A.R.S. tit. 20 ch. 13 — Arizona Revised Statutes Title 20 Chapter 13 — Accountable Health Plans

20-2301. Definitions; late enrollee coverage A. In this chapter, unless the context otherwise requires: 1. "Accountable health plan" means an entity that offers, issues or otherwise provides a health benefits plan and that is approved by the director as an accountable health plan pursuant to section 20-2303. 2. "Affiliation period" means a period of two months, or three months for late enrollees, that under the terms of the health benefits plan offered by a health care services organization must expire before the health benefits plan becomes effective and in which the health care services organization is not required to provide health care services or benefits and cannot charge the participant or beneficiary a premium for any coverage during the period. 3. "Base premium rate" means, for each rating period, the lowest premium rate that could have been charged under a rating system by the accountable health plan to small employers for health benefits plans involving the same or similar coverage, family size and composition, and geographic area. 4. "Bona fide association" means, for a health benefits plan issued by an accountable health plan, an association that meets the requirements of section 20-2324. 5. "COBRA continuation provision" means: (a) Section 4980B, except subsection (f)(1) as it relates to pediatric vaccines, of the internal revenue code of 1986. (b) Title I, subtitle B, part 6, except section 609, of the employee retirement income security act of 1974 (P.L. 93-406; 88 Stat. 829; 29 United States Code sections 1001 through 1461). (c) Title XXII of the public health service act. (d) Section 20-2330 or a similar provision of the law of this state or any other state. 6. "Creditable coverage" means coverage solely for an individual, other than limited benefits coverage, under any of the following: (a) An employee welfare benefit plan that provides medical care to employees or the employees' dependents directly or through insurance or reimbursement or otherwise pursuant to the employee retirement income security act of 1974. (b) A church plan as defined in the employee retirement income security act of 1974. (c) A health benefits plan issued by an accountable health plan as defined in this section. (d) Part A or part B of title XVIII of the social security act. (e) Title XIX of the social security act, other than coverage consisting solely of benefits under section 1928. (f) Title 10, chapter 55 of the United States Code. (g) A medical care program of the Indian health service or of a tribal organization. (h) A health benefits risk pool operated by any state of the United States. (i) A health plan offered pursuant to title 5, chapter 89 of the United States Code. (j) A public health plan as defined by federal law. (k) A health benefit plan pursuant to section 5(e) of the peace corps act (P.L. 87-293; 75 Stat. 612; 22 United States Code sections 2501 through 2523). (l) A policy or contract, including short-term limited duration insurance, issued on an individual basis by an insurer, a health care services organization, a hospital service corporation, a medical service corporation or a hospital, medical, dental and optometric service corporation. (m) A policy or contract issued by a health care insurer or an accountable health plan to a member of a bona fide association. 7. "Demographic characteristics" means objective factors an insurer considers in determining premium rates. Demographic characteristics do not include health status-related factors, industry or duration of coverage since issue. 8. "Different policy forms" means variations between policy forms offered by a health care insurer, including policy forms that have different cost sharing arrangements or different riders. 9. "Genetic information" means information about genes, gene products and inherited characteristics that may derive from the individual or a family member, including information regarding carrier status and information derived from laboratory tests that identify mutations in specific genes or chromosomes, physical medical examinations, family histories and direct analyses of genes or chromosomes. 10. "Health benefits plan" means a hospital and medical service corporation policy or certificate, a health care services organization contract, a group disability policy, a certificate of insurance of a group disability policy that is not issued in this state, a multiple employer welfare arrangement or any other arrangement under which health services or health benefits are provided to two or more individuals. Health benefits plan does not include the following: (a) Accident only, dental only, vision only, disability income only or long-term care only insurance, fixed or hospital indemnity coverage, limited benefit coverage, specified disease coverage, credit coverage or Taft-Hartley trusts. (b) Coverage that is issued as a supplement to liability insurance. (c) Medicare supplemental insurance. (d) Workers' compensation insurance. (e) Automobile medical payment insurance. 11. "Health status-related factor" means any factor in relation to the health of the individual or a dependent of the individual enrolled or to be enrolled in an accountable health plan, including: (a) Health status. (b) Medical condition, including physical and mental illness. (c) Claims experience. (d) Receipt of health care. (e) Medical history. (f) Genetic information. (g) Evidence of insurability, including conditions arising out of acts of domestic violence as defined in section 20-448. (h) The existence of a physical or mental disability. 12. "Higher level of coverage" means a health benefits plan offered by an accountable health plan for which the actuarial value of the benefits under the coverage is at least fifteen percent more than the actuarial value of the health benefits plan offered by the accountable health plan as a lower level of coverage in this state but not more than one hundred twenty percent of a policy form weighted average. 13. "Index rate" means, as to a rating period, the arithmetic average of the applicable base premium rate and the highest premium rate that could have been charged under a rating system by the accountable health plan to small employers for a health benefits plan involving the same or similar coverage, family size and composition, and geographic area. 14. "Late enrollee" means an employee or dependent who requests enrollment in a health benefits plan after the initial enrollment period that is provided under the terms of the health benefits plan if the initial enrollment period is at least thirty-one days. An employee or dependent shall not be considered a late enrollee if: (a) The person: (i) At the time of the initial enrollment period was covered under a public or private health insurance policy or any other health benefits plan. (ii) Lost coverage under a public or private health insurance policy or any other health benefits plan due to the employee's termination of employment or eligibility, the reduction in the number of hours of employment, the termination of the other plan's coverage, the death of the spouse, legal separation or divorce or the termination of employer contributions toward the coverage. (iii) Requests enrollment within thirty-one days after the termination of creditable coverage that is provided under a public or private health insurance or other health benefits plan. (iv) Requests enrollment within thirty-one days after the date of marriage. (b) The person is employed by an employer that offers multiple health benefits plans and the person elects a different plan during an open enrollment period. (c) A court orders that coverage be provided for a spouse or minor child under a covered employee's health benefits plan and the person requests enrollment within thirty-one days after the court order is issued. (d) The person becomes a dependent of a covered person through marriage, birth, adoption or placement for adoption and requests enrollment no later than thirty-one days after becoming a dependent. 