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    Document Summary
    - Report Published -

    Senate Document No. 8
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    Document Title
    Report of the State Corporation Commission Bureau of Insurance on Plans Issued Pursuant to Chapter 796 (House Bill 2024) and Chapter 877 (Senate Bill 1411) of the 2009 Acts of Assembly

    Bureau of Insurance, State Corporation Commission

    Enabling Authority
    Chapter 877 Enactment Clause 3. (Regular Session, 2009)

    Executive Summary
    Chapter 796 of the 2009 Acts of Assembly (House Bill 2024) was introduced in the 2009 Session of the General Assembly. Delegate Daniel W. Marshall, III, was the chief patron of the bill. Similar legislation was introduced in the same legislative session by Senator John C. Watkins as Chapter 877 of the 2009 Acts of Assembly (Senate Bill 1411). The bills were passed by the General Assembly, and the provisions relating to the plans discussed in this report became effective on July 1, 2009.

    House Bill 2024 and Senate Bill 1411 were introduced to provide for the availability of "basic" health insurance in Virginia for small employers. The bills amended and re-enacted 32.1-102.4 in the Health Title to include provisions relating to the certificate of public need to allow for alternate methods of satisfying the conditions of a compliance plan. The bills added 38.2-3406.1, 38.2-3406.2 and 38.2-3541.1 to the Insurance Title and amended and re-enacted 38.2-4214 and 38.2-4319 in the Health Services Plans and Health Maintenance Organizations (HMOs) chapters. House Bill 2024 also added 38.2-3541.1 relating to the continuation of coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA). The provision relating to COBRA coverage was effective on April 8, 2009.

    The bills establish a plan of "basic health insurance coverage" that may be offered to small employers in Virginia. Essentially, with respect to these plans, insurers and health services plans may exclude one or more of the state-mandated benefits, except for those requiring coverage for mammograms, pap smears, PSA testing, and colorectal cancer screening ( 38.2-3418.1, 38.2-3418.1:2, 38.2-3418.7, and 38.2-3418.7:1, respectively). The bills also require that the plans provide for reimbursement to mandated providers listed in 38.2-3408 for covered services that those providers may legally render in Virginia. The plans are commonly referred to as "mandate-lite" plans. With the exception of the four previously mentioned mandates, the plans may include none or all of the state-mandated benefits or mandated offers as the insurance carrier and the insured agree.

    The bills require those insurers and health services plans offering the mandate-lite plans to disclose prominently (1) that the policy or contract is not required to provide state-mandated benefits; (2) those state-mandated benefits that are not included in the plan; and (3) eligibility requirements. The disclosures must be included in (1) the application and any enrollment forms; (2) the policy form or subscription contract; and (3) certificate forms or other evidences of coverage that are furnished to each participant in each of the plans.

    The bills also require those insurers and health services plans offering mandate-lite plans to report to the Bureau of Insurance annually on the number of small employers and individuals covered by the plans, the coverage provided, and the cost of premiums and out-of-pocket expenses. The Bureau of Insurance must compile the information and evaluate the impact of the plans and report to the Governor and the General Assembly on August 1, 2010 and August 1, 2011.

    Subsequent legislation, Chapter 515 of the 2010 Acts of Assembly (House Bill 556) was introduced by Delegate Daniel W. Marshall, III. House Bill 556 allows HMOs to provide mandate-lite plans. House Bill 556 was enacted by the General Assembly with a July 1, 2010 effective date.