§1073.  Guaranteed availability of individual health insurance coverage to certain individuals with prior group or individual coverage

A.(1)  Except as otherwise provided for in this Section, each health insurance issuer that offers health insurance coverage, as defined in R.S. 22:1061(2)(a), in the individual market of the state may not, with respect to an eligible individual, as defined in Subsection B of this Section, desiring to enroll in individual health insurance coverage:

(a)  Decline to offer such coverage to, or deny enrollment of, such individual.

(b)  Impose any preexisting condition exclusion, as defined in R.S. 22:1061(5)(p), with respect to such coverage.

(2)  The requirement of Subparagraph (1)(a) of this Subsection shall not apply to health insurance coverage offered in the individual market where the state has adopted an alternative mechanism authorized by the Health Insurance Portability and Accountability Act of 1996 which has not been found to be unacceptable by the secretary of the United States Department of Health and Human Services.

B.  As used in this Section, the term "eligible individual" means an individual who meets the requirements of Subsection H of this Section or an individual:

(1)(a)  For whom, as of the date on which the individual seeks coverage under this Section, the aggregate of the periods of creditable coverage is eighteen or more months.

(b)  Whose most recent prior creditable coverage was under a group health plan, governmental plan, or church plan, or health insurance coverage offered in connection with any such plan.

(2)  Who does not have other insurance coverage and is not eligible for coverage under:

(a)  A group health plan.

(b)  Medicare coverage under 42 USC 1395 et seq.

(c)  A state Medicaid program or any successor program.

(3)  With respect to whom the most recent coverage within the coverage period described in Subparagraph (1)(a) of this Subsection was not terminated based on a factor described in R.S. 22:1068(B)(1) or (2), relating to nonpayment of premiums or fraud.

(4)  Who, if offered the option of continuation of coverage under a COBRA continuation provision or under a similar state program, elected this coverage.

(5)  Who, if the individual elected such continuation coverage, has exhausted such continuation coverage under such provision or program.

C.(1)  In the case of health insurance coverage offered in the individual market where the state has not adopted an acceptable alternative mechanism, the health insurance issuer may elect to limit the coverage offered under Subsection A of this Section so long as it offers at least two different policy forms of health insurance coverage both of which:

(a)  Are designed for, made generally available to, and actively marketed to, and enroll both eligible and other individuals by the issuer.

(b)  Meet the requirement of Paragraph (2) or (3) of this Subsection, as elected by the issuer.  For purposes of this Subsection, policy forms which have different cost-sharing arrangements or different riders shall be considered to be different policy forms.

(2)  The requirement of this Paragraph is met, for health insurance coverage policy forms offered by an issuer in the individual market, if the issuer offers the policy forms for individual health insurance coverage with the largest, and next to largest, premium volume of all such policy forms offered by the issuer in the state or applicable marketing or service area, as may be prescribed in regulation, by the issuer in the individual market in the period involved.

(3)(a)  The requirement of this Paragraph is met, for health insurance coverage policy forms offered by an issuer in the individual market, if the issuer offers a lower-level coverage policy form, as defined in Subparagraph (b) of this Paragraph, and a higher-level coverage policy form, as defined in Subparagraph (c) of this Paragraph, each of which includes benefits substantially similar to other individual health insurance coverage offered by the issuer in the state and each of which provides for risk adjustment, risk spreading, or a risk spreading mechanism, among the policies of an issuer or otherwise provides for some financial subsidization for eligible individuals.

(b)  A policy form is described in this Subparagraph if the actuarial value of the benefits under the coverage is at least eighty-five percent but not greater than one hundred percent of a weighted average, described in Subparagraph (d) of this Paragraph.

(c)  A policy form is described in this Subparagraph if

(i)  The actuarial value of the benefits under the coverage is at least fifteen percent greater than the actuarial value of the coverage described in Subparagraph (b) of this Paragraph offered by the issuer in the state.

(ii)  The actuarial value of the benefits under the coverage is at least one hundred percent but not greater than one hundred and twenty percent of a weighted average, described in Subparagraph (d) of this Paragraph.

(d)  For purposes of this Paragraph, the weighted average described in this Subparagraph is the average actuarial value of the benefits provided by all the health insurance coverage issued, as elected by the issuer, either by that issuer or by all issuers in the state in the individual market during the previous year, not including coverage issued under this Section, weighted by enrollment for the different coverage.