15. "Lower level of coverage" means a health benefits plan offered by an accountable health plan for which the actuarial value of the benefits under the health benefits plan is at least eighty-five percent but not more than one hundred percent of the policy form weighted average. 16. "Network plan" means a health benefits plan provided by an accountable health plan under which the financing and delivery of health benefits are provided, in whole or in part, through a defined set of providers under contract with the accountable health plan in accordance with the determination made by the director pursuant to section 20-1053 regarding the geographic or service area in which an accountable health plan may operate. 17. "Policy form weighted average" means the average actuarial value of the benefits provided by all health benefits plans issued by either the accountable health plan or, if the data are available, by all accountable health plans in the group market in this state during the previous calendar year, weighted by the enrollment for all coverage forms. 18. "Preexisting condition" means a condition, regardless of the cause of the condition, for which medical advice, diagnosis, care or treatment was recommended or received within not more than six months before the date of the enrollment of the individual under a health benefits plan issued by an accountable health plan. A genetic condition is not a preexisting condition in the absence of a diagnosis of the condition related to the genetic information and shall not result in a preexisting condition limitation or preexisting condition exclusion. 19. "Preexisting condition limitation" or "preexisting condition exclusion" means a limitation or exclusion of benefits for a preexisting condition under a health benefits plan offered by an accountable health plan. 20. "Small employer" means an employer who employs at least two but not more than fifty eligible employees on a typical business day during any one calendar year. For the purposes of this paragraph, "employee" includes the employees of the employer and the individual proprietor or self-employed person if the employer is an individual proprietor or self-employed person. 21. "Taft-Hartley trust" means a jointly-managed trust, as allowed by 29 United States Code sections 141 through 187, that contains a plan of benefits for employees and that is negotiated in a collective bargaining agreement governing the wages, hours and working conditions of the employees, as allowed by 29 United States Code section 157. 22. "Waiting period" means the period that must pass before a potential participant or beneficiary in a health benefits plan offered by an accountable health plan is eligible to be covered for benefits as determined by the individual's employer. B. Coverage for a late enrollee begins on the date the person becomes a dependent if a request for enrollment is received within thirty-one days after the person becomes a dependent. 20-2302. Scope of article A. This article applies to any health benefits plan that provides coverage to eligible employees or dependents in this state and that is issued by an accountable health plan if: 1. Any portion of the premium or benefits is paid by or on behalf of the employer. 2. The eligible employee or dependent is reimbursed by or on behalf of the employer for any portion of the premium. 3. The health benefits plan is treated by the employer or any of the eligible employees or dependents as part of a plan or program for the purposes of section 106, 162 or 220 of the internal revenue code. B. This article applies to a health benefits plan that qualifies as a group health plan under section 2791(a)(1) of the health insurance portability and accountability act of 1996 (P.L. 104-191; 110 Stat. 1936). C. This article does not apply to any policy that is issued on an individual basis. 20-2303. Approval as accountable health plan; definition An entity may offer, issue or otherwise provide a health benefits plan only if the entity is authorized to transact insurance in this state and is approved as an accountable health plan by the director based on a determination that the entity meets the applicable requirements of this chapter. 20-2304. Availability of insurance; premium tax exemption A. As a condition of doing business in this state, each accountable health plan shall offer at least one health benefits plan on a guaranteed issuance basis to small employers as required by this section. All small employers qualify for this guaranteed offer of coverage. The accountable health plan shall provide a health benefits plan to each small employer without regard to health status-related factors if the small employer agrees to make the premium payments and to satisfy any other reasonable provisions of the plan that are not inconsistent with this chapter. B. If an accountable health plan offers more than one health benefits plan to small employers, the accountable health plan shall offer a choice of all health benefits plans that the accountable health plan offers to small employers and shall accept any small employer that applies for any of those plans. C. For any offering of any health benefits plan to a small employer, as part of the accountable health plan's solicitation and sales materials, an accountable health plan shall make a reasonable disclosure to the employer of the availability of the information described in this subsection and, on request of the employer, shall provide that information to the employer. The accountable health plan shall provide information concerning the following: 1. Provisions of coverage relating to the following, if applicable: (a) The accountable health plan's right to change premium rates and the factors that may affect changes in premium rates. (b) Renewability of coverage. (c) Any preexisting condition exclusion. (d) Any affiliation period applied by a health care services organization. (e) The geographic areas served by health care services organizations. 2. The benefits and premiums available under all health benefits plans for which the employer is qualified. D. The accountable health plan shall describe the information required by subsection C of this section in language that is understandable by the average small employer and with a level of detail that is sufficient to reasonably inform a small employer of the employer's rights and obligations under the health benefits plan. This requirement is satisfied if the accountable health plan provides each of the following for each product the accountable health plan offers: 1. An outline of coverage that describes the benefits in summary form. 2. The rate or rating schedule that applies to the product, preexisting condition exclusion or affiliation period. 