2009 Georgia Insurance Continuation Law

Senate Bill 94

To amend Title 33 of the Official Code of Georgia Annotated, relating to insurance, so as to revise the time periods and eligibility for continuation coverage under certain group accident and sickness insurance plans; to provide for additional continuation plan options; to require the Commissioner of Insurance to promulgate rules and regulations to provide for reporting and notification of eligibility requirements for participation in the Georgia Health Insurance Assignment System and the Georgia Health Benefits Assignment System; to provide that the Commissioner of Insurance shall be authorized to allow certain health reimbursement arrangement only plans that encourage employer financial support of health insurance or health related expenses to be approved for sale in connection with or packaged with otherwise approved individual health insurance policies; to provide for related matters; to repeal conflicting laws; and for other purposes.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA: SECTION 1.
Title 33 of the Official Code of Georgia Annotated, relating to insurance, is amended by revising Code Section 33-24-21.1, relating to conversion privilege and continuation right provisions in group accident and sickness contracts, as follows:
"33-24-21.1.
(a)  As used in this Code section, the term:
(1)  'Assistance eligible individual' shall have the same meaning as provided by Section 3001 of Title III of the federal American Recovery and Reinvestment Act of 2009.
(2)  'Creditable coverage' under another health benefit plan means medical expense coverage with no greater than a 90 day gap in coverage under any of the following:
(A)  Medicare or Medicaid;
(B)  An employer based accident and sickness insurance or health benefit arrangement;
(C)  An individual accident and sickness insurance policy, including coverage issued by a health maintenance organization, nonprofit hospital or nonprofit medical service corporation, health care corporation, or fraternal benefit society;
(D)  A spouse's benefits or coverage under medicare or Medicaid or an employer based health insurance or health benefit arrangement;
(E)  A conversion policy;
(F)  A franchise policy issued on an individual basis to a member of a true association as defined in subsection (b) of Code Section 33-30-1;
(G)  A health plan formed pursuant to 10 U.S.C. Chapter 55;
(H)  A health plan provided through the Indian Health Service or a tribal organization
program or both;
(I)  A state health benefits risk pool;
(J)  A health plan formed pursuant to 5 U.S.C. Chapter 89;
(K)  A public health plan; or
(L)  A Peace Corps Act health benefit plan.
(3)  'Eligible dependent' means a person who is entitled to medical benefits coverage under a group contract or group plan by reason of such person's dependency on or relationship to a group member.
(4)  'Group contract or group plan' is synonymous with the term 'contract or plan' and means:
(A)  A group contract of the type issued by a nonprofit medical service corporation
established under Chapter 18 of this title;
(B)  A group contract of the type issued by a nonprofit hospital service corporation
established under Chapter 19 of this title;
(C)  A group contract of the type issued by a health care plan established under
Chapter 20 of this title;
(D)  A group contract of the type issued by a health maintenance organization
established under Chapter 21 of this title; or
(E)  A group accident and sickness insurance policy or contract, as defined in
Chapter 30 of this title.
(5)  'Group member' means a person who has been a member of the group for at least six months and who is entitled to medical benefits coverage under a group contract or group plan and who is an insured, certificate holder, or subscriber under the contract or plan.
(6)  'Insurer' means an insurance company, health care corporation, nonprofit hospital service corporation, medical service nonprofit corporation, health care plan, or health maintenance organization.
(7)  'Qualifying eligible individual' means:
(A)  A Georgia domiciliary, for whom, as of the date on which the individual seeks coverage under this Code section, the aggregate of the periods of creditable coverage is 18 months or more; and
(B)  Who is not eligible for coverage under any of the following:
(i)  A group health plan, including continuation rights under this Code section or the federal Consolidated Omnibus Budget Reconciliation Act of 1986 (COBRA);
(ii)  Part A or Part B of Title XVIII of the federal Social Security Act; or
(iii)  The state plan under Title XIX of the federal Social Security Act or any successor program.
(a.1)  Any group member or qualifying eligible individual who is an assistance eligible individual as provided by Section 3001 of Title III of the federal American Recovery and Reinvestment Act (P.L. 111-5), during the period permitted under such act whose coverage has been terminated and who has been continuously covered under the group contract or group plan, and under any contract or plan providing similar benefits that it replaces, for at least six months immediately prior to such termination, shall be entitled to have his or her coverage and the coverage of his or her eligible dependents continued under the contract or plan.  Such coverage shall continue for the fractional policy month remaining, if any, at termination plus nine additional policy months upon payment of the premium to the insurer by cash, certified check, or money order, at the same rate for active group members set forth in the contract or plan, on a monthly basis in advance as such premium becomes due during this coverage period.  For the period that the assistance eligible individual is eligible for the premium assistance subsidy as provided in Section 3001 of Title III of the federal American Recovery and Reinvestment Act (P.L. 111-5), such premium payment shall be calculated as 35 percent of the rate for active group members including any portion of the premium paid by a former employer or other person if such employer or other person no longer contributes premium payments for this coverage.
