HOUSE BILL 285

54th legislature - STATE OF NEW MEXICO - first session, 2019

INTRODUCED BY

Micaela Lara Cadena

AN ACT

RELATING TO HEALTH COVERAGE; ENACTING THE SHORT-TERM AND LIMITED-BENEFIT PLAN ACT TO ESTABLISH GUIDELINES RELATING TO SHORT-TERM AND LIMITED-BENEFITS HEALTH COVERAGE; ENACTING A NEW SECTION OF CHAPTER 59A, ARTICLE 16 NMSA 1978 TO BAN THE SALE AND ISSUANCE OF UNLICENSED AND UNAPPROVED HEALTH BENEFITS PLANS.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

     SECTION 1. A new section of the New Mexico Insurance Code is enacted to read:

     "[NEW MATERIAL] SHORT TITLE.--Sections 1 through 8 of this act may be cited as the "Short-Term and Limited-Benefit Plan Act"."

     SECTION 2. A new section of the New Mexico Insurance Code is enacted to read:

     "[NEW MATERIAL] DEFINITIONS.--As used in the Short-Term and Limited-Benefit Plan Act:

          A. "bona fide association" means an association that has been in existence for not less than five years and that exists for purposes other than the business of insurance;

          B. "excepted benefits" means benefits furnished pursuant to the following:

                (1) coverage-only accident or disability income insurance;

                (2) coverage issued as a supplement to liability insurance;

                (3) liability insurance;

                (4) workers' compensation or similar insurance;

                (5) automobile medical payment insurance;

                (6) credit-only insurance;

                (7) coverage for on-site medical clinics;

                (8) other similar insurance coverage specified in office of superintendent of insurance rules, under which benefits for medical care are secondary or incidental to other benefits;

                (9) the following benefits if offered separately:

                     (a) limited-scope dental or vision benefits;

                     (b) benefits for long-term care, nursing home care, home health care, community-based care or any combination of those benefits; and

                     (c) other similar limited benefits specified in office of superintendent of insurance rules;

                (10) the following benefits, offered as independent, non-coordinated benefits:

                     (a) coverage-only for a specified disease or illness; or

                     (b) hospital indemnity or other fixed indemnity insurance; and

                (11) the following benefits if offered as a separate insurance policy:

                     (a) medicare supplemental health insurance as defined pursuant to Section 1882(g)(1) of the federal Social Security Act; and

                     (b) coverage supplemental to the coverage provided pursuant to Chapter 55 of Title 10 USCA and similar supplemental coverage provided to coverage pursuant to a group health plan;

          C. "health benefits plan" means an individual or group policy or agreement entered into, offered or issued by a health insurance carrier to provide, deliver, arrange for, pay for or reimburse any of the costs of health care services;

          D. "health insurance carrier" means an entity subject to the insurance laws and regulations of the state, including a health insurance company, a health maintenance organization, a hospital and health services corporation, a provider service network, a nonprofit health care plan or any other entity that contracts or offers to contract, or enters into agreements to provide, deliver, arrange for, pay for or reimburse any costs of health care services, or that provides, offers or administers health benefits plans or managed health care plans in the state;

          E. "limited-benefit plan" means a health benefits plan that provides excepted benefits other than:

                (1) workers' compensation;

                (2) credit-only;

                (3) benefits for long-term care, nursing home care, home health care, community-based care or any combination of those benefits;

                (4) medicare supplemental health insurance; or

                (5) a short-term plan;

          F. "major medical plan" means a health benefits plan, including a short-term plan, that provides benefits other than excepted benefits; and

          G. "short-term plan" means a nonrenewable major medical plan, regardless of where the plan is delivered, that:

                (1) has a specified duration of not more than three months after the effective date of the plan; and

                (2) is issued only to individuals who have not been enrolled in a health benefits plan that provides the same or similar nonrenewable coverage from any health insurance carrier within the three months preceding enrollment in the short-term plan."

