00 HOUSE CS FOR CS FOR SENATE BILL NO. 185(L&C) 01 "An Act relating to the business of insurance; relating to exceptions to prohibited 02 rebates; relating to the powers of the director of the division of insurance; relating to 03 prohibited practices in the advertisement of insurance; relating to insurance coverage 04 for prosthetic and orthotic devices; relating to medical assistance for prosthetic and 05 orthotic devices; and providing for an effective date." 06 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 07  * Section 1. AS 21.36.010 is amended to read: 08 Sec. 21.36.010. Purpose. The purpose of this chapter is to regulate an act or a 09 trade practice in the business of insurance in accordance with the intent of Congress as 10 expressed in 15 U.S.C. 1011 - 1015 (McCarran-Ferguson Act) and P.L. 106-102  11 (Gramm-Leach-Bliley Act) by defining or providing for determination of all the 12 practices in this state that constitute an unfair method of competition or an unfair or 13 deceptive act or practice and by prohibiting them.  01  * Sec. 2. AS 21.36.110 is amended to read: 02 Sec. 21.36.110. Exceptions to discrimination and rebates. Nothing in 03 AS 21.36.090, 21.36.100, and AS 21.54.100 may be construed as including within the 04 definition of discrimination or rebates any of the following practices:  05 (1) in the case of a contract of life insurance or life annuity, paying 06 bonuses to policyholders or otherwise abating their premiums in whole or in part out 07 of surplus accumulated from nonparticipating insurance, if the bonuses or abatement 08 of premiums is fair and equitable to policyholders and for the best interests of the 09 insurer; 10 (2) in the case of a life insurance policy issued on industrial debit, 11 preauthorized check, bank draft, or similar plans, making allowance to policyholders 12 who have made premium payments directly to an office of the insurer or by 13 preauthorized debit, check, bank draft, or similar plan, in an amount that fairly 14 represents the saving in collection expense; 15 (3) readjustment of the rate of premium for a group insurance policy 16 based on the loss or expense experience thereunder, at the end of the first or a 17 subsequent policy year of insurance thereunder, which may be made retroactive only 18 for that policy year; 19 (4) issuance of life or health insurance policies or annuity contracts at 20 rates less than the usual rates of premiums for the policies or contracts, or modification 21 of premium or rate based on amount of insurance; but the issuance or modification 22 may not result in reduction in premium or rate in excess of savings in administration 23 and issuance expenses reasonably attributable to the policies or contracts; 24 (5) a reward under a wellness program established under a health care 25 plan that favors an individual if the wellness program meets the following 26 requirements: 27 (A) the wellness program is reasonably designed to promote 28 health or prevent disease; 29 (B) an individual has an opportunity to qualify for the reward at 30 least once a year; 31 (C) the reward is available for all similarly situated individuals; 01 (D) the wellness program has alternative standards for 02 individuals who are unable to obtain the reward because of a health factor; 03 (E) alternative standards are available for an individual who is 04 unable to participate in a reward program because of a health condition; 05 (F) the insurer provides information explaining the standard for 06 achieving the reward and discloses the alternative standards; and 07 (G) the total rewards for all wellness programs under the health 08 insurance policy do not exceed 20 percent of the cost of coverage;  09 (6) the offer or provision by an insurer or insurance producer,  10 including by or through an employee, affiliate, or third-party representative, of a  11 value-added product or service at no cost or reduced cost when that product or  12 service is not specified in the policy of insurance and the product or service  13 (A) is offered in accordance with (b) of this section;  14 (B) relates to the insurance coverage; and  15 (C) is primarily designed to  16 (i) provide loss mitigation or loss control;  17 (ii) reduce claim costs or claim settlement costs;  18 (iii) provide education about liability risks or risk of  19 loss to persons or property;  20 (iv) monitor or assess risk, identify sources of risk,  21 or develop strategies for eliminating or reducing risk;  22 (v) enhance health;  23 (vi) enhance financial wellness by providing  24 education or financial planning services;  25 (vii) provide post-loss services;  26 (viii) incentivize behavioral changes to improve the  27 health or reduce the risk of death or disability of a policyholder,  28 potential policyholder, certificate holder, potential certificate  29 holder, insured, potential insured, or applicant; or  30 (ix) assist in the administration of the employee or  31 retiree benefit insurance coverage;  01 (7) the provision of an offer, gift, item, or service provided in  02 accordance with (d) of this section. 