(a.2)  The rights and benefits under this Code section attributable to Section 3001 of Title III of the federal American Recovery and Reinvestment Act (P.L. 111-5) shall expire when that act expires.  Any extension of such benefits shall require an Act of the Georgia General Assembly.  Under no circumstances shall the extended benefits for assistance eligible individuals become the responsibility of the State of Georgia or any insurer after September 30, 2010.
(b)  Each group contract or group plan delivered or issued for delivery in this state, other than a group accident and sickness insurance policy, contract, or plan issued in connection with an extension of credit, which provides hospital, surgical, or major medical coverage, or any combination of these coverages, on an expense incurred or service basis, excluding contracts and plans which provide benefits for specific diseases or accidental injuries only, shall provide that members and qualifying eligible individuals whose insurance under the group contract or plan would otherwise terminate shall be entitled to continue their hospital, surgical, and major medical insurance coverage under that group contract or plan for themselves and their eligible dependents.
(c)(1)  Any group member or qualifying eligible individual whose coverage has been terminated and who has been continuously covered under the group contract or group plan, and under any contract or plan providing similar benefits which it replaces, for at least six months immediately prior to such termination, shall be entitled to have his or her coverage and the coverage of his or her eligible dependents continued under the contract or plan.  Such coverage must continue for the fractional policy month remaining, if any, at termination plus three additional policy months, except the period of continuation coverage for assistance eligible individual in subsection (a.1) of this Code section, shall be nine months, upon payment of the premium by cash, certified check, or money order, at the option of the employer, to the policyholder or employer, at the same rate for active group members set forth in the contract or plan, on a monthly basis in advance as such premium becomes due during this coverage period.  Such premium payment must include any portion of the premium paid by a former employer or other person if such employer or other person no longer contributes premium payments for this coverage.  At the end of such period, the group member shall have the same conversion rights that were available on the date of termination of coverage in accordance with the conversion privileges contained in the group contract or group plan.
(2)  A covered individual who is an assistance eligible individual has a right to elect continuation of his or her coverage and the coverage of his or her dependents at any time between the effective date of this paragraph and 60 days after receiving notice from the employer's insurer of the right to participate in a second election period for state continuation benefits under this Code section in accordance with Section 3001 of Title III of the federal American Recovery and Reinvestment Act (P.L. 111-5) if:
(A)  The individual was involuntarily terminated from employment between September 1, 2008, and February 17, 2009, as defined in Section 3001 of Title III of the federal American Recovery and Reinvestment Act (P.L. 111-5);
(B)  The individual was eligible for state continuation under this chapter at the time of termination;
(C)  The individual continues to be eligible for state continuation benefits under this chapter, provided that the total period of continuous eligibility shall not exceed nine policy months from the month of the qualifying event making the individual an assistance eligible individual or the date of the election as provided in this paragraph, whichever is later; and
(D)  The individual or the employer of the individual contacts the insurer and informs the insurer that the individual wants to take advantage of the second election period for state continuation coverage under the provisions of Section 3001 of Title III of the federal American Recovery and Reinvestment Act (P.L. 111-5).
(3)  In addition to the group policy under which the group member was insured, the group member and any qualifying eligible individual shall, to the extent that such plan is currently offered under the group plans offered by the company, also be offered the option of continuation coverage through a high deductible health plan, or its actuarial equivalent, that is eligible for use with a health savings account under the applicable provisions of Section 223 of the Internal Revenue Code.  Such high deductible health plans shall have premiums consistent with the underlying group plan of coverage rated relative to the standard or manual rates for the benefits provided.
(4)  Claims for a covered individual under continuation of coverage shall not be considered in rating or rerating the group premiums for the group from which the continuation of coverage is provided, except that the pooled experience for all of the insurer's continuation of coverage claims for fully insured claims may impact all such groups on an equal percentage basis.
(d)(1)  A group member shall not be entitled to have coverage continued if:
(A) termination of coverage occurred because the employment of the group member was terminated for cause; (B) termination of coverage occurred because the group member failed to pay any required contribution; or (C) any discontinued group coverage is immediately replaced by similar group coverage including coverage under a health benefits plan as defined in the federal Employee Retirement Income Security Act of 1974, 29 U.S.C. Section 1001, et seq.  Further, a group member shall not be entitled to have coverage continued if the group contract or group plan was terminated in its entirety or was terminated with respect to a class to which the group member belonged. This subsection shall not affect conversion rights available to a qualifying eligible individual under any contract or plan.
