Chapter 376, RSMo, is amended by adding thereto five new sections relating to stop loss insurance regulation.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF MISSOURI, AS FOLLOWS:

     Section A. Chapter 376, RSMo, is amended by adding five new sections, to be known as sections 376.1050, 376.1052, 376.1054, 376.1055 and 376.1056, to read as follows:

     376.1050. This law shall be known as the "Stop Loss Insurance Act". The purpose of this act is to establish a standard for the determination of whether an insurance policy should be treated as a health insurance policy or a stop loss insurance policy for the purpose of state regulation of insurance. The laws regulating insurance in Missouri impose distinctly different requirements upon health insurance policies and stop loss insurance policies. These include different licensing, reporting, policy form and solvency requirements for insurers issuing the policies. The act applies only to insurers and the insurance policies sold to insured employer groups; the act does not apply to employers or the self-funded health plans they establish for their employees.

     376.1052. As used in sections 376.1050 to 376.1056, the following terms shall have the following meanings:

     (1) "Actuarial certification", a written statement by a member of the American Academy of Actuaries, or other individual acceptable to the director, that an insurer is in compliance with the provisions of sections 376.1050 to 376.1056, based upon the individual's examination and including a review of the appropriate records and the actuarial assumptions and methods used by the insurer in establishing attachment points and other applicable determinations in conjunction with the provision of stop loss insurance coverage;

     (2) "Attachment point", the claims amount incurred by an insured group beyond which the insurer incurs a liability for payment;

     (3) "Director", the director of the Missouri department of insurance;

     (4) "Expected claims", the amount of claims that, in the absence of a stop loss policy or other insurance, are projected to be incurred by an insured group through its health plan.

     376.1054. 1. An insurer shall issue an insurance policy that provides coverage to an insured employer group for health care expenses incurred under an employer-sponsored health plan provided to the employer's employees, retired employees or their dependents as a health insurance policy, rather than as a stop loss insurance policy, if the policy:

     (1) Has an attachment point for claims incurred per individual which is lower than ten thousand dollars; or

     (2) (a) For insured employer groups with fifty or fewer covered employees, has an aggregate attachment point which is lower than the greater of:

     a. Four thousand dollars times the number of employees;

     b. One hundred twenty percent of expected claims; or

     c. Ten thousand dollars; or

     (b) For insured employer groups with fifty-one or more covered employees, has an aggregate attachment point which is lower than one hundred ten percent of expected claims.

     2. Insurers shall determine the number of covered employees of an employer, for the purposes of this subsection, on a consistent basis, such as annually.

     3. For the purposes of determining the dollar amounts set forth in subsection 1 of this section, and upon consideration of the medical components of the Consumer Price Index, the director may amend these dollar amounts and shall publish any change in these dollar amounts at least six months prior to their effective dates.

     4. A policy issued by an insurer that provides direct coverage of health care expenses of an individual is a health insurance policy regardless of whether the policy is denominated as a stop loss policy.

     5. The director may adopt rules in accordance with the requirements of chapter 536, RSMo, that further prescribe when a policy issued to an insured employer group to cover health care expenses incurred under an employer-sponsored health plan is a health insurance policy.

     6. An insurer that is required to issue a policy as a health insurance policy under this section shall, even if the policy is denominated a stop loss policy by the insurer, comply with all the laws of this state that apply to a health insurance policy.

     376.1055. An insurer shall file with the director annually on or before March fifteenth, an actuarial certification certifying that the insurer is in compliance with sections 376.1050 to 376.1056. The certification shall be in a form and manner, and shall contain information, specified by the director. A copy of the certification shall be retained by the insurer at its principal place of business.

     376.1056. Sections 376.1050 to 376.1056 shall become effective with respect to stop loss insurance policies issued or renewed after January 1, 1998.