Repeal of Outdated Notice Regarding Form and Rate Filings; Notice of Form and Rate Filing Requirements under the Accident and Health Filing Reform Act; Notice 2018-10
[48 Pa.B. 7282]
[Saturday, November 17, 2018]
Certain accident and health insurance policy forms, subject to filing under section 3(a) of the Accident and Health Filing Reform Act (40 P.S. § 3801.303(a)), amended by the act of December 22, 2011 (P.L. 615, No. 134) (Act 134), were exempted from filing with the Insurance Department (Department) by the Insurance Commissioner (Commissioner) by notice published at 46 Pa.B. 2744 (May 28, 2016) under the authority of section 3(b) of Act 134 (Notice 2016-01-Revised). Notice 2016-01-Revised is hereby repealed and replaced.
Regulations and other Federal guidance promulgated since Notice 2016-01-Revised related to the Federal Patient Protection and Affordable Care Act (Pub.L. No. 111-148) and the Health Care and Education Reconciliation Act of 2010 (Pub.L. No. 111-152) together, the Affordable Care Act (ACA)) have purported to change requirements on accident and health policy forms and rates in the large and small group markets, as well as the individual market. Under Act 134, the Commonwealth has authority to review rates for accident and health policies in light of the ACA, and has authority to review forms for accident and health policies that are not exempted from filing.
In recognition of the recent changes in the health insurance landscape, and in order to monitor and assure compliance with State and Federal law requirements, the Department has determined that it is in the public interest to review forms, including riders, amendments, endorsements and, where applicable, documentation for associations acting as policyholders, for short-term limited-duration insurance (STLDI) policies. Certain of these forms are encompassed within current form filing requirements, but some may be currently exempted. Receiving these forms prior to use, as specified in Act 134, will assist the Department in protecting Commonwealth insurance consumers.1
This notice clarifies current form filing requirements, and therefore is immediately effective. Insofar as this notice is determined to give notice of the discontinuation of any form filing exemptions, that discontinuation shall be effective 90 days hence, as authorized by section 3(b) of Act 134 (authorizing the Commissioner to require any forms exempted from filing to be subsequently made subject to filing with the Department upon 90 days advance notice publication in the Pennsylvania Bulletin). By this publication, the Commissioner hereby communicates her intent to discontinue certain form filing exemptions, and also restates current filing requirements.
This notice specifically addresses the form filing requirements pertaining to STLDI policies. The Department recognizes STLDI forms were previously treated as limited benefit forms. STLDI is and remains subject to State law provisions that apply to forms that provide benefits of a limited nature, such as, for example, the requirement in 31 Pa. Code § 88.85 (relating to unusual limitations, reductions, restrictions) that requires a diagonal legend identifying it as a ''limited policy.'' However, because STLDI has been differentiated from other policies that limit benefits, particularly in its treatment in Federal regulations and guidance, it is separately identified in this notice and in the Department's form review process.
In addition, the Department is aware that certain insurers may seek to market and issue insurance in this Commonwealth, including STLDI, through out-of-state association health plans (AHP), and may consider that coverage as large group coverage not currently subject to form filing. As previously publicly explained by the Department and acknowledged by the Federal Department of Labor,2 the Department follows the ''look through'' approach reflected in State and Federal law:An insured health plan for employer members of an association in Pennsylvania will provide policy forms and rates, compliant with Pennsylvania law and the Affordable Care Act, consistent with the market in which each employer member is a part, that is, a sole proprietor will have an individual policy, an employer group of 2—50 employees will have a small group policy, and an employer group of more than 50 employees will have a large group policy.
While the effective date of any new filing requirement in this notice is 90 days hence, as required by Act 134, the Department expects issuers of insurance through AHPs, including STLDI, to be currently complying with filing requirements in a manner consistent with the August 2, 2018, letter. Therefore, issuers already should be filing with the Department any coverage offered through an AHP intended for sale to individual or small group members of an association in accordance with the Department's individual or small group filing requirements, as applicable.
Further, with respect to AHPs, the Department by this notice reminds insurers of their obligations to file documentation regarding an association or other group of employers to which they market or issue insurance, whether that association or group is located in this Commonwealth or out-of-state, if the coverage is intended to cover employers or individuals in this Commonwealth.
Accordingly, the Department identifies the forms that are currently required to be filed, as well as those that will no longer be exempt from filing, effective 90 days after publication of this notice. The forms specified here are required to be filed by each insurer, as that term is defined in Act 134; provided, however, that a form eligible to be filed through, and in fact filed through, the Interstate Insurance Compact need not be filed with the Department in accordance with this notice.
Forms currently required to be filed
• Individual accident and health forms, including:
o Major medical.
o Limited benefit.3
o Short-term limited-duration.
o Long-term care.
o Medicare supplement.
o Student and franchise accident and health.
