Related statute(s) or rule(s)
Section 609.71, Stats., was also created by 2009 Wis. Act 218 requiring defined health plans comply with the requirements contained in s. 632.89 and s. Ins 3.37, Wis. Admin. Code describe coverage for transitional treatment as required by s. 632.89 (4) (a), Stats.
Plain language analysis
The proposed rule implements the recreated s. 632.89, Stats., instituting mental health parity in the treatment of nervous and mental disorders and substance use disorders. The proposed rule amends regulations relating to transitional treatment coverage and creates a new section for implementing requirements for the coverage of nervous and mental disorders and substance use disorders.
The transitional treatment regulation is bifurcated into requirements for plans issued on or after November 1, 2007 and prior to December 1, 2010 and parallel numbered sections for polices issued on or after December 1, 2010. For existing policies or policies for which an employer has requested an exemption pursuant to s. 632.89 (3c) or (3f), Stats., the requirements reflect s. 632.89, 2007 Stats., and updated cites and provisions of regulations contained in the department of health services pertaining to transitional treatment.
For plans issued on or after December 1, 2010, parallel requirements are created within the proposed revisions to s. Ins 3.37 to apply to insurers offering group health insurance plans and for self-insured governmental plans on a going forward basis. The types of services are the same except for removal of minimum dollar limitations and the types of insurers or self-insured governmental plans to which the requirements apply.
Concerns were raised regarding compliance with the PPACA requirement of no annual limits for essential benefits and s. 632.89 (2), 2007 Stat., benefit levels. The concerns were silenced after identifying that the s. 632.89 (2), 2007 Stat., are written as “not less than" so act as benefit floors and do not preclude exceeding the floor amount therefore not volatile of the federal law.
The proposed rule also creates s. Ins 3.375, Wis. Adm. Code, to implement s. 632.89, Stats., for policies issued on or after December 1, 2010, that requires insurers offering group health insurance and self-insured governmental plans to provide coverage for the treatment of nervous and mental disorders and substance use disorders no more restrictively than coverage for the most common or frequent type of treatment limitations that are applied to substantially all other coverage under the plan. This means insurers and self-insured governmental plans cannot impose limited benefits or impose different cost-sharing provisions based upon receiving nervous, mental or substance use disorders treatment. The rule defines “substantially all" to mean that the terms of coverage for nervous, mental and substance use disorders is to be treated no more restrictively than a single type of financial requirements or quantitative treatment limitations that apply to two-thirds of covered medical or surgical benefits.
Pursuant to s. 632.89 (3c), Stats., for employers seeking an exemption based upon increased costs related to the parity requirements, employers may request insurers to have a qualified actuary determine, at the insurer's cost, whether the employer is eligible for the exemption. Nothing in the rule, however, limits or prohibits an employer or self-funded governmental plan from obtaining, at their cost, a qualified actuarial determination.
Proposed s. Ins 3.375 (5), contains provisions governing insurers offering individual health benefit plans that contain benefits for the treatment of nervous and mental disorders or substance use disorders. Insurers offering these individual health benefit plans shall make available the criteria for determining medical necessity and if the individual health benefit plan denies benefits related to nervous and mental disorders or substance use disorders it shall make the reason for the denial available to the insured, participant, or beneficiary in addition to complying with s. 632.857, Stats.
For eligible employers electing an exemption, Appendix 1 and 2 contain the model notices that insurers are to provide to employers or self-insured governmental plans that the employer is to post and distribute to employees explaining the basis of the exemption as well as a list of the benefits that will be provided to the employees as was contained in s. 632.89, 2007 Stats.
Summary of, and comparison with, existing or proposed federal regulations
The Mental Health Parity and Addiction Equity Act of 2008 (“MHPAEA"), was effective October 1, 2009 with interim final regulations published in February 2010. Wisconsin's 2009 Wis. Act 218 paralleled many provisions of the federal law in the statute and enhanced coverage benefits for Wisconsin consumers insured through small employers and covered by individual health benefit plans.
