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H.359

Introduced by   Representatives Flory of Pittsford, Sunderland of Rutland Town, Adams of Hartland, Allaire of Rutland City, Baker of West Rutland, Bartlett of Dover, Bostic of St. Johnsbury, Branagan of Georgia, Brennan of Colchester, Canfield of Fair Haven, Clark of St. Johnsbury, Clark of Vergennes, DePoy of Rutland City, Donaghy of Poultney, Dunsmore of Georgia, Endres of Milton, Errecart of Shelburne, Helm of Castleton, Houston of Ferrisburgh, Hube of Londonderry, Hudson of Lyndon, Kainen of Hartford, Kennedy of Chelsea, Kilmartin of Newport City, Koch of Barre Town, Komline of Dorset, Krawczyk of Bennington, Larocque of Barnet, Larrabee of Danville, LaVoie of Swanton, Lawrence of Lyndon, Livingston of Manchester, Louras of Rutland City, Marcotte of Coventry, Marron of Stowe, McAllister of Highgate, McFaun of Barre Town, Metzger of Milton, Miller of Elmore, Morley of Barton, Morrissey of Bennington, Myers of Essex, Niquette of Colchester, O'Donnell of Vernon, Otterman of Topsham, Parent of St. Albans City, Peaslee of Guildhall, Schiavone of Shelburne, Shaw of Derby, Smith of New Haven, Valliere of Barre City, Winters of Swanton, Winters of Williamstown and Wright of Burlington

Referred to Committee on

Date:

Subject:  Health insurance; out-of-state insurers; choice and availability

Statement of purpose:  This bill would allow Vermonters to purchase health insurance policies from insurance companies domiciled in other states, provided certain requirements of Vermont law are met, including minimum capital, surplus, and reserve requirements; disclosure and reporting requirements; and grievance procedures.  The bill would also require that prospective Vermont enrollees be provided adequate and full disclosure of how the out‑of‑state health insurance plans may differ from Vermont health insurance plans in a format approved by the commissioner of banking, insurance, securities, and health care administration.

AN ACT RELATING TO THE PURCHASE OF HEALTH INSURANCE

It is hereby enacted by the General Assembly of the State of Vermont:

Sec. 1.  Short Title

This act shall be known and may be cited as “The Consumer Health Care Options, Choice, and Empowerment Act” or “CHOICE.”

Sec. 2.  8 V.S.A. chapter 107 subchapter 9 is added to read:

Subchapter 9.  Consumer Health Care Options, Improvement,

Choice, and Empowerment Act

§ 4100n.  DEFINITIONS

For the purposes of this subchapter:

(1)  “Commissioner” means the commissioner of banking, insurance, securities, and health care administration.

(2)  “Out-of-state insurer” means a company offering health insurance policies that is domiciled in another state of the United States.

§ 4100o.  OUT-OF-STATE INSURERS

An insurer may not offer a health insurance policy to a resident of the state of Vermont unless it is issued a “certification of insurer” by the commissioner.  The certification shall assure that the following qualifications have been met:

(1)  The out-of-state insurer holds a valid certificate of authority to market individual health insurance in the state of its domicile.

(2)  Any policy for individual health insurance offered for sale in Vermont by an out-of-state insurer domiciled in another state of the United States complies with the applicable individual health insurance laws in the state of its domicile, and the policy is actively marketed in that state.

(3)  The insurance policy offered to Vermont residents is currently being actively marketed in the state of the out-of-state insurer’s domicile.

(4)  The out-of-state insurer maintains minimum capital and surplus requirements and maintains reserves as required by the commissioner.

(5)  The out-of-state insurer meets the commissioner’s requirements of reporting plan information with respect to individual health plans offered for sale in Vermont and discloses to prospective enrollees how the health plans differ from individual health plans offered by domestic insurers in a format approved by the commissioner.  Health plan policies and applications for coverage must contain the following disclosure statement or a substantially similar statement:

“This policy is issued by an out-of-state insurer and is governed by the laws and regulations of the State of (out-of-state insurer’s state of domicile).  This policy may not be subject to all the insurance laws and rules of the State of Vermont, including coverage of certain health care services or benefits mandated by Vermont law.  Before purchasing this policy, you should carefully review the terms and conditions of coverage under this policy, including any exclusions or limitations of coverage.”

(6)  Grievance procedures.  The out-of-state insurer meets the requirements of the state of Vermont grievance procedures with respect to health plans offered for sale in this state.

(7)  Unfair (insurance) trade practices.  Vermont’s provisions apply to the out-of-state insurer.

(8)  Premium taxes.  The out-of-state insurer is subject to applicable premium taxes imposed on insurers marketing individual health insurance in Vermont.

(9)  The out-of-state insurer participates in an insurance insolvency guaranty association to which a Vermont insurer that markets individual health insurance is required to belong in accordance with this title.  An insurance producer may not act as an agent of an out-of-state insurer certified to market individual health insurance pursuant to this bill, unless the producer holds a valid producer license from the state domicile of the out-of-state insurer.

§ 4100p.  VERMONT INSURERS

Notwithstanding any other provision of this title, except as expressly provided, a domestic insurer may offer for sale in this state an individual health plan duly authorized for sale in another state by a parent or subsidiary of the domestic insurer if:

(1)  The parent or subsidiary of the Vermont insurer holds a valid certificate of authority to market individual health insurance in the state of its domicile.

(2)  Any policy, contract or certificate of individual health insurance offered for sale in this state by a Vermont insurer complies with the applicable individual health insurance laws in the state or country of domicile of the parent or subsidiary, and the policy is actively marketed in that state.

(3)  The Vermont insurer meets the requirements for reporting plan information with respect to individual health plans offered for sale in this state and discloses to prospective enrollees how the individual health plans of the parent or subsidiary differ from individual health plans offered by domestic insurers in a format approved by the commissioner within 90 days of the effective date of this section.  Health plan policies and applications for coverage must contain the following disclosure statement or a substantially similar statement:

“This policy is issued by a Vermont Insurer but is governed by the laws and rules of the State of (state of domicile of parent or subsidiary of domestic), which is the state of domicile of the parent or subsidiary of the domestic insurer or health maintenance organization.  This policy might not be subject to all the insurance laws and rules of the State of Vermont, including coverage of certain health care services or benefits mandated by Vermont law.  Before purchasing this policy, you should carefully review the terms and conditions of coverage under this policy, including any exclusions or limitations of coverage.”

(4)  The Vermont insurer meets the requirements for grievance procedures with respect to health plans offered for sale in this state.

Sec. 3.  EFFECTIVE DATE AND APPLICABILITY

(a)  This act shall apply to out-of-state insurers and Vermont insurers notwithstanding any other provision of law to the contrary in Title 8 of the Vermont Statutes or otherwise, except where it expressly so provides.

(b)  This act shall take effect July 1, 2005.  The commissioner’s requirements of reporting plan information with respect to individual health plans offered for sale in Vermont and disclosure to prospective enrollees on differences from individual health plans offered by domestic insurers shall be prepared and approved by the commissioner within 90 days of the effective date of this act.



Published by:

The Vermont General Assembly
115 State Street
Montpelier, Vermont


www.leg.state.vt.us