2005 House Bill text for HB0086

HOUSE BILL 86

47th legislature - STATE OF NEW MEXICO - first session, 2005

INTRODUCED BY

Mimi Stewart

AN ACT

RELATING TO INSURANCE; DEFINING DOMESTIC PARTNER BENEFITS; AMENDING AND ENACTING SECTIONS OF THE NMSA 1978.

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

Section 1. A new section of Chapter 59A, Article 18 NMSA 1978 is enacted to read:

"[NEW MATERIAL] "DOMESTIC PARTNER" DEFINED.--As used in the Insurance Code, "domestic partner" means an adult in a mutually exclusive, intimate and committed relationship who shares a primary residence for twelve or more consecutive months with, is jointly responsible for the common welfare of and shares financial obligations with another person. A domestic partner is a family member, and domestic partners constitute a family; the dependent child of a domestic partner may be included as a family member at the election of the insured domestic partner; a domestic partner is included in the term "spouse". An affidavit of domestic partnership may be required by an insurer."

Section 2. Section 59A-18-4 NMSA 1978 (being Laws 1984, Chapter 127, Section 334) is amended to read:

"59A-18-4. INSURABLE INTEREST--PERSONAL INSURANCE.--

A. Any individual of competent legal capacity may procure or effect an insurance contract upon his own life or body for the benefit of any person. No person shall procure or cause to be procured any insurance contract upon the life or body of another individual unless the benefits under such contract are payable to the individual insured or his personal representatives, or to a person having, at the time such contract was made, an insurable interest in the individual insured.

B. If the beneficiary, assignee or other payee under any contract made in violation of this section receives from the insurer any benefits thereunder accruing upon the death, disablement or injury of the individual insured, the individual insured or personal representative may maintain an action to recover such benefits from the person so receiving them.

C. As used in this section, "insurable" interest as to such personal insurance means that every person has an insurable interest in the life, body and health of himself, if an individual, and in the life, body and health of other individuals as follows:

(1) in the case of individuals related closely by blood or by law or in the case of domestic partners, a substantial interest engendered by love and affection; and

(2) in the case of other persons, a lawful and substantial economic interest in having the life, health or bodily safety of the insured individual continue, as distinguished from an interest which would arise only, or would be enhanced in value, by the death, disablement or injury of the individual insured.

D. An individual party to a contract or option for purchase or sale of an interest in a business partnership or firm, or of shares of stock of a corporation or of an interest in such shares, has an insurable interest in the life, body and health of each individual party to such contract and for the purposes of such contract only, in addition to any insurable interest which may otherwise exist as to such individual.

E. An insurer shall be entitled to rely upon all statements, declarations and representations made by an applicant for insurance relative to the insurable interest of the applicant in the insured; and no insurer shall incur legal liability, except as set forth in the policy, by virtue of any untrue statements, declarations or representations so relied upon in good faith by the insurer."

Section 3. Section 59A-18-8 NMSA 1978 (being Laws 1984, Chapter 127, Section 338) is amended to read:

"59A-18-8. CONSENT OF INSURED--LIFE, HEALTH INSURANCE.--No life or health insurance contract upon an individual, except a contract of group life insurance or of group or blanket health insurance, shall be made or effectuated unless at the time of the making of the contract, such individual applies therefor or has consented thereto in writing, except in the following cases:

A. a spouse or domestic partner may effectuate such insurance upon the other spouse or domestic partner;

B. any person having an insurable interest in the life of a minor, or any person upon whom a minor is dependent for support and maintenance, may effectuate insurance upon the life of or pertaining to such minor; and

C. family policies may be issued insuring any two [(2)] or more members of a family on an application signed by either parent, a stepparent, a guardian, a domestic partner or by a husband or wife."

Section 4. Section 59A-21-10 NMSA 1978 (being Laws 1984, Chapter 127, Section 407, as amended) is amended to read:

"59A-21-10. DEPENDENTS' COVERAGE.--Insurance under any group life insurance policy issued pursuant to Sections

59A-21-4 and 59A-21-6 through 59A-21-8 NMSA 1978 may be extended to insure the dependents, or any class or classes thereof, of each employee or member who so elects. The term "dependent" means the spouse or domestic partner of the employee or member and an employee's or member's minor child, including a child beyond the age of majority up to a maximum of twenty-five years of age while attending an educational institution, and such other children of the employee or member as provided within the group life insurance policy. The premiums for the insurance on such dependents may be paid by the group policyholder or by the employee or member or by the group policyholder and the employee or member jointly."

