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Health and Life Insurance Advisory Council

Insurance Regulation Law Update

The business and regulatory environment for insurance is constantly changing, and part of our client service platform involves staying on top of those changes. One way we do this is by attending the periodic meetings of the industry-regulator-consumer liaison committees sponsored by the Wisconsin Office of the Commissioner of Insurance (OCI) for life, health, and property and casualty insurance. The following is our report on the health insurance discussion from the most recent meeting of the Health and Life Insurance Advisory Council: 

Affordable Care Act (ACA) Implementation
Navigators and Certified Application Counselors (CACs).OCI attorney Julie Walsh reported that the emergency rule on navigators and CACs is in effect (until April 7); that OCI held a hearing on the permanent rule at the end of January; and that OCI is still on track to obtain the governor’s approval to submit the permanent rule to the legislature by the end of March, which will minimize any gap between the emergency rule and the permanent rule. The changes in the permanent rule mainly relate to the marketing side (with input from the regional enrollment networks) and assister (CAC) issues. There are exceptions for governmental entities and for traditional financial assistance provided by health care providers.

A court has issued a preliminary injunction against enforcement of the corresponding Missouri law based on federal preemption (though the federal government is not a party in the action). The National Association of Insurance Commissioners (NAIC) is tracking the lawsuit, which did result in some questions when the Wisconsin rule came before the legislature’s Joint Committee for the Review of Administrative Rules. However, the Wisconsin rule and its enforcement are somewhat different, and J.P. Wieske, OCI’s Legislative Liaison and Public Information Officer, noted that the federal rules clearly contemplate a state role in regulating Navigators and CACs, so the injunction is an aberration.

Federal Correspondence.J.P. Wieske noted that Wisconsin has had a couple of run-ins with the federal government, joking that the result has been participation by senior federal officials on calls with the state (and probably a special file).

  • Direct Enrollment. In connection with the extension of BadgerCare, the governor in November asked the federal Department of Health and Human Services (DHHS) to allow Wisconsinites to use ACA premium tax credits to purchase coverage outside of the federally-facilitated marketplace (the “exchange”). There was no response. When OCI learned of direct enrollment pilot programs in other states, Commissioner Ted Nickel sent a letter to DHHS in December, requesting that Wisconsin be added to the pilot program. Again, there has been no response.
  • Rate Review. OCI also pushed back against federal encroachment on state authority when Deputy Commissioner Dan Schwartzer sent a recent letter to the federal Center for Consumer Information and Insurance Oversight (CCIIO) regarding changes in the Uniform Rate Review Template and Actuarial Memorandum to expand the information required from insurers. CCIIO has already designated Wisconsin as having an effective rate review program, so CCIIO should not usurp this authority. Moreover, CCIIO used sub-regulatory guidance to propose the changes, which means no public comment is required. (While CCIIO did ask for public comment on this proposal, that could change in the future.)

Rate and Form Filings for 2015.OCI just posted updated information on rates and forms, and is ready to accept filings for 2015. Federal guidance suggests a June 27 deadline, but that only gives OCI a month to report to CCIIO by the July 31 deadline (and OCI would like to have at least 60 days to allow for back and forth on the filings). OCI encourages early filings to leave time for dealing with issues that might arise and reviews the filings in the order they are received. OCI Advanced Insurance Examiner Stephanie Cook noted that there are quarterly deadlines for small group filings and that there are big changes to rate filings. 

Mr. Wieske noted that confidentiality will be handled in the same manner as last year, including OCI release of all the filings at about the same time (which allows OCI to look for outliers).

Uniform Application. In response to a question, J.P. Wieske stated that insurers may use the federal application or may continue to use the Wisconsin uniform application. (The law does not prohibit asking the health questions that are on the uniform application, it just prohibits insurers from using the answers.)

National Association of Insurance Commissioners
ACA Excise Tax. J.P. Wieske noted that accounting for the ACA excise tax on health insurers seems to be the “zombie issue.” (It never dies.) However, OCI expects a long-overdue final resolution on a call this week, which should be the compromise position that calls for accounting for the tax immediately in the year it is to be paid (initially in 2014) and not in the year that provides the data for calculating the tax (the year before the one in which the tax is paid).

Model Acts.The NAIC’s ACA Model Act Review Working Group, which is chaired by Mr. Wieske, is continuing to sort through model laws that have been affected by the ACA. The group has recommended that the NAIC archive several of the laws that are no longer needed and is now trying to prioritize action on the 17 model laws the group recommended for review in light of the ACA.

One of the models that will probably get a strong push in both directions (immediate vs. deferred review) is the Managed Care Network Adequacy Model. However, he noted that there was no way the model could be revised in time for this year’s filings, so any changes probably will not take effect until next year. In addition, CCIIO may have its own standards, so the NAIC may want to determine whether that will happen before revising the model. In response to a question about whether CCIIO might issue standards by letter, Mr. Wieske said OCI has broad concerns about any sub-regulatory approach and that a “we’ll know it when we see it” approach does not provide enough guidance. In response to a question about whether the HMO rules might be tightened, Mr. Wieske said the focus of states like California seemed to be more on the PPO rules and seemed to be a response to the narrower networks seen on the exchanges. He concluded by indicating that the work on the model will not be a rush job.

Committee Assignments. NAIC committee assignments have been released, and OCI is represented on the Life Insurance and Annuities (A) Committee, the Health Insurance and Managed Care (B) Committee (vice chair), the Regulatory Framework (B) Task Force (chair), the Health Care Reform Actuarial (B) Working Group, and the Senior Issues (B) Task Force.

Spring National Meeting. J.P. Wieske stated that OCI is planning a conference call for the Council to provide an update on the March 29–April 1 Orlando meeting.

Legislation
Wisconsin. OCI Administrative Policy Advisor Terri Carlson noted that a lot of legislation is moving in the waning days of the state legislative session.

  • Provider Apologies. On behalf of the Injured Families and Patients Compensation Fund, OCI has been monitoring proposals to make an apology by a health care provider inadmissible in a suit against the provider. Assembly Bill (AB) 120 is on the calendar in the Assembly today.
  • OCI Omnibus Bill. Twin versions of this bill (AB 735 and Senate Bill [SB] 582), which include the Own Risk and Solvency Assessment (ORSA) requirements, are also on the calendars in their respective houses. J.P. Wieske noted that there has been no opposition to the proposal, so it should be presented to the governor.
  • Treatment Options. SB 518, which requires podiatrists, chiropractors, dentists, and optometrists to inform patients of treatment options, is on the calendar in the Senate.
  • Oral Chemo. Finally, in response to a question, J.P. Wieske noted that the oral chemotherapy mandate proposals — AB 392 and SB 300 — are stalled.

Federal. The National Association of Registered Agents and Brokers Reform Act of 2013 (NARAB II) would keep state control over agents but creates a national licensing regime. The proposal passed in both the House and the Senate, but it was attached to flood insurance legislation in the Senate, so it will need to go back to the House. 

Consumer Complaint Web Portal
Roger Frings, OCI Policy Initiatives Advisor, reported that OCI is going through the comments it received on the prototype consumer complaint web portal at a December webinar. OCI will invite companies to test the system over the coming months before phasing in the system. Companies interested in participating should contact Mr. Frings.

For more information on the Insurance Regulation Group, please contact William Toman at (608) 283-2434 / william.toman@quarles.com or your Quarles & Brady attorney.