0001| HOUSE BILL 297
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0002| 42ND LEGISLATURE - STATE OF NEW MEXICO - SECOND SESSION,
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0003| 1996
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0004| INTRODUCED BY
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0005| MICHAEL OLGUIN
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0006|
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0007|
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0008|
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0009| FOR THE HEALTH CARE TASK FORCE
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0010|
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0011| AN ACT
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0012| RELATING TO INSURANCE; AMENDING AND ENACTING CERTAIN PROVISIONS
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0013| OF THE NEW MEXICO INSURANCE CODE REGARDING INDIVIDUAL OR GROUP
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0014| HEALTH INSURANCE POLICIES.
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0015|
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0016| BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
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0017| Section 1. Section 59A-16-12.1 NMSA 1978 (being Laws 1991,
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0018| Chapter 111, Section 12) is amended to read:
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0019| "59A-16-12.1. DISCRIMINATION ON THE BASIS OF DETERIORATION
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0020| IN HEALTH.--
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0021| A. No insurer shall cancel or change the premiums,
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0022| benefits or conditions of an individual health insurance policy
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0023| or contract as to one insured solely because of a deterioration
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0024| in the health of that insured occurring after the issuance or
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0025| delivery of the policy or contract.
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0001| B. No conversion of a group health insurance policy
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0002| that provides hospital, surgical and medical expense benefits
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0003| shall be made to a conversion policy that has not been approved
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0004| and found by the superintendent to provide benefits and
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0005| conditions closely approximating the coverage of the policy from
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0006| which conversion is exercised.
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0007| C. No insurer or other provider of health care
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0008| benefits regulated pursuant to Section 59A-23-44, 59A-23-46 or
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0009| 59A-23-47 NMSA 1978 shall exclude an individual from coverage in
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0010| a group because of the individual's health condition unless the
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0011| entire group is excluded from coverage, except that this
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0012| provision shall not prohibit the insurer or other provider of
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0013| health care benefits from excluding "late enrollees or late
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0014| entrants" from coverage. For purposes of this provision, "late
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0015| enrollees or late entrants" means those individuals who did not
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0016| enroll when first eligible for coverage or during an open
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0017| enrollment period."
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0018| Section 2. Section 59A-18-13.1 NMSA 1978 (being Laws 1994,
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0019| Chapter 75, Section 26) is amended to read:
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0020| "59A-18-13.1. ADJUSTED COMMUNITY RATING.--
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0021| A. Until July 1, 1998, every insurer, fraternal
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0022| benefit society, health maintenance organization or nonprofit
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0023| health care plan that provides primary health insurance or
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0024| health care coverage insuring or covering major medical expenses
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0025| shall, in determining the initial year's premium charged for an
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0001| individual, use only the rating factors of age, gender,
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0002| geographic area of the place of employment and smoking
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0003| practices; provided, however, for individual policies the
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0004| rating factor of the individual's place of residence may be used
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0005| instead of the geographic area of the individual's place of
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0006| employment. In determining the initial and any subsequent
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0007| year's rate, the difference in rates in any one age group that
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0008| may be charged on the basis of a person's gender shall not
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0009| exceed another person's rates in the age group by more than
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0010| twenty percent of the lower rate, and no person's rate shall
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0011| exceed the rate of any other person with similar family
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0012| composition by more than two hundred fifty percent of the lower
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0013| rate, except that the rates for children under the age of
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0014| nineteen or children aged nineteen to twenty-five who are full-time students may be lower than the bottom rates in the two
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0015| hundred fifty percent band. The rating factor restrictions
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0016| shall not prohibit an insurer, society, organization or plan
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0017| from offering rates that differ depending upon family
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0018| composition.
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0019| B. Effective July 1, 1998, every insurer, fraternal
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0020| benefit society, health maintenance organization or nonprofit
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0021| health care plan that provides primary health insurance or
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0022| health care coverage insuring or covering major medical expenses
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0023| shall charge the same premium for the same coverage to each New
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0024| Mexico resident, regardless of a person's individual
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0025| circumstances for medical risk, job risk or gender. The only
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0001| rating factor that may be used is whether a person is under or
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0002| over the age of nineteen.
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0003| C. The superintendent shall adopt regulations to
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0004| implement the provisions of this section."