3. The minimum employer contribution and group participation rules that apply to any particular type of coverage. 4. In the case of a network plan, a map or listing of the areas served. E. An accountable health plan is not required to disclose any information that is proprietary and protected trade secret information under applicable law. F. An accountable health plan that issues a health benefits plan through a network plan may limit the employers that may apply for any health benefits plan offered by the accountable health plan to those eligible individuals who live, work or reside in the service area for the network plan of the accountable health plan. G. On approval of the director, an accountable health plan may refuse to enroll a qualified small employer in a health benefits plan or in a geographic area served by the plan if the accountable health plan demonstrates that its financial or administrative capacity to serve previously enrolled groups and individuals would be impaired. An accountable health plan that refuses to enroll a qualified small employer may not enroll an employer of the same or larger size until the earlier of: 1. The date on which the director determines that the accountable health plan has the capacity to enroll a qualified small employer. 2. The date on which the accountable health plan enrolls a qualified small employer. H. An accountable health plan that offers coverage to a qualified small employer shall offer coverage to all of the eligible employees of the qualified small employer and their eligible dependents. I. An accountable health plan may request health screening and underwriting information on prospective enrollees to evaluate the risks associated with a qualified small employer who applies for coverage. The accountable health plan may use this information for the purposes of setting premiums, evaluating plan offerings and making reinsurance decisions. An accountable health plan shall not use this information to deny coverage to a qualified small employer or to an eligible employee or to an eligible dependent, except a late enrollee who attempts to enroll outside an open enrollment period. J. Accountable health plans are exempt from the premium taxes that are required by section 20-224, subsection B and sections 20-837, 20-1010 and 20-1060 for the net premiums received for health benefits plans issued to small employers, including the net premiums collected from coverage issued pursuant to section 20-2313, subsection C. Each accountable health plan shall notify the small employers to whom it provides coverage of the reductions in the premium tax as specified in this subsection. K. The director may use independent contractor examiners pursuant to sections 20-148 and 20-159 to review the higher level of coverage and lower level of coverage health benefits plans offered by an accountable health plan insurer in compliance with this section. All examination and examination related expenses shall be borne by the insurer and shall be paid by the insurance examiners' revolving fund pursuant to section 20-159. 20-2306. Use of uniform employee health status questionnaire A. An accountable health plan shall use the uniform employee health status questionnaire prescribed by the department for all small groups for which the accountable health plan requires employees and their covered dependents to complete health status questionnaires. B. An accountable health plan may add to the questionnaire additional questions that pertain to eligibility for coverage and for underwriting purposes and may ask the producer or the employees and dependents follow-up questions about their responses to the uniform employee health status questionnaire. 20-2307. Eligibility; annual open enrollment period A. Except as otherwise provided in this section or section 20-2308 or 20-2309, an accountable health plan may not exclude from coverage any employee or a spouse or a dependent child of the employee if the person meets the eligibility requirements established by the employer. B. Subsection A of this section does not apply to a period in which an employee is excluded from coverage under the health benefits plan pursuant to an employer requirement that imposes a minimum period of service before the employee and the employee's dependents are eligible for coverage. C. An accountable health plan may deny enrollment to employees or family members of an employer if the employees or family members are located outside the service area of the accountable health plan and if the denial is applied uniformly without regard to health status-related factors or insurability. D. An accountable health plan that provides an annual open enrollment period of at least thirty-one days may deny enrollment to a late enrollee until the next annual open enrollment period or may require acceptable evidence of insurability. 20-2308. Portability A newborn child, adopted child or child placed for adoption is an eligible individual if the child was timely enrolled and otherwise would have met the definition of an eligible individual as prescribed in section 20-1379 other than the required period of creditable coverage and the child is-not subject to any preexisting condition exclusion or limitation if the child has been continuously covered under health insurance coverage or a health benefits plan offered by an accountable health plan since birth, adoption or placement for adoption. 20-2309. Renewability A. At least sixty days before the date of expiration of a health benefits plan, an accountable health plan that provides a health benefits plan shall provide for written notice to the employer of the terms for renewal of the plan. The notice shall include an explanation of the extent to which any increase in premiums is due to actual or expected claims experience of the individuals covered under the employer's health benefits plan contract. B. An accountable health plan may refuse to renew or may terminate a health benefits plan only if: 1. The employer fails to pay premiums or contributions in accordance with the terms of the health benefits plan of the accountable health plan or the accountable health plan does not receive premium payments in a timely manner. 2. The employer committed an act or practice that constitutes fraud or made an intentional misrepresentation of material fact under the terms of the health benefits plan. 3. The employer has failed to comply with a material plan provision relating to individual or employer participation rules as prescribed in subsection C of this section. 4. The accountable health plan has ceased to offer new coverage and has terminated or ceased to renew all in-force coverage in the group market pursuant to this section. 5. In the case of an accountable health plan that offers a health benefits plan through a network plan in this state, there is no longer any enrollee in connection with the accountable health plan who lives, resides or works in the service area of the accountable health plan or in the area served by the network plan for which the accountable health plan is authorized to do business and the accountable health plan would deny enrollment pursuant to section 20-2304, subsection G. 6. In the case of an accountable health plan that offers a health benefits plan in the group market only through one or more bona fide associations, the membership of an employer in the association has ceased but only if that coverage is terminated uniformly without regard to any health status-related factor or any covered individual. C. An accountable health plan may require that a minimum percentage of employees who are not covered under a spouse's or parent's employer's health benefits plan be enrolled in a plan if the percentage is applied uniformly to all plans that are offered to employers of comparable size. D. An accountable health plan is not required to renew a health benefits plan with respect to an employer or individual if the accountable health plan: 1. Elects not to renew all of its health benefits plans that are issued to employers or individuals in this state. 