Insurance Quarterly - Kansas Insurance Department

Insurance Quarterly
Spring 2014
The Kansas Insurance Department • Sandy Praeger, Commissioner
KID gets four bills through Legislature
Four prospective pieces of
legislation that the department
brought to the 2014 session
of the Kansas Legislature were
signed into law earlier this
spring.
insurance-related bills that
did. A full description of each
passed bill can be found at
http://www.kslegislature.org/li/
b2013_14/measures/bills/.
SB 267-Insurance; excluding
real estate from acceptable
security deposits with the commissioner and requiring original handwritten signatures on
certain deposit forms
Zac Anshutz, assistant commissioner, said the KID legislative
team concentrated on proposed bills that, while technical in nature, had the best opportunity to be passed through
both the House of Representatives and the Senate.
“We had a true team effort
from our KID staff to get these bills passed,” Anshutz said. “Given that the Legislature had big items
on their plate this session, we feel good about what
we accomplished.”
Members of the KID legislative team were Anshutz,
Diane Minear, Cindy Hermes, John Wine, Ken Abitz,
Kathy Bohnhoff, Glenda Haverkamp, Lacey Kennett
and Bob Hanson.
Summary: Amended
K.S.A. 40-229a regard ing acceptable security
deposits for insurance companies and acceptable forms of signatures by
company officials. The first amendment of
the bill removed real estate from the list of
acceptable assets that can be deposited with
the Kansas Insurance Commissioner. The
second amendment of the bill required an
original signature to be on file with KID before the department would recognize an
electronic or a digital signature.
A summary of each KID bill is follows, as well as
KID bills that did not pass and outside-department
story continued on page 4
Inside
Sheppard joins KHI staff
She has been named Senior Analyst and
Strategy Team Leader for KHI’s work surrounding health reform.
Page 2
Marketplace update
The statistics, released by the federal
HHS office, were accurate as of May 1,
2014.
Page 2
KID opts out of FFM choice
Insurers expressed concerns about
price and adverse selection if employee
choice is implemented in 2015.
Page 3
Spring 2014
Sheppard joins KHI staff
The Kansas Health Institute (KHI) has added a new member to its leadership team.
Linda J. Sheppard has been named Senior Analyst and Strategy Team Leader
for KHI’s work surrounding health reform effective June 30, 2014. She will analyze state and federal health reform initiatives including the Affordable Care
Act (ACA) and their impact in Kansas.
Sheppard joins KHI after serving most recently as Special Counsel and Director of Health Care Policy & Analysis at the Kansas Insurance Department (KID).
Her prior roles at KID included Project Manager for the Department’s implementation of the insurance provisions of the ACA, Director of the Accident and
Health Division and Assistant General Counsel.
Sheppard
“There is no one in our state who understands the challenges and opportunities
presented by health reform better than Linda. She gained this perspective through her frequent interaction with insurance regulators in other states, as well working closely with the federal government over
the last several years,” said Robert St. Peter, M.D., president and CEO of KHI. “We look forward to the continued contributions Linda will make here in Kansas as a member of the KHI team.”
Through a contract between KID and KHI, Sheppard will continue to serve in an advisory capacity to KID
and Kansas Insurance Commissioner Sandy Praeger through the end of the year. Praeger said, “Linda has
been an incredibly valuable member of our KID health insurance team. We look forward to continuing to
use her and her expertise during this transition period as she assumes new duties at the Kansas Health
Institute.”
Health Insurance Marketplace enrollment update
The following statistics on Kansas enrollment numbers in the Health Insurance Marketplace were
released by the federal Health and Human Services
office and were accurate as of May 1, 2014.
• Sixty percent of enrollees opted for a silver level
plan, while 19% chose a bronze plan, 16% chose a
gold plan, 2% chose a platinum plan, and 2% chose
a catastrophic plan.
• A total of 57,013 Kansans selected a plan through
the Health Insurance Marketplace during the enrollment period that lasted October 1, 2013, through
March 31, 2014. This number also includes enrollees who qualifed for special enrollment periods
through April 19, 2014.
• Slightly more than half (55%) of enrollees were
female.
• 44,869 people, or 79% of enrollees, received
financial assistance through the marketplace.