03  * Sec. 3. AS 21.36.110 is amended by adding new subsections to read: 04 (b) Except as provided in (c) of this section, an insurer or insurance producer 05 offering a value-added product or service in accordance with (a)(6) of this section 06 shall ensure that 07 (1) the cost to the insurer or producer of offering the product or service 08 to a customer is reasonable relative to that customer's premium or insurance coverage 09 for the policy class, the aggregate cost of a value-added product or service offered 10 under this subsection does not exceed the greater of $250 for each policy term or five 11 percent of the premium for the applicable policy, and that a value-added product or 12 service is not offered solely to an individual negotiating or procuring a group or 13 association policy on behalf of others; 14 (2) if the insurer or producer is providing the product or service 15 offered, the customer is provided with information for whom to contact to assist the 16 customer with questions regarding the product or service; and 17 (3) the product or service is made available based on documented, 18 objective criteria and offered in a manner that is not unfairly discriminatory; 19 documented criteria described in this paragraph must be maintained by the insurer or 20 producer and provided to the director upon request. 21 (c) If an insurer or insurance producer does not have sufficient evidence but 22 has a good faith belief that a value-added product or service meets the criteria in 23 (a)(6)(C) of this section, the insurer or producer may provide the product or service in 24 a manner that is not unfairly discriminatory as part of a pilot or testing program for a 25 period of not more than three years. An insurer or producer offering a product or 26 service to consumers in the state as part of a pilot or testing program under this 27 subsection shall notify the director before launching the program and may proceed 28 with the program if the director does not object within 21 days after receiving the 29 notice. 30 (d) An insurer or insurance producer may 31 (1) offer or give noncash gifts, items, or services to, including 01 provision of meals to or charitable donations made on behalf of, a customer in 02 connection with the marketing, sale, purchase, or retention of a contract of insurance if 03 (A) the offer is made in a manner that is not unfairly 04 discriminatory; 05 (B) the customer is not required to purchase, continue to 06 purchase, or renew a policy in exchange for the noncash gift, item, or service; 07 and 08 (C) the cost of the noncash gift, item, or service does not 09 exceed an amount determined by the director to be reasonable for each term of 10 a policy year; 11 (2) offer or give noncash gifts, items, or services to, including 12 provision of meals to or charitable donations made on behalf of, a commercial or 13 institutional customer in connection with the marketing, sale, purchase, or retention of 14 a contract of insurance if 15 (A) the offer is made in a manner that is not unfairly 16 discriminatory; 17 (B) the customer is not required to purchase, continue to 18 purchase, or renew a policy in exchange for the noncash gift, item, or service; 19 (C) the cost of the noncash gift, item, or service is reasonable 20 relative to the premium or proposed premium; and 21 (D) the cost of the noncash gift, item, or service is not included 22 in any amounts charged to another person or entity; 23 (3) conduct a raffle or drawing to the extent permitted by state law if 24 (A) there is no financial cost to entrants to participate; 25 (B) the raffle or drawing does not obligate participants to 26 purchase insurance; 27 (C) the prizes are not valued in excess of a reasonable amount 28 determined by the director; 29 (D) the raffle or drawing is open to the public; 30 (E) the raffle or drawing is offered in a manner that is not 31 unfairly discriminatory; and 01 (F) a participant is not required to purchase, continue to 02 purchase, or renew a policy in exchange for participation in the raffle or 03 drawing. 04 (e) The director may adopt regulations to implement this section.  05  * Sec. 4. AS 21.36 is amended by adding a new section to read: 06 Sec. 21.36.115. Prohibited advertising practices. An insurer, insurance 07 producer, or representative of an insurer or producer may not 08 (1) offer or provide insurance as an incentive for purchasing another 09 policy; or 10 (2) use in an advertisement the words "free," "no cost," or similar 11 language that suggests that the insurance coverage is free or provided at no cost to the 12 consumer. 