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0005| Section 3. Section 59A-23B-6 NMSA 1978 (being Laws 1991,
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0006| Chapter 111, Section 6, as amended) is amended to read:
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0007| "59A-23B-6. FORMS AND RATES--APPROVAL OF THE
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0008| SUPERINTENDENT OF INSURANCE--ADJUSTED COMMUNITY RATING.--
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0009| A. All policy or plan forms, including applications,
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0010| enrollment forms, policies, plans, certificates, evidences of
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0011| coverage, riders, amendments, endorsements and disclosure forms,
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0012| shall be submitted to the [department of] insurance
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0013| department for approval prior to use.
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0014| B. No policy or plan may be issued in the state
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0015| unless the rates have first been filed with and approved by the
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0016| superintendent [of insurance]. This subsection shall not
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0017| apply to policies or plans subject to the Small Group Rate and
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0018| Renewability Act.
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0019| C. Until July 1, 1998, in determining the initial
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0020| year's premium or rate charged for coverage under a policy or
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0021| plan, the only rating factors that may be used are age, gender,
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0022| geographic area of the place of employment and smoking
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0023| practices. Until July 1, 1998, in determining the initial and
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0024| any subsequent year's rate, the difference in rates in any one
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0025| age group that may be charged on the basis of a person's gender
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0001| shall not exceed another person's rates in the age group by more
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0002| than twenty percent of the lower rate, and no person's rate
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0003| shall exceed the rate of any other person with similar family
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0004| composition by more than two hundred fifty percent of the lower
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0005| rate, except that the rates for children under the age of
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0006| nineteen or children aged nineteen to twenty-five who are full-time students may be lower than the bottom rates in the two
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0007| hundred fifty percent band. The rating factor restrictions
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0008| shall not prohibit an insurer, society, organization or plan
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0009| from offering rates that differ depending upon family
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0010| composition.
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0011| D. Effective July 1, 1998, each policy or plan
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0012| covered by the Minimum Healthcare Protection Act shall charge
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0013| the same premium for the same coverage to each New Mexico
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0014| resident, regardless of a person's individual circumstances for
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0015| medical risk, job risk or gender. The only rating factor that
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0016| may be used is whether a person is under or over the age of
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0017| nineteen.
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0018| E. The superintendent [of insurance] shall adopt
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0019| regulations to implement the provisions of this section."
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0020| Section 4. Section 59A-23C-3 NMSA 1978 (being Laws 1991,
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0021| Chapter 153, Section 3, as amended) is amended to read:
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0022| "59A-23C-3. DEFINITIONS.--As used in the Small Group Rate
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0023| and Renewability Act:
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0024| A. "actuarial certification" means a written
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0025| statement by a member of the American academy of actuaries or
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0001| another individual acceptable to the superintendent that a small
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0002| employer carrier is in compliance with the provisions of Section
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0003| 59A-23C-5 NMSA 1978, based upon the person's examination,
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0004| including a review of the appropriate records and of the
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0005| actuarial assumptions and methods utilized by the carrier in
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0006| establishing premium rates for applicable health benefit plans;
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0007| B. "base premium rate" means, for each class of
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0008| business as to a rating period, the lowest premium rate charged
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0009| under a rating system for that class of business by the small
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0010| employer carrier to small employers with similar case
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0011| characteristics for health benefit plans with the same or
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0012| similar coverage;
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0013| C. "carrier" means any person who provides health
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0014| insurance in this state. For the purposes of the Small Group
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0015| Rate and Renewability Act, "carrier" or "insurer" includes a
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0016| licensed insurance company, a licensed fraternal benefit
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0017| society, a prepaid hospital or medical service plan, a health
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0018| maintenance organization, a nonprofit health care organization,
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0019| a multiple employer welfare arrangement or any other person
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0020| providing a plan of health insurance subject to state insurance
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0021| regulation;
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0022| D. "case characteristics" means demographic or other
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0023| relevant characteristics of a small employer, as determined by a
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0024| small employer carrier, that are considered by the carrier in
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0025| the determination of premium rates for the small employer, but
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0001| "case characteristics" does not include claim experience, health
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0002| status and duration of coverage since issue;
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0003| E. "class of business" means all small employers as
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0004| shown on the records of the small employer carrier. A separate
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0005| class of business may be established by the small employer
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0006| carrier on the basis that the applicable health benefit plans
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0007| have been acquired from another small employer carrier as a
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0008| distinct grouping of plans;
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0009| F. "department" means the department of insurance;
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0010| G. "health benefit plan" or "plan" means any
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0011| hospital or medical expense incurred policy or certificate,
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0012| hospital or medical service plan contract or health maintenance
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0013| organization subscriber contract. "Health benefit plan" does
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0014| not include accident-only, credit, dental or disability income
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0015| insurance, medicare supplement coverage, coverage issued as a
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0016| supplement to liability insurance, workers' compensation or
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0017| similar insurance or automobile medical-payment insurance;