(2)  A qualifying eligible individual shall not be entitled to have coverage continued if the most recent creditable coverage within the coverage period was terminated based on one of the following factors: (A) failure of the qualifying eligible individual to pay premiums or contributions in accordance with the terms of the health insurance coverage or failure of the issuer to receive timely premium payments; (B) the qualifying eligible individual has performed an act or practice that constitutes fraud or made an intentional misrepresentation of material fact under the terms of coverage; or (C) any discontinued group coverage is immediately replaced by similar group coverage including coverage under a health benefits plan as defined in the federal Employee Retirement Income Security Act of 1974, 29 U.S.C. Section 1001, et seq.  This subsection shall not affect conversion rights available to a group member under any contract or plan.
(e)  If the group contract or group plan terminates while any group member or qualifying eligible individual is covered or whose coverage is being continued, the group administrator, as prescribed by the insurer, must notify each such group member or qualifying eligible individual that he or she must exercise his or her conversion rights within:
(1)  Thirty days of such notice for group members who are not qualifying eligible individuals; or
(2)  Sixty-three days of such notice for qualifying eligible individuals.
(f)  Every group contract or group plan, other than a group accident and sickness insurance policy, contract, or plan issued in connection with an extension of credit, which provides hospital, surgical, or major medical expense insurance, or any combination of these coverages, on an expense incurred or service basis, excluding policies which provide benefits for specific diseases or for accidental injuries only, shall contain a conversion privilege provision.
(g)  Eligibility for the converted policies or contracts shall be as follows:
(1)  Any qualifying eligible individual whose insurance and its corresponding eligibility under the group policy, including any continuation available, elected, and exhausted under this Code section or the federal Consolidated Omnibus Budget Reconciliation Act of 1986 (COBRA), has been terminated for any reason, including failure of the employer to pay premiums to the insurer, other than fraud or failure of the qualifying eligible individual to pay a required premium contribution to the employer or, if so required, to the insurer directly and who has at least 18 months of creditable coverage immediately prior to termination shall be entitled, without evidence of insurability, to convert to individual or group based coverage covering such qualifying eligible individual and any eligible dependents who were covered under the qualifying eligible individual's coverage under the group contract or group plan.  Such conversion coverage must be, at the option of the individual, retroactive to the date of termination of the group coverage or the date on which continuation or COBRA coverage ended, whichever is later.  The insurer must offer qualifying eligible individuals at least two distinct conversion options from which to choose.  One such choice of coverage shall be comparable to comprehensive health insurance coverage offered in the individual market in this state or comparable to a standard option of coverage available under the group or individual health insurance laws of this state.  The other choice may be more limited in nature but must also qualify as creditable coverage.  Each coverage shall be filed, together with applicable rates, for approval by the Commissioner.  Such choices shall be known as the 'Enhanced Conversion Options';
(2)  Premiums for the enhanced conversion options for all qualifying eligible individuals shall be determined in accordance with the following provisions:
(A)  Solely for purposes of this subsection, the claims experience produced by all groups covered under comprehensive major medical or hospitalization accident and sickness insurance for each insurer shall be fully pooled to determine the group pool rate.  Except to the extent that the claims experience of an individual group affects the overall experience of the group pool, the claims experience produced by any individual group of each insurer shall not be used in any manner for enhanced conversion policy rating purposes;
(B)  Each insurer's group pool shall consist of each insurer's total claims experience produced by all groups in this state, regardless of the marketing mechanism or distribution system utilized in the sale of the group insurance from which the qualifying eligible individual is converting.  The pool shall include the experience generated under any medical expense insurance coverage offered under separate group contracts and contracts issued to trusts, multiple employer trusts, or association groups or trusts, including trusts or arrangements providing group or group-type coverage issued to a trust or association or to any other group policyholder where such group or group-type contract provides coverage, primarily or incidentally, through contracts issued or issued for delivery in this state or provided by solicitation and sale to Georgia residents through an out-of-state multiple employer trust or arrangement; and any other group-type coverage which is determined to be a group shall also be included in the pool for enhanced conversion policy rating purposes; and
(C)  Any other factors deemed relevant by the Commissioner may be considered in determination of each enhanced conversion policy pool rate so long as it does not have the effect of lessening the risk-spreading characteristic of the pooling requirement. Duration since issue and tier factors may not be considered in conversion policy rating.  Notwithstanding subparagraph (A) of this paragraph, the total premium calculated for all enhanced conversion policies may deviate from the group pool rate by not more than plus or minus 50 percent based upon the experience generated under the pool of enhanced conversion policies so long as rates do not deviate for similarly situated individuals covered through the pool of enhanced conversion policies;
(3)  Any group member who is not a qualifying eligible individual and whose insurance under the group policy has been terminated for any reason, including failure of the employer to pay premiums to the insurer, other than eligibility for medicare (reaching a limiting age for coverage under the group policy) or failure of the group member to pay a required premium contribution, and who has been continuously covered under the group contract or group plan, and under any contract or plan providing similar benefits which it replaces, for at least six months immediately prior to termination shall be entitled, without evidence of insurability, to convert to individual or group coverage covering such group member and any eligible dependents who were covered under the group member's coverage under the group contract or group plan.  Such conversion coverage must be, at the option of the individual, retroactive to the date of termination of the group coverage or the date on which continuation or COBRA coverage ended, whichever is later.  The premium of the basic converted policy shall be determined in accordance with the insurer's table of premium rates applicable to the age and classification of risks of each person to be covered under that policy and to the type and amount of coverage provided.  This form of conversion coverage shall be known as the 'Basic Conversion Option'; and
(4)   Nothing in this Code section shall be construed to prevent an insurer from offering additional options to qualifying eligible individuals or group members.
