Report Title:

Health Insurance

Description:

Requires insurers, mutual benefit societies, and health maintenance organizations to provide employers with employee group health claims experience under the employer health plan for the current policy period within 90 days of a request. Prohibits inclusion of clause that allows them broad discretionary authority to set type and scope of medical coverage to be provided in health insurance contracts with employers issued after 12/31/2005. (SD1)

HOUSE OF REPRESENTATIVES

H.B. NO.

106

TWENTY-THIRD LEGISLATURE, 2005

H.D. 3

STATE OF HAWAII

S.D. 1


 

A BILL FOR AN ACT

 

relating to health insurance.

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

SECTION 1. It is in the best interest of the entire community that individual privacy is both valued and protected. Because the majority of businesses in Hawaii are small businesses, certain safeguards need to be put in place to protect the sharing of highly confidential claims experience information from which employers might reasonably be able to infer which of their employees are using more benefits than others. It is the legislature's intent to ensure that this sensitive information is safeguarded and that individuals are not penalized for their respective health conditions.

The legislature further finds that certain health insurers in the State employ a variety of clauses in their health insurance contracts with employers that unfairly burden Hawaii employers with risks of liability. One such clause requires employers to pay for legal and medical expenses if a worker appeals a denial of medical coverage to the State's external review panel or a court and the insurer loses. Another clause provides insurers with broad discretionary authority to set the type and scope of medical coverage provided to Hawaii employers. According to the office of the insurance commissioner, such a discretionary authority clause gives insurers broad powers to define medical coverage and is illegal in Maine and Minnesota. This broad discretionary authority also gives the insurer the right to determine which products to offer to patients and who is eligible for coverage. Determining whether to cover a medical treatment that the insurer deems experimental is one example of the discretionary power to determine the scope of medical coverage for patients.

However, according to the office of the insurance commissioner, certain hospital and medical service associations and health maintenance organizations in Hawaii routinely invoke their "broad discretionary authority" rights even in cases that do not involve experimental treatment when patients appeal a denial of coverage before the State's external review panel.

The purposes of this Act are: (1) to define what types of healthcare information and under what circumstances this data may be provided to employer groups; and (2) to prohibit the use of "broad discretionary authority" clauses in health insurance contracts in the State.

PART I

SECTION 2. Chapter 431, Hawaii Revised Statutes, is amended by adding a new section to article 10A to be appropriately designated and to read as follows:

"§431-   Health claims experience request. (a) Except as provided in subsection (d), an insurer upon written request shall provide an employer that provides health care coverage to its employees, the employer’s aggregate group health claims experience for the current policy period.

(b) The insurer shall provide the information under subsection (a) no more than sixty days after receiving a request from the employer.

(c) The insurer may charge the employer a reasonable processing fee of not more than $50 for providing the information under subsection (a).

(d) An insurer is not required to provide the information under subsection (a):

(1) To employers that provide coverage under a particular policy for less than fifty employees;

(2) For any time more than eighteen months prior to the date of the request;

(3) With regard to any individual;

(4) If the information identifies an individual; or

(5) If the information is confidential under section 325-101, 334-5, 431:3A-301, 432D-21, 577-26, or 577A-3."

SECTION 3. Chapter 432, Hawaii Revised Statutes, is amended by adding a new section to article 1 to be appropriately designated and to read as follows:

"§432-   Health claims experience request. (a) Except as provided in subsection (d), a mutual benefit society upon written request shall provide an employer that provides health care coverage to its employees, the employer’s aggregate group health claims experience for the current policy period.

(b) The mutual benefit society shall provide the information under subsection (a) no more than sixty days after receiving a request from the employer.

(c) The mutual benefit society may charge the employer a reasonable processing fee of not more than $50 for providing the information under subsection (a).

(d) A mutual benefit society is not required to provide the information under subsection (a):

(1) To employers that provide coverage under a particular policy for less than fifty employees;

(2) For any time more than eighteen months prior to the date of the request;

(3) With regard to any individual;

(4) If the information identifies an individual; or

(5) If the information is confidential under section 325-101, 334-5, 431:3A-301, 432D-21, 577-26, or 577A-3."

SECTION 4. Chapter 432D, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§432D-   Health claims experience request. (a) Except as provided in subsection (d), a health maintenance organization upon written request shall provide an employer that provides health care coverage to its employees, the employer’s aggregate group health claims experience for the current policy period.

(b) The health maintenance organization shall provide the information under subsection (a) no more than sixty days after receiving a request from the employer.

(c) The health maintenance organization may charge the employer a reasonable processing fee of not more than $50 for providing the information under subsection (a).

(d) A health maintenance organization is not required to provide the information under subsection (a):

(1) To employers that provide coverage under a particular policy for less than fifty employees;

(2) For any time more than eighteen months prior to the date of the request;

(3) With regard to any individual;

(4) If the information identifies an individual; or

(5) If the information is confidential under section 325-101, 334-5, 431:3A-301, 432D-21, 577-26, or 577A-3."

PART II

SECTION 5. Chapter 431, Hawaii Revised Statutes, is amended by adding a new section to article 10A to be appropriately designated and to read as follows:

"§431:10A-   Discretionary authority clauses; prohibited. No employer group health policy, contract, plan, or agreement issued or renewed in this State after December 31, 2005, by an insurer under this article, other than life insurance, annuities, disability income insurance, and long-term care insurance, shall contain any provision customarily known as "discretionary authority" that grants broad powers to the insurer to determine the type and scope of medical coverage to be provided in contracts with an insured, including the power to determine eligibility for coverage for experimental treatment."

SECTION 6. Chapter 432, Hawaii Revised Statutes, is amended by adding a new section to article 1 to be appropriately designated and to read as follows:

"§432:1-   Discretionary authority clauses; prohibited. No individual and group hospital or medical service plan, policy, contract, or agreement issued or renewed in this State after December 31, 2005, by a mutual benefit society under this chapter shall contain any provision customarily known as "discretionary authority" that grants broad powers to the mutual benefit society to determine the type and scope of medical coverage to be provided in contracts with a covered member, including the power to determine eligibility for coverage for experimental treatment."

SECTION 7. Chapter 432D, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§432D-   Discretionary authority clauses; prohibited. No policy, contract, plan, or agreement issued or renewed in the State after December 31, 2005, by a health maintenance organization under this chapter shall contain any provision customarily known as "discretionary authority" that grants broad powers to the health maintenance organization to determine the type and scope of medical coverage to be provided in contracts with a covered subscriber, including the power to determine eligibility for coverage for experimental treatment."

SECTION 8. New statutory material is underscored.

SECTION 9. This Act shall take effect upon its approval; provided that Part I shall take effect on July 1, 2050.