SB 318 - This act amends how certain categories of health insurance policies are offered in Missouri:

THE SMALL EMPLOYER AND INDIVIDUAL HEALTH INSURANCE AVAILABILITY ACT - The statutes creating the Missouri Health Insurance Pool for high-risk persons are repealed. Many of the statutes establishing the Small Employer Program are repealed or expanded to also include health insurance policies for individuals. Changes include expanding the definition of the "Carrier" to include all entities providing a plan of health insurance or health benefits in the state of Missouri; defining Community rate" as the rate charged by a carrier for the same coverage to all individuals of the same or similar age, family size and geographic location; defining an "Eligible Employee" as a person who works on a year round basis; and establishing the size of a "Small Employer" subject to this act at more than three and not more than five hundred employees.

The State of Missouri is divided into three (3) initial "communities" for community rating purposes. The St. Louis Metropolitan Statistical Area and the Kansas City Metropolitan Statistical Area and the rest of the State of Missouri. After July 1, 1996 the new Health Benefit Plan Committee established by this act may divide the rest of the state of Missouri into up to three more community rating areas, for a total of five.

Community Rating - Insurers will establish "Community Rates", standard health insurance premiums based exclusively upon age, family size and geographic location. After July 1, 1996, all new or renewal individual health insurance premiums must be based upon the carrier's community rate, which may only be adjusted based upon age, with a maximum deviation of plus or minus 20%, family size and geographic location. The community rating for small employer plans is for the entire group, so health insurance premiums are not adjusted for individuals within that small employer group. Each carrier must make reasonable disclosure of the community rating factors used to potential covered persons.

Health Benefit Plans - After July 1, 1996, every carrier must actively offer to individuals and small employers one of the five health benefit plans established by the Health Benefit Plan Committee. One plan of the five must contain at a minimum, the health maintenance organization benefits contained in the Missouri Consolidated Plan for state employees.

A carrier may issue a supplemental health policy for benefits not included in one of the five health benefit plans. No supplemental health policy may duplicate any benefit of any of the five health benefit plans. If a supplemental policy is offered or issued, the carrier shall make consumer information in connection with the policy.

A carrier must sell any of the five plans to an individual who pays the premium and satisfies other enrollment requirements during the open enrollment period.

Pre-existing Condition Limitations - There are no preexisting condition limitations for regular enrollees and late enrollee preexisting condition limitations may not exceed six months.

Open Enrollment Periods - In each community, there will be a common annual open enrollment period of 30 days for individuals, with a restriction upon the enrollment of persons who have not resided in the state for at least one year prior to the beginning of the open enrollment. After a person becomes insured, health care coverage may only be terminated for nonpayment of premiums, or for fraud or misrepresentation.

Reinsurance - A Board of Directors similar to that created by Sections 379.942 and 379.943, RSMo will establish a reinsurance program and devise methods to examine carrier payments which exceed the statewide average per insured for that plan, an assessment and reimbursement program for these carriers and pre-reimbursement efficiency and risk management standards. Participating reinsuring carriers may receive up to 80% reimbursement for costs which exceed statewide average costs by at least 20%. The recoupment of net losses will follow this formula: (a) 1st - the loss will be apportioned among reinsurance carriers, in a proportional manner; (b) 2nd - if the net loss is more than 4% of aggregate premiums collected by reinsuring carriers, a 1% assessment may be made upon all group health premiums collected, with a potential credit for carriers covering high-risk individuals.

Each carrier will cover a share of high-risk individuals and small employer groups in proportion to their market share, the failure to do so may result in a higher assessment.

The Health Benefit Plan Committee - This act also amends the composition and duties of the Health Benefit Plan Committee. The Health Benefit Plan Committee will be composed of 14 members comprised of one representative from an insurance company, a health services corporation, a physician, a osteopathic MD, an administrator of a hospital, one independent insurance agent, two small employers, three consumers, and the Directors of the Department of Insurance and the Department of Health. These committee members shall be appointed by the Governor with the advice and consent of the Senate.

On or before March 31, 1996, the Committee shall formulate five health benefit plans. One of the plans shall provide, at a minimum, the health maintenance organization benefits prescribed by the Missouri consolidated plan for state employees and all plans shall provide at a minimum the health benefit plans set forth in sections 376.810 to 376.814, RSMo for mental illness and chemical dependency. One of the plans shall be a point of service plan. It may require an enrollee a copayment of up to 20% of the amount which would have been paid to an in-network provider for an item or service if the enrollee uses an out-of- network provider.

The Directors of the Department of Insurance and Revenues will develop a plan, to be presented to the General Assembly by January 1, 1996, which permits health care services to be purchased using medical savings accounts or other such plan with tax incentives.
CHERYL GRAZIER