
the continuous period under this subsection.

(B) (1) An accident and sickness insurer which offers group policies
providing hospital, medical or surgical expense benefits shall provide a
certification as described in subsection (B)(2): (a) At the time an eligible
employee, member or dependent ceases to be covered under such policy
or otherwise becomes covered under a COBRA continuation provision;
(b) in the case of an eligible employee, member or dependent being covered
under a COBRA continuation provision, at the time such eligible em-
ployee, member or dependent ceases to be covered under a COBRA con-
tinuation provision; and (c) on the request on behalf of such eligible em-
ployee, member or dependent made not later than 24 months after the
date of the cessation of the coverage described in subsection (B)(1)(a) or
(B)(1)(b), whichever is later.

(2) The certification described in this subsection is a written certifi-
cation of (a) the period of coverage under a policy specified in subsection
(A) and any coverage under such COBRA continuation provision, and (b)
any waiting period imposed with respect to the eligible employee, member
or dependent for any coverage under such policy.

(C) Any group policy may impose participation requirements, define
full-time employees or members and otherwise be designed for the group

Ch. 190             1997 Session Laws of Kansas             1553

as a whole through negotiations between the group sponsor and the in-
surer to the extent such design is not contrary to or inconsistent with this
act and may be issued to such group upon the following basis:.

(D) (1) An accident and sickness insurer offering a group policy pro-
viding hospital, medical or surgical expense benefits must renew or con-
tinue in force such coverage at the option of the policyholder or certifi-
cateholder except as provided in subsection (2).

(2) An accident and sickness insurer may nonrenew or discontinue
coverage under a group policy providing hospital, medical or surgical
expense benefits based only on one or more of the following circumstances:

(a) If the policyholder or certificateholder has failed to pay any pre-
mium or contributions in accordance with the terms of the group policy
providing hospital, medical or surgical expense benefits or the accident
and sickness insurer has not received timely premium payments;

(b) if the policyholder or certificateholder has performed an act or
practice that constitutes fraud or made an intentional misrepresentation
of material fact under the terms of such coverage;

(c) if the policyholder or certificateholder has failed to comply with
a material plan provision relating to employer contribution or group par-
ticipation rules;

(d) if the accident and sickness insurer is ceasing to offer coverage in
such group market in accordance with subsections (D)(3) or (D)(4);

(e) in the case of accident and sickness insurer that offers coverage
under a policy providing hospital, medical or surgical expense benefits
through an enrollment area, there is no longer any eligible employee,
member or dependent in connection with such policy who lives, resides
or works in the medical service enrollment area of the accident and sick-
ness insurer (or in the area for which the accident and sickness insurer is
authorized to do business); or

(f) in the case of a group policy providing hospital, medical or surgical
expense benefits which is offered through an association or trust pursuant
to subsections (F)(3) or (F)(5), the membership of the employer in such
association or trust ceases but only if such coverage is terminated uni-
formly without regard to any health status related factor relating to any
eligible employee, member or dependent.

(3) In any case in which an accident and sickness insurer which offers
a group policy providing hospital, medical or surgical expense benefits
decides to discontinue offering such type of group policy, such coverage
may be discontinued only if:

(a) The accident and sickness insurer notifies all policyholders and
certificateholders and all eligible employees or members of such discon-
tinuation at least 90 days prior to the date of the discontinuation of such
coverage;

(b) the accident and sickness insurer offers to each policyholder who
is provided such group policy providing hospital, medical or surgical ex-

1554             1997 Session Laws of Kansas             Ch. 190

pense benefits which is being discontinued the option to purchase any
other group policy providing hospital, medical or surgical expense benefits
currently being offered by such accident and sickness insurer; and

(c) in exercising the option to discontinue coverage and in offering
the option of coverage under paragraph (b), the accident and sickness
insurer acts uniformly without regard to the claims experience of those
policyholders or certificateholders or any health status related factors re-
lating to any eligible employee, member or dependent covered by such
group policy or new employees or members who may become eligible for
such coverage.

(4) If the accident and sickness insurer elects to discontinue offering
group policies providing hospital, medical or surgical expense benefits or
group coverage to a small employer pursuant to K.S.A. 40-2209f and
amendments thereto, such coverage may be discontinued only if:

(a) The accident and sickness insurer provides notice to the insurance
commissioner, to all policyholders or certificateholders and to all eligible
employees and members covered by such group policy providing hospital,
medical or surgical expense benefits at least 180 days prior to the date of
the discontinuation of such coverage;

(b) all group policies providing hospital, medical or surgical expense
benefits offered by such accident and sickness insurer are discontinued
and coverage under such policies are not renewed; and

(c) the accident and sickness insurer may not provide for the issuance
of any group policies providing hospital, medical or surgical expense ben-
efits in the discontinued market during a five year period beginning on
the date of the discontinuation of the last such group policy which is
nonrenewed.

(E) (1) An accident and sickness insurer offering a group policy pro-
viding hospital, medical or surgical expense benefits may not establish
rules for eligibility (including continued eligibility) of any employee, mem-
ber or dependent to enroll under the terms of the group policy based on
any of the following factors in relation to the eligible employee, member
or dependent: (a) Health status, (b) medical condition (including both
physical and mental illness), (c) claims experience, (d) receipt of health
care, (e) medical history, (f) genetic information, (g) evidence of insura-
bility (including conditions arising out of acts of domestic violence), or
(h) disability. This subsection shall not be construed to require a policy
providing hospital, medical or surgical expense benefits to provide par-
ticular benefits other than those provided under the terms of such group
policy or to prevent a group policy providing hospital, medical or surgical
expense benefits from establishing limitations or restrictions on the
amount, level, extent or nature of the benefits or coverage for similarly
situated individuals enrolled under the group policy.

(F) Group accident and health insurance may be offered to a group
under the following basis:

Ch. 190             1997 Session Laws of Kansas             1555

(1) Under a policy issued to an employer or trustees of a fund estab-
lished by an employer, who is the policyholder, insuring at least three two
employees of such employer, for the benefit of persons other than the
employer. The term ``employees'' shall include the officers, managers,
employees and retired employees of the employer, the partners, if the
employer is a partnership, the proprietor, if the employer is an individual
proprietorship, the officers, managers and employees and retired em-
ployees of subsidiary or affiliated corporations of a corporation employer,
and the individual proprietors, partners, employees and retired employ-
ees of individuals and firms, the business of which and of the insured
employer is under common control through stock ownership contract, or
otherwise. The policy may provide that the term ``employees'' may include
the trustees or their employees, or both, if their duties are principally
connected with such trusteeship. A policy issued to insure the employees
of a public body may provide that the term ``employees'' shall include
elected or appointed officials.

(2) Under a policy issued to a labor union which shall have a consti-
tution and bylaws insuring at least 25 members of such union.

(3) Under a policy issued to the trustees of a fund established by two
or more employers or business associations or by one or more labor un-
ions or by one or more employers and one or more labor unions, which
trustees shall be the policyholder, to insure employees of the employers
or members of the union or members of the association for the benefit
of persons other than the employers or the unions or the associations.
The term ``employees'' shall include the officers, managers, employees
and retired employees of the employer and the individual proprietor or
partners if the employer is an individual proprietor or partnership. The
policy may provide that the term ``employees'' shall include the trustees
or their employees, or both, if their duties are principally connected with
such trusteeship.

(4) A policy issued to a creditor, who shall be deemed the policyhol-
der, to insure debtors of the creditor, subject to the following require-
ments: (a) The debtors eligible for insurance under the policy shall be all
of the debtors of the creditor whose indebtedness is repayable in install-
ments, or all of any class or classes determined by conditions pertaining
to the indebtedness or to the purchase giving rise to the indebtedness.
(b) The premium for the policy shall be paid by the policyholder, either
from the creditor's funds or from charges collected from the insured
debtors, or from both.

(5) A policy issued to an association which has been organized and is
maintained for the purposes other than that of obtaining insurance, in-
suring at least 25 members, employees, or employees of members of the
association for the benefit of persons other than the association or its
officers. The term ``employees'' shall include retired employees. The pre-
miums for the policies shall be paid by the policyholder, either wholly

1556             1997 Session Laws of Kansas             Ch. 190

from association funds, or funds contributed by the members of such
association or by employees of such members or any combination thereof.

(6) Under a policy issued to any other type of group which the com-
missioner of insurance may find is properly subject to the issuance of a
group sickness and accident policy or contract.

(B) (G) Each such policy shall contain in substance: (1) A provision
that a copy of the application, if any, of the policyholder shall be attached
to the policy when issued, that all statements made by the policyholder
or by the persons insured shall be deemed representations and not war-
ranties, and that no statement made by any person insured shall be used
in any contest unless a copy of the instrument containing the statement
is or has been furnished to such person or the insured's beneficiary.

(2) A provision setting forth the conditions under which an individ-
ual's coverage terminates under the policy, including the age, if any, to
which an individual's coverage under the policy shall be limited, or, the
age, if any, at which any additional limitations or restrictions are placed
upon an individual's coverage under the policy.

(3) Provisions setting forth the notice of claim, proofs of loss and
claim forms, physical examination and autopsy, time of payment of claims,
to whom benefits are payable, payment of claims, change of beneficiary,
and legal action requirements. Such provisions shall not be less favorable
to the individual insured or the insured's beneficiary than those corre-
sponding policy provisions required to be contained in individual accident
and sickness policies.

(4) A provision that the insurer will furnish to the policyholder, for
the delivery to each employee or member of the insured group, an in-
dividual certificate approved by the commissioner of insurance setting
forth in summary form a statement of the essential features of the insur-
ance coverage of such employee or member, the procedure to be followed
in making claim under the policy and to whom benefits are payable. Such
certificate shall also contain a summary of those provisions required under
paragraphs (2) and (3) of this subsection in addition to the other essential
features of the insurance coverage. If dependents are included in the
coverage, only one certificate need be issued for each family unit.

(C) (H) No group disability income policy which integrates benefits
with social security benefits, shall provide that the amount of any disability
benefit actually being paid to the disabled person shall be reduced by
changes in the level of social security benefits resulting either from
changes in the social security law or due to cost of living adjustments
which become effective after the first day for which disability benefits
become payable.

(D) (I) A group policy of insurance delivered or issued for delivery
or renewed which provides hospital, surgical or major medical expense
insurance, or any combination of these coverages, on an expense incurred
basis, shall provide that an employee or member or such employee's or

Ch. 190             1997 Session Laws of Kansas             1557

member's covered dependents whose insurance under the group policy
has been terminated for any reason, including discontinuance of the
group policy in its entirety or with respect to an insured class, and who
has been continuously insured under the group policy or under any group
policy providing similar benefits which it replaces for at least three
months immediately prior to termination, shall be entitled to have such
coverage nonetheless continued under the group policy for a period of
six months and have issued to the employee or member or such em-
ployee's or member's covered dependents by the insurer, at the end of
such six-month period of continuation, a policy of health insurance which
conforms to the applicable requirements specified in this subsection. This
requirement shall not apply to a group policy which provides benefits for
specific diseases or for accidental injuries only or a group policy issued to
an employer subject to the continuation and conversion obligations set
forth at title I, subtitle B, part 6 of the employee retirement income
security act of 1974 or at title XXII of the public health service act, as
each act was in effect on January 1, 1987 to the extent federal law provides
the employee or member or such employee's or member's covered de-
pendents with equal or greater continuation or conversion rights; or an
employee or member or such employee's or member's covered depen-
dents shall not be entitled to have such coverage continued or a converted
policy issued to the employee or member or such employee's or member's
covered dependents if termination of the insurance under the group pol-
icy occurred because: (a) The employee or member or such employee's
or member's covered dependents failed to pay any required contribution
after receiving reasonable notice of such required contribution from the
insurer in accordance with rules and regulations adopted by the commis-
sioner of insurance; (b) any discontinued group coverage was replaced by
similar group coverage within 31 days; (c) the employee or member is or
could be covered by medicare (title XVIII of the United States social
security act as added by the social security amendments of 1965 or as
later amended or superseded); or (d) the employee or member is or could
be covered to the same extent by any other insured or lawful self-insured
arrangement which provides expense incurred hospital, surgical or med-
ical coverage and benefits for individuals in a group under which the
person was not covered prior to such termination. In the event the group
policy is terminated and not replaced the insurer may issue an individual
policy or certificate in lieu of a conversion policy or the continuation of
group coverage required herein if the individual policy or certificate pro-
vides substantially similar coverage for the same or less premium as the
group policy. In any event, the employee or member shall have the option
to be issued a conversion policy which meets the requirements set forth
in this subsection (D) (I) in lieu of the right to continue group coverage.

The continued coverage and the issuance of a converted policy shall
be subject to the following conditions:

1558             1997 Session Laws of Kansas             Ch. 190

(1) Written application for the converted policy shall be made and
the first premium paid to the insurer not later than 31 days after termi-
nation of coverage under the group policy or not later than 31 days after
notice is received pursuant to subsection (D)(21)(b)(ii) (I)(21)(b)(ii).

(2) The converted policy shall be issued without evidence of insura-
bility.

