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AN ACT

RELATING TO INSURANCE; ELIMINATING IN CERTAIN CASES THE

INITIAL TWO-YEAR PERIOD WHEN A HEALTH INSURANCE POLICY MAY BE

VOIDED OR A CLAIM FOR LOSS DENIED; RAISING THE MINIMUM AMOUNT

OF THE MAXIMUM LIMIT OF COVERAGE FOR POLICIES UNDER THE

MINIMUM HEALTHCARE PROTECTION ACT; CHANGING A REQUIREMENT FOR

DETERMINING A PERIOD OF CREDITABLE COVERAGE UNDER THE HEALTH

INSURANCE PORTABILITY ACT.

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

Section 1. Section 59A-22-5 NMSA 1978 (being Laws 1984,

Chapter 127, Section 426, as amended) is amended to read:

"59A-22-5. TIME LIMIT ON CERTAIN DEFENSES.--

A. There shall be a provision for comprehensive

major medical policies as follows: As of the date of issue

of this policy, no misstatements, except willful or

fraudulent misstatements, made by the applicant in the

application for this policy shall be used to void the policy

or to deny a claim for loss incurred or disability (as

defined in the policy). In the event a misstatement in an

application is made that is not fraudulent or willful, the

issuer of the policy may prospectively rate and collect from

the insured the premium that would have been charged to the

insured at the time the policy was issued had such

misstatement not been made.

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B. There shall be a provision for policies other

than comprehensive major medical policies as follows: After

two years from the date of issue of this policy, no

misstatements, except fraudulent misstatements, made by the

applicant in the application for this policy shall be used to

void the policy or to deny a claim for loss incurred or

disability (as defined in the policy) commencing after the

expiration of such two-year period.

C. The foregoing policy provisions

shall not be so construed as to affect any initial two-year

period nor to limit the application of Sections 59A-22-17

through 59A-22-19, 59A-22-21 and 59A-22-22 NMSA 1978 in the

event of misstatement with respect to age or occupation or

other insurance.

D. A policy that the insured has the right to

continue in force subject to its terms by the timely payment

of premium (1) until at least age fifty or (2) in the case of

a policy issued after age forty-four, for at least five years

from its date of issue, may contain in lieu of the foregoing

the following provision, from which the clause in parentheses

may be omitted at the insurance company's option, under the

caption "Incontestable":

After this policy has been in force for a period of two

years during the lifetime of the insured (excluding any

period during which the insured is disabled), it shall become

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incontestable as to the statements contained in the

application.

E. For individual policies that do not reimburse

or pay as a result of hospitalization, medical or surgical

expenses, no claim for loss incurred or disability (as

defined in the policy) shall be reduced or denied on the

ground that a disease or physical condition disclosed on the

application and not excluded from coverage by name or a

specific description effective on the date of loss had

existed prior to the effective date of coverage of this

policy. As an alternative, those policies may contain

provisions under which coverage may be excluded for a period

of six months following the effective date of coverage as to

a given covered insured for a preexisting condition, provided

that:

(1) the condition manifested itself within a

period of six months prior to the effective date of coverage

in a manner that would cause a reasonably prudent person to

seek diagnosis, care or treatment; or

(2) medical advice or treatment relating to

the condition was recommended or received within a period of

six months prior to the effective date of coverage.

F. Individual policies that reimburse or pay as a

result of hospitalization, medical or surgical expenses may

contain provisions under which coverage is excluded during a

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period of six months following the effective date of coverage

as to a given covered insured for a preexisting condition,

provided that:

(1) the condition manifested itself within a

period of six months prior to the effective date of coverage

in a manner that would cause a reasonably prudent person to

seek diagnosis, care or treatment; or

(2) medical advice or treatment relating to

the condition was recommended or received within a period of

six months prior to the effective date of coverage.

G. The preexisting condition exclusions authorized

in Subsections E and F of this section shall be waived to the

extent that similar conditions have been satisfied under any

prior health insurance coverage if the application for new

coverage is made not later than thirty-one days following the

termination of prior coverage. In that case, the new

coverage shall be effective from the date on which the prior

coverage terminated.