     SECTION 3. A new section of the New Mexico Insurance Code is enacted to read:

     "[NEW MATERIAL] SHORT-TERM PLANS--LIMITED-BENEFIT PLANS-- STANDARDS FOR POLICY PROVISIONS.--

          A. The superintendent shall adopt and promulgate rules to establish specific standards:

                (1) that set the manner, content and required disclosure for the sale of short-term plans and limited-benefit plans, including standards for full and fair disclosure; and

                (2) for the sale of short-term plans and limited-benefit plans, which standards shall include standards relating to:

                     (a) terms of renewability or extension of coverage;

                     (b) initial and subsequent conditions of eligibility;

                     (c) nonduplication of coverage provisions;

                     (d) coverage of dependents;

                     (e) preexisting conditions;

                     (f) termination of insurance;

                     (g) probationary periods;

                     (h) limitations;

                     (i) exceptions;

                     (j) reductions and exclusions;

                     (k) elimination periods;

                     (l) requirements for replacement by the health insurance carrier;

                     (m) recurrent conditions; and

                     (n) the definition of terms to describe the specific types of coverage sold pursuant to the Short-Term and Limited-Benefit Plan Act and specific standards and policy provisions required of these plans.

          B. All advertisements, marketing materials and application and policy forms relating to short-term plans shall prominently display a notice that the coverage is unavailable to any potential insured who has been covered under a short-term plan in the previous twelve-month period."

     SECTION 4. A new section of the New Mexico Insurance Code is enacted to read:

     "[NEW MATERIAL] BENEFITS--MINIMUM STANDARDS--MEDICAL LOSS RATIOS.--

          A. The superintendent shall adopt and promulgate rules to establish minimum standards for benefits under short-term plans and limited-benefit plans subject to the Short-Term and Limited-Benefit Plan Act. The rules shall set minimum standards for the following categories of coverage:

                (1) hospital indemnity or other fixed indemnity coverage;

                (2) disability income protection coverage;

                (3) accident-only coverage;

                (4) short-term plan coverage;

                (5) specified disease coverage;

                (6) specified accident coverage;

                (7) limited-scope vision coverage;

                (8) limited-scope dental coverage; and

                (9) other limited-benefit plan coverage as authorized by the superintendent.

          B. The superintendent shall adopt and promulgate rules related to:

                (1) the permissibility of combining the products listed in Subsection A of this section for sale; and

                (2) requirements for notice to consumers about the comprehensiveness of coverage of combined products.

          C. Rules of the superintendent shall require short-term plans to cover state-mandated benefits in addition to each of the following categories of benefits:

                (1) diagnostic;

                (2) rehabilitative;

                (3) maternity;

                (4) neonatal;

                (5) behavioral health services;

                (6) emergency services;

                (7) hospitalization;

                (8) ambulatory services; and

                (9) prescription drugs.

          D. After the first three years of a limited-benefit plan's initial issuance, a health insurance carrier shall not deliver or issue for delivery in the state a limited-benefit plan that does not meet a minimum medical loss ratio by an amount specified in rules of the office of superintendent of insurance.

          E. Short-term plans are subject to the following provisions:

                (1) Section 59A-22-50 NMSA 1978 for individual short-term plans;

                (2) Section 59A-23C-10 NMSA 1978 for small-group short-term plans;

                (3) Section 59A-46-51 NMSA 1978 for individual or group short-term health maintenance organization contracts; and

                (4) Section 59A-47-46 NMSA 1978 for individual or group short-term nonprofit health care plans."

     SECTION 5. A new section of the New Mexico Insurance Code is enacted to read:

     "[NEW MATERIAL] RATES.--The superintendent shall adopt and promulgate rules to establish standards for rates of short-term plans and limited-benefit plans."

     SECTION 6. A new section of the New Mexico Insurance Code is enacted to read:

     "[NEW MATERIAL] DISCLOSURE REQUIREMENTS.--

          A. A health insurance carrier shall deliver a comprehensive outline of coverage to an applicant or enrollee of a short-term plan or limited-benefit plan subject to the provisions of the Short-Term and Limited-Benefit Plan Act before the sale or issuance of the health benefits plan.