(3) The terminated employee or member shall pay to the insurer the
premium for the six-month continuation of coverage and such premium
shall be the same as that applicable to members or employees remaining
in the group. Failure to pay such premium shall terminate coverage under
the group policy at the end of the period for which the premium has been
paid. The premium rate charged for converted policies issued subsequent
to the period of continued coverage shall be such that can be expected
to produce an anticipated loss ratio of not less than 80% based upon
conversion, morbidity and reasonable assumptions for expected trends in
medical care costs. In the event the group policy is terminated and is not
replaced, converted policies may be issued at self-sustaining rates that
are not unreasonable in relation to the coverage provided based on con-
version, morbidity and reasonable assumptions for expected trends in
medical care costs. The frequency of premium payment shall be the fre-
quency customarily required by the insurer for the policy form and plan
selected, provided that the insurer shall not require premium payments
less frequently than quarterly.

(4) The effective date of the converted policy shall be the day follow-
ing the termination of insurance under the group policy.

(5) The converted policy shall cover the employee or member and
the employee's or member's dependents who were covered by the group
policy on the date of termination of insurance. At the option of the in-
surer, a separate converted policy may be issued to cover any dependent.

(6) The insurer shall not be required to issue a converted policy cov-
ering any person if such person is or could be covered by medicare (title
XVIII of the United States social security act as added by the social se-
curity amendments of 1965 or as later amended or superseded). Fur-
thermore, the insurer shall not be required to issue a converted policy
covering any person if:

(a) (i) Such person is covered for similar benefits by another hospital,
surgical, medical or major medical expense insurance policy or hospital
or medical service subscriber contract or medical practice or other pre-
payment plan or by any other plan or program, or

(ii) such person is eligible for similar benefits (whether or not covered
therefor) under any arrangement of coverage for individuals in a group,
whether on an insured or uninsured basis, or

(iii) similar benefits are provided for or available to such person, pur-
suant to or in accordance with the requirements of any state or federal
law, and

Ch. 190             1997 Session Laws of Kansas             1559

(b) the benefits provided under the sources referred to in paragraph
(i) above for such person or benefits provided or available under the
sources referred to in paragraphs (ii) and (iii) above for such person,
together with the benefits provided by the converted policy, would result
in over-insurance according to the insurer's standards. The insurer's stan-
dards must bear some reasonable relationship to actual health care costs
in the area in which the insured lives at the time of conversion and must
be filed with the commissioner of insurance prior to their use in denying
coverage.

(7) A converted policy may include a provision whereby the insurer
may request information in advance of any premium due date of such
policy of any person covered as to whether:

(a) Such person is covered for similar benefits by another hospital,
surgical, medical or major medical expense insurance policy or hospital
or medical service subscriber contract or medical practice or other pre-
payment plan or by any other plan or program;

(b) such person is covered for similar benefits under any arrangement
of coverage for individuals in a group, whether on an insured or uninsured
basis; or

(c) similar benefits are provided for or available to such person, pur-
suant to or in accordance with the requirements of any state or federal
law.

The converted policy may provide that the insurer may refuse to renew
the policy and the coverage of any person insured for the following rea-
sons only:

(a) Either the benefits provided under the sources referred to in par-
agraphs (i) and (ii) above for such person or benefits provided or available
under the sources referred to in paragraph (iii) above for such person,
together with the benefits provided by the converted policy, would result
in over-insurance according to the insurer's standards on file with the
commissioner of insurance, or the converted policyholder fails to provide
the requested information;

(b) fraud or material misrepresentation in applying for any benefits
under the converted policy;

(c) eligibility of the insured person for coverage under medicare (title
XVIII of the United States social security act as added by the social se-
curity amendments of 1965 or as later amended or superseded) or under
any other state or federal law (except title XIX of the social security act
of 1965) providing for benefits similar to those provided by the converted
policy; or

(d) other reasons approved by the commissioner of insurance.

(8) An insurer shall not be required to issue a converted policy which
provides coverage and benefits in excess of those provided under the
group policy from which conversion is made.

(9) If the converted policy provides that any hospital, surgical or med-

1560             1997 Session Laws of Kansas             Ch. 190

ical benefits payable may be reduced by the amount of any such benefits
payable under the group policy after the termination of the individual's
insurance or the converted policy includes provisions so that during the
first policy year the benefits payable under the converted policy, together
with the benefits payable under the group policy, shall not exceed those
that would have been payable had the individual's insurance under the
group policy remained in force and effect, the converted policy shall pro-
vide credit for deductibles, copayments and other conditions satisfied
under the group policy.

(10) Subject to the provisions and conditions of this act, if the group
insurance policy from which conversion is made insures the employee or
member for basic hospital or surgical expense insurance, the employee
or member shall be entitled to obtain a converted policy providing, at the
insured's option, coverage on an expense incurred basis under any one of
the plans meeting the following requirements:
Plan A

(a) hospital room and board daily expense benefits in a maximum
dollar amount approximating the average semiprivate rate charged in
metropolitan areas of this state, for a maximum duration of 70 days,

(b) miscellaneous hospital expense benefits of a maximum amount of
10 times the hospital room and board daily expense benefits, and

(c) surgical operation expense benefits according to a surgical sched-
ule consistent with those customarily offered by the insurer under group
or individual health insurance policies and providing a maximum benefit
of $800, or
Plan B

(a) hospital room and board daily expense benefits in a maximum
dollar amount equal to 75% of the maximum dollar amount determined
for plan A, for a maximum duration of 70 days,

(b) miscellaneous hospital expense benefits of a maximum amount of
10 times the hospital room and board daily expense benefits, and

(c) surgical operation expense benefits according to a surgical sched-
ule consistent with those customarily offered by the insurer under group
or individual health insurance policies and providing a maximum benefit
of $600, or
Plan C

(a) hospital room and board daily expense benefits in a maximum
dollar amount equal to 50% of the maximum dollar amount determined
for plan A, for a maximum duration of 70 days,

(b) miscellaneous hospital benefits of a maximum amount of 10 times
the hospital room and board daily expense benefits, and

(c) surgical operation expense benefits according to a surgical sched-
ule consistent with those customarily offered by the insurer under group

Ch. 190             1997 Session Laws of Kansas             1561

or individual health insurance policies and providing a maximum benefit
of $400.

The maximum dollar amounts of plan A shall be determined by the
commissioner of insurance and may be redetermined by such official from
time to time as to converted policies issued as new policies subsequent
to such redetermination. At the request of the insured, such redetermi-
ned amounts shall, subject to the provisions of condition (17) and sub-
mission of reasonable evidence of insurability, be made available to the
holders of converted policies which have been in effect at least three years
on the date the redetermined amounts become effective. At the option
of the insurer, any such requested increase or decrease in coverage on
outstanding policies or any renewal thereof need not be made effective
until the first policy anniversary date following the insured's request. Such
redetermination shall not be made more often than once in three years.
The maximum dollar amounts in plans A, B and C shall be rounded to
the nearest multiple of $10.

(11) (10) Subject to the provisions and conditions of this act, if the
group insurance policy from which conversion is made insures the em-
ployee or member for major medical expense insurance, the employee
or member shall be entitled to obtain a converted policy providing cata-
strophic or major medical coverage under a plan meeting the following
requirements:

(a) A maximum benefit at least equal to either, at the option of the
insurer, paragraphs (i) or (ii) below:

(i) The smaller of the following amounts:

1. The maximum benefit provided under the group policy.

2. A maximum payment of $250,000 per covered person for all cov-
ered medical expenses incurred during the covered person's lifetime.

(ii) The smaller of the following amounts:

1. The maximum benefit provided under the group policy.

2. A maximum payment of $250,000 for each unrelated injury or sick-
ness.

(b) Payment of benefits at the rate of 80% of covered medical ex-
penses which are in excess of the deductible, until 20% of such expenses
in a benefit period reaches $1,000, after which benefits will be paid at
the rate of 100% during the remainder of such benefit period. Payment
of benefits for outpatient treatment of mental illness, if provided in the
converted policy, may be at a lesser rate but not less than 50%.

(c) A deductible for each benefit period which, at the option of the
insurer, shall be (a) the sum of the benefits deductible and $100, or (b)
the corresponding deductible in the group policy. The term ``benefits
deductible,'' as used herein, means the value of any benefits provided on
an expense incurred basis which are provided with respect to covered
medical expenses by any other hospital, surgical, or medical insurance
policy or hospital or medical service subscriber contract or medical prac-

1562             1997 Session Laws of Kansas             Ch. 190

tice or other prepayment plan, or any other plan or program whether on
an insured or uninsured basis, or in accordance with the requirements of
any state or federal law and, if pursuant to condition (12), the converted
policy provides both basic hospital or surgical coverage and major medical
coverage, the value of such basic benefits.

If the maximum benefit is determined by paragraph (a)(ii) above, the
insurer may require that the deductible be satisfied during a period of
not less than three months if the deductible is $100 or less, and not less
than six months if the deductible exceeds $100.

(d) The benefit period shall be each calendar year when the maxi-
mum benefit is determined by paragraph (a)(i) above or 24 months when
the maximum benefit is determined by paragraph (a)(ii) above.

(e) The term ``covered medical expenses,'' as used above, shall in-
clude at least, in the case of hospital room and board charges 80% of the
average semiprivate room and board rate for the hospital in which the
individual is confined and twice such amount for charges in an intensive
care unit. Any surgical schedule shall be consistent with those customarily
offered by the insurer under group or individual health insurance policies
and must provide at least a $1,200 maximum benefit.

(12) (11) The conversion privilege required by this act shall, if the
group insurance policy insures the employee or member for basic hospital
or surgical expense insurance as well as major medical expense insurance,
make available the plans of benefits set forth in conditions (10) and (11)
condition 10. At the option of the insurer, such plans of benefits may be
provided under one policy.

The insurer may also, in lieu of the plans of benefits set forth in con-
ditions (10) and (11) condition 10, provide a policy of comprehensive
medical expense benefits without first dollar coverage. The policy shall
conform to the requirements of condition (11) (10). An insurer electing
to provide such a policy shall make available a low deductible option, not
to exceed $100, a high deductible option between $500 and $1,000, and
a third deductible option midway between the high and low deductible
options.

(13) (12) The insurer, at its option, may also offer alternative plans
for group health conversion in addition to those required by this act.

(14) (13) In the event coverage would be continued under the group
policy on an employee following the employee's retirement prior to the
time the employee is or could be covered by medicare, the employee may
elect, in lieu of such continuation of group insurance, to have the same
conversion rights as would apply had such person's insurance terminated
at retirement by reason of termination of employment or membership.

(15) (14) The converted policy may provide for reduction of coverage
on any person upon such person's eligibility for coverage under medicare
(title XVIII of the United States social security act as added by the social
security amendments of 1965 or as later amended or superseded) or un-

Ch. 190             1997 Session Laws of Kansas             1563

der any other state or federal law providing for benefits similar to those
provided by the converted policy.

(16) (15) Subject to the conditions set forth above, the continuation
and conversion privileges shall also be available:

(a) To the surviving spouse, if any, at the death of the employee or
member, with respect to the spouse and such children whose coverage
under the group policy terminates by reason of such death, otherwise to
each surviving child whose coverage under the group policy terminates
by reason of such death, or, if the group policy provides for continuation
of dependents' coverage following the employee's or member's death, at
the end of such continuation;

(b) to the spouse of the employee or member upon termination of
coverage of the spouse, while the employee or member remains insured
under the group policy, by reason of ceasing to be a qualified family
member under the group policy, with respect to the spouse and such
children whose coverage under the group policy terminates at the same
time; or

(c) to a child solely with respect to such child upon termination of
such coverage by reason of ceasing to be a qualified family member under
the group policy, if a conversion privilege is not otherwise provided above
with respect to such termination.

(17) If the benefit levels required in condition (10) exceed the benefit
levels provided under the group policy, the conversion policy may offer
benefits which are substantially similar to those provided under the group
policy either at the time the group policy was discontinued in its entirety
and not replaced or as the group policy is in effect at the time the benefits
under the converted policies are determined or redetermined in lieu of
those required in condition (10).

(18) (16) The insurer may elect to provide group insurance coverage
which complies with this act in lieu of the issuance of a converted indi-
vidual policy.

(19) (17) A notification of the conversion privilege shall be included
in each certificate of coverage.

(20) (18) A converted policy which is delivered outside this state must
be on a form which could be delivered in such other jurisdiction as a
converted policy had the group policy been issued in that jurisdiction.

(21) (19) The insurer shall give the employee or member and such
employee's or member's covered dependents: (a) Reasonable notice of
the right to convert at least once during the six-month continuation pe-
riod; or (b) for persons covered under 29 U.S.C. 1161 et seq., notice of
the right to a conversion policy required by this subsection (D) shall be
given at least 30 days: (i) Prior to the end of the continuation period
provided by 29 U.S.C. 1161 et seq., or (ii) from the date the employer
ceases to provide any similar group health plan to any employee. Such

1564             1997 Session Laws of Kansas             Ch. 190

notices shall be provided in accordance with rules and regulations
adopted by the commissioner of insurance.