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0018| H. "index rate" means, for each class of business
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0019| for small employers with similar case characteristics, the
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0020| arithmetic average of the applicable base premium rate and the
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0021| corresponding highest premium rate;
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0022| I. "new business premium rate" means, for each class
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0023| of business as to a rating period, the premium rate charged or
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0024| offered by the small employer carrier to small employers with
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0025| similar case characteristics for newly issued health benefit
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0001| plans with the same or similar coverage;
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0002| J. "rating period" means the calendar period for
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0003| which premium rates established by a small employer carrier are
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0004| assumed to be in effect, as determined by the small employer
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0005| carrier;
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0006| K. "small employer" means any person, firm,
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0007| corporation, partnership or association actively engaged in
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0008| business who, on at least fifty percent of its working days
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0009| during the preceding year, employed no less than two and no more
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0010| than fifty eligible employees; provided that:
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0011| (1) in determining the minimum number of
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0012| eligible employees, the spouse or dependent of an employee may,
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0013| at the employer's discretion, be counted as a separate employee;
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0014| and
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0015| (2) companies that are affiliated companies or
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0016| that are eligible to file a combined tax return for purposes of
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0017| state income taxation shall be considered one employer;
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0018| L. "small employer carrier" means any insurer that
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0019| offers health benefit plans covering the employees of a small
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0020| employer; and
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0021| M. "superintendent" means the superintendent of
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0022| insurance."
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0023| Section 5. Section 59A-23C-5 NMSA 1978 (being Laws 1991,
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0024| Chapter 153, Section 5, as amended) is amended to read:
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0025| "59A-23C-5. RESTRICTIONS RELATING TO PREMIUM RATES.--
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0001| A. Premium rates for health benefit plans subject to
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0002| the Small Group Rate and Renewability Act shall be subject to
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0003| the following provisions:
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0004| (1) the index rate for a rating period for any
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0005| class of business shall not exceed the index rate for any other
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0006| class of business by more than twenty percent;
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0007| (2) for a class of business, the premium rates
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0008| charged during a rating period to small employers with similar
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0009| case characteristics for the same or similar coverage, or the
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0010| rates that could be charged to those employers under the rating
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0011| system for that class of business, shall not vary from the index
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0012| rate by more than [twenty] fifteen percent of the index
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0013| rate;
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0014| (3) the percentage increase in the premium rate
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0015| charged to a small employer for a new rating period may not
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0016| exceed the sum of the following:
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0017| (a) the percentage change in the new
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0018| business premium rate measured from the first day of the prior
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0019| rating period to the first day of the new rating period. In the
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0020| case of a class of business for which the small employer carrier
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0021| is not issuing new policies, the carrier shall use the
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0022| percentage change in the base premium rate;
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0023| (b) an adjustment, not to exceed ten
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0024| percent annually and adjusted pro rata for rating periods of
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0025| less than one year due to the claim experience, health status or
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0001| duration of coverage of the employees or dependents of the small
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0002| employer as determined from the carrier's rate manual for the
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0003| class of business; and
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0004| (c) any adjustment due to change in
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0005| coverage or change in the case characteristics of the small
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0006| employer as determined from the carrier's rate manual for the
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0007| class of business; and
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0008| (4) in the case of health benefit plans issued
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0009| prior to the effective date of the Small Group Rate and
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0010| Renewability Act, a premium rate for a rating period may exceed
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0011| the ranges described in Paragraph (1) or (2) of this subsection
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0012| for a period of five years following the effective date of the
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0013| Small Group Rate and Renewability Act. In that case, the
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0014| percentage increase in the premium rate charged to a small
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0015| employer in that class of business for a new rating period may
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0016| not exceed the sum of the following:
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0017| (a) the percentage change in the new
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0018| business premium rate measured from the first day of the prior
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0019| rating period to the first day of the new rating period. In the
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0020| case of a class of business for which the small employer carrier
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0021| is not issuing new policies, the carrier shall use the
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0022| percentage change in the base premium rate; and
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0023| (b) any adjustment due to change in
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0024| coverage or change in the case characteristics of the small
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0025| employer as determined from the carrier's rate manual for the
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0001| class of business.
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0002| B. Nothing in this section is intended to affect the
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0003| use by a small employer carrier of legitimate rating factors
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0004| other than claim experience, health status or duration of
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0005| coverage in the determination of premium rates. Small employer
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0006| carriers shall apply rating factors, including case
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0007| characteristics, consistently with respect to all small
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0008| employers in a class of business.