2. Provides notice to the director at least five business days before the accountable health plan gives notice to each employer or individual covered under a health benefits plan of the intention to discontinue offering any health benefits plans in this state. 3. Provides notice of termination or nonrenewal to each employer or individual covered under a plan at least one hundred eighty days before the renewal date of the plan. If the accountable health plan terminates coverage, the accountable health plan may not issue a health benefits plan to an employer in this state during the five year period beginning on the termination date of the last plan that was not renewed. E. If an accountable health plan decides to discontinue offering a particular health benefits plan offered in the group market, the accountable health plan may discontinue that coverage only if the accountable health plan: 1. Provides notice to the director at least five business days before the accountable health plan gives notice to each employer or individual covered under that health benefits plan of the intention to discontinue offering that health benefits plan in this state. 2. Provides notice to each employer or individual covered under that health benefits plan at least ninety days before the date of the discontinuation of that coverage. 3. Offers to each employer whose coverage is discontinued pursuant to this subsection the option to purchase all other health benefits plans currently offered by the accountable health plan for employers in the group market uniformly without regard to any health status-related factor of any employee or a spouse or a dependent of the employee enrolled or individuals who may become eligible for that coverage. 20-2310. Discrimination prohibited; preexisting conditions; wellness programs A. Except as provided in subsection B of this section, a health benefits plan may not deny, limit or condition the coverage or benefits based on a person's health status-related factors or a lack of evidence of insurability. B. A health benefits plan shall not exclude coverage for preexisting conditions, except that: 1. A health benefits plan may exclude coverage for preexisting conditions for a period of not more than twelve months or, in the case of a late enrollee, eighteen months. The exclusion of coverage does not apply to services that are furnished to newborns who were otherwise covered from the time of their birth or to persons who satisfy the portability requirements under section 20-2308. 2. The accountable health plan shall reduce the period of any applicable preexisting condition exclusion by the aggregate of the periods of creditable coverage that apply to the individual. C. A health benefits plan shall not include an affiliation period in a policy unless the affiliation period satisfies the requirements prescribed in 45 Code of Federal Regulations section 146.119(b). D. On request of a health benefits plan, a person who provides coverage during a period of continuous coverage with respect to a covered individual shall promptly disclose the coverage provided to the covered individual, the period of the coverage and the benefits provided under the coverage. E. The accountable health plan shall calculate creditable coverage according to the following rules: 1. The accountable health plan shall give an individual credit for each day the individual was covered by creditable coverage. 2. The accountable health plan shall not count a period of creditable coverage for an individual enrolled in a health benefits plan if after the period of coverage and before the enrollment date there were sixty-three consecutive days during which the individual was not covered under any creditable coverage. 3. The accountable health plan shall give credit in the calculation of creditable coverage for any period that an individual is in a waiting period or an affiliation period for any health coverage. 4. The accountable health plan shall not count a period of creditable coverage with respect to enrollment of an individual if, after the most recent period of creditable coverage and before the enrollment date, sixty-three consecutive days lapse during all of which the individual was not covered under any creditable coverage. The accountable health plan shall not include in the determination of the period of continuous coverage described in this section any period that an individual is in a waiting period for health insurance coverage offered by a health care insurer, is in a waiting period for benefits under a health benefits plan offered by an accountable health plan or is in an affiliation period. 5. In determining the extent to which an individual has satisfied any portion of any applicable preexisting condition period the accountable health plan shall count a period of creditable coverage without regard to the specific benefits covered during that period. 6. An accountable health plan shall not impose any preexisting condition exclusion in the case of an individual who is covered under creditable coverage thirty-one days after the individual's date of birth. 7. An accountable health plan shall not impose any preexisting condition exclusion in the case of a child who is adopted or placed for adoption before age eighteen and who is covered under creditable coverage thirty-one days after the adoption or placement for adoption. F. An accountable health plan shall provide the certificate of creditable coverage described in subsection G of this section without charge for creditable coverage occurring after June 30, 1996 if the individual: 1. Ceases to be covered under a health benefits plan offered by an accountable health plan or otherwise becomes covered under a COBRA continuation provision. An individual who is covered by a health benefits plan that is offered by an accountable health plan, that is terminated or not renewed at the choice of the employer and where the replacement of the health benefits plan is without a break in coverage is not entitled to receive the certification prescribed in this paragraph but is instead entitled to receive the certifications prescribed in paragraphs 2 and 3 of this subsection. 2. Who was covered under a COBRA continuation provision ceases to be covered under the COBRA continuation provision. 3. Requests certification from the accountable health plan within twenty-four months after the coverage under a health benefits plan offered by an accountable health plan ceases. G. The certificate of creditable coverage provided by an accountable health plan is a written certification of: 1. The period of creditable coverage of the individual under the accountable health plan and any applicable coverage under a COBRA continuation provision. 