(E) (J) (1) No policy issued by an insurer to which this section applies
shall contain a provision which excludes, limits or otherwise restricts cov-
erage because medicaid benefits as permitted by title XIX of the social
security act of 1965 are or may be available for the same accident or
illness.

(2) Violation of this subsection shall be subject to the penalties pre-
scribed by K.S.A. 40-2407 and 40-2411, and amendments thereto.

(K) The commissioner is hereby authorized to adopt such rules and
regulations as may be necessary to carry out the provisions of this section.

Sec. 2. K.S.A. 1996 Supp. 40-2209d is hereby amended to read as
follows: 40-2209d. As used in this act:

(a) ``Actuarial certification'' means a written statement by a member
of the American academy of actuaries or other individual acceptable to
the commissioner that a small employer carrier is in compliance with the
provisions of K.S.A. 40-2209h and amendments thereto, based upon the
person's examination, including a review of the appropriate records and
of the actuarial assumptions and methods used by the small employer
carrier in establishing premium rates for applicable health benefit plans.

(b) ``Approved service area'' means a geographical area, as approved
by the commissioner to transact insurance in this state, within which the
carrier is authorized to provide coverage.

(c) ``Base premium rate'' means, for each class of business as to a
rating period, the lowest premium rate charged or that could have been
charged under the rating system for that class of business, by the small
employer carrier to small employers with similar case characteristics for
health benefit plans with the same or similar coverage.

(d) ``Basic small employer health care plan'' means a health benefit
plan developed by the board pursuant to K.S.A. 40-2209k and amend-
ments thereto.

(e) ``Board'' means the board of directors of the program.

(f) ``Carrier'' or ``small employer carrier'' means any insurance com-
pany, nonprofit medical and hospital service corporation, nonprofit op-
tometric, dental, and pharmacy service corporations, municipal group-
funded pool, fraternal benefit society or health maintenance organization,
as these terms are defined by the Kansas Statutes Annotated, that offers
health benefit plans covering eligible employees of one or more small
employers in this state.

(g) ``Case characteristics'' means, with respect to a small employer,
the geographic area in which the employees reside; the age and sex of
the individual employees and their dependents; the appropriate industry
classification as determined by the carrier, and the number of employees
and dependents and such other objective criteria as may be approved

Ch. 190             1997 Session Laws of Kansas             1565

family composition by the commissioner. ``Case characteristics'' shall not
include claim experience, health status and duration of coverage since
issue.

(h) ``Class of business'' means all or a separate grouping of small em-
ployers established pursuant to K.S.A. 40-2209g and amendments
thereto.

(i) ``Commissioner'' means the commissioner of insurance.

(j) ``Department'' means the insurance department.

(k) ``Dependent'' means the spouse or child of an eligible employee,
subject to applicable terms of the health benefits plan covering such em-
ployee and the dependent eligibility standards established by the board.

(l) ``Eligible employee'' means an employee who works on a full-time
basis, with a normal work week of 30 or more hours, and includes a sole
proprietor, a partner of a partnership or an independent contractor, pro-
vided such sole proprietor, partner or independent contractor is included
as an employee under a health benefit plan of a small employer but does
not include an employee who works on a part-time, temporary or substi-
tute basis.

(m) ``Financially impaired'' means a member which, after the effec-
tive date of this act, is not insolvent but is:

(1) Deemed by the commissioner to be in a hazardous financial con-
dition pursuant to K.S.A. 40-222d and amendments thereto; or

(2) placed under an order of rehabilitation or conservation by a court
of competent jurisdiction.

(n) ``Health benefit plan'' means any hospital or medical expense pol-
icy, health, hospital or medical service corporation contract, and a plan
provided by a municipal group-funded pool, or a health maintenance
organization contract offered by an employer or any certificate issued
under any such policies, contracts or plans. ``Health benefit plan'' does
not include policies or certificates covering only accident, credit, dental,
disability income, long-term care, hospital indemnity, medicare supple-
ment, specified disease, vision care, coverage issued as a supplement to
liability insurance, insurance arising out of a workers compensation or
similar law, automobile medical-payment insurance, or insurance under
which benefits are payable with or without regard to fault and which is
statutorily required to be contained in any liability insurance policy or
equivalent self-insurance.

(o) ``Index rate'' means, for each class of business as to a rating period
for small employers with similar case characteristics, the arithmetic av-
erage of the applicable base premium rate and the corresponding highest
premium rate.

(p) ``Initial enrollment period'' means the period of time specified in
the health benefit plan during which an individual is first eligible to enroll
in a small employer health benefit plan. Such period shall be no less

1566             1997 Session Laws of Kansas             Ch. 190

favorable than a period beginning on the employee's or member's date
of initial eligibility and ending 31 days thereafter.

(q) ``Late enrollee'' means an eligible employee or dependent who
requests enrollment in a small employer's health benefit plan following
the initial enrollment period provided under the terms of the first plan
for which such employee or dependent was eligible through such small
employer, however an eligible employee or dependent shall not be con-
sidered a late enrollee if:

(1) the individual:

(A) Was covered under another employer-provided health benefit
plan or was covered under section 607(1) of the employee retirement in-
come security act of 1974 (ERISA) at the time the individual was eligible
to enroll;

(B) states in writing, at the time of the initial eligibility, that coverage
under another employer health benefit plan was the reason for declining
enrollment but only if the group policyholder or the accident and sickness
issuer required such a written statement and provided the individual with
notice of the requirement for a written statement and the consequences
of such written statement;

(C) has lost coverage under another employer health benefit plan or
under section 607(1) of the employee retirement income security act of
1974 (ERISA) as a result of the termination of employment, reduction in
the number of hours of employment, termination of employer contribu-
tions toward such coverage, the termination of the other plan's coverage,
death of a spouse, or divorce or legal separation; and

(D) requests enrollment within 31 63 days after the termination of
coverage under another employer health benefit plan; or

(2) the individual is employed by an employer who offers multiple
health benefit plans and the individual elects a different health benefit
plan during an open enrollment period; or

(3) a court has ordered coverage to be provided for a spouse or minor
child under a covered employee's plan.

(r) ``New business premium rate'' means, for each class of business
as to a rating period, the lowest premium rate charged or offered, or
which could have been charged or offered, by the small employer carrier
to small employers with similar case characteristics for newly issued health
benefit plans with the same or similar coverage.

(s) ``Plan of operation'' means the articles, bylaws and operating rules
of the program adopted by the board pursuant to K.S.A. 40-2209l and
amendments thereto.

(t) ``Preexisting conditions provision exclusion'' means a policy pro-
vision which excludes or limits coverage for charges or expenses incurred
during a specified period not to exceed 90 days following the insured's
effective date of coverage as to a condition or related conditions (whether
physical or mental), regardless of the cause of the condition for which

Ch. 190             1997 Session Laws of Kansas             1567

medical advice, diagnosis, care or treatment or advice was sought was
recommended or received in the six months immediately preceding the
effective date of coverage.

(u) ``Premium'' means moneys paid by a small employer or eligible
employees or both as a condition of receiving coverage from a small em-
ployer carrier, including any fees or other contributions associated with
the health benefit plan.

(v) ``Program'' means the Kansas small employer health reinsurance
program, established under K.S.A. 40-2209l and amendments thereto.

(w) ``Rating period'' means the calendar period for which premium
rates established by a small employer carrier are assumed to be in effect
but any period of less than one year shall be considered as a full year.

(x) ``SEHC plan'' means the Kansas small employer health care plan
which shall be a health benefit plan for small employers established by
the board in accordance with K.S.A. 40-2209k and amendments thereto.

(y) ``Service Waiting period'' means a period of time after full-time
employment begins before an employee is first eligible to enroll in any
applicable health benefit plan offered by the small employer.

(z) ``Small employer'' means any person, firm, corporation, partner-
ship or association eligible for group sickness and accident insurance pur-
suant to subsection (A) of K.S.A. 40-2209 and amendments thereto ac-
tively engaged in business whose total employed work force consisted of,
on at least 50% of its working days during the preceding year, of at least
two and no more than 50 eligible employees, the majority of whom were
employed within the state. In determining the number of eligible em-
ployees, companies which are affiliated companies or which are eligible
to file a combined tax return for purposes of state taxation, shall be con-
sidered one employer. Except as otherwise specifically provided, provi-
sions of this act which apply to a small employer which has a health benefit
plan shall continue to apply until the plan anniversary following the date
the employer no longer meets the requirements of this definition.

(aa) ``Standard small employer health care plan'' means a basic SEHC
plan with specified benefit enhancements and such deductible and co-
insurance provisions as may be developed by the board pursuant to K.S.A.
40-2209k and amendments thereto.

(bb) ``Affiliate'' or ``affiliated'' means an entity or person who directly
or indirectly through one or more intermediaries, controls or is controlled
by, or is under common control with, a specified entity or person.

Sec. 3. K.S.A. 1996 Supp. 40-2209f is hereby amended to read as
follows: 40-2209f. Health benefit plans covering small employers that are
issued or renewed within this state or outside this state covering persons
residing in this state shall be subject to the following provisions, as ap-
plicable:

(a) Provisions of preexisting conditions shall not exclude or limit cov-

1568             1997 Session Laws of Kansas             Ch. 190

erage for a period beyond 90 days following the individual's effective date
of coverage and may only relate to conditions or related conditions for
which diagnosis, advice or treatment was sought (whether physical or
mental) regardless of the cause of the condition for which medical advice,
diagnosis, care or treatment was recommended or received, during the six
months immediately preceding the effective date of coverage. Any pre-
existing conditions exclusion shall run concurrently with any waiting pe-
riod.

(b) Such policy may impose a preexisting conditions waiting period
exclusion, not to exceed 90 days for benefits for conditions, including
related conditions, for which diagnosis, treatment or advice was sought
(whether physical or mental), regardless of the cause of the condition for
which medical advice, diagnosis, care or treatment was recommended or
received in the six months prior to the effective date of coverage. On and
after May 1, 1994, Such policy shall waive such a waiting period pre-
existing conditions exclusion to the extent the employee or member or
individual dependent or family member was covered by (1) a group or
individual sickness and accident policy, (2) coverage under section 607(1)
of the employees retirement income security act of 1974 (ERISA), (3) a
group specified in K.S.A. 40-2222 and amendments thereto or (4) part A
or part B of title XVIII of the social security act, title XIX of the social
security act, other than coverage consisting solely of benefits under section
1928, chapter 55 of title 10 United States code, (5) medical care program
of the indian health service or of a tribal organization, (6) the Kansas
uninsurable health plan act pursuant to K.S.A. 40-2217 et seq. and amend-
ments thereto or similar health benefits risk pool of another state, (7) a
health plan offered under chapter 89 of title 5, United States code, (8) a
health benefit plan under section 5(e) of the peace corps act (22 U.S.C.
2504 (e) or (9) a group subject to K.S.A. 12-2616 et seq. and amendments
thereto which provided hospital, medical and surgical expense benefits
within 31 63 days prior to the effective date of coverage under a health
benefit plan with no gap in coverage. A group policy shall credit the
periods of prior coverage specified in this subsection without regard to
the specific benefits covered during the period of prior coverage. Any
period that the employee or member is in a waiting period for any cov-
erage under a group health plan or is in an affiliation period shall be
taken into account in determining the continuous period under this sub-
section.

(c) Any health benefit plan issued, delivered or renewed within this
state and subject to this act, shall be renewable with respect to all eligible
employees or dependents at the option of the policyholder, contract-
holder or small employer, except for:

(1) Nonpayment of the required premiums by the policyholder, con-
tractholder, or employer; or

(2) fraud or misrepresentation of the policyholder, contractholder, or

Ch. 190             1997 Session Laws of Kansas             1569

employer or, with respect to coverage of individual insureds, the insureds
or their representatives; or

(3) noncompliance with health benefit plan provisions; or

(4) when the total number of insured individuals covered under all
of the health benefit plans of any one employer is less than the total
number of individuals or percentage of individuals required by partici-
pation requirements under any specific health benefit plan of that em-
ployer; or

(5) when a material and significant change in the risk characteristics
of the group has occurred because the small employer is no longer actively
engaged in the business in which it was engaged on the policy's effective
date; or

(6) when the carrier ceases doing business in the small employer mar-
ket, if the following conditions are met:

(A) Notice of the decision to cease to do business in the small em-
ployer market is provided to the department, the board, to either the
policyholder or contractholder, and the employer;

(B) health benefit plans subject to this act shall not be canceled by
the carrier for one year after the date of the notice required under pro-
vision (A) unless the business has been sold to another carrier; and

(C) a carrier that ceases to do business in the small employer mar-
ketplace is prohibited from re-entering the small employer marketplace
for five years from the date of the notice required under provision (A).

(d) Notwithstanding subsection (c) pertaining to renewability, any
such health benefit plan or any coverage provided to any individual cov-
ered by such a plan subject to this act may be rescinded for fraud, material
misrepresentation or concealment by an applicant, employee, dependent
or small employer.

(e) A carrier shall not exclude any employee or dependent, who
would otherwise be covered under a health benefit plan on the basis of
an actual or expected health condition of such person, but a carrier shall
be allowed to exclude a late enrollee.