Additionally, the Patient Protection and Affordable Care Act of 2010, P.L. 111-148, as amended by the Federal Health Care and Education Reconciliation Act of 2010, P.L. 111-152 (jointly “PPACA"), identifies the treatment for mental health benefits and substance use disorders as an essential benefit that is to be contained in all health plans effective January 1, 2014. Further, as an essential benefit, as of September 23, 2010, insurers are to remove annual limits and phase out lifetime limitations over the next several years.
However, as of the date of this proposed rule, no specific federal guidance has been provided on how the MHPAEA and PPACA will be combined and what affect that combination will have on insurers and consumers. In the absence of such guidance, the commissioner's proposed rule does not interfere with an insurer's ability to comply with Wisconsin law, federal parity and federal health reform.
Comparison with rules in adjacent states
Illinois:
214 Ill. Comp. Stat. Ann 5/370c, SB 1341, and HB 2190 provide minimum mandated benefits affecting group health policies having more than 50 enrolled employees. Covered conditions include serious mental illness, including pervasive developmental disorders and post-traumatic stress disorders. Benefits include a minimum of 45 inpatient days and 35 outpatient visits benefits for serious mental illness; other mental health conditions may be subject to 50% co-pays and the lesser of the annual limit of $10,000.00 or 25% of the lifetime policy limit. Mental illness resulting from the use of controlled substances or cannabis and addictions to controlled substances and cannabis are not required to be covered.
Iowa:
Iowa code 514c.22 and HF420 provide minimum mandated benefits affecting group health policies having more than 50 enrolled employees. There is a 50-employee exemption if no coverage of mental illness is provided. Serious mental illness including pervasive developmental disorders and autistic disorders are covered; the minimum benefits include 30 inpatient days and 52 outpatient visits per plan year.
Michigan:
SB 1209/Act 252 provides a minimum mandated benefit affecting Health Maintenance Organizations (HMOs) that covers broad-based mental health disorders and substance use disorders. Minimum coverage levels include a 3% cost exemption and no fewer than 20 outpatient mental health visits per plan year.
Minnesota:
Minn. Stat. Sec. 62A.152, Minn. Stat. Sec. 62Q.47, and SB 845 provide comprehensive parity for HMOs and Community Integrated Service Networks. Benefits are mandated if offered for individual and group policies. Broad-based mental health disorders and substance use disorders are covered at minimum coverage levels.
Summary of factual data and analytical methodologies
The commissioner appointed a 20-member advisory council that met two times to discuss implementation advice to the commissioner on the parity law, content and delivery of notices to employees and components of the actuarial study. The council membership includes Sen. Hansen and Rep. Pasch, the sponsors of Wisconsin's law as well as representatives from the insurance industry, mental health and hospital providers, consumer mental health and substance use disorder advocates, large and small businesses. The commissioner's staff also met with the Department of Health Services to ensure citations and coverage description reflects current transitional treatment provisions and updated regulations. The proposed rule reflects the results of the council's deliberations and advice.
Analysis and supporting documents used to determine effect on small business
Upon review of insurers affected by the regulation, the office identified no small businesses that would be affected by the regulation.
Effect on Small Business
No significant effect will be imposed on regulated small businesses. No additional technology requirements are necessary to comply with the regulation.
Initial regulatory flexibility analysis
Pursuant to s. 227.14(2g), Stats., the proposed rule may have a significant economic impact on small businesses.
Small business regulatory coordinator
The OCI small business coordinator is Eileen Mallow and may be reached at phone number (608) 266-7843 or at email address eileen.mallow@wisconsin.gov.
Fiscal Estimate
There will be no state or local government fiscal effect.
Private sector fiscal effect
This rule change will have no significant effect on the private sector regulated by OCI.
Agency Contact Person
A copy of the full text of the proposed rule changes, analysis and fiscal estimate may be obtained from the Web site at: http://oci.wi.gov/ocirules.htm or by contacting Inger Williams, OCI Services Section, at:
Phone: (608) 264-8110
Address: 125 South Webster St – 2nd Floor, Madison WI
Mail: PO Box 7873, Madison, WI 53707-7873
Notice of Hearing
Insurance
NOTICE IS HEREBY GIVEN that pursuant to the authority granted under section 601.41 (3), Stats., and the procedures set forth in under section 227.18, Stats., OCI will hold a public hearing to consider the adoption of the attached proposed rulemaking order affecting sections Ins 2.18, 7.02, 7.04, 28.06, Wis. Adm. Code, relating to life settlements and affecting small business.