2. Any applicable waiting period or affiliation period imposed on an individual for any coverage under the accountable health plan. H. Any accountable health plan that issues health benefits plans in this state, as applicable, shall issue and accept a written certificate of creditable coverage of the individual that contains at least the following information: 1. The date that the certificate is issued. 2. The name of the individual or dependent for whom the certificate applies and any other information that is necessary to allow the issuer providing the coverage specified in the certificate to identify the individual, including the individual's identification number under the policy and the name of the policyholder if the certificate is for or includes a dependent. 3. The name, address and telephone number of the issuer providing the certificate. 4. The telephone number to call for further information regarding the certificate. 5. One of the following: (a) A statement that the individual has at least eighteen months of creditable coverage. For the purposes of this subdivision, "eighteen months" means five hundred forty-six days. (b) Both the date that the individual first sought coverage, as evidenced by a substantially complete application, and the date that creditable coverage began. 6. The date creditable coverage ended, unless the certificate indicates that creditable coverage is continuing from the date of the certificate. 7. The consumer assistance telephone number for the department. 8. The following statement in at least fourteen-point type: Important notice! Keep this certificate with your important personal records to protect your rights under the health insurance portability and accountability act of 1996 ("HIPAA"). This certificate is proof of your prior health insurance coverage. You may need to show this certificate to have a guaranteed right to buy new health insurance ("Guaranteed issue"). This certificate may also help you avoid waiting periods or exclusions for preexisting conditions. Under HIPAA, these rights are guaranteed only for a very short time period. After your group coverage ends, you must apply for new coverage within 63 days to be protected by HIPAA. If you have questions, call the Arizona department of insurance and financial institutions. I. An accountable health plan may provide any certification pursuant to subsection F, paragraph 1 of this section at the same time the accountable health plan sends the notice required by the applicable COBRA continuation provision. J. An accountable health plan has satisfied the certification requirement under this section if the accountable health plan offering the health benefits plan provides the prescribed certificate in accordance with this section within thirty days after the event that triggered the issuance of the certification. K. If an accountable health plan imposes a waiting period for coverage of preexisting conditions, within a reasonable period of time after receiving an individual's proof of creditable coverage and not later than the date by which the individual must select an insurance plan, the accountable health plan shall give the individual written disclosure of the accountable health plan's determination regarding any preexisting condition exclusion period that applies to that individual. The disclosure shall include all of the following information: 1. The period of creditable coverage allowed toward the waiting period for coverage of preexisting conditions. 2. The basis for the accountable health plan's determination and the source and substance of any information on which the accountable health plan has relied. 3. A statement of any right the individual may have to present additional evidence of creditable coverage and to appeal the accountable health plan's determination, including an explanation of any procedures for submission and appeal. L. Periods of creditable coverage for an individual are established by presentation of the written certifications described in this section and section 20-1379. In addition to written certification of the period of creditable coverage as described in this section, individuals may establish creditable coverage through the presentation of documents or other means. In order to make a determination that is based on the relevant facts and circumstances of the amount of creditable coverage that an individual has, an accountable health plan shall take into account all information that the plan obtains or that is presented to the plan on behalf of the individual. M. The department may enforce and monitor the issuance and delivery of the notices and certificates by accountable health plans and insurers as required by this section, the health insurance portability and accountability act of 1996 (P.L. 104-191; 110 Stat. 1936) and any federal regulations adopted to implement the health insurance portability and accountability act of 1996. N. This section does not prohibit any health benefits plan from providing or offering to provide rewards or incentives under a wellness program that satisfies the requirements for an exception from the general prohibition against discrimination based on a health factor under the health insurance portability and accountability act of 1996 (P.L. 104-191; 110 stat. 1936), including any federal regulations that are adopted pursuant to that act. O. Notwithstanding any other law, an insurer is not required to provide a certificate of creditable coverage if the federal laws that require providing a certificate of creditable coverage are superseded by the prohibition on preexisting condition exclusions. 20-2311. Premium rates and rating practices A. The premium rate that an accountable health plan charges during a rating period for a health benefits plan issued to a small employer shall not vary by more than sixty percent from the index rate for health benefits plans involving the same or similar coverage, family size and composition, and geographic area. B. In establishing premium rates for health benefits plans offered to small employers: 1. An accountable health plan making adjustments with respect to demographic characteristics shall apply those adjustments consistently across all small employers. 2. An accountable health plan may not use a geographic area that is smaller than a county or smaller than an area that includes all areas in which the first three digits of the zip code are identical, whichever is smaller. C. The percentage increase in the premium rate that is charged to a small employer for a new rating period may not exceed the sum of the following: 1. The percentage change in the base premium rate. 2. Fifteen percentage points. 3. Any adjustment due to a change in coverage, family size or composition, geographic area or demographic characteristics. D. At the time an accountable health plan offers a health benefits plan to a small employer, the accountable health plan shall fully disclose to the employer all of the following: 1. Rating practices for small employer health benefits plans, including rating practices for different populations and benefit designs. 2. The extent to which premium rates for the small employer are established or adjusted based on the actual or expected variation in claims costs or health condition of the employees of the small employer and their dependents. 