          B. A health insurance carrier shall collect an acknowledgment of receipt of the outline of coverage prior to the sale or issuance of the short-term plan or limited-benefit plan from the applicant or enrollee of a health benefits plan subject to the Short-Term and Limited-Benefit Plan Act. The health insurance carrier shall maintain evidence of the delivery.

          C. A health insurance carrier shall permit a health benefits plan holder to cancel any limited-benefit plan for a full refund of any premium payment within thirty days of the health benefits plan's issuance unless the plan holder has filed a claim.

          D. A health insurance carrier shall not be required to deliver an outline of coverage for a group limited-benefit plan, including group limited-scope vision and group limited-scope dental coverage, to individual members of the group if the certificate contains a description of:

                (1) benefits;

                (2) provisions that exclude, eliminate, restrict, limit, delay or in any other manner operate to qualify payment of benefits;

                (3) conditions under which coverage may be terminated;

                (4) notice requirements; and

                (5) any other information specified by the superintendent.

          E. The superintendent shall specify by rule the format and content of the outline of coverage required by Subsection A of this section. The outline of coverage shall include a:

                (1) statement identifying the applicable category or categories of coverage as prescribed in Subsection A of Section 4 of the Short-Term and Limited-Benefit Plan Act;

                (2) description of the principal benefits and coverage provided;

                (3) statement of the exceptions, reductions and limitations;

                (4) statement of the renewal provisions, including any reservation by the health insurance carrier or a right to change premiums; and

                (5) statement that the outline is a summary of the health benefits plan issued or applied for and that the health benefits plan should be consulted to determine governing plan provisions.

          F. A health insurance carrier shall deliver to persons eligible for medicare all notices required under state and federal law.

          G. A health insurance carrier shall prominently display in application materials it provides in connection with enrollment in short-term plans and limited-benefit plans a notice stating that this health benefits plan may contain limitations that do not comply with state or federal requirements for comprehensive health benefits plans. The superintendent shall specify the contents of the notice required pursuant to this subsection by bulletin or rule.

          H. As used in this section, "format" means style, arrangement and overall appearance, including such items as the size, color and prominence of type and the arrangement of text and captions."

     SECTION 7. A new section of the New Mexico Insurance Code is enacted to read:

     "[NEW MATERIAL] PROHIBITION--ASSOCIATION, TRUST OR MULTIPLE EMPLOYER WELFARE ARRANGEMENT PLANS.--No insurer shall issue, and no association, trust or multiple employer welfare arrangement shall offer, a short-term or limited-benefit plan to a resident of the state unless through a bona fide association."

     SECTION 8. A new section of the New Mexico Insurance Code is enacted to read:

     "[NEW MATERIAL] MAJOR MEDICAL PLANS--MINIMUM DURATION.--A major medical health benefit plan that is not a short-term plan shall have a specified duration of at least twelve months."

     SECTION 9. A new section of Chapter 59A, Article 16 NMSA 1978 is enacted to read:

     "[NEW MATERIAL] HEALTH BENEFITS PLANS--PROHIBITION--UNLICENSED HEALTH BENEFITS PLANS--UNAPPROVED HEALTH BENEFITS PLANS.--

          A. No person shall sell or issue a health benefits plan that is unlicensed or unapproved for sale or delivery in the state.

          B. As used in this section:

                (1) "health benefits plan" means a policy or agreement entered into, offered or issued by a health insurance carrier to provide, deliver, arrange for, pay for or reimburse any of the costs of health care services; and

                (2) "health insurance carrier" means an entity subject to the insurance laws and regulations of this state, including a health insurance company, a health maintenance organization, a hospital and health services corporation, a provider service network, a nonprofit health care plan or any other entity that contracts or offers to contract, or enters into agreements to provide, deliver, arrange for, pay for or reimburse any costs of health care services, or that provides, offers or administers health benefits plans or managed health care plans in this state."

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