• Group accident and health forms, including:
o Major medical.
o Limited benefit forms sold to small groups.4
o Short-term limited-duration forms sold to small groups.5
o Long-term care.
o Medicare supplement.
Forms to be filed beginning 90 days after publication of this notice
• Limited benefit forms sold only to large groups (that is, where all employer members of the association or group are large groups, or the association or group of employers meets the aggregation rule set forth in the Public Health Service Act (42 U.S.C.A. § 300gg-91(e)(6)) and in section 1304(b)(4) of the Affordable Care Act (42 U.S.C.A. § 18024(b)(4)).
• Short-term limited-duration forms sold only to large groups (that is, where all employer members of the association or group are large groups, or the association or group of employers meets the aggregation rule set forth in the Public Health Service Act (42 U.S.C.A. § 300gg-91—300gg-95 and in section 1304(b)(4) of the Affordable Care Act (42 U.S.C.A. § 18024(b)(4)).
Forms continuing to be deregulated and not subject to filing
• Blanket accident and health.
• Group disability.
Notwithstanding the continued exemption of certain forms from filing, the Department reminds insurers that it retains full authority to request a copy of any form being issued in this Commonwealth, as provided in section 10 of Act 134 (40 P.S. § 3801.310).
The Department by this notice reminds insurers that market or sell accident and sickness insurance to an association or other group of employers of the filing requirements set forth in section 756.2 of The Insurance Company Law of 1921 (40 P.S. § 756.2) pertaining to the coverage. See 40 P.S. § 756.2(a)(2) (in-state entities); § 756.2(e) and (f) (out-of-state entities). By statute, documentation is required to be filed for each such association or other group of employers.
The Department by this notice reminds insurers that the following accident and health rates are currently required to be filed; provided, however, that a rate eligible to be filed through, and in fact filed through, the Interstate Insurance Compact need not be filed with the Department:
• All individual major medical, student, franchise, blanket, limited benefit, STLD, individual disability, long-term care and Medicare supplement rates.
• All major medical rates and STLDI rates for policies sold to small groups.6 7
• All group long-term care and Medicare supplement rates.
The current form and rate filing requirements identified in this notice shall remain in effect as stated; insofar as this notice is determined to give notice of the discontinuation of any form filing exemptions, that discontinuation shall be effective 90 days after publication of this notice in the Pennsylvania Bulletin. In accordance with section 3(a) of Act 134, forms shall be filed no less than 45 days prior to use.
Questions concerning this notice may be directed to the Bureau of Life, Accident and Health, Office of Insurance Product Regulation, 1326 Strawberry Square, Harrisburg, PA 17120, email@example.com.
JESSICA K. ALTMAN,
[Pa.B. Doc. No. 18-1806. Filed for public inspection November 16, 2018, 9:00 a.m.]
1 The Department continues to anticipate that a time will come when the statutory and regulatory landscape for health insurance forms will be more settled, and the Department may be assured that the insurance industry is familiar with applicable requirements, at which point it may repeal the review of certain group forms. See, for example, 28 Pa.B. 4302 (August 29, 1998) (requiring form filings to assure compliance with Act 68 of 1998), later repealed by Notice 2002-06, 32 Pa.B. 3449 (July 13, 2002). However, given the recent promulgation of Federal regulations and other guidance, that time has not yet come.
2 See August 2, 2018, Letter from Commissioner Altman to the United States Department of Labor and Department of Health and Human Services, available at https://www.insurance.pa.gov/Pages/Homepage/Testimony_Speeches.aspx. See also August 24, 2018, letter response from the United States Department of Labor (available at the same web address).
3 A limited benefit policy, for purposes of this notice, includes dental, vision, hospital and other fixed indemnity, accident-only, critical illness, specified disease, wraparound, and any other supplemental or excepted benefit accident and health insurance policy. The term does not include a short-term limited-duration insurance policy, as explained in the previously listed text of this notice.
4 A limited benefit form marketed or sold to an association or other group of employers is currently subject to review if an employer member of the association is a small group or a sole proprietor.
5 An STLDI form marketed or sold to an association or other group of employers is currently subject to review if an employer member of the association is a small group or a sole proprietor.
6 Rates for a major medical or STLDI policy marketed or sold to an association or other group of employers are subject to review if an employer member of the association is a small group or a sole proprietor.
7 Rates for excepted benefits policies (as defined in section 2791(c) of the Public Health Service Act (110 Stat. 1972, (42 U.S.C. § 300gg-91(c))) issued on a group basis are not required to be filed under section 3(e) of Act 134. However, issuers of small group stand-alone dental plans should refer to binder filing requirements in the Department's annual filing instructions for ACA-compliant individual and small group products, available at http://www.insurance.pa.gov/Companies/ProductAndRateRequire.
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