(c) A carrier may exclude a late enrollee except during an open en-
rollment period.

(f) (d) Except as expressly provided by this act, every carrier doing
business in the small employer market retains the authority to underwrite
and rate individual accident and sickness insurance policies, and to rate
small employer groups using generally accepted actuarial practices.

(g) (e) No health benefit plan issued by a carrier may limit or exclude,
by use of a rider or amendment applicable to a specific individual, cov-
erage by type of illness, treatment, medical condition or accident, except
for preexisting conditions as permitted under subsection (a).

(h) (f) In the absence of the small employer's decision to the contrary,
all health benefit plans shall make coverage available to all the eligible
employees of a small employer without a waiting period. The decision of

1570             1997 Session Laws of Kansas             Ch. 190

whether to impose a waiting period for eligible employees of a small
employer shall be made by the small employer, who may only choose
from the waiting periods offered by the carrier. No waiting period shall
be greater than 90 days and shall permit coverage to become effective no
later than the first day of the month immediately following completion
of the waiting period.

(i) (g) The benefit structure of any health benefit plan subject to this
act may be changed by the carrier to make it consistent with the benefit
structure contained in health benefit plans developed by the board for
marketing to new groups but this shall not preclude the development and
marketing of other health benefit plans to small employers.

(j) (h) (1) Except as provided in subsection (h) (f), requirements used
by a small employer carrier in determining whether to provide coverage
to a small employer, including requirements for minimum participation
of eligible employees and minimum employer contributions, shall be ap-
plied uniformly among all small employers with the same number of el-
igible employees applying for coverage or receiving coverage from the
small employer carrier.

(2) A small employer carrier may vary application of minimum par-
ticipation requirements and minimum employer contribution require-
ments only by the size of the small employer group.

(3) (A) Except as provided in provision (B), in applying minimum
participation requirements with respect to a small employer, a small em-
ployer carrier shall not consider employees or dependents who have qual-
ifying existing coverage in a health benefit plan sponsored by another
employer in determining whether the applicable percentage of partici-
pation is met.

(B) With respect to a small employer, a small employer carrier may
consider employees or dependents who have coverage under another
health benefit plan sponsored by such small employer in applying mini-
mum participation requirements.

Sec. 4. K.S.A. 1996 Supp. 40-3209 is hereby amended to read as
follows: 40-3209. (a) All forms of group and individual certificates of cov-
erage and contracts issued by the organization to enrollees or other mar-
keting documents purporting to describe the organization's health care
services shall contain as a minimum:

(1) A complete description of the health care services and other ben-
efits to which the enrollee is entitled;

(2) the locations of all facilities, the hours of operation and the serv-
ices which are provided in each facility in the case of individual practice
associations or medical staff and group practices, and, in all other cases,
a list of providers by specialty with a list of addresses and telephone
numbers;

Ch. 190             1997 Session Laws of Kansas             1571

(3) the financial responsibilities of the enrollee and the amount of
any deductible, copayment or coinsurance required;

(4) all exclusions and limitations on services or any other benefits to
be provided including any deductible or copayment feature and all re-
strictions relating to pre-existing conditions;

(5) all criteria by which an enrollee may be disenrolled or denied
reenrollment;

(6) service priorities in case of epidemic, or other emergency condi-
tions affecting demand for medical services;

(7) a provision that an enrollee or a covered dependent of an enrollee
whose coverage under a health maintenance organization group contract
has been terminated for any reason but who remains in the service area
and who has been continuously covered by the health maintenance or-
ganization for at least three months shall be entitled to obtain a converted
contract or have such coverage continued under the group contract for a
period of six months following which such enrollee or dependent shall be
entitled to obtain a converted contract in accordance with the provisions
of this section. The converted contract shall provide coverage at least
equal to the conversion coverage options generally available from insurers
or mutual nonprofit hospital and medical service corporations in the serv-
ice area at the applicable premium cost. The group enrollee or enrollees
shall be solely responsible for paying the premiums for the alternative
coverage. The frequency of premium payment shall be the frequency
customarily required by the health maintenance organization, mutual
nonprofit hospital and medical service corporation or insurer for the pol-
icy form and plan selected, except that the insurer, mutual nonprofit
hospital and medical service corporation or health maintenance organi-
zation shall require premium payments at least quarterly. The coverage
shall be available to all enrollees of any group without medical under-
writing. The requirement imposed by this subsection shall not apply to a
contract which provides benefits for specific diseases or for accidental
injuries only, nor shall it apply to any employee or member or such em-
ployee's or member's covered dependents when:

(A) Such person was terminated for cause as permitted by the group
contract approved by the commissioner;

(B) any discontinued group coverage was replaced by similar group
coverage within 31 days; or

(C) the employee or member is or could be covered by any other
insured or noninsured arrangement which provides expense incurred hos-
pital, surgical or medical coverage and benefits for individuals in a group
under which the person was not covered prior to such termination. Writ-
ten application for the converted contract shall be made and the first
premium paid not later than 31 days after termination of the group cov-
erage or receipt of notice of conversion rights from the health mainte-
nance organization, whichever is later, and shall become effective the day

1572             1997 Session Laws of Kansas             Ch. 190

following the termination of coverage under the group contract. The
health maintenance organization shall give the employee or member and
such employee's or member's covered dependents reasonable notice of
the right to convert at least once within 30 days of termination of coverage
under the group contract. The group contract and certificates may include
provisions necessary to identify or obtain identification of persons and
notification of events that would activate the notice requirements and
conversion rights created by this section but such requirements and rights
shall not be invalidated by failure of persons other than the employee or
member entitled to conversion to comply with any such provisions. In
addition, the converted contract shall be subject to the provisions con-
tained in paragraphs (2), (4), (5), (6), (7), (8), (9), (12), (13), (14), (15),
(16), and (18), (19) and (20) of subsection (D) (I) of K.S.A. 40-2209, and
amendments thereto;

(8) (A) group contracts shall contain a provision extending payment
of such benefits until discharged or for a period not less than 31 days
following the expiration date of the contract, whichever is earlier, for
covered enrollees and dependents confined in a hospital on the date of
termination;

(B) a provision that coverage under any subsequent replacement con-
tract that is intended to afford continuous coverage will commence im-
mediately following expiration of any prior contract with respect to cov-
ered services not provided pursuant to subparagraph (8)(A); and

(9) an individual contract shall provide for a 10-day period for the
enrollee to examine and return the contract and have the premium re-
funded, but if services were received by the enrollee during the 10-day
period, and the enrollee returns the contract to receive a refund of the
premium paid, the enrollee must pay for such services.

(b) No health maintenance organization authorized under this act
shall contract with any provider under provisions which require enrollees
to guarantee payment, other than copayments and deductibles, to such
provider in the event of nonpayment by the health maintenance organi-
zation for any services which have been performed under contracts be-
tween such enrollees and the health maintenance organization. Further,
any contract between a health maintenance organization and a provider
shall provide that if the health maintenance organization fails to pay for
covered health care services as set forth in the contract between the
health maintenance organization and its enrollee, the enrollee or covered
dependents shall not be liable to any provider for any amounts owed by
the health maintenance organization. If there is no written contract be-
tween the health maintenance organization and the provider or if the
written contract fails to include the above provision, the enrollee and
dependents are not liable to any provider for any amounts owed by the
health maintenance organization.

(c) No group or individual certificate of coverage or contract form or

Ch. 190             1997 Session Laws of Kansas             1573

amendment to an approved certificate of coverage or contract form shall
be issued unless it is filed with the commissioner. Such contract form or
amendment shall become effective within 30 days of such filing unless
the commissioner finds that such contract form or amendment does not
comply with the requirements of this section.

(d) Every contract shall include a clear and understandable descrip-
tion of the health maintenance organization's method for resolving en-
rollee grievances.

(e) The provisions of subsections (A), (B) and, (C), (D) and (E) of
K.S.A. 40-2209 and 40-2215 and amendments thereto shall apply to all
contracts issued under this section, and the provisions of such sections
shall apply to health maintenance organizations.

Sec. 5. K.S.A. 40-2228 is hereby amended to read as follows: 40-
2228. (a) The commissioner may adopt reasonable rules and regulations:

(1) To establish specific standards for policy provisions of long-term
care insurance policies. Such standards shall be in addition to and in
accordance with applicable laws of this state, and shall address terms of
renewability, initial and subsequent conditions of eligibility, nonduplica-
tion of coverage provisions, coverage of dependents, preexisting condi-
tions, termination of insurance, probationary periods, limitations, excep-
tions, reductions, elimination periods, requirements for replacement,
recurrent conditions and definitions of terms; and

(2) to specify prohibited policy provisions not otherwise specifically
authorized by statute which, in the opinion of the commissioner, are un-
just, unfair or unfairly discriminatory to any person insured under a long-
term care insurance policy.

(b) Rules and regulations adopted by the commissioner shall:

(1) Recognize the unique, developing and experimental nature of
long-term care insurance; and

(2) recognize the appropriate distinctions necessary between group
and individual long-term care insurance policies.

(c) The commissioner may adopt rules and regulations establishing
loss-ratio standards for long-term care insurance policies if a specific ref-
erence to long-term care insurance policies is contained in the rules and
regulations.

(d) No long-term care insurance policy may:

(1) Be canceled, nonrenewed, or otherwise terminated solely on the
grounds of the age or the deterioration of the mental or physical health
of the insured individual or certificateholder; or

(2) contain a provision establishing any new waiting period in the
event existing coverage is converted to or replaced by a new or other form
within the same company, except with respect to an increase in benefits
voluntarily selected by the insured individual or group policyholder.

(e) (1) No long-term insurance policy or certificate shall use a defi-

1574             1997 Session Laws of Kansas             Ch. 190

nition of preexisting condition which is more restrictive than the follow-
ing: ``Preexisting condition'' means the existence of symptoms which
would cause an ordinarily prudent person to seek diagnosis, care or treat-
ment, or a condition for which medical advice or treatment was recom-
mended by, or received from a provider of health care services, within:
a condition for which medical advice or treatment was recommended by,
or received from a provider of health care services, within six months
preceding the effective date of coverage of an insured person.

(A) Six months preceding the effective date of coverage of an insured
person who is 65 years of age or older on the effective date of coverage;
or

(B) twenty-four months preceding the effective date of coverage of
an insured person who is under age 65 on the effective date of coverage.

(2) No long-term care insurance policy shall exclude coverage for a
loss or confinement which is the result of a preexisting condition unless
such loss or confinement begins within: six months following the effective
date of coverage of an insured person.

(A) Six months following the effective date of coverage of an insured
person who is 65 years of age or older on the effective date of coverage;
or

(B) twenty-four months following the effective date of coverage of an
insured person who is under age 65 on the effective date of coverage.

(3) The commissioner may extend the limitation periods set forth in
subsections (e)(1) and (e)(2) above as to specific age group categories or
specific policy forms upon finding that the extension is not contrary to
the best interest of the public.

(4) The definition of preexisting condition shall not prohibit an in-
surer from using an application form designed to elicit the complete
health history of an applicant, and, on the basis of the answers on that
application, from underwriting in accordance with that insurer's estab-
lished underwriting standards.

(f) No long-term care insurance policy shall require prior institution-
alization as a condition precedent to the payment of benefits.

(g) In order to provide for fair disclosure in the sale of long-term care
insurance policies:

(1) An outline of coverage shall be delivered to an applicant for a
long-term care insurance policy at the time of application. In the case of
direct response solicitations, the insurer shall deliver the outline of cov-
erage upon the applicant's request, but regardless of request, shall make
such delivery no later than at the time of policy delivery. Such outline of
coverage shall include:

(A) A description of the principal benefits and coverage provided in
the policy;

(B) a statement of the principal exclusions, reductions and limitations
contained in the policy;

Ch. 190             1997 Session Laws of Kansas             1575

(C) a statement of the renewal provisions, including any reservation
in the policy of a right to change premiums; and

(D) a statement that the outline of coverage is a summary of the
policy issued or applied for, and that the policy should be consulted to
determine governing contractual provisions.

(2) A certificate issued pursuant to a group long-term care insurance
policy which policy is delivered or issued for delivery in this state shall
include the information required by subsection (B)(4) of K.S.A. 40-2209,
and amendments thereto.

(h) No policy shall be advertised, marketed or offered as long-term
care insurance unless it complies with the provisions of this act.

New Sec. 6. (a) On and after July 1, 1997, and subject to any exclu-
sions set out in subsections (b) through (e), each accident and sickness
insurer that offers or renews policies providing hospital, medical or sur-
gical expense benefits to a small employer must: (1) Accept every small
employer that applies for such coverage; and (2) accept for enrollment
all eligible employees or dependents under such policy who apply for
enrollment during the period in which the eligible employee or depen-
dent first becomes eligible to enroll under the terms of the policy.