H. Nothing in this section shall be construed to

require the use of preexisting conditions or prohibit the use

of preexisting conditions that are more favorable to the

insured than those specified in this section."

Section 2. Section 59A-23B-3 NMSA 1978 (being Laws

1991, Chapter 111, Section 3, as amended) is amended to read:

"59A-23B-3. POLICY OR PLAN--DEFINITION--CRITERIA.--

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A. For purposes of the Minimum Healthcare

Protection Act, "policy or plan" means a healthcare benefit

policy or healthcare benefit plan that the insurer, fraternal

benefit society, health maintenance organization or nonprofit

healthcare plan chooses to offer to individuals, families or

groups of fewer than twenty members formed for purposes other

than obtaining insurance coverage and that meets the

requirements of Subsection B of this section. For purposes

of the Minimum Healthcare Protection Act, "policy or plan"

shall not mean a healthcare policy or healthcare benefit plan

that an insurer, health maintenance organization, fraternal

benefit society or nonprofit healthcare plan chooses to offer

outside the authority of the Minimum Healthcare Protection

Act.

B. A policy or plan shall meet the following

criteria:

(1) the individual, family or group

obtaining coverage under the policy or plan has been without

healthcare insurance, a health services plan or

employer-sponsored healthcare coverage for the six-month

period immediately preceding the effective date of its

coverage under a policy or plan, provided that the six-month

period shall not apply to:

(a) a group that has been in existence

for less than six months and has been without healthcare

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coverage since the formation of the group;

(b) an employee whose healthcare

coverage has been terminated by an employer;

as a dependent under the terms of the contract; or

(d) an individual and an individual's

dependents who no longer have healthcare coverage as a result

of termination or change in employment of the individual or

by reason of death of a spouse or dissolution of a marriage,

notwithstanding rights the individual or individual's

dependents may have to continue healthcare coverage on a

self-pay basis pursuant to the provisions of the federal

Consolidated Omnibus Budget Reconciliation Act of 1985;

(2) the policy or plan includes the

following managed care provisions to control costs:

(a) an exclusion for services that are

not medically necessary or are not covered by preventive

health services; and

(b) a procedure for preauthorization of

elective hospital admissions by the insurer, fraternal

benefit society, health maintenance organization or nonprofit

healthcare plan; and

(3) subject to a maximum limit on the cost

of healthcare services covered in any calendar year of not

less than fifty thousand dollars ($50,000) and, effective for

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policies written or renewed on or after January 1, 2009, of

not less than one hundred thousand dollars ($100,000),

adjusted for changes not to exceed the medical price index

component of the federal department of labor's consumer price

index at intervals and in a manner established by rule

pursuant to the Minimum Healthcare Protection Act, the policy

or plan provides the following minimum healthcare services to

covered individuals:

(a) inpatient hospitalization coverage

or home care coverage in lieu of hospitalization or a

combination of both, not to exceed twenty-five days of

coverage inclusive of any deductibles, co-payments or

co-insurance; provided that a period of inpatient

hospitalization coverage shall precede any home care

coverage;

(b) prenatal care, including a minimum

of one prenatal office visit per month during the first two

trimesters of pregnancy, two office visits per month during

the seventh and eighth months of pregnancy and one office

visit per week during the ninth month and until term;

provided that coverage for each office visit shall also

include prenatal counseling and education and necessary and

appropriate screening, including history, physical

examination and the laboratory and diagnostic procedures

deemed appropriate by the physician based upon recognized

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medical criteria for the risk group of which the patient is a

member;

physicians' and certified nurse midwives' services, delivery

room and other medically necessary services directly

associated with delivery;

(d) well-baby and well-child care,

including periodic evaluation of a child's physical and

emotional status, a history, a complete physical examination,

a developmental assessment, anticipatory guidance,

appropriate immunizations and laboratory tests in keeping

with prevailing medical standards; provided that such

evaluation and care shall be covered when performed at

approximately the age intervals of birth, two weeks, two

months, four months, six months, nine months, twelve months,

fifteen months, eighteen months, two years, three years, four

years, five years and six years;

