§ 27-50-3 - Definitions. [Effective until December 31, 2010.]. - Rhode Island Statutes

SECTION 27-50-3

   § 27-50-3  Definitions. [Effectiveuntil December 31, 2010.]. – (a) "Actuarial certification" means a written statement signed by a member ofthe American Academy of Actuaries or other individual acceptable to thedirector that a small employer carrier is in compliance with the provisions of§ 27-50-5, based upon the person's examination and including a review ofthe appropriate records and the actuarial assumptions and methods used by thesmall employer carrier in establishing premium rates for applicable healthbenefit plans.

   (b) "Adjusted community rating" means a method used todevelop a carrier's premium which spreads financial risk across the carrier'sentire small group population in accordance with the requirements in §27-50-5.

   (c) "Affiliate" or "affiliated" means any entity or personwho directly or indirectly through one or more intermediaries controls or iscontrolled by, or is under common control with, a specified entity or person.

   (d) "Affiliation period" means a period of time that mustexpire before health insurance coverage provided by a carrier becomeseffective, and during which the carrier is not required to provide benefits.

   (e) "Bona fide association" means, with respect to healthbenefit plans offered in this state, an association which:

   (1) Has been actively in existence for at least five (5)years;

   (2) Has been formed and maintained in good faith for purposesother than obtaining insurance;

   (3) Does not condition membership in the association on anyhealth-status related factor relating to an individual (including an employeeof an employer or a dependent of an employee);

   (4) Makes health insurance coverage offered through theassociation available to all members regardless of any health status-relatedfactor relating to those members (or individuals eligible for coverage througha member);

   (5) Does not make health insurance coverage offered throughthe association available other than in connection with a member of theassociation;

   (6) Is composed of persons having a common interest orcalling;

   (7) Has a constitution and bylaws; and

   (8) Meets any additional requirements that the director mayprescribe by regulation.

   (f) "Carrier" or "small employer carrier" means all entitieslicensed, or required to be licensed, in this state that offer health benefitplans covering eligible employees of one or more small employers pursuant tothis chapter. For the purposes of this chapter, carrier includes an insurancecompany, a nonprofit hospital or medical service corporation, a fraternalbenefit society, a health maintenance organization as defined in chapter 41 ofthis title or as defined in chapter 62 of title 42, or any other entity subjectto state insurance regulation that provides medical care as defined insubsection (y) that is paid or financed for a small employer by such entity onthe basis of a periodic premium, paid directly or through an association,trust, or other intermediary, and issued, renewed, or delivered within orwithout Rhode Island to a small employer pursuant to the laws of this or anyother jurisdiction, including a certificate issued to an eligible employeewhich evidences coverage under a policy or contract issued to a trust orassociation.

   (g) "Church plan" has the meaning given this term under§ 3(33) of the Employee Retirement Income Security Act of 1974 [29U.S.C. § 1002(33)].

   (h) "Control" is defined in the same manner as in chapter 35of this title.

   (i) "Creditable coverage" means, with respect to anindividual, health benefits or coverage provided under any of the following:

   (i) A group health plan;

   (ii) A health benefit plan;

   (iii) Part A or part B of Title XVIII of the Social SecurityAct, 42 U.S.C. § 1395c et seq., or 42 U.S.C. § 1395j et seq.,(Medicare);

   (iv) Title XIX of the Social Security Act, 42 U.S.C. §1396 et seq., (Medicaid), other than coverage consisting solely of benefitsunder 42 U.S.C. § 1396s (the program for distribution of pediatricvaccines);

   (v) 10 U.S.C. § 1071 et seq., (medical and dental carefor members and certain former members of the uniformed services, and for theirdependents)(Civilian Health and Medical Program of the UniformedServices)(CHAMPUS). For purposes of 10 U.S.C. § 1071 et seq., "uniformedservices" means the armed forces and the commissioned corps of the NationalOceanic and Atmospheric Administration and of the Public Health Service;

   (vi) A medical care program of the Indian Health Service orof a tribal organization;

   (vii) A state health benefits risk pool;

   (viii) A health plan offered under 5 U.S.C. § 8901 etseq., (Federal Employees Health Benefits Program (FEHBP));

   (ix) A public health plan, which for purposes of thischapter, means a plan established or maintained by a state, county, or otherpolitical subdivision of a state that provides health insurance coverage toindividuals enrolled in the plan; or

   (x) A health benefit plan under § 5(e) of the PeaceCorps Act (22 U.S.C. § 2504(e)).

   (2) A period of creditable coverage shall not be counted,with respect to enrollment of an individual under a group health plan, if,after the period and before the enrollment date, the individual experiences asignificant break in coverage.