13  * Sec. 5. AS 21.36.120(a) is amended to read: 14 (a) A property, casualty, or surety insurer or its employee or representative [,] 15 or an insurance producer [AN AGENT, OR SOLICITOR] may not pay, allow, give, 16 or offer to pay, allow, or give, directly or indirectly, as an inducement to insurance or 17 after insurance has been effected, a rebate, discount, abatement, credit, or reduction of 18 the premium named in the policy of insurance, or a special favor or advantage in the 19 dividends or other benefits to accrue thereon, or any valuable consideration or 20 inducement, not specified in the policy, except to the extent provided for in an 21 applicable filing with the director as provided by law. 22  * Sec. 6. AS 21.42 is amended by adding a new section to read: 23 Sec. 21.42.445. Coverage for prosthetic and orthotic devices. (a) A health 24 care insurer that offers, issues for delivery, delivers, or renews in the state a health 25 care insurance plan in the group or individual market shall provide coverage for 26 prosthetic and orthotic devices at a level that is at least equal to the coverage required 27 under 42 U.S.C. 1395k - 1395m. 28 (b) The coverage for prosthetic and orthotic devices required under this 29 section must include an initial prosthetic or orthotic device that the covered person's 30 health care provider determines are the most appropriate models to meet the medical 31 needs of the covered person to complete activities of daily living or essential job- 01 related activities, shower or bathe, perform applicable physical activities, including 02 running, biking, swimming, and strength training, and maximize whole-body health 03 and limb function. The coverage must also include one additional device necessary for 04 any of the activities listed above and all device materials and components and 05 instruction to the covered person on use of the devices. 06 (c) Coverage under this section must include coverage for repair or 07 replacement of a prosthetic or orthotic device as needed. The health care insurer shall 08 provide for the replacement of the device, or the repair or replacement of a part of the 09 device, without regard to continuous use or useful lifetime restrictions, if a health care 10 provider determines that the repair or replacement of the device or a part the device is 11 necessary because a change has occurred in the physiological condition of the covered 12 person or a change has occurred in the condition of the device or in a part of the 13 device that affects its functionality. 14 (d) A health care insurer shall classify the benefits provided under this section 15 as habilitative or rehabilitative benefits to meet state or federal requirements for 16 coverage of essential health benefits. 17 (e) A health care insurer may not deny coverage for a benefit to a covered 18 person with limb loss or absence that would otherwise be covered for a nondisabled 19 covered person seeking medical or surgical intervention to restore or maintain the 20 ability to perform the same physical activity. A health care insurer shall provide 21 replacement coverage when the condition of the prosthetic or orthotic device or a part 22 of the device requires repair and the cost of repair would be more than 60 percent of 23 the cost of replacement of the device or the part of the device needing repair. A health 24 care insurer may require confirmation from a health care provider before providing 25 repair or replacement coverage under this section if the device, or the part of the 26 device needing repair or replacement, is less than three years old. 27 (f) A health care insurer shall ensure at least two distinct providers of 28 prosthetics and orthotics are included within the health care insurer's network. If 29 medically necessary covered prosthetics or orthotics are not available from an in- 30 network provider, the health care insurer shall provide the covered person with a 31 referral to an out-of-network provider and shall fully reimburse the out-of-network 01 provider at a mutually agreed on rate, less the portion that is the responsibility of the 02 covered person. The copayment of the covered person is determined on an in-network 03 basis. 04 (g) A health care insurer may not require that a person covered under the 05 health care insurer's plan be subject to financial requirements that are applicable only 06 to prosthetic and orthotic coverage. A health care provider may not impose more 07 restrictive cost-sharing requirements for prosthetic or orthotic services than the plan's 08 cost-sharing requirements for inpatient physician and surgical services. 09 (h) A health care insurer shall provide a covered person with a description of 10 the covered person's rights under this section in evidence of coverage and any benefit 11 denial letter. A denial letter must be in writing and explain in detail the reason for the 12 denial, including an explanation as to how the request or claim does not meet the 13 medical necessity standards of the insurer, if applicable. 