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0009| C. A small employer carrier shall not involuntarily
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0010| transfer a small employer into or out of a class of business. A
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0011| small employer carrier shall not offer to transfer a small
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0012| employer into or out of a class of business unless the offer
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0013| is made to transfer all small employers in the class of business
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0014| without regard to case characteristics, claim experience, health
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0015| status or duration since issue.
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0016| D. Prior to usage and [the effective date of the
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Small Group Rate and Renewability Act] June 14, 1991, each
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0018| carrier shall file with the superintendent the rate manuals and
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0019| any updates thereto for each class of business. A rate filing
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0020| fee is payable under Subsection U of Section 59A-6-1 NMSA 1978
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0021| for the filing of each update. The superintendent shall
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0022| disapprove within sixty days of receipt of a complete filing or
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0023| the filing is deemed approved. If the superintendent
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0024| disapproves any such form during the sixty-day review period, he
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0025| shall give the carrier written notice of the disapproval stating
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0001| the ground thereof. At any time, the superintendent, after a
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0002| hearing thereof, may disapprove a form or withdraw a previous
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0003| approval. The superintendent's order on such hearing shall
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0004| state the grounds for disapproval or withdrawal of a previous
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0005| approval and the date not less than twenty days later when
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0006| disapproval or withdrawal becomes effective."
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0007| Section 6. Section 59A-23C-5.1 NMSA 1978 (being Laws 1994,
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0008| Chapter 75, Section 33) is amended to read:
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0009| "59A-23C-5.1. ADJUSTED COMMUNITY RATING.--
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0010| A. Until July 1, 1998, a health benefit plan that is
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0011| offered by a carrier to a small employer shall be offered
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0012| without regard to the health status of any individual in the
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0013| group, except as provided in the Small Group Rate and
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0014| Renewability Act. The only rating factors that may be used to
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0015| determine the initial year's premium charged a group, subject to
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0016| the maximum rate variation provided in this section for all
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0017| rating factors, are the group members':
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0018| (1) [age] ages;
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0019| (2) gender;
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0020| (3) geographic area of the place of employment;
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0021| or
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0022| (4) smoking practices.
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0023| B. Until July 1, 1998, in determining the initial
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0024| and any subsequent year's rate, the difference in rates in any
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0025| one age group that may be charged on the basis of a person's
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0001| gender shall not exceed another person's rates in the age group
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0002| by more than twenty percent of the lower rate, and no person's
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0003| rate shall exceed the rate of any other person with similar
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0004| family composition by more than two hundred fifty percent of the
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0005| lower rate, except that the rates for children under the age of
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0006| nineteen or children aged nineteen to twenty-five who are
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0007| full-time students may be lower than the bottom rates in the
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0008| two hundred fifty percent band. The rating factor restrictions
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0009| shall not prohibit a carrier from offering rates that differ
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0010| depending upon family composition.
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0011| C. Effective July 1, 1998, a health benefit plan
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0012| that is offered by a carrier to a small employer shall charge
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0013| the same premium for the same coverage to each New Mexico
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0014| resident, regardless of a person's individual circumstances for
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0015| medical risk, job risk or gender. The only rating factor that
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0016| may be used is whether a person is under or over the age of
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0017| nineteen.
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0018| D. The superintendent shall adopt regulations to
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0019| implement the provisions of this section."
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0020| Section 7. A new section of Chapter 59A, Article 23 is
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0021| enacted to read:
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0022| "[NEW MATERIAL] OUT-OF-STATE ASSOCIATIONS AND TRUSTS.--Unless the rate applicable to the certificate or coverage of an
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0023| out-of-state association or trust complies with the requirements
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0024| of Section 59A-18-13.1 or 59A-23C-5.1 NMSA 1978, the out-of-state association or trust may not:
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0025| A. advertise in the state as a benefit of membership
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0001| for any group health insurance policy available to its members
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0002| or beneficiaries;
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0003| B. issue a certificate for delivery in New Mexico to
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0004| any resident of the state; or
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0005| C. solicit membership in the state on the basis of
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0006| the existence or availability of such health insurance
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0007| coverage."
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0008| - 14 - State of New Mexico
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0009| House of Representatives
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0010|
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0011| FORTY-SECOND LEGISLATURE
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0012| SECOND SESSION, 1996
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0013|
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0014| January 29, l996
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0015|
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0016|
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0017| Mr. Speaker:
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0018|
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0019| Your RULES AND ORDER OF BUSINESS COMMITTEE, to
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0020| whom has been referred
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0021|
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0022| HOUSE BILL 297
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0023|
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0024| has had it under consideration and finds same to be
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0025| GERMANE in accordance with constitutional provisions.