Section 5. Section 59A-22-2 NMSA 1978 (being Laws 1984, Chapter 127, Section 423) is amended to read:

"59A-22-2. FORM AND CONTENT OF POLICY.--No policy of individual health insurance shall be delivered or issued for delivery in this state unless:

A. the entire money and other considerations therefor are expressed therein; [and]

B. the time at which insurance takes effect and terminates is expressed therein; [and]

C. it purports to insure only one person, except as provided in Chapter 59A, Article 23 [of the Insurance Code] NMSA 1978, and except that a policy or contract may be issued upon application of the head of a family, who shall be deemed the policyholder, covering members of any one family, including husband, wife, domestic partner, dependent children or any children under the age of nineteen [(19)] and other dependents living with the family; [and]

D. every printed portion of the text matter and of any endorsements or attached papers shall be printed in uniform type of which the face shall be not less than ten [(10)] point (the "text" shall include all printed matter except the name and address of the insurer, name and title of the policy, captions, subcaptions and form numbers), but notwithstanding any provision of this law, the superintendent shall not disapprove any such policy on the ground that every printed portion of its text matter or of any endorsement or attached paper is not printed in uniform type if it shall be shown that the type used is required to conform to the laws of another state in which the insurer is authorized; [and]

E. the exceptions and reductions of indemnity are adequately captioned and clearly set forth in the policy or contract; [and]

F. each such form, including riders and endorsements, shall be identified by a form number in the lower left-hand corner of the first page thereof; and

G. if any policy is issued by an insurer domiciled in this state for delivery to a person residing in another state, and if the official having responsibility for the administration of insurance laws of such other state shall have advised the superintendent that any such policy is not subject to approval or disapproval by such official, the superintendent may by ruling require that such policy meet the standards set forth in Sections [424 through 446 of this article] 59A-22-3 through 59A-22-25 NMSA 1978."

Section 6. A new section of Chapter 59A, Article 23 NMSA 1978 is enacted to read:

"[NEW MATERIAL] DOMESTIC PARTNER COVERAGE OPTIONAL TO GROUP.--

A. Health care coverage may be offered to a domestic partner or a dependent child of the domestic partner of an insured in blanket or group health insurance coverage by a group. If a group chooses to offer coverage to a domestic partner or a dependent child of the domestic partner of an insured under a blanket or group health insurance policy, the insurer shall not deny the enrollment of a domestic partner or a dependent child of the domestic partner based on the status of the person or child as a domestic partner or as a child of the domestic partner of an insured. Whether a domestic partner or a child of a domestic partner is insurable shall be determined by the insurer according to the same criteria used to determine if a spouse or a biological child of an insured may be covered.

B. As used in Chapter 59A, Article 23 NMSA 1978, "group" means a special group described in Section 59A-23-2 NMSA 1978 or a group as described in Section 59A-23-3 NMSA 1978."

Section 7. A new section of Chapter 59A, Article 23C NMSA 1978 is enacted to read:

"[NEW MATERIAL] COVERAGE FOR DOMESTIC PARTNER OPTIONAL TO SMALL EMPLOYER.--Health insurance coverage may be offered to a domestic partner or a dependent child of the domestic partner of an employee of a small employer. If a small employer chooses to offer coverage to a domestic partner or a dependent child of the domestic partner of an employee under a health insurance plan offered by the small employer, the insurer shall not deny the enrollment of a domestic partner or a dependent child of the domestic partner based on the status of the person as a domestic partner or the child as a child of the domestic partner of an employee. Whether a domestic partner or a child of a domestic partner is insurable shall be determined by the insurer according to the same criteria used to determine if a spouse or a biological child of an employee of a small employer may be covered."

Section 8. Section 59A-23D-2 NMSA 1978 (being Laws 1995, Chapter 93, Section 2, as amended) 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 or domestic partner;

(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;

(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; or

(f) a child of the employee's domestic partner;

(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 9. Section 59A-23E-9 NMSA 1978 (being Laws 1997, Chapter 243, Section 9, as amended) is amended to read:

"59A-23E-9. GROUP HEALTH PLAN--SPECIAL ENROLLMENT PERIODS FOR DEPENDENT BENEFICIARIES.--

A. A group health plan shall provide for a dependent special enrollment period described in Subsection B of this section during which a person may be enrolled under the plan as a dependent of the individual, and in the case of the birth or adoption of a child, the spouse or domestic partner of the individual may be enrolled as a dependent of the individual if the spouse or domestic partner is otherwise eligible for coverage, if:

(1) the plan makes coverage available to a dependent of an individual;

(2) the individual is a participant under the plan or has met any waiting period applicable to becoming a participant and is eligible to be enrolled under the plan but for a failure to enroll during a previous enrollment period; and

(3) the person has become the dependent of the individual through marriage, birth, adoption or affidavit of domestic partnership or placement for adoption.

B. A dependent special enrollment period pursuant to this subsection shall be for a period of not less than thirty days and shall begin on the later of:

(1) the date dependent coverage is made available; or

(2) the date of the marriage, domestic partnership, birth, adoption or placement for adoption described in Subsection A of this section.

C. If an individual seeks to enroll a person as a dependent during the first thirty days of a dependent special enrollment period, the coverage of the dependent becomes effective:

(1) in the case of marriage or domestic partnership, not later than the first day of the first month beginning after the date the completed request for enrollment is received;

(2) in the case of birth, as of the date of the birth; or

(3) in the case of adoption or placement for adoption, the date of the adoption or placement."

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