Legislature(2005 - 2006)CAPITOL 17
04/24/2006 03:15 PM House LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| SB289 | |
| SB310 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | SB 289 | TELECONFERENCED | |
| + | SB 310 | TELECONFERENCED | |
| + | TELECONFERENCED |
SB 289-INSURANCE CHAIR ANDERSON announced that the first order of business would be CS FOR SENATE BILL NO. 289(FIN), "An Act relating to the payment of insurer examination expenses, to the regulation of managed care insurance plans, to actuarial opinions and supporting documentation for an insurer, to insurance firms, managing general agents, and third-party administrators, to eligibility of surplus lines insurers, to prompt payment of health care insurance claims, to required notice by an insurer, to individual deferred annuities, to mental health benefits under a health care insurance plan, to the definitions of 'title insurance limited producer' and of other terms used in the title regulating the practice of the business of insurance, and to small employer health insurance; repealing the Small Employer Health Reinsurance Association; making conforming amendments; and providing for an effective date." JANE ALBERTS, Staff to Senator Con Bunde, Alaska State Legislature, began by explaining that the Senate Labor and Commerce Standing Committee sponsored SB 289 by request of the Division of Insurance. 4:13:29 PM CHAIR ANDERSON announced that he would like to move this legislation out of committee today unless members have consuming questions. 4:13:42 PM LINDA HALL, Director, Division of Insurance, Department of Commerce, Community, & Economic Development (DCCED), began by noting the division's support for SB 289. Ms. Hall specified that the majority of the legislation addresses issues relating to life, annuities, and health insurance. She then turned attention to Sections 3-24 and explained that generally [Alaska] has laws that only apply to group health insurance plans. This legislation changes those protections to consumers to also apply to individual health insurance plans. The aforementioned protections include internal and external appeals processes for claims denial and prompt payment statutes. The other nonsubstantive changes include replacing the term "health care" with "medical care", which is defined in statute. The aforementioned change would make it consistent with federal and state laws. Section 32 contains provisions regarding the prompt payment of health claims, which under this legislation will apply to individuals. The legislation also contains changes in the nonforfeiture language for annuities by adopting some model laws that the state had yet to adopt. The legislation contains changes to protect against excessive surrender charges on annuity products so that consumers aren't gouged. She informed the committee that the Small Employer Health Re-insurance Association isn't being utilized and costs the association $10,000-$12,000 a year to administer. Furthermore, only two lives are reinsured in that group and they are supportive of winding up the affairs of the association. 4:16:26 PM MS. HALL went on to inform the committee that the legislation includes some corrections to statutory references regarding qualified domestic relation orders. Furthermore, the Health Insurance Portability and Accountability Act (HIPAA) mental parity provisions, which are identical to provisions adopted in 1987, are included in this legislation. The aforementioned attempts to ensure that Alaska's statutes are in compliance with federal law. MS. HALL specified that the remainder of the legislation addresses areas outside of life and health insurance. On pages 15 and 16 there is an actuarial guideline, which is an additional tool that the division would use to quickly identify an insurer who is in a troubled financial position. The domestic insurer would be required to file its actuarial opinion summary, which would include its estimate of the range of reasonable reserves, and explain any adverse development. Ms. Hall said, "This is the National Association of Insurance Commissioners' model, that we would like adopted for use in regulating our domestic insurers." She then highlighted that the legislation includes changes in requirements for a managing general agent to place Alaska more clearly in line with how managing general agents are regulated around the country. The legislation also includes provisions to streamline various licensing procedures in order to allow the division to publish a list of eligible surplus lines insurers on the division's web site and to expand electronic communications. 4:18:10 PM REPRESENTATIVE ROKEBERG, recalling that Alaska had adopted the mental health provisions under HIPAA in the past, asked if those are optional. MS. HALL clarified that they merely sunsetted. REPRESENTATIVE ROKEBERG inquired as to what the mental health provisions stated prior to sunsetting. MS. HALL answered that the mental health provisions in SB 289 are the same as what they were prior to sunsetting. 4:18:46 PM MS. HALL, in further response to Representative Rokeberg, specified that the mental health provisions are embodied in Section 39. 4:19:22 PM KATIE CAMPBELL, Actuary Life/Health, Juneau Office, Division of Insurance, Department of Commerce, Community, & Economic Development, said that the section being referenced is located on page 32, line 19, and the language is identical to the federal law implementing the mental health parity. She explained that the language specifies that if [the provisions] would increase the cost of health care by more than 1 percent, the provisions wouldn't apply. The language is basically a copy of the law adopted in 1987. 4:20:01 PM REPRESENTATIVE GUTTENBERG inquired as to what happens after the repeal of the Small Employer Health Insurance Association. MS. HALL explained that upon repeal there won't be any re- insurance for the two lives in the Small Employer Health Insurance Association. The insurance company will accept the risk, without re-insuring. In further response to Representative Guttenberg, Ms. Hall related her understanding that the change won't impact the two lives remaining in the aforementioned association. 4:20:41 PM REPRESENTATIVE CRAWFORD highlighted the language to page 32, lines 12-13, which read: "Except as provided otherwise in this title, a health care insurance plan is not required to provide mental health benefits." He asked if that's been the situation all along. MS. HALL replied yes, and added that, save those items specifically mandated in state law, the division doesn't require any particular types of coverage to be in a health insurance plan. Therefore, individuals would have a choice as would an employer creating a health plan. The state, she related, has never chosen to mandate the requirement of mental health benefits. 4:21:38 PM REPRESENTATIVE CRAWFORD said that the sections leading up to the aforementioned language seem to provide for mental health parity, although the [insurer] can opt out of such coverage if the insurer so desires. MS. HALL clarified that if mental health services are offered, then it must done with parity. However, it's not required to be offered. 4:22:08 PM DR. RAMSEY NASSAR, Psychiatrist, began by informing the committee that although he is only testifying as a citizen, he is a member of the Alaska State Psychiatric Association and Alaska State Medical Association. Dr. Nassar opined that the line between mental health and physical health is becoming more blurred as more is learned about various conditions. In general, Dr. Nassar said that he is for parity in as much as it can be provided. 4:23:59 PM REPRESENTATIVE GUTTENBERG inquired as to Dr. Nassar's specific concerns about SB 289. DR. NASSAR replied that he wanted to support moving toward parity, and noted that he doesn't have any specific concerns regarding the legislation. 4:24:50 PM REPRESENTATIVE ROKEBERG moved to report CSSB 289(FIN) out of committee with individual recommendations and the accompanying fiscal notes. There being no objection, CSSB 289(FIN) was reported from the House Labor and Commerce Standing Committee. 4:25:04 PM
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