(b) (1) In the case of an accident and health insurer that offers a
policy providing hospital, medical or surgical expense benefits to a small
employer through a medical service enrollment area the accident and
health insurer may:

(A) Limit the small employers that may apply for such coverage to
those with eligible employees or dependents who live, work or reside in
the medical service enrollment area for such policy; and

(B) within the medical service enrollment area of such policy, deny
coverage to such small employer if the accident and sickness insurer has
demonstrated to the commissioner that: (i) It will not have the capacity
to deliver services adequately to small employees and dependents of any
additional small employers because of its obligations to existing small
employer group policyholders or certificateholders and to eligible em-
ployees and dependents; and (ii) it will apply this paragraph uniformly to
all small employers without regard to the claims experience of those small
employers and their employees and dependents and without regard to
the health status factors of any employees or dependents.

(2) An accident and sickness insurer which denies coverage to a small
employer under any policy providing hospital, medical or surgical expense
benefits in any medical service enrollment area in accordance with sub-
section (b)(1)(B) may not offer such policies to small employers within
such medical service enrollment area for a period of 180 days after cov-
erage is denied.

(c) (1) An accident and sickness insurer may deny coverage to a small
employer under a policy providing hospital, medical or surgical expense

1576             1997 Session Laws of Kansas             Ch. 190

benefits if the accident and sickness insurer has demonstrated to the
commissioner that:

(A) It does not have the financial reserves necessary to underwrite
additional coverage; and

(B) it is applying this paragraph uniformly to all small employers in
this state without regard to the claims experience of the small employers
and their employees and dependents and without regard to any health
status factors of any employees or dependents.

(2) An accident and health insurer upon denying coverage to small
employers under policies providing hospital, medical or surgical expense
benefits in accordance with subsection (c)(1) may not offer any policies
providing hospital, medical or surgical expense benefits to any small em-
ployer for a period of 180 days after the date such policies are denied or
until the accident and health insurer has demonstrated to the commis-
sioner that it has sufficient financial reserves to underwrite additional
coverage, whichever is later.

(d) The requirements of subsection (a) shall not be construed to pre-
clude an accident and health insurer from establishing employer contri-
bution rules or group participation rules for the offering of policies pro-
viding hospital, medical or surgical expense benefits to small employers.

(e) The requirements of subsection (a) shall not apply to small em-
ployer group policies offered by an accident and health insurer if such
coverage is made available only through one or more associations.

(f) As used in this subsection the following mean:

(1) ``Dependent'' means those persons as defined in subsection (k) of
K.S.A. 40-2209d and amendments thereto;

(2) ``employee'' means those persons as defined in subsection (1) of
K.S.A. 40-2209d and amendments thereto;

(3) ``employer contribution rule'' means a requirement relating to the
minimum level or amount of employer contribution toward the premium
for enrollment of employees and dependents;

(4) ``group participation rule'' means a requirement relating to the
minimum number of employees and dependents that must be enrolled
in relation to a specified percentage or number of eligible employees or
dependents;

(5) ``health status related factors'' means: (A) a physical or mental
illness medical condition, (B) claims experience, (C) receipt of health
care, (D) medical history, (E) genetic information, (F) evidence of insur-
ability including conditions arising out of acts of domestic violence and
(H) disability; and

(6) ``small employer'' means those employers as defined by subsection
(z) of K.S.A. 40-2209d and amendments thereto.

Sec. 7. On and after January 1, 1998, K.S.A. 40-2118 is hereby
amended to read as follows: 40-2118. As used in this act, unless the con-

Ch. 190             1997 Session Laws of Kansas             1577

text otherwise requires, the following words and phrases shall have the
meanings ascribed to them in this section:

(a) ``Administering carrier'' means the insurer or third-party admin-
istrator designated in K.S.A. 40-2120.

(b) ``Association'' means the Kansas health insurance association es-
tablished in K.S.A. 40-2119.

(c) ``Board'' means the board of directors of the association.

(d) ``Church plan'' means a plan as defined under section 3(33) of the
Employee Retirement Income Security Act of 1974.

(d) (e) ``Commissioner'' means the commissioner of insurance.

(f) ``Creditable coverage'' means with respect to an individual, cov-
erage of the individual under any of the following:

(1) A group health plan.

(2) health insurance coverage;

(3) part A or Part B of Title XVIII of the Social Security Act;

(4) title XIX of the Social Security Act, other than coverage consisting
solely of benefit under Section 1928;

(5) chapter 55 of Title 10, United States Code;

(6) a medical care program of the Indian Health Service or of a tribal
organization;

(7) a state health benefit risk pool;

(8) a health plan offered under Chapter 89 of Title 5, United States
Code;

(9) a public health plan as defined under regulations promulgated by
the secretary of health and human services; and

(10) a health benefit plan under section 5(e) of the Peace Corps Act
(22 U.S.C. 2504(d)).

(g) ``Dependent'' means a resident spouse or resident unmarried child
under the age of 19 years, a child who is a student under the age of 23
years and who is financially dependent upon the parent, or a child of any
age who is disabled and dependent upon the parent.

(h) ``Federally defined eligible individual'' means an individual:

(1) For whom, as of the date the individual seeks coverage under this
section, the aggregate of the periods of creditable coverage is 18 or more
months and whose most recent prior coverage was under a group health
plan, government plan or church plan;

(2) who is not eligible for coverage under a group health plan, Part
A or B of Title XVII of the Social Security Act, or a state plan under Title
XIX of the Social Security Act, or any successor program, and who does
not have any other health insurance coverage;

(3) with respect to whom the most recent coverage was not terminated
for factors relating to nonpayment of premiums or fraud; and

(4) who had been offered the option of continuation coverage under
COBRA or under a similar program, who elected such continuation cov-
erage, and who has exhausted such continuation coverage.

1578             1997 Session Laws of Kansas             Ch. 190

(i) ``Governmental plan'' means a plan as defined under section 3(32)
of the Employee Retirement Income Security Act of 1974 and any plan
maintained for its employees by the government of the United States or
by any agency or instrumentality of such government.

(j) ``Group health plan'' means an employee benefit plan as defined
by section 3(1) of the Employee Retirement Income Security Act of 1974
to the extent that the plan provides any hospital, surgical or medical ex-
pense benefits to employees or their dependents (as defined under the
terms of the plan) directly or through insurance, reimbursement or oth-
erwise.

(e) (k) ``Health insurance'' means any hospital or medical expense
policy, health, hospital or medical service corporation contract, and a plan
provided by a municipal group-funded pool, or a health maintenance
organization contract offered by an employer or any certificate issued
under any such policies, contracts or plans. ``Health insurance'' does not
include policies or certificates covering only accident, credit, dental, dis-
ability income, long-term care, hospital indemnity, medicare supplement,
specified disease, vision care, coverage issued as a supplement to liability
insurance, insurance arising out of a workers compensation or similar law,
automobile medical-payment insurance, or insurance under which ben-
efits are payable with or without regard to fault and which is statutorily
required to be contained in any liability insurance policy or equivalent
self-insurance.

(f) (l) ``Health maintenance organization'' means any organization
granted a certificate of authority under the provisions of the health main-
tenance organization act.

(g) (m) ``Insurance arrangement'' means any plan, program, contract
or any other arrangement under which one or more employers, unions
or other organizations provide to their employees or members, either
directly or indirectly through a group-funded pool, trust or third-party
administrator, health care services or benefits other than through an in-
surer.

(h) (n) ``Insurer'' means any insurance company, fraternal benefit so-
ciety, health maintenance organization and nonprofit hospital and medical
service corporation authorized to transact health insurance business in
this state.

(i) (o) ``Medicaid'' means the medical assistance program operated by
the state under title XIX of the federal social security act.

(j) (p) ``Medicare'' means coverage under both parts A and B of title
XVIII of the federal social security act, 42 USC 1395.

(k) (q) ``Member'' means all insurers and insurance arrangements
participating in the association.

(l) (r) ``Plan'' means the Kansas uninsurable health insurance plan
created pursuant to this act.

(m) (s) ``Plan of operation'' means the plan to create and operate the

Ch. 190             1997 Session Laws of Kansas             1579

Kansas uninsurable health insurance plan, including articles, bylaws and
operating rules, adopted by the board pursuant to K.S.A. 40-2119.

Sec. 8. On and after July 1, 1997, K.S.A. 1996 Supp. 40-2119 is
hereby amended to read as follows: 40-2119. (a) There is hereby created
a nonprofit legal entity to be known as the Kansas health insurance as-
sociation. All insurers and insurance arrangements providing health care
benefits in this state shall be members of the association. The association
shall operate under a plan of operation established and approved under
subsection (b) of this section and shall exercise its powers through a board
of directors established under this section.

(b) (1) The board of directors of the association shall be selected by
members of the association subject to the approval of the commissioner.
To select the initial board of directors, and to initially organize the asso-
ciation, the commissioner shall give notice to all members in this state of
the time and place of the organizational meeting. In determining voting
rights at the organizational meeting, each member shall be entitled to
one vote in person or by proxy. If the board of directors is not selected
within 60 days after the organizational meeting, the commissioner shall
appoint the initial board. In approving or selecting members of the board,
the commissioner shall consider, among other things, whether all mem-
bers are fairly represented. Members of the board may be reimbursed
from the moneys of the plan for expenses incurred by them as members
of the board of directors but shall not otherwise be compensated by the
plan for their services.

(2) The board shall submit to the commissioner a plan of operation
for the association and any amendments thereto necessary or suitable to
assure the fair, reasonable and equitable administration of the plan. The
plan of operation shall become effective upon approval in writing by the
commissioner consistent with the date on which the coverage under this
act must be made available. The commissioner shall, after notice and
hearing, approve the plan of operation if it is determined to be suitable
to assure the fair, reasonable and equitable administration of the plan and
provides for the sharing of association losses on an equitable proportion-
ate basis among the members of the association. If the board fails to
submit a suitable plan of operation within 180 days after its appointment,
or at any time thereafter fails to submit suitable amendments to the plan
of operation, the commissioner shall, after notice and hearing, adopt and
promulgate such reasonable rules and regulations as are necessary or
advisable to effectuate the provisions of this section. Such rules and reg-
ulations shall continue in force until modified by the commissioner or
superseded by a plan of operation submitted by the board and approved
by the commissioner. The plan of operation shall, in addition to require-
ments enumerated elsewhere in this act:

1580             1997 Session Laws of Kansas             Ch. 190

(A) Establish procedures for the handling and accounting of assets
and moneys of the plan;

(B) select an administering carrier in accordance with K.S.A. 40-
2120, and amendments thereto;

(C) establish procedures for the collection of assessments from all
members to provide for claims paid under the plan and for administrative
expenses incurred or estimated to be incurred during the period for which
the assessment is made. The level of payments shall be established by the
board pursuant to K.S.A. 40-2121, and amendments thereto. Assessments
shall be due and payable within 30 days of receipt of the assessment
notice;

(D) establish appropriate cost control measures, including but not
limited to, preadmission review, case management, utilization review and
exclusions and limitations with respect to treatment and services under
the plan; and

(E) develop and implement a program to publicize the existence of
the plan, the eligibility requirements and procedures for enrollment and
to maintain public awareness of the plan.

(F) Establish benefit levels, lifetime maximum benefits, and other cov-
erage and eligibility parameters, and establish such other requirements
and procedures as are necessary to assure the availability of a benefit
program or programs conforming with the requirements of a qualified
high risk pool as set forth in section 111 of Public Law 104-191 and
amendments thereto.

(c) The association shall have the general powers and authority enu-
merated by this subsection in accordance with the plan of operation ap-
proved by the commissioner under subsection (b). The association shall
have the general powers and authority granted under the laws of this state
to insurers licensed to transact the kind of health service or insurance
included under K.S.A. 40-2123, and amendments thereto, and in addition
thereto, the specific authority and duty to:

(1) Enter into contracts as are necessary or proper to carry out the
provisions and purposes of this act, including the authority, with the ap-
proval of the commissioner, to enter into contracts with similar plans of
other states for the joint performance of common administrative func-
tions, or with persons or other organizations for the performance of ad-
ministrative functions;

(2) sue or be sued, including taking any legal actions necessary or
proper for recovery of any assessments for, on behalf of, or against par-
ticipating members;

(3) take such legal action as necessary to avoid the payment of im-
proper claims against the association or the coverage provided by or
through the plan;

(4) establish appropriate rates, rate schedules, rate adjustments, ex-
pense allowances, agents' referral fees, claim reserve formulas and any

Ch. 190             1997 Session Laws of Kansas             1581

other actuarial function appropriate to the operation of the plan. During
the first two years of operation of the plan, rates shall be established in
an amount that is estimated by the board to cover all claims that may be
made against the plan and the expenses of operating the plan. In following
years, rates for coverage shall be reasonable in terms of the benefits pro-
vided, the risk experience and expenses of providing the coverage, except
that such rates shall not exceed 150% of the average premium rate
charged for similar coverage in the private market. Rates and rate sched-
ules may be adjusted for appropriate risk factors such as age, sex and
geographic location in claims costs and shall take into consideration ap-
propriate risk factors in accordance with established actuarial and under-
writing practices, however particular health conditions or illnesses shall
not constitute appropriate risk factors;

(5) assess members of the association in accordance with the provi-
sions of K.S.A. 40-2121, and amendments thereto;

(6) design the policy policies of insurance to be offered by the plan
which may cover only shall cover at least the expenses enumerated in
subsection (b) of K.S.A. 40-2123, and amendments thereto, but with such
limitations and optional benefit levels as the plan prescribes;

(7) issue policies of insurance in accordance with the requirements
of this act; and

(8) appoint from among members appropriate legal, actuarial and
other committees as necessary to provide technical assistance in the op-
eration of the plan, policy and other contract design, and any other func-
tion within the authority of the association.