(e) coverage for low-dose screening

mammograms for determining the presence of breast cancer;

provided that the mammogram coverage shall include one

baseline mammogram for persons age thirty-five through

thirty-nine years, one biennial mammogram for persons age

forty through forty-nine years and one annual mammogram for

persons age fifty years and over; and further provided that

the mammogram coverage shall only be subject to deductibles

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and co-insurance requirements consistent with those imposed

on other benefits under the same policy or plan;

(f) coverage for cytologic screening,

to include a Papanicolaou test and pelvic exam for

asymptomatic as well as symptomatic women;

(g) a basic level of primary and

preventive care, including no less than seven physician,

nurse practitioner, nurse midwife or physician assistant

office visits per calendar year, including any ancillary

diagnostic or laboratory tests related to the office visit;

(h) coverage for childhood

immunizations, in accordance with the current schedule of

immunizations recommended by the American academy of

pediatrics, including coverage for all medically necessary

booster doses of all immunizing agents used in childhood

immunizations; provided that coverage for childhood

immunizations and necessary booster doses may be subject to

deductibles and co-insurance consistent with those imposed on

other benefits under the same policy or plan; and

(i) coverage for smoking cessation

treatment.

C. A policy or plan may include the following

managed care and cost control features to control costs:

(1) a panel of providers who have entered

into written agreements with the insurer, fraternal benefit

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society, health maintenance organization or nonprofit

healthcare plan to provide covered healthcare services at

specified levels of reimbursement; provided that such written

agreement shall contain a provision relieving the individual,

family or group covered by the policy or plan from an

obligation to pay for a healthcare service performed by the

provider that is determined by the insurer, fraternal benefit

society, health maintenance organization or nonprofit

healthcare plan not to be medically necessary;

(2) a requirement for obtaining a second

opinion before elective surgery is performed;

(3) a procedure for utilization review by

the insurer, fraternal benefit society, health maintenance

organization or nonprofit healthcare plan; and

(4) a maximum limit on the cost of

healthcare services covered in a calendar year of not less

than fifty thousand dollars ($50,000) and, effective for

policies written or renewed on or after January 1, 2009, of

not less than one hundred thousand dollars ($100,000),

adjusted for changes not to exceed the medical price index

component of the federal department of labor's consumer price

index at intervals and in a manner established by rule

pursuant to the Minimum Healthcare Protection Act.

D. Nothing contained in Subsection C of this

section shall prohibit an insurer, fraternal benefit society,

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health maintenance organization or nonprofit healthcare plan

from including in the policy or plan additional managed care

and cost control provisions that the superintendent

determines to have the potential for controlling costs in a

manner that does not cause discriminatory treatment of

individuals, families or groups covered by the policy or

plan.

E. Notwithstanding any other provisions of law, a

policy or plan shall not exclude coverage for losses incurred

for a preexisting condition more than six months from the

effective date of coverage. The policy or plan shall not

define a preexisting condition more restrictively than a

condition for which medical advice was given or treatment

recommended by or received from a physician within six months

before the effective date of coverage.

F. A medical group, independent practice

association or health professional employed by or contracting

with an insurer, fraternal benefit society, health

maintenance organization or nonprofit healthcare plan shall

not maintain an action against an insured person, family or

group member for sums owed by an insurer, fraternal benefit

society, health maintenance organization or nonprofit

healthcare plan that are higher than those agreed to pursuant

to a policy or plan."

Section 3. Section 59A-23E-5 NMSA 1978 (being Laws

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1997, Chapter 243, Section 5, as amended) is amended to read:

"59A-23E-5. GROUP HEALTH PLAN--RULES FOR CREDITING

PREVIOUS COVERAGE.--

A. A period of creditable coverage shall not be

counted with respect to enrollment of an individual under a

group health plan if, after the period and before the

enrollment date, there was a ninety-five-day continuous

period during which the individual was not covered under any

creditable coverage.

B. In determining the continuous period for the

purpose of Subsection A of this section, any period that an

individual is in a waiting period for any coverage under a

group health plan or for group health insurance coverage or

is in an affiliation period shall not be counted."

Section 4. EFFECTIVE DATE.--The effective date of the

provisions of this act is July 1, 2008.