14  * Sec. 7. AS 47.07.030(b) is amended to read: 15 (b) In addition to the mandatory services specified in (a) of this section and the 16 services provided under (d) of this section, the department may offer only the 17 following optional services: case management services for traumatic or acquired brain 18 injury; case management and nutrition services for pregnant women; personal care 19 services in a recipient's home; emergency hospital services; long-term care 20 noninstitutional services; medical supplies and equipment; advanced practice 21 registered nurse services; clinic services; rehabilitative services for children eligible 22 for services under AS 47.07.063, substance abusers, and emotionally disturbed or 23 chronically mentally ill adults; targeted case management services; inpatient 24 psychiatric facility services for individuals 65 years of age or older and individuals 25 under 21 years of age; psychologists' services; clinical social workers' services; marital 26 and family therapy services; professional counseling services; midwife services; 27 prescribed drugs; physical therapy; occupational therapy; chiropractic services; low- 28 dose mammography screening, as defined in AS 21.42.375(e); hospice care; treatment 29 of speech, hearing, and language disorders; adult dental and dental hygiene services; 30 prosthetic and orthotic devices or replacements as covered in AS 21.42.445(b) and  31 (c); [AND] eyeglasses; optometrists' services; intermediate care facility services, 01 including intermediate care facility services for persons with intellectual and 02 developmental disabilities; skilled nursing facility services for individuals under 21 03 years of age; and reasonable transportation to and from the point of medical care. 04  * Sec. 8. The uncodified law of the State of Alaska is amended by adding a new section to 05 read: 06 REPORTING. (a) Not later than October 1, 2028, a health care insurer subject to 07 AS 21.42.445, added by sec. 6 of this Act, shall submit a report to the director of the division 08 of insurance, Department of Commerce, Community, and Economic Development, on a form 09 determined by the director, that contains the total number of claims and the total amount of 10 claims paid for services required under AS 21.42.445 for the preceding two fiscal years. 11 (b) Before the first day of the First Regular Session of the Thirty-Sixth Alaska State 12 Legislature, the director of the division of insurance, Department of Commerce, Community, 13 and Economic Development, shall prepare a report that contains the information reported 14 under (a) of this section aggregated by fiscal year, and shall deliver the report to the senate 15 secretary and the chief clerk of the house of representatives and notify the legislature that the 16 report is available. 17 (c) Before the first day of the First Regular Session of the Thirty-Sixth Alaska State 18 Legislature, the commissioner of health shall prepare a report aggregated by fiscal year of the 19 total number of claims and the total amount of claims paid for prosthetic and orthotic services 20 provided through medical assistance under AS 47.07.030(b), as amended by sec. 7 of this Act, 21 and shall deliver the report to the senate secretary and the chief clerk of the house of 22 representatives and notify the legislature that the report is available. 23  * Sec. 9. The uncodified law of the State of Alaska is amended by adding a new section to 24 read: 25 APPLICABILITY. AS 21.42.445, added by sec. 6 of this Act, applies to a health care 26 insurance plan or contract issued, delivered, or renewed on or after the effective date of sec. 6 27 of this Act. 28  * Sec. 10. The uncodified law of the State of Alaska is amended by adding a new section to 29 read: 30 TRANSITION: REGULATIONS. The director of the division of insurance may adopt 31 regulations necessary to implement secs. 1 - 5 of this Act. The regulations take effect under 01 AS 44.62 (Administrative Procedure Act), but not before the effective date of the law 02 implemented by the regulation. 03  * Sec. 11. The uncodified law of the State of Alaska is amended by adding a new section to 04 read: 05 MEDICAID STATE PLAN FEDERAL APPROVAL. To the extent necessary to 06 implement this Act, the Department of Health shall amend and submit to the United States 07 Department of Health and Human Services for approval the state plan for medical assistance 08 coverage consistent with AS 47.07.030(b), as amended by sec. 7 of this Act. 09  * Sec. 12. The uncodified law of the State of Alaska is amended by adding a new section to 10 read: 11 CONDITIONAL EFFECT; NOTIFICATION. (a) Section 7 of this Act takes effect 12 only if, on or before January 1, 2029, the United States Department of Health and Human 13 Services 14 (1) approves the amendment to the state plan for medical assistance coverage 15 under AS 47.07.030(b); or 16 (2) determines that approval of the amendment to the state plan for medical 17 assistance coverage under AS 47.07.030(b) is not necessary. 18 (b) The commissioner of health shall notify the revisor of statutes in writing within 30 19 days after the United States Department of Health and Human Services approves the 20 amendment to the state plan or determines that approval is not necessary under this section. 21 * Sec. 13. Section 10 of this Act takes effect immediately under AS 01.10.070(c). 22  * Sec. 14. If sec. 7 of this Act takes effect, it takes effect on the day after the United States 23 Department of Health and Human Services approves the amendment submitted under sec. 12 24 of this Act or determines that approval of the amendment is not necessary. 25  * Sec. 15. Except as provided in secs. 13 and 14 of this Act, this Act takes effect January 1, 26 2027.