(h)  Each group certificate issued to each group member or qualifying eligible individual, in addition to setting forth any conversion rights, shall set forth the continuation right in a separate provision bearing its own caption.  The provisions shall clearly set forth a full description of the continuation and conversion rights available, including all requirements, limitations, and exceptions, the premium required, and the time of payment of all premiums due during the period of continuation or conversion.
(i)  This Code section shall not apply to limited benefit insurance policies.  For the purposes of this Code section, the term 'limited benefit insurance' means accident and sickness insurance designed, advertised, and marketed to supplement major medical insurance.  The term limited benefit insurance includes accident only, CHAMPUS supplement, dental, disability income, fixed indemnity, long-term care, medicare supplement, specified disease, vision, and any other accident and sickness insurance other than basic hospital expense, basic medical-surgical expense, and comprehensive major medical insurance coverage.
(j)  The Commissioner shall adopt such rules and regulations as he or she deems necessary for the administration of this Code section.  Such rules and regulations may prescribe various conversion plans, including minimum conversion standards and minimum benefits, but not requiring benefits in excess of those provided under the group contract or group plan from which conversion is made, scope of coverage, preexisting limitations, optional coverages, reductions, notices to covered persons, and such other requirements as the Commissioner deems necessary for the protection of the citizens of this state.
(k)(1)  Except as provided in paragraph (2) of this subsection, this Code section shall apply to all group plans and group contracts delivered or issued for delivery in this state on or after July 1, 2009, and to group plans and group contracts then in effect on the first anniversary date occurring on or after July 1, 2009.
(2)  The provisions of paragraphs (2) and (3) of subsection (c) of this Code section shall apply to all group plans and group contracts in effect on September 1, 2008.
(l)  As soon as practicable, but no later than 30 days after the effective date of this subsection, the Commissioner shall develop and direct insurers to issue notices for assistance eligible individuals regarding availability of expanded eligibility, second election, and continuation coverage assistance to be sent to the last known addresses of such assistance eligible individuals.
(m)  Nothing in this chapter shall imply that individuals entitled to continuation coverage who are not assistance eligible individuals shall receive benefits beyond the period of coverage provided in paragraph (1) of subsection (c) of this Code section or that assistance eligible individuals are entitled to any continuation benefit period beyond what is provided by Section 3001 of Title III of the federal American Recovery and Reinvestment Act of

SECTION 2.
Said title is further amended by adding a new Code section to read as follows:
"33-51-7.
(a)  The Commissioner shall be authorized to allow health reimbursement arrangement only plans that encourage employer financial support of health insurance or health related expenses recognized under the rules of the federal Internal Revenue Service to be approved for sale in connection with or packaged with individual health insurance policies otherwise approved by the Commissioner.
(b)  Health reimbursement arrangement only plans that are not sold in connection with or packaged with individual health insurance policies shall not be considered insurance under this title.
(c)  Individual insurance policies offered or funded through health reimbursement arrangements shall not be considered employer sponsored or group coverage for purposes of this title, and nothing in this Code section shall be interpreted to require an insurer to offer an individual health insurance policy for sale in connection with or packaged with a health reimbursement arrangement or to accept premiums from health reimbursement arrangement plans for individual health insurance policies."

SECTION 3.
This Act shall become effective upon its approval by the Governor or upon its becoming law without such approval.

SECTION 4.
All laws and parts of laws in conflict with this Act are repealed.