AN ACT
RELATING TO INSURANCE; REQUIRING GROUP HEALTH CARE COVERAGE
OF UNMARRIED DEPENDENTS UNTIL THEIR TWENTY-FIFTH BIRTHDAY.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
Section 1. Section 13-7-1 NMSA 1978 (being Laws 1997,
Chapter 74, Section 1) is amended to read:
"13-7-1. SHORT TITLE.--Chapter 13, Article 7 NMSA 1978
may be cited as the "Health Care Purchasing Act"."
Section 2. A new section of the Health Care Purchasing
Act is enacted to read:
"MAXIMUM AGE OF
DEPENDENT.--Any group health care coverage, including any form of
self-insurance, offered, issued or renewed under the Health Care Purchasing Act
on or after July 1, 2003 that offers coverage of an insured's dependent shall
not terminate coverage of an unmarried dependent by reason of the dependent's
age before the dependent's twenty-fifth birthday, regardless of whether the
dependent is enrolled in an educational institution."
Section 3. A new section of Chapter 59A, Article 23 NMSA
1978 is enacted to read:
"MAXIMUM AGE OF
DEPENDENT.--Each blanket or group health policy or certificate of insurance
delivered, issued for delivery or renewed in New Mexico on or after July 1,
2003 that provides coverage for an insured's dependent shall not terminate
coverage of an unmarried dependent by reason of the dependent's age before the
dependent's twenty-fifth birthday, regardless of whether the dependent is
enrolled in an educational institution."
Section 4. Section 59A-23D-2 NMSA 1978 (being Laws 1995,
Chapter 93, Section 2, as amended by Laws 1997, Chapter 243, Section 27 and
also by Laws 1997, Chapter 254, Section 2) is amended to read:
"59A-23D-2. DEFINITIONS.--As used in the Medical Care
Savings Account Act:
A. "account administrator" means any
of the following that administers medical care savings accounts:
(1) a national or state chartered bank, savings
and loan association, savings bank or credit union;
(2) a trust company authorized to act as a
fiduciary in this state;
(3) an insurance company or health maintenance
organization authorized to do business in this state pursuant to the New Mexico
Insurance Code; or
(4) a person approved by the federal secretary of
health and human services;
B. "deductible" means the total
covered medical expense an employee or his dependents must pay prior to any
payment by a qualified higher deductible health plan for a calendar year;
C. "department" means the insurance
division of the public regulation commission;
D. "dependent" means:
(1) a spouse;
(2) an unmarried or unemancipated child of the
employee who is a minor and who is:
(a) a natural child;
(b) a legally adopted child;
(c) a stepchild living in the same household who
is primarily dependent on the employee for maintenance and support;
(d) a child for whom the employee is the legal
guardian and who is primarily dependent on the employee for maintenance and
support, as long as evidence of the guardianship is evidenced in a court order
or decree; or
(e) a foster child living in the same household,
if the child is not otherwise provided with health care or health insurance
coverage;
(3) an unmarried child described in Subparagraphs
(a) through (e) of Paragraph (2) of this subsection who is between the ages of
eighteen and twenty-five; or
(4) a child over the age of eighteen who is
incapable of self-sustaining employment by reason of mental retardation or
physical handicap and who is chiefly dependent on the employee for support and
maintenance;
E. "eligible individual" means an
individual who with respect to any month:
(1) is covered under a qualified higher
deductible health plan as of the first day of that month;
(2) is not, while covered under a qualified
higher deductible health plan, covered under any health plan that:
(a) is not a qualified higher deductible health
plan; and
(b) provides coverage for any benefit that is
covered under the qualified higher deductible health plan; and
(3) is covered by a qualified higher deductible
health plan that is established and maintained by the employer of the
individual or of the spouse of the individual;
F. "eligible medical expense" means an
expense paid by the employee for medical care described in Section 213(d) of
the Internal Revenue Code of 1986 that is deductible for federal income tax
purposes to the extent that those amounts are not compensated for by insurance
or otherwise;
G. "employee" includes a self-employed
individual;
H. "employer" includes a self-employed
individual;
I. "medical care savings account" or
"savings account" means an account established by an employer in the
United States exclusively for the purpose of paying the eligible medical
expenses of the employee or dependent, but only if the written governing instrument
creating the trust meets the following requirements:
(1) except in the case of a rollover
contribution, no contribution will be accepted:
(a) unless it is in cash; or
(b) to the extent the contribution, when added to
previous contributions to the trust for the calendar year, exceeds seventy-five
percent of the highest annual limit deductible permitted pursuant to the
Medical Care Savings Account Act;
(2) no part of the trust assets will be invested
in life insurance contracts;
(3) the assets of the trust will not be
commingled with other property except in a common trust fund or common
investment fund; and
(4) the interest of an individual in the balance
in his account is nonforfeitable;
J. "program" means the medical care
savings account program established by an employer for his employees; and
K. "qualified higher deductible health
plan" means a health coverage policy, certificate or contract that
provides for payments for covered health care benefits that exceed the policy,
certificate or contract deductible, that is purchased by an employer for the
benefit of an employee and that has the following deductible provisions:
(1) self-only coverage with an annual deductible
of not less than one thousand five hundred dollars ($1,500) or more than two
thousand two hundred fifty dollars ($2,250) and a maximum annual out-of-pocket
expense requirement of three thousand dollars ($3,000), not including premiums;
(2) family coverage with an annual deductible of
not less than three thousand dollars ($3,000) or more than four thousand five
hundred dollars ($4,500) and a maximum annual out-of-pocket expense requirement
of five thousand five hundred dollars ($5,500), not including premiums; and
(3) preventive care coverage may be provided
within the policies without the preventive care being subjected to the qualified
higher deductibles."