Hearing Information
Date and Time:
Location:
March 17, 2011
Thursday
10:00am
OCI
2nd Floor, Room 227
125 S. Webster St.
Madison, WI 53703
Submittal of Written Comments
Written comments can be mailed to:
  James W. Harris
  Legal Unit - OCI Rule Comment for Rule Ins
  Office of the Commissioner of Insurance
  PO Box 7873
  Madison WI 53707-7873
Written comments can be hand delivered to:
  James W. Harris
  Legal Unit - OCI Rule Comment for Rule Ins
  Office of the Commissioner of Insurance
  125 South Webster St – 2nd Floor
  Madison WI 53703-3474
Comments can be emailed to:
  James W. Harris
Comments submitted through the Wisconsin Administrative Rule Web site at: http://adminrules.wisconsin.gov on the proposed rule will be considered.
The deadline for submitting comments is 4:00 p.m. on the 14th day after the date for the hearing stated in this Notice of Hearing.
Copies of Proposed Rule
A copy of the full text of the proposed rule changes, analysis and fiscal estimate may be obtained from the OCI internet Web site at http://oci.wi.gov/ocirules.htm or by contacting Inger Williams, Public Information and Communications, OCI, at: inger.williams@wisconsin.gov, (608) 264-8110, 125 South Webster Street – 2nd Floor, Madison WI or PO Box 7873, Madison WI 53707-7873.
Analysis Prepared by the Office fo the Commissioner of Insurance (OCI)
Statute(s) interpreted
Sections 600.01, 632.69, Stats.
Statutory authority
Explanation of agency authority
2009 Wisconsin Act 344 created s. 632.69, Stats., replacing Wisconsin's viatical settlement statute with comprehensive regulation of life settlement transactions. The statute replaces licensing requirements for brokers and providers and establishes pre-licensing and continuing education standards. The statute provides the commissioner with authority to adopt rules implementing and administering the law including appropriate licensing requirements and standards for continuing licensure for providers and brokers, financial accountability for providers and brokers, and the adoption of rules governing the relationship and responsibilities of insurers, providers and brokers during settlement of a life insurance policy.
Related statute(s) or rule(s)
See the statutes interpreted in paragraph 1, above.
Plain language analysis
The proposed rule will assist in implementation of the requirements of s. 632.69, Stat. including those provisions relating to licensure, training, disclosures, reporting, examinations and conduct of licensees. The proposed rule sets forth initial and renewal license application deadlines, fees and requirements, including financial accountability, training, and information to be submitted. The rule lists criteria that may be used in assessing qualification of an applicant for licensure. The proposed rule provides for notification to the commissioner of administrative actions, criminal proceedings and lawsuits that may affect licensure, and reporting of cessation of business activity or change of business address or location of business records. The proposed rule provides detail for fulfilling the form filing and approval requirements of s. 632.69 (5), Stat. as well as providing formats for notices to policyholders, owners and purchasers. The proposed rule incorporates license application forms in to ch. Ins 7, Wis. Adm. Code, and add certain categories of approved training to s. Ins 28.06, Wis. Adm. Code.
Summary of, and comparison with, existing or proposed federal regulations
There are no federal regulations which are intended to address life settlement activities to be regulated by the proposed rule.
Comparison with rules in adjacent states
Illinois:
215 ILCS 159/1, et. Seq., effective 7/01/2010, amended Illinois viatical settlement law. To date there has been no formal adoption of language similar to the proposed rule.
Iowa:
IAC 191-48, effective 4/03/2009, contains provisions for viatical and life settlements comparable to the proposed rule.
Michigan:
Michigan General Insurance Laws, Chapter 550 contains viatical settlement contract regulations. To date there has been no formal adoption of language similar to the proposed rule.
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Links to Admin. Code and Statutes in this Register are to current versions, which may not be the version that was referred to in the original published document.