3. The accountable health plan's right to change premium rates, the extent to which premiums can be modified and the factors that affect changes in premium rates. E. Each accountable health plan shall file annually with the director a written statement by a member of the American academy of actuaries or another individual acceptable to the director certifying that based on an examination by the individual, including a review of the appropriate records and of the actuarial assumptions of the accountable health plan and methods used by the accountable health plan in establishing base premium rates, index rates and premium rates for small employer health benefits plans: 1. The accountable health plan is in compliance with the applicable provisions of this article. 2. The rating methods are actuarially sound. F. Each accountable health plan shall retain a copy of the statement required by subsection E for examination at its principal place of business. G. Each accountable health plan shall annually file with the director for informational purposes the accountable health plan's base premium rates and index rates. On request, the director shall make the base premium rates or the index rates available to the public for inspection. H. This section does not apply if a small employer obtains a health benefits plan that is subject to and complies with 42 United States Code section 300gg. 20-2313. Marketing practices A. An accountable health plan or its insurance producer shall not: 1. Discourage an employer from filing an application for a health benefits plan because of the health status-related factors, industry, occupation or geographic location of the employer. 2. Encourage or direct an employer to seek a health benefits plan from another insurer because of the health status-related factors, industry, occupation or geographic location of the employer. B. This section does not prohibit an accountable health plan from providing information regarding the geographic service area of the accountable health plan. C. Notwithstanding any law to the contrary, an accountable health plan may market health benefits plans to groups of small employers from the same or different industries that elect to pool their risks on a voluntary basis. 20-2321. Maternity benefits; adoption; coverage A. A contract that is issued to an enrollee pursuant to this article and that provides coverage for maternity benefits shall also provide that the maternity benefits apply to the costs of the birth of a child who is legally adopted by the enrollee if all of the following are true: 1. The child is adopted within one year of birth. 2. The enrollee is legally obligated to pay the costs of birth. 3. All preexisting conditions and other limitations have been met and all deductibles and copayments have been paid by the enrollee. 4. The enrollee has notified the insurer of the enrollee's acceptability to adopt children pursuant to section 8-105 within sixty days after this approval or within sixty days after a change in insurance policies, plans or companies. B. The coverage prescribed by subsection A of this section is excess to any other coverage the natural mother may have for maternity benefits except coverage made available to persons pursuant to title 36, chapter 29 but not including coverage made available to persons defined as eligible under section 36-2901, paragraph 6, subdivisions (b), (c), (d) and (e). C. If other coverage exists the agency, attorney or individual arranging the adoption shall make arrangements for the insurance to pay those costs that may be covered under that policy and shall advise the adopting parent in writing of the existence and extent of the coverage without disclosing any confidential information such as the identity of the natural parent. D. The enrollee adopting parents shall notify their accountable health plan of the existence and extent of the other coverage. E. An accountable health plan is not required to pay any costs in excess of the amounts it would have been obligated to pay to its hospitals and providers if the natural mother and child had received the maternity and newborn care directly from or through that accountable health plan. F. Beginning January 1, 1998, any contract that provides maternity benefits shall not restrict benefits for any hospital length of stay in connection with childbirth for the mother or the newborn child to less than forty-eight hours following a normal vaginal delivery or ninety-six hours following a cesarean section. The contract shall not require the provider to obtain authorization from the accountable health plan for prescribing the minimum length of stay required by this subsection. The contract may provide that an attending provider in consultation with the mother may discharge the mother or the newborn child before the expiration of the minimum length of stay required by this subsection. The accountable health plan shall not: 1. Deny the mother or the newborn child eligibility or continued eligibility to enroll or to renew coverage under the terms of the contract solely for the purpose of avoiding the requirements of this subsection. 2. Provide monetary payments or rebates to mothers to encourage those mothers to accept less than the minimum protections available pursuant to this subsection. 3. Penalize or otherwise reduce or limit the reimbursement of an attending provider because that provider provided care to any insured under the contract in accordance with this subsection. 4. Provide monetary or other incentives to an attending provider to induce that provider to provide care to an insured under the contract in a manner that is inconsistent with this subsection. 5. Except as described in subsection G of this section, restrict benefits for any portion of a period within the minimum length of stay in a manner that is less favorable than the benefits provided for any preceding portion of that stay. G. Nothing in subsection F of this section: 1. Requires a mother to give birth in a hospital or to stay in the hospital for a fixed period of time following the birth of the child. 2. Prevents an accountable health plan from imposing deductibles, coinsurance or other cost sharing in relation to benefits for hospital lengths of stay in connection with childbirth for a mother or a newborn child under the contract, except that any coinsurance or other cost sharing for any portion of a period within a hospital length of stay required pursuant to subsection F of this section shall not be greater than the coinsurance or cost sharing for any preceding portion of that stay. 3. Prevents an accountable health plan from negotiating the level and type of reimbursement with a provider for care provided in accordance with subsection F of this section. H. An accountable health plan shall not impose any preexisting condition exclusions or limitations relating to pregnancy as a preexisting condition. 20-2322. Mental health services and benefits; definitions A. Beginning on January 1, 1998, any health benefits plan that is offered by an accountable health plan and that provides services or health benefits that include mental health services or mental health benefits shall comply with this section. B. If the health benefits plan does not include an aggregate lifetime limit on substantially all health services or health benefits that are not related to mental health services or mental health benefits, the health benefits plan shall not impose any aggregate lifetime limit on mental health services or mental health benefits. If the health benefits plan includes an aggregate lifetime limit on substantially all health services or health benefits that are not related to mental health services or mental health benefits, the health benefits plan shall either: 1. Apply the applicable lifetime limit to both the health services or health benefits that are not related to mental health services or mental health benefits and to the mental health services or mental health benefits. 