Section 5. A new section of the Health Maintenance
Organization Law is enacted to read:
"MAXIMUM AGE OF
DEPENDENT.--Each group health maintenance organization contract delivered or
issued for delivery in New Mexico on or after July 1, 2003 that provides
coverage for an enrollee's dependents shall not terminate coverage of an
unmarried dependent by reason of the dependent's age before the dependent's
twenty-fifth birthday, regardless of whether the dependent is enrolled in an
educational institution; provided that this requirement does not apply to the
medicaid managed care system."
Section 6. Section 59A-47-1 NMSA 1978 (being Laws 1984,
Chapter 127, Section 878) is amended to read:
"59A-47-1. SHORT TITLE.--Chapter 59A, Article 47 NMSA
1978 may be cited as the "Nonprofit Health Care Plan Law"."
Section 7. A new section of the Nonprofit Health Care
Plan Law is enacted to read:
"MAXIMUM AGE OF
DEPENDENT.--Any group subscriber contract offered, issued or renewed in New
Mexico on or after July 1, 2003 that provides coverage of a subscriber's
dependents shall not terminate coverage of an unmarried dependent by reason of
the dependent's age before the dependent's twenty-fifth birthday, regardless of
whether the dependent is enrolled in an educational institution."
Section 8. Section 59A-56-3 NMSA 1978 (being Laws 1994,
Chapter 75, Section 3, as amended) is amended to read:
"59A-56-3. DEFINITIONS.--As used in the Health Insurance
Alliance Act:
A. "alliance" means the New Mexico
health insurance alliance;
B. "approved health plan" means any
arrangement for the provisions of health insurance offered through and approved
by the alliance;
C. "board" means the board of
directors of the alliance;
D. "child" means a dependent unmarried
individual who is less than twenty-five years of age;
E. "creditable coverage" means, with
respect to an individual, coverage of the individual pursuant to:
(1) a group health plan;
(2) health insurance coverage;
(3) Part A or Part B of Title 18 of the federal
Social Security Act;
(4) Title 19 of the federal Social Security Act
except coverage consisting solely of benefits pursuant to Section 1928 of that
title;
(5) 10 USCA Chapter 55;
(6) a medical care program of the Indian health
service or of an Indian nation, tribe or pueblo;
(7) the Medical Insurance Pool Act;
(8) a health plan offered pursuant to 5 USCA Chapter 89;
(9) a public health plan as defined in federal
regulations; or
(10) a health benefit plan offered pursuant to
Section 5(e) of the federal Peace Corps Act;
F. "department" means the insurance
division of the commission;
G. "director" means an individual who
serves on the board;
H. "earned premiums" means premiums paid
or due during a calendar year for coverage under an approved health plan less
any unearned premiums at the end of that calendar year plus any unearned
premiums from the end of the immediately preceding calendar year;
I. "eligible expenses" means the allowable
charges for a health care service covered under an approved health plan;
J. "eligible individual":
(1) means an individual who:
(a) as of the date of the individual's
application for coverage under an approved health plan, has an aggregate of
eighteen or more months of creditable coverage, the most recent of which was
under a group health plan, governmental plan or church plan as those plans are
defined in Subsections P, N and D of Section 59A-23E-2 NMSA 1978, respectively,
or health insurance offered in connection with any of those plans, but for the
purposes of aggregating creditable coverage, a period of creditable coverage shall
not be counted with respect to enrollment of an individual for coverage under
an approved health plan if, after that period and before the enrollment date,
there was a sixty-three-day or longer period during all of which the individual
was not covered under any creditable coverage; or
(b) is entitled to continuation coverage pursuant
to Section 59A-56-20 or 59A-23E-19 NMSA 1978; and
(2) does not include an individual who:
(a) has or is eligible for coverage under a group
health plan;
(b) is eligible for coverage under medicare or a
state plan under Title 19 of the federal Social Security Act or any successor
program;
(c) has health insurance coverage as defined in
Subsection R of Section 59A-23E-2 NMSA 1978;
(d) during the most recent coverage within the
coverage period described in Subparagraph (a) of Paragraph (1) of this
subsection was terminated from coverage as a result of nonpayment of premium or
fraud; or
(e) has been offered the option of coverage under
a COBRA continuation provision as that term is defined in Subsection F of
Section 59A-23E-2 NMSA 1978, or under a similar state program, except for