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0001|
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0002| Respectfully submitted,
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0003|
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0004|
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0005|
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0006|
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0007| Barbara A. Perea Casey,
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0008| Chairperson
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0009|
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0010|
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0011| Adopted Not Adopted
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0012|
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0013| (Chief Clerk) (Chief Clerk)
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0014|
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0015| Date
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0016|
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0017| The roll call vote was 9 For 0 Against
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0018| Yes: 9
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0019| Excused: Lujan, Nicely, Olguin, Pederson, Wallach,
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0020| S. Williams
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0021| Absent: None
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0022|
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0023| H0297RC1 State of New Mexico
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0024| House of Representatives
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0025|
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0001| FORTY-SECOND LEGISLATURE
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0002| SECOND SESSION, 1996
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0003|
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0004|
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0005|
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0006|
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0007|
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0008| Mr. Speaker:
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0009|
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0010| Your BUSINESS AND INDUSTRY COMMITTEE, to whom has
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0011| been referred
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0012|
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0013| HOUSE BILL 297
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0014|
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0015| has had it under consideration and reports same with
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0016| recommendation that it DO PASS, amended as follows:
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0017|
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0018| 1. On page 9, line 13, strike the brackets and line
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0019| through and strike "fifteen".,
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0020|
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0021| and thence referred to the JUDICIARY COMMITTEE.
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0022|
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0023| Respectfully submitted,
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0024|
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0025|
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0001|
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0002|
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0003| Fred Luna, Chairman
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0004|
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0005|
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0006| Adopted Not Adopted
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0007|
|
0008| (Chief Clerk) (Chief Clerk)
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0009|
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0010| Date
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0011|
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0012| The roll call vote was 11 For 0 Against
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0013| Yes: 11
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0014| Excused: None
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0015| Absent: Varela
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0016|
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0017|
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0018| .111184.1
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0019| H0297BI1 State of New Mexico
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0020| House of Representatives
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0021|
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0022| FORTY-SECOND LEGISLATURE
|
0023| SECOND SESSION, 1996
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0024|
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0025|
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0001| February 10, 1996
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0002|
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0003|
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0004| Mr. Speaker:
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0005|
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0006| Your JUDICIARY COMMITTEE, to whom has been referred
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0007|
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0008| HOUSE BILL 297, as amended
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0009|
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0010| has had it under consideration and reports same with
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0011| recommendation that it DO PASS, amended as follows:
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0012|
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0013|
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0014| 1. On page 2, lines 7 and 8, strike "Section 59A-23-44,
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0015| 59A-23-46 or 59A-23-47" and insert in lieu thereof "Section 59A,
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0016| Articles 23, 44, 46 or 47".
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0017|
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0018|
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0019| Respectfully submitted,
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0020|
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0021|
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0022|
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0023|
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0024|
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0025| Cisco McSorley, Chairman
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0001|
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0002|
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0003| Adopted Not Adopted
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0004|
|
0005| (Chief Clerk) (Chief Clerk)
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0006|
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0007| Date
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0008|
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0009| The roll call vote was 8 For 1 Against
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0010| Yes: 8
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0011| No: Christensen
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0012| Excused: Alwin, Gubbels, Larranaga
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0013| Absent: Luna
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0014|
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0015|
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0016| .112035.1
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0017| H0297JC1
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0018|
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0019| FORTY-SECOND LEGISLATURE
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0020| SECOND SESSION, 1996
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0021|
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0022|
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0023| February 12, 1996
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0024|
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0025| Mr. President:
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0001|
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0002| Your CORPORATIONS & TRANSPORTATION COMMITTEE, to
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0003| whom has been referred
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0004|
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0005| HOUSE BILL 297, as amended
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0006|
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0007| has had it under consideration and reports same with
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0008| recommendation that it DO PASS.
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0009|
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0010| Respectfully submitted,
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0011|
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0012|
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0013|
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0014| __________________________________
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0015| Roman M. Maes, III, Chairman
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0016|
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0017|
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0018|
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0019| Adopted_______________________ Not Adopted_______________________
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0020| (Chief Clerk) (Chief Clerk)
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0021|
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0022|
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0023|
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0024| Date ________________________
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0025|
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0001|
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0002| The roll call vote was 4 For 1 Against
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0003| Yes: 4
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0004| No: Rawson
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0005| Excused: Kidd, McKibben, Reagan, Robinson
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0006| Absent: None
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0007|
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0008|
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0009| H0297CT1
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0010|
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