2. Not include an aggregate lifetime limit on mental health services or mental health benefits that is less than the applicable lifetime limit for health services or health benefits that are not related to mental health services or mental health benefits. C. If the health benefits plan does not include an aggregate annual limit on substantially all health services or health benefits that are not related to mental health services or mental health benefits, the health benefits plan shall not impose any aggregate annual limit on mental health services or mental health benefits. If the health benefits plan includes an aggregate annual limit on substantially all health services or health benefits that are not related to mental health services or mental health benefits, the health benefits plan shall either: 1. Apply the applicable annual limit to both the health services or health benefits that are not related to mental health services or mental health benefits and to the mental health services or mental health benefits. 2. Not include any aggregate annual limit on mental health services or mental health benefits that is less than the applicable annual limit for health services or health benefits that are not related to mental health services or mental health benefits. D. Except as provided in subsections A, B and C, this section does not prevent an accountable health plan that offers a health benefits plan that provides mental health services or mental health benefits from imposing terms and conditions, including cost sharing, limits on the number of visits or days of coverage or requirements relating to medical necessity in relation to the amount, duration or scope of coverage for mental health services or mental health benefits under the health benefits plan. Nothing in this section requires an accountable health plan to: 1. Offer a health benefits plan that provides mental health services or mental health benefits. 2. Comply with this section in connection with any health benefits plan offered to a small employer. 3. Comply with this section if that compliance under the health benefits plan offered by the accountable health plan would result in an increase in the cost to the health benefits plan of at least one per cent. E. The requirements of this section apply separately to each health benefits plan offered by an accountable health plan and shall be consistent with title VII of the health insurance portability and accountability act of 1996 (P.L. 104-204; 110 Stat. 2944) and 45 Code of Federal Regulations part 146. F. Mental health services or mental health benefits do not include benefits for the treatment of substance abuse or chemical dependency. G. For the purposes of this section: 1. "Aggregate annual limit" means a dollar limitation on the total amount that may be paid in a twelve month period for benefits or services under a health benefits plan for an individual who is covered under a health benefits plan. 2. "Aggregate lifetime limit" means a dollar limitation on the total amount that may be paid for benefits or services under a health benefits plan for an individual who is covered under a health benefits plan. 20-2324. Bona fide associations; definitions A. An association qualifies as a bona fide association if the association either: 1. Meets the following requirements: (a) Has been formed and maintained in good faith for purposes other than obtaining insurance and does not condition membership in the association on the purchase of insurance that is sponsored by the association. (b) Has a constitution and bylaws. (c) Insures at least twenty-five members, employees or employees of members of the association for the benefit of persons other than the association or its officers or trustees. (d) Does not condition membership in the association on any health status-related factor relating to an individual, including an employee of an employer or a dependent of an employee, and clearly states this in all membership and application materials. (e) Makes health benefits plans offered through the association available to all members regardless of any health status-related factor relating to any member of the association or individual eligible for coverage through a member and clearly states this in all membership and application materials. (f) Does not make health benefits plans offered through the association available other than in connection with a member of the association and clearly states this in all membership and application materials. 2. Meets the requirements of an employer as defined in the employee retirement income security act of 1974 (P.L. 93-406; 88 Stat. 829; 29 United States Code section 1002). An insurer electing to offer health benefits plans through a bona fide association to small employer groups of one, which may include sole proprietors or working owners, is not required to make health benefits plans available under section 20-2304, subsection A to small employer groups of one if the small employer is not seeking a health benefits plan through a bona fide association. B. The requirements of section 20-2304, subsection A do not apply to health benefits plans offered by an accountable health plan if the accountable health plan makes this coverage available in the small group market only through one or more bona fide associations. C. The department may survey insurers issuing health benefits plans to determine the number of health benefits plans issued to bona fide associations in this state each year. D. This section does not limit or prohibit the operation of a self-funded multiple employer welfare arrangement in this state through any of the following: 1. A bona fide association if the bona fide association is established and operating in compliance with applicable provisions of the employee retirement income security act of 1974. 2. A statewide chamber of commerce or a statewide business league that meets all of the following criteria: (a) The statewide chamber of commerce or the statewide business league has a constitution or bylaws. (b) The statewide chamber of commerce or the statewide business league was organized and has been maintained in good faith for a continuous five-year period for purposes other than providing for or obtaining insurance. (c) The statewide chamber of commerce or statewide business league is exempt from federal taxation pursuant to section 501(c)(6) of the internal revenue code. E. The department retains the authority to investigate whether an association is unlawfully transacting insurance in violation of this title. F. For the purposes of subsection A, paragraph 1 of this section, "employees" includes retired employees. G. For the purposes of this section: 1. "Small employer" includes, if an insurer elects to issue coverage to small employer groups of one: (a) For health benefits plans issued through a bona fide association, an employer who employs at least one but not more than fifty eligible employees on a typical business day during any one calendar year. (b) For health benefits plans issued through a statewide chamber of commerce or a statewide business league, a sole proprietor or working owner. 