continuation coverage under Section 59A‑56‑20 NMSA 1978, and did
not exhaust the coverage available under the offered program;
K. "enrollment date" means, with
respect to an individual covered under a group health plan or health insurance
coverage, the date of enrollment of the individual in the plan or coverage or,
if earlier, the first day of the waiting period for that enrollment;
L. "gross earned premiums" means
premiums paid or due during a calendar year for all health insurance written in
the state less any unearned premiums at the end of that calendar year plus any
unearned premiums from the end of the immediately preceding calendar year;
M. "group health plan" means an
employee welfare benefit plan to the extent the plan provides hospital,
surgical or medical expenses benefits to employees or their dependents, as
defined by the terms of the plan, directly through insurance, reimbursement or
otherwise;
N. "health care service" means a
service or product furnished an individual for the purpose of preventing,
alleviating, curing or healing human illness or injury and includes services
and products incidental to furnishing the described services or products;
O. "health insurance" means
"health" insurance as defined in Section 59A-7-3 NMSA 1978; any
hospital and medical expense-incurred policy; nonprofit health care plan
service contract; health maintenance organization subscriber contract;
short-term, accident, fixed indemnity, specified disease policy or disability
income insurance contracts and limited health benefit or credit health
insurance; coverage for health care services under uninsured arrangements of
group or group-type contracts, including employer self-insured, cost-plus or
other benefits methodologies not involving insurance or not subject to New
Mexico premium taxes; coverage for health care services under group-type
contracts that are not available to the general public and can be obtained only
because of connection with a particular organization or group; coverage by
medicare or other governmental programs providing health care services; but
"health insurance" does not include insurance issued pursuant to
provisions of the Workers' Compensation Act or similar law, automobile medical
payment insurance or provisions by which benefits are payable with or without
regard to fault and are required by law to be contained in any liability
insurance policy;
P. "health maintenance organization"
means a health maintenance organization as defined by Subsection M of Section
59A-46-2 NMSA 1978;
Q. "incurred claims" means claims paid
during a calendar year plus claims incurred in the calendar year and paid prior
to April 1 of the succeeding year, less claims incurred previous to the current
calendar year and paid prior to April 1 of the current year;
R. "insured" means a small employer or
its employee and an individual covered by an approved health plan, a former
employee of a small employer who is covered by an approved health plan through
conversion or an individual covered by an approved health plan that allows
individual enrollment;
S. "medicare" means coverage under
both Parts A and B of Title 18 of the federal Social Security Act;
T. "member" means a member of the
alliance;
U. "nonprofit health care plan" means
a "health care plan" as defined in Subsection K of Section 59A-47-3
NMSA 1978;
V. "premiums" means the premiums
received for coverage under an approved health plan during a calendar year;
W. "small employer" means a person
that is a resident of this state, has employees at least fifty percent of whom
are residents of this state, is actively engaged in business and that on at
least fifty percent of its working days during either of the two preceding
calendar years, employed no fewer than two and no more than fifty eligible
employees; provided that:
(1) in determining the number of eligible
employees, the spouse or dependent of an employee may, at the employer's
discretion, be counted as a separate employee;
(2) companies that are affiliated companies or
that are eligible to file a combined tax return for purposes of state income
taxation shall be considered one employer; and
(3) in the case of an employer that was not in
existence throughout a preceding calendar year, the determination of whether
the employer is a small or large employer shall be based on the average number
of employees that it is reasonably expected to employ on working days in the
current calendar year;
X. "superintendent" means the
superintendent of insurance;
Y. "total premiums" means the total
premiums for business written in the state received during a calendar year; and
Z. "unearned premiums" means the
portion of a premium previously paid for which the coverage period is in the
future."