Group 15 Regulation US

Question 1

State regulation of Group Insurance
Part 1 of 4
Organization of State Insuramce Departments, Licensing of companies, form and rate filings, and licensing producers

Answer 1

1. Organization of State Insurance Departments
   
   1. 1 State Insurance Department regulates insurance
   2. 2 Commissioner or Superintendent head of insurance department
   3. 2.1 Interprets the insurance laws, makes regulations, license insurance companies, authorized reinsurers, TPAs, agents
   4. 3 conduct examinations of insurers, assess penalties for violations
2. Licensing of insurance companies
   
   2. 1 to engage insurance in a state, company must obtain insurance license from commissioner; license pertains to specific lines of business
3. Policy/certificate form and rate filing regulations
   
   3. 1 prior approval state or file and use; require filing of group health premium rates or rating formulas
   4. 2 ACA established a federal review to supplement state rate regulation
4. Licensing producers
   
   4. 1 most require producers (agents, brokers) to be licensed; commissioner may suspend a license or impose penalties

Question 2

State regulation of group insurance
Part 2 of 4
State consumer protection regulation

Answer 2

1. Regulation is minimal for dental, medical stop-loss, group. More extensive for comprehensive medical, med sup, LTC
2. May require mandated benefits be included
3. May forbid certain exclusions
4. Benefits must be reasonable in relation to premiums
5. ACA minimum loss ratio of 80% for indiv and small ER coverage
6. Prohibits discrimination among classes
7. Advertising regulation
8. Disclosure of key features to potential customer-outline of coverage, summary of benefits, illustration of results of policy under various scenarios; wording may be specified

Question 3

State regulation of group insurance
Part 3 of 4
Regulation of insurer solvency

Answer 3

1. Financial soundness assessed initially during licensing
2. Financial reports required to be annually filed with commissioner
3. Types of investments an insurer may make are regulated
4. Capital requirements
   
   4. 1 NAIC adopted RBC formulae for annual statements
   5. 2 Determine ratio of TAC (total adjusted capital) to RBC
   6. 3 lower ratio indicates greater possibility of problems
5. Reserves: claim, contract, PDRs, provider liabilities
   
   5. 1 certified annually by an MAAA, the appointed actuary
6. Rehabilitation, liquidation; guaranty associations protect insureds

Question 4

State regulation of group insurance
Part 4 of 4
Contract provisions and 5 other areas of state regulation

Answer 4

1. Contract provisions
   
   1. 1 standard contract provisions
      
      1. 1.1 grace period, incontestability, evidence of insurability, misstatement of age, benefit/eligibility
   2. 2 policy provisions for group health plans only
      
      1. 2.1 preexisting conditions, notice and proof of claims, legal actions
   3. 3 policy provisions for group life plans only
      
      1. 3.1 beneficiaries, conversion rights, death during the conversion period, DI continuance
2. Coordination of benefits
3. Continuance of coverage
4. Small group reform: require guaranteed issue
5. Med Supp NAIC model
   
   5. 1 uniform benefits, advertising, marketing and disclosure
6. Common LTC laws
   
   6. 1 benefit triggers, conversion on termination, benefit increases, advertising, preexisting conditions, form and rate filing

Question 5

State Regulation of PPOs

Answer 5

1. Provider protections
   
   1. 1 any-willing-provider laws
   2. 2 restriction on differences in benefit levels of preferred and non-preferred providers
2. Consumer protections
   
   2. 1 NAIC preferred provider arrangement model act assures availability and access to all appropriate care
   3. 2 May require quality assurance program
   4. 3 ACA requires that plan cover emergency at the In network benefit level
3. State PPO laws provide legal support for HMOs serving as preferred providers for insurers

Question 6

State regulation of HMOs

Broad list

Answer 6

1. Definition of HMOs
2. Certification of authority
3. HMO rate regulation
4. Financial regulation
5. Power granted by states to HMOs
6. Regulation of producers
7. Any willing provider laws
8. State HMO regulatory focus
9. Utilization review regulation

Question 7

State regulation of HMOs

1. Definitions of HMOs
2. Requirements for Certificate of Authority

Answer 7

1. Definitions of HMOs
   
   1. 1 State laws define HMO along lines of NAIC model
   2. 2 Three basic principles
   3. 2.1 Provides provision of health care services
   4. 2.2 make available all health services enrollee might reasonably require
   5. 2.3 Payments only on a prepayment basis
2. Requirements for Certificate of Authority
   