Page 2 Spring 2014
• Enrollees in marketplace plans were divided by
age in the following way:
Under 18
7%
Age 18-25 11%
Age 26-34 20%
Age 35-44
Age 45-54
Age 55-64
16%
20%
26%
Kansas Insurance Quarterly
Department decides against FFM employee choice
Insurance Commissioner Sandy Praeger announced
June 2 that the Kansas Insurance Department
would not be implementing employee choice for
the 2015 plan year in the Small Business Health Options Program (SHOP exchange).
The federal Health & Human Services (HHS) office
gave states with federally-facilitated marketplaces
(FFM) the option to allow employee choice during
the 2015 plan year. As of publication, a total of 18
HHS exchange states, including Kansas, have opted
not to offer employee choice, while 14 will offer the
option.
about the implementation of employee choice for
2015 and have indicated that they would need to
increase the price of their products and plans to
account for the employee choice adverse selection
impact and the potential increase in medical costs...
We share the concerns raised by our issuers and the
impact that all of these factors might have on small
employers and their employees in Kansas.”
This employee choice option was intended to give
employees of small businesses who purchased coverage on the SHOP exchange choices of coverage
from several options on the exchange. For example,
if the small business chose to offer gold plans to
their employees, the employee would then be able
to choose which plan from the gold tier they wanted to enroll in.
In the letter announcing her decision to HHS, Commissioner Praeger said, “We held discussions with
the two issuers who offered SHOP plans for the
2014 year, and are expected to participate in 2015...
We also solicited comments from another issuer
The states that choose to not offer employee choice
that is very active in our small group market...All
in 2015 may still have the option to introduce it durthree of the companies expressed their concerns
ing the 2016 plan year.
Kansas Insurance Department
Commissioner Praeger was
surprised with the Hall of Fame
award from the National Association of Insurance and Financial Advisors of Kansas (NAIFA
Kansas) and was presented
the award in Manhattan on
Wednesday, April 23. The annual
award is presented to individuals who make a contribution to
the insurance industry and their
communities.
Kansas Insurance Quarterly
Spring 2014 Page 3
Legislative update (cont’d)
The bill passed both chambers unanimously
and was signed by the governor April 4, with
a July 1 effective date.
SB 268-Insurance; Risk-based capital requirements.
Summary: Amended K.S.A. 40-2c01, and
updated the Risk-Based Capital laws that
ensure each Kansas domestic company has
the minimum amount of capital needed to
support its overall business operations, in consideration of its size and risk profile. The
bill passed both chambers unanimously and
was signed by the governor April 4, with a July 1
effective date.
SB 306-Modernizing certain insurance laws to allow
use of additional investments.
Summary: Amended the investment statutes
to create parity and modernize investment
guidelines for property and casualty and
life insurance companies. Initially there were
two bills, one requested by Security Benefit
Life and the other by KID. The bills were
combined into SB 306, which passed both
chambers unanimously and was signed by
the governor April 10, with a July 1 effective
date.
HB 2515-Insurance; eliminating font and type requirements for certain non-English insurance documents; confidentiality of certain documents; continuation of health insurance for spouse and children
of certain emergency personnel and employees of
the department of corrections; purchase of certain
insurance by the state fair board.
Summary: This bill was put into a “vehicle”
and became HB 2537. Section 2 amended
K.S.A. 40-222, regarding confidential
information obtained or disclosed to the
Commissioner, as part of the department’s
analysis of the financial condition or market
regulation of a company. The amendment also granted affiliates of the NAIC access to
such information. HB 2537 also included an
amendment to K.S.A. 40-216, striking the
statutory requirement that disclosure
statements be printed in 10-point font. Also
included in the bill, but not part of KID’s
legislation, is the requirement that state
agencies and municipalities pay COBRA
premiums for continuation of coverage to a
surviving spouse and eligible dependent
children in the event of a line of duty death
of a law enforcement officer employed by
the Kansas Department of Corrections. HB
2537 also allows the State Fair Board to purchase event cancellation and rain insurance
coverage. The bill was signed by the governor May 12, with a July 1 effective date.
Two KID bills listed below did not emerge from
the legislative committees where they were introduced.
HB 2513-Insurance; examination fee for use of consultants to examine large companies.
Summary: The bill proposed to amend K.S.A.
