When state law on how health insurers handle complaints conflicts with federal law, market conduct examiners may need to base examinations on the applicable state law, especially when state law goes beyond the federal health care law requirements, state regulators have written in a recent market conduct exam standards draft.
Examiners may have their work cut out for them with efforts to follow both the state and federal statutes and make sure the higher standard is followed.
The NAIC is updating the health insurance market conduct examination, Chapter 20 in the Market Regulation Handbook, as part of revisions to the entire handbook, with new Standards for the Patient Protection and Affordable Care Act (PPACA.) A new series of drafts was dated December 13.
Examiners will need to be well-versed in PPACA and also cognizant of their state laws to make sure health insurers are well-regulated and in compliance.
For example, examiners should be aware that, with regard to reinstatement of coverage, an individual enrolling in a health benefit plan for group health insurance coverage is to be treated by the health carrier as if the individual were a special enrollee in the plan, as provided under federal regulations, a policyholder service standards section states.
In many instances, examiners will need to monitor websites. They must verify that the health carrier maintains proper documentation for all correspondence supporting the corrective action provided to the insured, including website notifications.
Examiners also must verify that, when a health benefit plan receives a waiver from the U.S. Department of Health and Human Services (HHS), the health carrier notifies prospective applicants, affected policyholders and the commissioner in each state where prospective applicants and any affected insured are known to reside.
Examiners must also make sure that a health carrier does not deny or unreasonably delay the issuance of a policy, refuse to issue a policy or issue a policy with any preexisting condition exclusion rider or endorsement to an applicant or insured who is under the age of 19 on the basis of a preexisting condition.
The examiners must also make sure that the health insurer has established written complaint handling policy/procedures regarding compliance with PPACA-related restrictions on limitations or exclusions of coverage on any individual under the age of 19.
The NAIC has model language supporting the PPACA requirements and must now review companies to make sure they are compliant, including maintaining proper documentation and having an established written complaint handling policy as many new insureds come into the market. Standards are based on NAIC adopted model language, which is based upon federal health care law, but may go beyond it.
In other PPACA-related news, HHS Secretary Kathleen Sebelius today announced that three more states are on track to implement the health care law and establish health insurance marketplaces, or exchanges, in their states. HHS issued the first conditional approval of a State Partnership Exchange to Delaware and Minnesota and Rhode Island to operate a state-based exchange.
Today’s conditional approvals follow those issued last week to Colorado, Connecticut, the District of Columbia, Kentucky, Massachusetts, Maryland, New York, Oregon, and Washington to operate state-based exchanges.
Most states will begin with a federal exchange, or partnership on January 1, 2014, when the doors to the exchange open. The federal government is ready to enforce, if need be, Gary Cohen, director of the Center for Consumer Information and Insurance Oversight (CCIIO), has said—if states cannot or are unwilling to. Many are concerned with costs to taxpayers and some are trying to bridge the gap that existed before the election reinforced the staying power of the PPACA as the law of the land.