Sec. 9. On and after July 1, 1997, K.S.A. 1996 Supp. 40-2121 is
hereby amended to read as follows: 40-2121. (a) Following the close of
each fiscal year, the administering carrier shall determine the net pre-
miums, the plan expenses of administration and the incurred losses for
the year. Any net loss of the plan determined after taking into account
amounts transferred pursuant to subsection (h) of K.S.A. 79-4804, and
amendments thereto, investment income and other appropriate gains and
losses shall be assessed by the board to all members of the association in
proportion to their respective shares of total health insurance premiums
received in this state during the calendar year coinciding with or ending
during the fiscal year of the association or any other equitable basis as
may be provided in the plan of operation. For health maintenance or-
ganization members and insurance arrangements, the proportionate share
of losses shall be determined through application of an equitable formula
based upon claims paid on the value of services provided. In sharing
losses, the board may abate or defer in whole or in part the assessment
of a member if, in the opinion of the board, payment of the assessment
would endanger the ability of the member to fulfill its contractual obli-
gations. Health insurance benefits paid by an insurance arrangement that

1582             1997 Session Laws of Kansas             Ch. 190

are less than an amount determined by the board to justify the cost of
collection shall not be considered for purposes of determining assess-
ments. Net gains, if any, shall be held at interest to offset future losses
or allocated to reduce future premiums. In addition to any annual as-
sessment at the close of the fiscal year of the plan authorized by this
subsection, the board may provide for interim assessments of the members
of the association, subject to the approval of the commissioner, as may be
necessary to assure the financial capability of the association in meeting
the incurred or estimated claims expenses of the plan and the operating
and administrative expenses of the plan.

(b) In addition to any assessment authorized by subsection (a) of this
section, the board may assess the members of the association for any
initial costs associated with developing and implementing the plan to the
extent such costs exceed the funds transferred to the uninsurable health
insurance plan fund pursuant to K.S.A. 40-2125 and amendments thereto.
Such assessment shall be allocated among the members of the association
in the manner prescribed by subsection (a) of this section or any other
equitable formula established by the board. Assessments under this sub-
section shall not be subject to the credit against premium tax under sub-
section (c) of this section.

(c) For all taxable years commencing after December 31, 1995, and
prior to January 1, 1998, 80% of any assessment made against a member
of the association pursuant to subsection (a) of this section may be claimed
by such member as a credit against such member's premium or privilege
tax liability imposed by K.S.A. 12-2624, 40-252 or 40-3213 and amend-
ments thereto, for the taxable year in which such assessment is paid. For
the tax year commencing after December 31, 1997, 70% of any assessment
made against a member of the association pursuant to subsection (a) of
this section may be claimed by such member as a credit against such
member's premium tax liability imposed by K.S.A. 12-2624, 40-252 or 40-
3213 and amendments thereto, for the taxable year in which such assess-
ment is paid.

For the tax year commencing after December 31, 1998, 65% of any
assessment made against a member of the association pursuant to subsec-
tion (a) of this section may be claimed by such member as a credit against
such member's premium tax liability imposed by K.S.A. 12-2624, 40-252
or 40-3213 and amendments thereto, for the taxable year in which such
assessment is paid.

For the tax year commencing after December 31, 1999, 60% of any
assessment made against a member of the association pursuant to subsec-
tion (a) of this section may be claimed by such member as a credit against
such member's premium tax liability imposed by K.S.A. 12-2624, 40-252
or 40-3213 and amendments thereto, for the taxable year in which such
assessment is paid.

Ch. 190             1997 Session Laws of Kansas             1583

The amendments made to the Kansas uninsurable health insurance plan
act by 1997 Senate Bill No. 204 shall expire on January 1, 2001.

Sec. 10. On and after January 1, 1998, K.S.A. 1996 Supp. 40-2122 is
hereby amended to read as follows: 40-2122. (a) Except for those persons
who meet the criteria set forth in subsection (b) of this section, any person
who has been a resident of this state for at least six months prior to making
application for coverage or any federally defined eligible individual who
is a legal domiciliary of this state, shall be eligible for plan coverage if
such person is able to provide evidence satisfactory to the administering
carrier that such person meets one of the following criteria:

(1) Such person has had health insurance coverage involuntarily ter-
minated for any reason other than nonpayment of premium;

(2) such person has applied for health insurance and been rejected
by two carriers because of health conditions;

(3) such person has applied for health insurance and has been quoted
a premium rate which:

(A) In the first two years of operation of the plan, is more than 150%
of the premium rate available through the plan; or

(B) in succeeding years of operation of the plan, is in excess of the
premium rate established for plan coverage in an amount set by the board;
or is in excess of the plan rate;

(4) such person has been accepted for health insurance subject to a
permanent exclusion of a preexisting disease or medical condition.; or

(5) such person is a federally defined eligible individual.

(b) Each resident dependent of a person who is eligible for plan cov-
erage shall also be eligible for plan coverage.

(b) (c) The following persons shall not be eligible for coverage under
the plan:

(1) Any person who is eligible for medicare or a recipient of medicaid
benefits;

(2) any person who has had coverage under the plan terminated less
than 12 months prior to the date of the current application, except that
this provision shall not apply with respect to an applicant who is a fed-
erally defined eligible individual;

(3) any person who has received accumulated benefits from the plan
equal to or in excess of the lifetime maximum benefits under the plan
prescribed by K.S.A. 40-2124 and amendments thereto;

(4) any person having access to accident and health insurance through
an employer-sponsored group or self-insured plan; or

(5) any person who is eligible for any other public or private program
that provides or indemnifies for health services.

(c) Any person who ceases to meet the eligibility requirements of this
section may be terminated at the end of a policy period.

(d) All plan members, insurers and insurance arrangements shall no-

1584             1997 Session Laws of Kansas             Ch. 190

tify in writing persons denied health insurance coverage, for any reason,
of the availability of coverage through the Kansas health insurance asso-
ciation.

Sec. 11. K.S.A. 1996 Supp. 40-2124 is hereby amended to read as
follows: 40-2124. (a) Coverage under the plan shall be subject to both
deductible and coinsurance provisions set by the board. The plan may
offer applicants for coverage thereunder a choice of deductible and co-
payment options or combinations thereof. At least one option shall pro-
vide for a minimum annual deductible of $5,000. On and after January
1, 1998, the plan shall offer to current participants and new enrollees no
fewer than four choices of deductible and copayment options. Coverage
shall contain a coinsurance provision for each service covered by the plan,
and such copayment requirement shall not be subject to a stop-loss pro-
vision. Such coverage may provide for a percentage or dollar amount of
coinsurance reduction at specific thresholds of copayment expenditures
by the insured.

(b) Coverage under the plan shall be subject to a maximum lifetime
benefit of $500,000 $1,000,000 per covered individual.

(c) On and after May 1, 1994, coverage under the plan shall exclude
charges or expenses incurred during the first 90 days following the effec-
tive date of coverage as to any condition: (1) Which manifested itself
during the six-month period immediately prior to the application for cov-
erage in such manner as would cause an ordinarily prudent person to seek
diagnosis, care or treatment; or (2) for which medical advice, care or
treatment was recommended or received in the six-month period im-
mediately prior to the application for coverage. In succeeding years of
operation of the plan, coverage of preexisting conditions may be excluded
as determined by the board, except that no such exclusion shall exceed
180 calendar days, and no exclusion shall be applied to a federally defined
eligible individual provided that application for coverage is made not later
than 63 days following the applicant's most recent prior creditable cov-
erage.

(d) (1) Benefits otherwise payable under plan coverage shall be re-
duced by all amounts paid or payable through any other health insurance,
or insurance arrangement, and by all hospital and medical expense ben-
efits paid or payable under any workers compensation coverage, auto-
mobile medical payment or liability insurance whether provided on the
basis of fault or nonfault, and by any hospital or medical benefits paid or
payable under or provided pursuant to any state or federal law or pro-
gram.

(2) The association shall have a cause of action against an eligible
person for the recovery of the amount of benefits paid which are not
covered expenses. Benefits due from the plan may be reduced or refused
as a set-off against any amount recoverable under this section.

Ch. 190             1997 Session Laws of Kansas             1585

New Sec. 12. (a) Except as provided in this section, an accident and
sickness insurer which offers individual policies providing hospital, med-
ical or surgical expense benefits shall renew or continue in force such
coverage at the option of the individual.

(b) An accident and sickness insurer may nonrenew or discontinue
an individual policy providing hospital, medical or surgical expense ben-
efits based only on one or more of the following:

(1) If the individual has failed to pay premiums or contributions in
accordance with the terms of the health insurance coverage or the acci-
dent and sickness insurer has not received timely premium payments;

(2) if the individual has performed an act or practice that constitutes
fraud or made an intentional misrepresentation of material fact under the
terms of the coverage;

(3) if the accident and sickness insurer is ceasing to offer individual
policies providing hospital, medical or surgical expense benefits in accord-
ance with subsection (c);

(4) in the case of accident and sickness insurer which offers individual
policies providing hospital, medical or surgical expense benefits through
enrollment area, if the individual no longer resides, lives or works in the
medical service enrollment area (or in an area for which the accident and
sickness insurer is authorized to do business) but only if such coverage is
terminated under this paragraph uniformly without regard to any health
status-related factor of covered individuals; or

(5) if the case of a policy providing hospital, medical or surgical ex-
pense benefits that is made available to individuals only through one or
more bona fide associations, the membership of the individual in the
association (on the basis of which the coverage is provided) ceases but
only if such coverage is terminated under this paragraph uniformly with-
out regard to any health status-related factor of covered individuals.

(c) If the accident and sickness insurer decides to discontinue offer-
ing a particular individual policy providing hospital, medical or surgical
expense benefits such policy may only be discontinue if:

(1) The accident and sickness insurer provides notice to each covered
individual who is provided such policy providing hospital, medical or sur-
gical expense benefits at least 90 days prior to the date of the discontin-
uation of such coverage;

(2) the accident and sickness insurer offers to each covered individual
who is provided such policy providing hospital, medical or surgical ex-
pense benefits the option to purchase any other individual policy provid-
ing hospital, medical or surgical expense benefits which is being sold by
the accident and sickness insurer; and

(3) in exercising the option to discontinue coverage and in offering
the option of coverage under subsection (b), the accident and sickness
insurer acts uniformly without regard to any health status-related factor

1586             1997 Session Laws of Kansas             Ch. 190

of enrolled individuals or individuals who may become eligible for cov-
erage under the policy.

(d) Subject to subsection (c), if the accident and sickness insurer
elects to discontinue offering any individual policies providing hospital,
medical or surgical expense benefits in this state, such insurance coverage
may be discontinued only if:

(1) The accident and sickness insurer provides notice to the commis-
sioner and to each individual policyholder of such discontinuation at least
180 days prior to the date of the expiration of such coverage; and

(2) the accident and sickness insurer is prohibited from the issuance
of any individual policies providing hospital, medical or surgical expense
benefits in the state during a five-year period beginning on the date of
the discontinuation of the last individual policy providing hospital, med-
ical or surgical expense benefits which is not renewed.

(e) An accident and sickness insurer may modify the terms and con-
ditions of the individual policy providing hospital, medical or surgical
expense benefits so long as such modification is consistent with other
provisions of the insurance code and is effective on a uniform basis among
all individuals who are covered by such policy.

(f) In applying this section in the case of individual policies providing
hospital, medical or surgical expense benefits that are made available by
accident and sickness insurer to individuals only through one or more
associations, a reference to an ``individual'' is deemed to include a ref-
erence to such an association of which the individual is a member.

(g) As used in this section, ``health status-related factor'' means: (1)
A physical or mental illness medical condition; (2) claims experience; (3)
receipt of health care; (4) medical history; (5) genetic information; (6)
evidence of insurability including conditions arising out of acts of domes-
tic violence; and (7) disability.

(h) As used in this section, ``policies providing hospital, medical or
surgical expense benefits'' does not include short term, limited duration
policies of insurance.

(i) The commissioner is hereby authorized to adopt such rules and
regulations as may be necessary to carry out the provisions of this section.