2. "Sole proprietor" means a person who is a working owner, who owns a business and who does not operate the business using any type of entity. 3. "Working owner" means a person who a responsible plan fiduciary reasonably determines is an individual who meets all of the following requirements: (a) Has an ownership right of any nature in a trade or business, whether incorporated or unincorporated, including a partner and another self-employed individual. (b) Is earning wages or self-employment income from the trade or business for providing personal services to the trade or business. (c) Either: (i) Works on average at least twenty hours per week or at least eighty hours per month providing personal services to the trade or business. (ii) Has wages or self-employment income from the trade or business that at least equals the working owner's cost of coverage for participation by the working owner and any covered beneficiaries in the group health plan sponsored by the association in which the individual is participating. 20-2325. Diabetes; equipment; supplies A. Any health benefits plan that is offered by an accountable health plan and that provides coverage for diabetes shall also provide coverage for equipment and supplies that are medically necessary and that are prescribed by a health care provider, including: 1. Blood glucose monitors. 2. Blood glucose monitors for the legally blind. 3. Test strips for glucose monitors and visual reading and urine testing strips. 4. Insulin preparations and glucagon. 5. Insulin cartridges. 6. Drawing up devices and monitors for the visually impaired. 7. Injection aids. 8. Insulin cartridges for the legally blind. 9. Syringes and lancets including automatic lancing devices. 10. Prescribed oral agents for controlling blood sugar that are included on the plan formulary. 11. To the extent coverage is required under medicare, podiatric appliances for prevention of complications associated with diabetes. 12. Any other device, medication, equipment or supply for which coverage is required under medicare from and after January 1, 1999. The coverage required in this paragraph is effective six months after the coverage is required under medicare. B. Nothing in subsection A of this section: 1. Entitles a member or enrollee of an accountable health plan to equipment or supplies for the treatment of diabetes that are not medically necessary as determined by the accountable health plan's medical director or the medical director's designee. 2. Provides coverage for diabetic supplies obtained by a member or enrollee of an accountable health plan without a prescription unless otherwise permitted pursuant to the terms of the health benefits plan. 3. Prohibits an accountable health plan from imposing deductibles, coinsurance or other cost sharing in relation to benefits for equipment or supplies for the treatment of diabetes. 20-2326. Drugs; cancer treatment; definitions A. Any health benefits plan that is offered by an accountable health plan and that provides coverage for prescription drugs shall not limit or exclude coverage for any prescription drug prescribed for the treatment of cancer on the basis that the prescription drug has not been approved by the United States food and drug administration for the treatment of the specific type of cancer for which the prescription drug has been prescribed, if the prescription drug has been recognized as safe and effective for treatment of that specific type of cancer in one or more of the standard medical reference compendia prescribed in subsection B or medical literature that meets the criteria prescribed in subsection B. The coverage required under this subsection includes covered medically necessary services associated with the administration of the prescription drug. This subsection does not: 1. Require coverage of any prescription drug used in the treatment of a type of cancer if the United States food and drug administration has determined that the prescription drug is contraindicated for that type of cancer. 2. Require coverage for any experimental prescription drug that is not approved for any indication by the United States food and drug administration. 3. Alter any law with regard to provisions that limit the coverage of prescription drugs that have not been approved by the United States food and drug administration. 4. Require reimbursement or coverage for any prescription drug that is not included in the drug formulary or list of covered prescription drugs specified in the health benefits plan. 5. Prohibit a health benefits plan from limiting or excluding coverage of a prescription drug, if the decision to limit or exclude coverage of the prescription drug is not based primarily on the coverage of prescription drugs required by this section. 6. Prohibit the use of deductibles, coinsurance, copayments or other cost sharing in relation to drug benefits and related medical benefits offered. B. For the purposes of subsection A: 1. The acceptable standard medical reference compendia are the following: (a) The American hospital formulary service drug information, a publication of the American society of health system pharmacists. (b) The national comprehensive cancer network drugs and biologics compendium. (c) Thomson Micromedex compendium DrugDex. (d) Elsevier gold standard's clinical pharmacology compendium. (e) Other authoritative compendia as identified by the secretary of the United States department of health and human services. 2. Medical literature may be accepted if all of the following apply: (a) At least two articles from major peer reviewed professional medical journals have recognized, based on scientific or medical criteria, the drug's safety and effectiveness for treatment of the indication for which the drug has been prescribed. (b) No article from a major peer reviewed professional medical journal has concluded, based on scientific or medical criteria, that the drug is unsafe or ineffective or that the drug's safety and effectiveness cannot be determined for the treatment of the indication for which the drug has been prescribed. (c) The literature meets the uniform requirements for manuscripts submitted to biomedical journals established by the international committee of medical journal editors or is published in a journal specified by the United States department of health and human services as acceptable peer reviewed medical literature pursuant to section 186(t)(2)(B) of the social security act (42 United States Code section 1395x(t)(2)(B)). 20-2327. Metabolic disorders; medical foods; definitions A. Any health benefits plan that is offered by an accountable health plan and that contains a prescription drug benefit shall provide coverage of medical foods to treat inherited metabolic disorders as provided by this section. B. The metabolic disorders triggering medical foods coverage under this section shall: 1. Be part of the newborn screening program prescribed in section 36-694. 2. Involve amino acid, carbohydrate or fat metabolism. 3. Have medically standard methods of diagnosis, treatment and monitoring, including quantification of metabolites in blood, urine or spinal fluid or enzyme or DNA confirmation in tissues. 4. Require specially processed or treated medical foods that are generally available