40-223, concerning the maximum amount
of examination fees and expenses that
companies having $200 million or more in
gross premiums would pay for examinations
conducted by outside consultants on behalf
of the department. The bill received a hearing in the House Insurance Committee but it
was not worked or brought to a vote, and
consequently, it died in committee.
story continued on page 5
Page 4 Spring 2014
Kansas Insurance Quarterly
KID legislation (cont’d)
SB 322-Insurance Department Service Regulation
Fund; amount of assessment.
SB 309- Health insurance coverage for qualified
professional associations.
Summary: The department opposed the
Governor’s proposal to sweep $5 million in
July 2014 and $3 million in March 2015 from
the Department’s Regulation Fee Fund. Had
the sweeps been approved by the Legislature, the department would have contributed $28 million since July 2013 and been
left with a balance of approximately
$600,000.
To pay for the proposed
sweeps, the department
requested legislation to
increase the allowable
percentage of assess
ment made on a
company. The bill was
allowed to die in
committee when com
mittees from both
chambers did not
approve the Gover
nor’s recommendation
to sweep the department’s Regulation Fee
Fund.
The outside bills listed below were of interest to
the department and industry observers, but were
not part of the KID legislative package.
HB 2668- Predetermination of health insurance
benefits.
Summary: This is the House version of SB
251, which died in a Senate committee. The
bill requires health insurance plans, on
request of a physician, to provide a real-time
explanation of benefits (EOBs). It was signed
by the governor May 12, with a delayed
effective date of July 1, 2017.
Kansas Insurance Quarterly
Summary: Amended the law establishing
Multiple Employer Welfare Agreements by
expanding the types of professional associations permitted to form unregulated insurance groups. The department testified as
neutral with concerns. It was signed into
law by the governor April 10, with a July 1 effective date.
HB 2553- Health care compact.
Summary: Allows Kansas to
join the Interstate Health Care
Compact. The Compact would
allow member states to regulate health care within their
state lines and to secure
federal funding for member
states. The Compact can only
become law upon approval of
Congress. The governor signed
the bill April 22, with an
effective date of July 1.
SB 362-Navigator background check act.
Summary: The bill would have created the
Health Care Insurance Navigator Registration
Act, requiring navigators to register with the
Attorney General prior to performing
services under the federal Affordable Care
Act. The bill passed the Senate on a vote of
30-10 but it died in the House Committee on
Health and Human Services.
HB 2470- Purchasing authority for certain insurance
by the board of regents for state educational
institutions.
story continued on page 6
Spring 2014 Page 5
Legislative update (cont’d)
Summary: Amended K.S.A. 75-4101 concerning state educational institutions and permitting the purchase of surplus lines insurance
by the Kansas State Board of Regents. It was
signed by the Governor March 31 and effective July 1.
HB 2744- Insurance; coverage for autism spectrum
disorder.
Summary: Required health insurance coverage for the diagnosis and treatment of
Autism Spectrum Disorder (ASD) in children
under the age of 12 years and creates the
Applied Behavior Analysis Licensure Act
(ABA). The bill requires large health
insurance plans to provide ASD coverage
effective January 1, 2015; extends the
autism coverage requirement to grandfathered individual or small group plans effective July 1, 2016; places limits on ABA
coverage, with higher limits for the first four
years beginning with the later of the date of
diagnosis or January 1, 2015, for children
diagnosed with ASD between birth and 5
years of age and then reduced limits for
children less than 12 years of age; defines
terms related to ASD; phases in licensure
requirements for ABA providers and allows
for exemption from licensure for certain
providers; requires the Behavioral Sciences
Regulatory Board (BSRB) to adopt rules and
regulations for the implementation and
administration of the Act; authorizes the
BSRB to take disciplinary action as to the
licenses of licensees and applicants for licensure; and applies the ASD coverage requirement to all insurance policies, subscriber
contracts or certificates of insurance avail
able to individuals residing or employed in
Kansas and to corporations organized under
the Nonprofit Medical and Hospital Service
Corporation Act.
Page 6 Spring 2014
Kansas Insurance Department
Commissioner Praeger visited with attendees of
the Girls State program at the beginning of June.
Girls State allows high school girls to learn the
basics of city, county and state governments. Each
year, the Girls State participant elected as Insurance
Commissioner visits KID to get a better idea how
the department operates.
Kansas Insurance Quarterly
Spring 2014
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Kansas Insurance Quarterly