New Sec. 13. (a) An accident and sickness insurer which offers cov-
erage through a group policy providing hospital, medical or surgical ex-
pense benefits pursuant to K.S.A. 40-2209 and amendments thereto
which includes mental health benefits shall be subject to the following
requirements:

(1) If the policy does not include an aggregate lifetime limit on sub-
stantially all hospital, medical and surgical expense benefits, the policy
may not impose any aggregate lifetime limit on mental health benefits;

(2) if the policy includes an aggregate lifetime limit on substantially
all hospital, medical and surgical expense benefits the plan shall either:

Ch. 190             1997 Session Laws of Kansas             1587

(A) Apply the applicable lifetime limit both to the hospital, medical and
surgical expense benefits to which it otherwise would apply and to mental
health benefits and not distinguished in the application of such limit be-
tween such hospital, medical and surgical expense benefits and mental
health benefits; or (B) not include any aggregate lifetime limit on mental
health benefits that is less than the applicable lifetime limit on hospital,
medical and surgical expense benefits;

(3) if the policy does not include an annual limit on substantially all
hospital, medical and surgical expense benefits, the plan or coverage may
not impose any annual limit on mental health benefits; and

(4) if the policy includes an annual limit on substantially all hospital,
medical and surgical expense benefits the policy shall either: (A) Apply
the applicable annual limit both to hospital, medical and surgical expense
benefits to which it otherwise would apply and to mental health benefits
and not distinguish in the application of such limit between such hospital,
medical and surgical expense benefits and mental health benefits; or (B)
not include any annual limit on mental health benefits that is less than
the applicable annual limit.

(b) If the group policy providing hospital, medical or surgical expense
benefits is not otherwise covered by subsection (a) and either does not
apply a lifetime or annual benefit or applies different lifetime or annual
benefits to different categories of hospital, medical and surgical expense
benefits, the commissioner may adopt rules and regulations under which
subsections (a)(2) and (a)(4) are applied to such policies with respect to
mental health benefits by substituting for the applicable lifetime or annual
limits an average limit that is computed taking into account the weighted
average of the lifetime or annual limits applicable to such categories.

(c) Nothing in this section shall be construed as either:

(1) Requiring an accident and sickness policy to offer mental health
benefits except as otherwise required by K.S.A. 40-2,105 and amend-
ments thereto; or

(2) affecting any terms and conditions of a policy which does include
mental health benefits including provisions regarding cost sharing, limits
on the number of visits or days of coverage, requirements relating to
medical necessity, requirements relating to the amount, duration or scope
of mental health benefits under the plan or coverage, except as specifically
provided in subsection (a).

(d) This section shall not apply to any group accident and health in-
surance policy which is sold to a small employer as defined in K.S.A.
40-2209 and amendments thereto.

(e) This section shall not apply with respect to a group policy provid-
ing hospital, medical or surgical expense benefits if the application of this
section will result in an increase in the cost under the plan of at least 1%.

(f) In the case of a group policy providing hospital, medical or surgical
expense benefits that offers an eligible employee, member or dependent

1588             1997 Session Laws of Kansas             Ch. 190

two or more benefit package options under the policy, subsections (a)
and (b) shall be applied separately with respect to each such option.

(g) As used in this section:

(1) ``Aggregate lifetime limit'' means, with respect to benefits under
a group policy providing hospital, medical or surgical expense benefits, a
dollar limitation on the total amount that may be paid with respect to
such benefits under the policy with respect to an eligible employee, mem-
ber or dependent;

(2) ``annual limit'' means, with respect to benefits under a group pol-
icy providing hospital, medical or surgical expense benefits, a dollar lim-
itation on the total amount of benefits that may be paid with respect to
such benefits in a 12-month period under the policy with respect to an
eligible employee, member or dependent;

(3) ``hospital, medical or surgical expense benefits'' means benefits
with respect to hospital, medical or surgical services, as defined under
the terms of the policy, but does not include mental health benefits;

(4) ``mental health benefits'' means benefits with respect to mental
health services, as defined under the terms of the policy, but does not
include benefits with respect to treatment of substance abuse or chemical
dependency.

(h) This section shall be effective for group policies providing hos-
pital, medical or surgical expense benefits which are entered into or re-
newed after January 1, 1998. This section shall not apply to benefits for
services furnished on or after September 30, 2001.

(i) The commissioner is hereby authorized to adopt such rules and
regulations as may be necessary to carry out the provisions of this section.

New Sec. 14. (a) As used in this section, ``genetic screening or test-
ing'' means a laboratory test of a person's genes or chromosomes for
abnormalities, defects or deficiencies, including carrier status, that are
linked to physical or mental disorders or impairments, or that indicate a
susceptibility to illness, disease or other disorders, whether physical or
mental, which test is a direct test for abnormalities, defects or deficien-
cies, and not an indirect manifestation of genetic disorders.

(b) An insurance company, health maintenance organization, non-
profit medical and hospital, dental, optometric or pharmacy corporations,
or a group subject to K.S.A. 12-2616 et seq., and amendments thereto,
shall not:

(1) Require or request directly or indirectly any individual or a mem-
ber of the individual's family to obtain a genetic test;

(2) require or request directly or indirectly any individual to reveal
whether the individual or a member of the individual's family has ob-
tained a genetic test or the results of the test, if obtained by the individual
or a member of the individual's family;

(3) condition the provision of insurance coverage or health care ben-

Ch. 190             1997 Session Laws of Kansas             1589

efits on whether an individual or a member of the individual's family has
obtained a genetic test or the results of the test, if obtained by the indi-
vidual or a member of the individual's family; or

(4) consider in the determination of rates or any other aspect of in-
surance coverage or health care benefits provided to an individual
whether an individual or a member of the individual's family has obtained
a genetic test or the results of the test, if obtained by the individual or a
member of the individual's family.

(c) Subsection (b) does not apply to an insurer writing life insurance,
disability income insurance or long-term care insurance coverage.

(d) An insurer writing life insurance, disability income insurance or
long-term care insurance coverage that obtains information under para-
graphs (1) or (2) of subsection (b), shall not:

(1) Use the information contrary to paragraphs (3) or (4) of subsec-
tion (b) in writing a type of insurance coverage other than life for the
individual or a member of the individual's family; or

(2) provide for rates or any other aspect of coverage that is not rea-
sonably related to the risk involved.

Sec. 15. K.S.A. 1996 Supp. 40-2,105 is hereby amended to read as
follows: 40-2,105. (a) On or after the effective date of this act, every
insurer which issues any individual or group policy of accident and sick-
ness insurance providing medical, surgical or hospital expense coverage
for other than specific diseases or accidents only and which provides for
reimbursement or indemnity for services rendered to a person covered
by such policy in a medical care facility, must provide for reimbursement
or indemnity under such individual policy or under such group policy,
except as provided in subsection (d), which shall be limited to not less
than 30 days per year when such person is confined for treatment of
alcoholism, drug abuse or nervous or mental conditions in a medical care
facility licensed under the provisions of K.S.A. 65-429 and amendments
thereto, a treatment facility for alcoholics licensed under the provisions
of K.S.A. 65-4014 and amendments thereto, a treatment facility for drug
abusers licensed under the provisions of K.S.A. 65-4605 and amendments
thereto, a community mental health center or clinic licensed under the
provisions of K.S.A. 75-3307b and amendments thereto or a psychiatric
hospital licensed under the provisions of K.S.A. 75-3307b and amend-
ments thereto. Such individual policy or such group policy shall also pro-
vide for reimbursement or indemnity, except as provided in subsection
(d), of the costs of treatment of such person for alcoholism, drug abuse
and nervous or mental conditions, limited to not less than 100% of the
first $100, 80% of the next $100 and 50% of the next $1,640 in any year
and limited to not less than $7,500 in such person's lifetime, in the facil-
ities enumerated when confinement is not necessary for the treatment or

1590             1997 Session Laws of Kansas             Ch. 190

by a physician licensed or psychologist licensed to practice under the laws
of the state of Kansas.

(b) For the purposes of this section ``nervous or mental conditions''
means disorders specified in the diagnostic and statistical manual of men-
tal disorders, fourth edition, (DSM-IV, 1994) of the American psychiatric
association but shall not include conditions not attributable to a mental
disorder that are a focus of attention or treatment (DSM-IV, 1994).

(c) The provisions of this section shall be applicable to health main-
tenance organizations organized under article 32 of chapter 40 of the
Kansas Statutes Annotated.

(d) There shall be no coverage under the provisions of this section
for any assessment against any person required by a diversion agreement
or by order of a court to attend an alcohol and drug safety action program
certified pursuant to K.S.A. 8-1008 and amendments thereto.

(e) The provisions of this section shall not apply to any medicare
supplement policy of insurance, as defined by the commissioner of in-
surance by rule and regulation.

(f) The provisions of this section shall be applicable to the Kansas
state employees health care benefits program developed and provided by
the Kansas state employees health care commission.

(g) The outpatient coverage provisions of this section shall not apply
to a high deductible health plan as defined in Section 301 of P.L. 104-191
and any amendments thereto if such plan is purchased in connection with
a medical savings account pursuant to that act. After the amount of eli-
gible deductible expenses have been paid by the insured, the outpatient
costs of treatment of the insured for alcoholism, drug abuse and nervous
or mental conditions shall be paid on the same level they are provided for
a medical condition.

New Sec. 16. Sections 16 to 23 of this act shall be known and may
be cited as the patient protection act.

New Sec. 17. As used in this act:

(a) ``Emergency medical condition'' means the sudden and, at the
time, unexpected onset of a health condition that requires immediate
medical attention, where failure to provide medical attention would result
in serious impairment to bodily functions or serious dysfunction of a bod-
ily organ or part, or would place the person's health in serious jeopardy.

(b) ``Emergency services'' means ambulance services and health care
items and services furnished or required to evaluate and treat an emer-
gency medical condition, as directed or ordered by a physician.

(c) ``Health benefit plan'' means any hospital or medical expense pol-
icy, health, hospital or medical service corporation contract, a plan pro-
vided by a municipal group-funded pool, a policy or agreement entered
into by a health insurer or a health maintenance organization contract
offered by an employer or any certificate issued under any such policies,

Ch. 190             1997 Session Laws of Kansas             1591

contracts or plans. ``Health benefit plan'' does not include policies or
certificates covering only accident, credit, dental, disability income,
long-term care, hospital indemnity, medicare supplement, specified dis-
ease, vision care, coverage issued as a supplement to liability insurance,
insurance arising out of a workers compensation or similar law, automo-
bile medical-payment insurance, or insurance under which benefits are
payable with or without regard to fault and which is statutorily required
to be contained in any liability insurance policy or equivalent self-insur-
ance.

(d) ``Health insurer'' means any insurance company, nonprofit med-
ical and hospital service corporation, municipal group-funded pool, fra-
ternal benefit society, health maintenance organization, or any other en-
tity which offers a health benefit plan subject to the Kansas Statutes
Annotated.

(e) ``Insured'' means a person who is covered by a health benefit plan.

(f) ``Participating provider'' means a provider who, under a contract
with the health insurer or with its contractor or subcontractor, has agreed
to provide one or more health care services to insureds with an expec-
tation of receiving payment, other than coinsurance, copayments or de-
ductibles, directly or indirectly from the health insurer.

(g) ``Provider'' means a physician, hospital or other person which is
licensed, accredited or certified to perform specified health care services.

(h) ``Provider network'' means those participating providers who have
entered into a contract or agreement with a health insurer to provide
items or health care services to individuals covered by a health benefit
plan offered by such health insurer.

(i) ``Physician'' means a person licensed by the state board of healing
arts to practice medicine and surgery.

New Sec. 18. (a) A health benefit plan shall not deny coverage for
emergency services if the symptoms presented by an insured and re-
corded by the attending provider indicate that an emergency medical
condition exists, or for emergency services necessary to provide an in-
sured with a medical examination and stabilizing treatment, regardless of
whether prior authorization was obtained to provide those services.

(b) If a participating provider or other authorized representative of a
health insurer authorizes emergency services, the health insurer shall not
subsequently rescind or modify that authorization after the provider ren-
ders the authorized care in good faith and pursuant to the authorization
except for:

(1) Payments made as a result of misrepresentation, fraud, omission
or clerical error; and

(2) copayment, coinsurance or deductible amounts that are the re-
sponsibility of the insured.

(c) Once an insured is stabilized pursuant to subsection (a), a health

1592             1997 Session Laws of Kansas             Ch. 190

benefit plan may require as a condition of further coverage that a hospital
emergency facility shall promptly contact the health insurer for prior au-
thorization for continuing treatment, specialty consultations, transfer ar-
rangements or other medically necessary and appropriate care for an in-
sured.

(d) Coverage of emergency services shall be subject to applicable
copayments, coinsurance and deductibles.

(e) For required post evaluation or post stabilization services imme-
diately following treatment of an emergency medical condition, a health
insurer shall provide access to an authorized representative 24 hours a
day, seven days a week.

New Sec. 19. No health insurer shall prohibit or restrict any partic-
ipating provider from discussing with or disclosing to any insured or other
individual any medically appropriate health care information that such
provider deems appropriate regarding the nature of treatment options,
the risks or alternatives thereto, the process used or the decision made
by such insurer to approve or deny health care services, the availability
of alternate therapies, consultations, or tests, or from advocating on behalf
of the insured within the utilization review or grievance processes estab-
lished by the health insurer.

New Sec. 20. No health insurer shall offer or operate a compensation
arrangement between such health insurer or its agents and a participating
provider that may directly or indirectly serve as an inducement to reduce
or limit the delivery of medically necessary services with respect to an
insured in any health benefit plan offered by such health insurer. Com-
pensation arrangements which involve capitation payments or other risk
sharing provisions shall not be considered inducements.