(4)  The issuer elections under this Subsection shall apply uniformly to all eligible individuals in the state for that issuer. Such an election shall be effective for policies offered during a period of not shorter than two years.

(5)  For purposes of Paragraph (3) of this Subsection, the actuarial value of benefits provided under individual health insurance coverage shall be calculated based on a standardized population and a set of standardized utilization and cost factors.

D.(1)  In the case of a health insurance issuer that offers health insurance coverage in the individual market through a network plan, the issuer may:

(a)  Limit the individuals who may be enrolled under such coverage to those who live, reside, or work within the service area for such network plan.

(b)  Within the service area of such plan, deny such coverage to such individuals if the issuer has demonstrated to the commissioner of insurance that:

(i)  It will not have the capacity to deliver services adequately to additional individual enrollees because of its obligations to existing group contract holders and enrollees and individual enrollees.

(ii)  It is applying this Paragraph uniformly to individuals without regard to any health status-related factor of such individuals and without regard to whether the individuals are eligible individuals.

(2)  An issuer, upon denying health insurance coverage in any service area in accordance with Subparagraph (1)(b) of this Subsection, may not offer coverage in the individual market within such service area for a period of one hundred eighty days after such coverage is denied.

E.(1)  A health insurance issuer may deny health insurance coverage in the individual market to an eligible individual if the issuer has demonstrated to the commissioner of insurance that:

(a)  It does not have the financial reserves necessary to underwrite additional coverage.

(b)  It is applying this Paragraph uniformly to all individuals in the individual market in the state consistent with applicable state law and without regard to any health status-related factor of such individuals and without regard to whether the individuals are eligible individuals.

(2)  An issuer upon denying individual health insurance coverage in any service area in accordance with Paragraph (1) of this Subsection may not offer such coverage in the individual market within such service area for a period of one hundred eighty days after the date such coverage is denied or until the issuer has demonstrated to the commissioner of insurance that the issuer has sufficient financial reserves to underwrite additional coverage, whichever is later. The commissioner of insurance may apply the requirements of this Paragraph on a service-area-specific basis.

F.(1)  The provisions of Subsection A of this Section shall not be construed to require that a health insurance issuer offering health insurance coverage only in connection with group health plans or through one or more bona fide associations, or both, offer such health insurance coverage in the individual market.

(2)  A health insurance issuer offering health insurance coverage in connection with group health plans under this Subpart shall not be deemed to be a health insurance issuer offering individual health insurance coverage solely because such issuer offers a conversion policy.

G.  Nothing in this Section shall be construed:

(1)  To restrict the amount of the premium rates that an issuer may charge an individual for health insurance coverage provided in the individual market under applicable state law.

(2)  To prevent a health insurance issuer offering health insurance coverage in the individual market from establishing premium discounts or rebates or modifying otherwise applicable copayments or deductibles in return for adherence to programs of health promotion and disease prevention.

H.  For purposes of this Section, "eligible individual" also means an individual who has had his individual health insurance coverage discontinued pursuant to R.S. 22:1074(C) and who is a resident of this state:

(1)  For whom, as of the date on which the individual seeks coverage under this Section, the aggregate of the periods of continuous health insurance coverage in this state is eighteen or more months with no breaks in such coverage in excess of sixty-three days.

(2)  Whose most recent prior creditable coverage was under  individual health insurance coverage.

(3)  Who does not have other health insurance coverage and is not eligible for coverage under:

(a)  A group health plan.

(b)  Medicare coverage under 42 USC 1395 et seq.

(c)  A state Medicaid program or any successor program.

(d)  An offer of individual health insurance coverage by a health insurance issuer that does not include exclusions from coverage.

(4)  With respect to whom the most recent coverage within the coverage period described in Paragraph (1) of this Subsection was not terminated based on a factor described in R.S. 22:1074(B)(1) or (2) relating to nonpayment of premiums or fraud.

Acts 1997, No. 1138, §1, eff. July 14, 1997; Acts 2001, No. 174, §1, eff. May 31, 2001; Redesignated from R.S. 22:250.12 by Acts 2008, No. 415, §1, eff. Jan. 1, 2009; Acts 2010, No. 123, §1, eff. June 8, 2010.

NOTE:  Former R.S. 22:1073 redesignated as R.S. 22:793 by Acts 2008, No. 415, §1, eff. Jan. 1, 2009.