   2. 1 description of HMOs organization, governance, and management
   3. 2 contracts with providers
   4. 3 coverage agreements
   5. 4 financial information
   6. 5 provider information
   7. 6 grievance procedure
   8. 7 quality assurance program
   9. 8 insolvency protection measures

Question 8

State regulation of HMOs

1. State Regulatory Focus
2. UR regulation
3. Power granted to HMOs by states

Answer 8

1. State regulatory focus
   
   1. 1 protection of consumers
   2. 2 Establishing ground rules for competition
   3. 3 assuring solvency of HMOs
   4. 4 Quality assurance and accessibility of care
2. Utilization review regulation
   
   2. 1 requires licensure of UR firms
   3. 2 Restrictions on use of UR
   4. 3 Mandates on the hours of operation
   5. 4 restrictions on access to medical information
   6. 5 restrictions on location at which UR performed
   7. 6 burdensome regulatory filings of UR data
3. Powers granted to HMOs by states
   
   3. 1 purchase, lease, construction of hospitals, medical facilities
   4. 2 Health services through providers under contract or employed
   5. 3 contracting with third parties for marketing and administration
   6. 4 contracting with insurers
   7. 5 health services in addition to basic services on a prepaid basis
   8. 6 HMO powers are not limited to those specifically enumerated

Question 9

The role of federal regulation

Broad list

Answer 9

1. In general State regulate insurance (McCarran-Ferguson Act)
   
   1. 1 Federal laws regulate ERs and their group plans
2. Federal HMO Act
   
   2. 1 Advantages of Federal Qualification
      
      2. 1.1 Advantage have diminished
      3. 1.2 HMO can challenge ERs contribution strategy of ER discriminates against it
      4. 1.3 Required as a Medicare or Medicaid carrier
   3. 2 Disadvantages of Federal Qualification
      
      2. 2.1 Specified minimum coverage for qualifies HMOs, Restrictions on copayments, Restrictions on rating
3. COBRA
4. ACA
5. HIPAA
6. ERISA
   
   6. 1 Federal law with greatest impact on state regulation
   7. 2 Primarily regulates employer provided pensions
   8. 3 Self-funded plans are exempt from state regulation
   9. 4 Large employers find it difficult to comply with state regulations

Question 10

The role of federal regulation

COBRA

Answer 10

1. May continue group health benefits beyond date coverage would otherwise terminate
2. Entire cost paid by COBRA continuant
3. Applied to employers with 20 or more employees
4. Group life AD&D and DI not required to be continued
5. Maximum time period: 36 months after qualifying event
6. Termination of COBRA Continuance
   
   6. 1 Date ER ceases to provide group plan to any EE
   7. 2 Date beneficiary becomes covered under other group plan or entitled to Medicare
7. 3 Date employer fails to receive payment for person’s COBRA coverage

Question 11

The role of Federal regulation

Affordable care act (ACA)

Answer 11

1. Requires medical coverage meet a minimum loss ratio
2. Insurers proposing rate increase >= 10%, submit detailed public info
3. Requires individuals to purchase health insurance or pay a penalty
4. requires insurance be guarantee issue and limits rate variations by age
5. Medicaid changes include
   
   5. 1 expansion of program to individuals with income less than 133% FPL
   6. 2 Provisions for quality improvement
   7. 3 Provides higher payments for primary care services

Question 12

The role of federal regulation

HIPAA

Answer 12

1. Portability and availability reforms
   
   1. 1 may not establish eligibility or require higher prem based on health status
   2. 2 permit EE’s or dependent’s to enroll after losing coverage
   3. 3 small group market must accept every group and every eligible individual that applies in initial enrollment
   4. 4 group coverage may only be terminated for nonpayment of premiums, fraud, or discontinuance of all health coverage
2. Preventing health care fraud and abuse
3. Administrative simplification and privacy
4. HIPAA extended duration of COBRA eligibility

Question 13

ACA impact on ERISA

Answer 13

1. Requires that insurers provide a summary of benefits
   
   1. 1 no more than 4 pages, a prescribed format, understandable
   2. 2 uniform definition of insurance terms
   3. 3 description of coverage
   4. 4 description of any other benefits
   5. 5 exceptions, reductions, and limits of coverage
   6. 6 cost sharing provisions
   7. 7 Renewability and continuation of coverage
   8. 8 examples of common benefit scenarios
   9. 9 whether the plan provides minimum essential coverage
   10. 10 contact info for the beneficiary and an Internet address
2. If there is any material modification, nodify enrollees