New Sec. 21. Every health insurer shall inform in writing current
and prospective insureds that the following information shall be available
upon request:

(a) A complete description of the health care services, items and other
benefits to which the insured is entitled in the particular health benefit
plan which is covering or being offered to such person;

(b) a description of any limitations, exceptions or exclusions to cov-
erage in the health benefit plan, including prior authorization policies,
restricted drug formularies or other provisions which restrict access to
covered services or items by the insured;

(c) a listing of the health benefit plan's participating providers, their
business addresses and telephone numbers, the availability of those pro-
viders, and any limitations on an insured's choice of provider;

(d) notification in advance of any changes in the health benefit plan
which either reduces the coverage or benefits, or increases the cost, to
such person; and

(e) a description of the grievance and appeal procedures available

Ch. 190             1997 Session Laws of Kansas             1593

under the health benefit plan and an insured's rights regarding termina-
tion, disenrollment, nonrenewal or cancelation of coverage.

New Sec. 22. (a) A health insurer providing a health benefit plan
shall maintain a provider network that is sufficient in numbers and types
of providers to assure that all covered services to an insured will be ac-
cessible without unreasonable delay. Sufficiency of the provider network
shall be determined in accordance with the requirements of this section,
and may be established by reference to any reasonable criteria used by
the health insurer, including but not limited to: provider-insured ratios
by specialty; primary care provider-insured ratios; geographic accessibil-
ity; waiting times for appointments with participating providers; hours of
operation; and the availability of technological and specialty services to
serve the needs of insureds requiring technologically advanced or spe-
cialty care.

(b) A health insurer shall have a plan by which an insured with a life-
threatening, chronic, degenerative or disabling condition or disease,
which requires specialized medical care over a prolonged period of time,
may receive a referral to a specialist with expertise in treating such disease
or condition who shall be responsible for and capable of providing and
coordinating the insured's specialty care.

(c) Nothing in this section shall require a health insurer to provide
benefits not otherwise covered by the terms of the health benefits plan.

(d) A provider network shall not be determined to be insufficient for
failure to contract with any provider unwilling to contract under the same
terms and conditions, including reimbursement levels, as such health in-
surer offers to other similarly situated health care providers.

New Sec. 23. The commissioner of insurance may adopt rules and
regulations as necessary to implement the provisions of the patient pro-
tection act.

Sec. 24. K.S.A. 40-2201 is hereby amended to read as follows: 40-
2201. (a) The term ``policy of accident and sickness insurance'' as used
herein includes any policy or contract insuring against loss resulting from
sickness or bodily injury or death by accident, or both, issued by a stock,
or mutual company or association or any other insurer.

(b) The term ``policy of stop loss or excess loss insurance coverage''
means a policy, contract, endorsement, attachments, amendments or other
modifications that insure against losses of the policyholder issued by a
stock, or mutual company or association or any other insurer.

New Sec. 25. Sections 25 to 33, inclusive, and amendments thereto
shall be known and may be cited as the woman's-right-to-know act.

Sec. 26. K.S.A. 65-6701 is hereby amended to read as follows: 65-
6701. As used in this act:

(a) ``Abortion'' means the use of any means to intentionally terminate
a pregnancy except for the purpose of causing a live birth. Abortion does

1594             1997 Session Laws of Kansas             Ch. 190

not include: (1) The use of any drug or device that inhibits or prevents
ovulation, fertilization or the implantation of an embryo; or (2) disposition
of the product of in vitro fertilization prior to implantation.

(b) ``Counselor'' means a person who is: (1) Licensed to practice med-
icine and surgery; (2) licensed to practice psychology; (3) licensed to prac-
tice professional or practical nursing; (4) registered to practice profes-
sional counseling; (5) licensed as a social worker; (6) the holder of a
master's or doctor's degree from an accredited graduate school of social
work; (7) registered to practice marriage and family therapy; (8) a regis-
tered physician's assistant; or (9) a currently ordained member of the
clergy or religious authority of any religious denomination or society.
Counselor does not include the physician who performs or induces the
abortion or a physician or other person who assists in performing or in-
ducing the abortion.

(c) ``Department'' means the department of health and environment.

(d) ``Gestational age'' means the time that has elapsed since the first
day of the woman's last menstrual period.

(e) ``Medical emergency'' means that condition which, on the basis of
the physician's good faith clinical judgment, so complicates the medical
condition of a pregnant woman as to necessitate the immediate abortion
of her pregnancy to avert her death or for which a delay will create serious
risk of substantial and irreversible impairment of a major bodily function.

(f) ``Minor'' means a person less than 18 years of age.

(d) (g) ``Physician'' means a person licensed to practice medicine and
surgery in this state.

(e) (h) ``Pregnant'' or ``pregnancy'' means that female reproductive
condition of having a fetus in the mother's body.

(i) ``Qualified person'' means an agent of the physician who is a psy-
chologist, licensed social worker, registered professional counselor, reg-
istered nurse or physician.

(j) ``Unemancipated minor'' means any minor who has never been:
(1) Married; or (2) freed, by court order or otherwise, from the care,
custody and control of the minor's parents.

(f) (k) ``Viable'' means that stage of gestation when, in the best med-
ical judgment of the attending physician, the fetus is capable of sustained
survival outside the uterus without the application of extraordinary med-
ical means.

New Sec. 27. No abortion shall be performed or induced without
the voluntary and informed consent of the woman upon whom the abor-
tion is to be performed or induced. Except in the case of a medical emer-
gency, consent to an abortion is voluntary and informed only if:

(a) At least 24 hours before the abortion the physician who is to per-
form the abortion or the referring physician has informed the woman in
writing of:

Ch. 190             1997 Session Laws of Kansas             1595

(1) The name of the physician who will perform the abortion;

(2) a description of the proposed abortion method;

(3) a description of risks related to the proposed abortion method,
including risks to the woman's reproductive health and alternatives to the
abortion that a reasonable patient would consider material to the decision
of whether or not to undergo the abortion;

(4) the probable gestational age of the fetus at the time the abortion
is to be performed and that Kansas law requires the following: ``No person
shall perform or induce an abortion when the fetus is viable unless such
person is a physician and has a documented referral from another phy-
sician not financially associated with the physician performing or inducing
the abortion and both physicians determine that: (1) The abortion is nec-
essary to preserve the life of the pregnant woman; or (2) the fetus is
affected by a severe or life-threatening deformity or abnormality.'' If the
child is born alive, the attending physician has the legal obligation to take
all reasonable steps necessary to maintain the life and health of the child;

(5) the probable anatomical and physiological characteristics of the
fetus at the time the abortion is to be performed;

(6) the medical risks associated with carrying a fetus to term; and

(7) any need for anti-Rh immune globulin therapy, if she is Rh neg-
ative, the likely consequences of refusing such therapy and the cost of
the therapy.

(b) At least 24 hours before the abortion, the physician who is to
perform the abortion, the referring physician or a qualified person has
informed the woman in writing that:

(1) Medical assistance benefits may be available for prenatal care,
childbirth and neonatal care, and that more detailed information on the
availability of such assistance is contained in the printed materials given
to her and described in section 28 and amendments thereto;

(2) the printed materials in section 28 and amendments thereto de-
scribe the fetus and list agencies which offer alternatives to abortion with
a special section listing adoption services;

(3) the father of the fetus is liable to assist in the support of her child,
even in instances where he has offered to pay for the abortion except that
in the case of rape this information may be omitted; and

(4) the woman is free to withhold or withdraw her consent to the
abortion at any time prior to invasion of the uterus without affecting her
right to future care or treatment and without the loss of any state or
federally-funded benefits to which she might otherwise be entitled.

(c) Prior to the abortion procedure, prior to physical preparation for
the abortion and prior to the administration of medication for the abor-
tion, the woman shall meet privately with the physician who is to perform
the abortion and such person's staff to ensure that she has an adequate
opportunity to ask questions of and obtain information from the physician
concerning the abortion.

1596             1997 Session Laws of Kansas             Ch. 190

(d) At least 24 hours before the abortion, the woman is given a copy
of the printed materials described in section 28 and amendments thereto.
If the woman asks questions concerning any of the information or ma-
terials, answers shall be provided to her in her own language.

(e) The woman certifies in writing on a form provided by the de-
partment, prior to the abortion, that the information required to be pro-
vided under subsections (a), (b) and (d) has been provided and that she
has met with the physician who is to perform the abortion on an individual
basis as provided under subsection (c). All physicians who perform abor-
tions shall report the total number of certifications received monthly to
the department. The department shall make the number of certifications
received available on an annual basis.

(f) Prior to the performance of the abortion, the physician who is to
perform the abortion or the physician's agent receives a copy of the writ-
ten certification prescribed by subsection (e) of this section.

(g) The woman is not required to pay any amount for the abortion
procedure until the 24-hour waiting period has expired.

New Sec. 28. (a) The department shall cause to be published and
distributed widely, within 30 days after the effective date of this act, and
shall update on an annual basis, the following easily comprehensible
printed materials:

(1) Geographically indexed materials designed to inform the woman
of public and private agencies and services available to assist a woman
through pregnancy, upon childbirth and while her child is dependent,
including but not limited to, adoption agencies. The materials shall in-
clude a comprehensive list of the agencies, a description of the services
they offer and the telephone numbers and addresses of the agencies; and
inform the woman about available medical assistance benefits for prenatal
care, childbirth and neonatal care and about the support obligations of
the father of a child who is born alive. The department shall ensure that
the materials described in this section are comprehensive and do not
directly or indirectly promote, exclude or discourage the use of any agency
or service described in this section. The materials shall also contain a toll-
free 24-hour a day telephone number which may be called to obtain,
orally, such a list and description of agencies in the locality of the caller
and of the services they offer. The materials shall state that it is unlawful
for any individual to coerce a woman to undergo an abortion, that any
physician who performs an abortion upon a woman without her informed
consent may be liable to her for damages. Kansas law permits adoptive
parents to pay costs of prenatal care, childbirth and neonatal care. The
materials shall include the following statement:

``Many public and private agencies exist to provide counseling
and information on available services. You are strongly urged to seek
their assistance to obtain guidance during your pregnancy. In ad-

Ch. 190             1997 Session Laws of Kansas             1597

dition, you are encouraged to seek information on abortion services,
alternatives to abortion, including adoption, and resources available
to post-partum mothers. The law requires that your physician or
the physician's agent provide the enclosed information.''

(2) Materials that inform the pregnant woman of the probable ana-
tomical and physiological characteristics of the fetus at two-week gesta-
tional increments from fertilization to full term, including pictures or
drawings representing the development of a fetus at two-week gestational
increments, and any relevant information on the possibility of the fetus'
survival. Any such pictures or drawings shall contain the dimensions of
the fetus and shall be realistic. The materials shall be objective, nonjudg-
mental and designed to convey only accurate scientific information about
the fetus at the various gestational ages. The material shall also contain
objective information describing the methods of abortion procedures
commonly employed, the medical risks commonly associated with each
such procedure and the medical risks associated with carrying a fetus to
term.

(3) A certification form to be used by physicians or their agents under
subsection (e) of section 27 and amendments thereto, which will list all
the items of information which are to be given to women by physicians
or their agents under the woman's-right-to-know act.

(b) The materials required under this section shall be printed in a
typeface large enough to be clearly legible. The materials shall be made
available in both English and Spanish language versions.

(c) The materials required under this section shall be available at no
cost from the department upon request and in appropriate number to
any person, facility or hospital.

New Sec. 29. Where a medical emergency compels the performance
of an abortion, the physician shall inform the woman, before the abortion
if possible, of the medical indications supporting the physician's judgment
that an abortion is necessary to avert her death or to avert substantial and
irreversible impairment of a major bodily function.

New Sec. 30. Any physician who intentionally, knowingly or reck-
lessly fails to provide informed consent pursuant to the woman's-right-
to-know act is guilty of unprofessional conduct as defined in K.S.A. 65-
2837 and amendments thereto.

New Sec. 31. Any physician who complies with the provisions of this
act shall not be held civilly liable to a patient for failure to obtain informed
consent to the abortion.

New Sec. 32. The provisions of this act are declared to be severable,
and if any provision, word, phrase or clause of the act or the application
thereof to any person shall be held invalid, such invalidity shall not affect
the validity of the remaining portions of the woman's-right-to-know act.

1598             1997 Session Laws of Kansas             Ch. 190

New Sec. 33. (a) Nothing in the woman's-right-to-know act shall be
construed as creating or recognizing a right to abortion.

(b) It is not the intention of the woman's-right-to-know act to make
lawful an abortion that is currently unlawful.

Sec. 34. K.S.A. 40-2118, 40-2201, 40-2228, 65-6701 and 65-6706 and
K.S.A. 1996 Supp. 40-2,105, 40-2119, 40-2121, 40-2122, 40-2124, 40-
2209, 40-2209d, 40-2209f and 40-3209 are hereby repealed.

Sec. 35. This act shall take effect and be in force from and after its
publication in the statute book.

Approved May 15, 1997.