   (j) "Dependent" means a spouse, an unmarried child under theage of nineteen (19) years, an unmarried child who is a student under the ageof twenty-five (25) years, and an unmarried child of any age who is financiallydependent upon, the parent and is medically determined to have a physical ormental impairment which can be expected to result in death or which has lastedor can be expected to last for a continuous period of not less than twelve (12)months.

   (k) "Director" means the director of the department ofbusiness regulation.

   (l) [Deleted by P.L. 2006, ch. 258, § 2, and P.L.2006, ch. 296, § 2.]

   (m) "Eligible employee" means an employee who works on afull-time basis with a normal work week of thirty (30) or more hours, exceptthat at the employer's sole discretion, the term shall also include an employeewho works on a full-time basis with a normal work week of anywhere between atleast seventeen and one-half (17.5) and thirty (30) hours, so long as thiseligibility criterion is applied uniformly among all of the employer'semployees and without regard to any health status-related factor. The termincludes a self-employed individual, a sole proprietor, a partner of apartnership, and may include an independent contractor, if the self-employedindividual, sole proprietor, partner, or independent contractor is included asan employee under a health benefit plan of a small employer, but does notinclude an employee who works on a temporary or substitute basis or who worksless than seventeen and one-half (17.5) hours per week. Any retiree undercontract with any independently incorporated fire district is also included inthe definition of eligible employee. Persons covered under a health benefitplan pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1986shall not be considered "eligible employees" for purposes of minimumparticipation requirements pursuant to § 27-50-7(d)(9).

   (n) "Enrollment date" means the first day of coverage or, ifthere is a waiting period, the first day of the waiting period, whichever isearlier.

   (o) "Established geographic service area" means a geographicarea, as approved by the director and based on the carrier's certificate ofauthority to transact insurance in this state, within which the carrier isauthorized to provide coverage.

   (p) "Family composition" means:

   (1) Enrollee;

   (2) Enrollee, spouse and children;

   (3) Enrollee and spouse; or

   (4) Enrollee and children.

   (q) "Genetic information" means information about genes, geneproducts, and inherited characteristics that may derive from the individual ora family member. This includes information regarding carrier status andinformation derived from laboratory tests that identify mutations in specificgenes or chromosomes, physical medical examinations, family histories, anddirect analysis of genes or chromosomes.

   (r) "Governmental plan" has the meaning given the term under§ 3(32) of the Employee Retirement Income Security Act of 1974, 29 U.S.C.§ 1002(32), and any federal governmental plan.

   (s) "Group health plan" means an employee welfare benefitplan as defined in § 3(1) of the Employee Retirement Income Security Actof 1974, 29 U.S.C. § 1002(1), to the extent that the plan provides medicalcare, as defined in subsection (y) of this section, and including items andservices paid for as medical care to employees or their dependents as definedunder the terms of the plan directly or through insurance, reimbursement, orotherwise.

   (2) For purposes of this chapter:

   (i) Any plan, fund, or program that would not be, but forPHSA Section 2721(e), 42 U.S.C. § 300gg(e), as added by P.L. 104-191, anemployee welfare benefit plan and that is established or maintained by apartnership, to the extent that the plan, fund or program provides medicalcare, including items and services paid for as medical care, to present orformer partners in the partnership, or to their dependents, as defined underthe terms of the plan, fund or program, directly or through insurance,reimbursement or otherwise, shall be treated, subject to paragraph (ii) of thissubdivision, as an employee welfare benefit plan that is a group health plan;

   (ii) In the case of a group health plan, the term "employer"also includes the partnership in relation to any partner; and

   (iii) In the case of a group health plan, the term"participant" also includes an individual who is, or may become, eligible toreceive a benefit under the plan, or the individual's beneficiary who is, ormay become, eligible to receive a benefit under the plan, if:

   (A) In connection with a group health plan maintained by apartnership, the individual is a partner in relation to the partnership; or

   (B) In connection with a group health plan maintained by aself-employed individual, under which one or more employees are participants,the individual is the self-employed individual.

   (t) "Health benefit plan" means any hospital or medicalpolicy or certificate, major medical expense insurance, hospital or medicalservice corporation subscriber contract, or health maintenance organizationsubscriber contract. Health benefit plan includes short-term and catastrophichealth insurance policies, and a policy that pays on a cost-incurred basis,except as otherwise specifically exempted in this definition.

   (2) "Health benefit plan" does not include one or more, orany combination of, the following:

   (i) Coverage only for accident or disability incomeinsurance, or any combination of those;

   (ii) Coverage issued as a supplement to liability insurance;

   (iii) Liability insurance, including general liabilityinsurance and automobile liability insurance;

   (iv) Workers' compensation or similar insurance;

   (v) Automobile medical payment insurance;

   (vi) Credit-only insurance;

   (vii) Coverage for on-site medical clinics; and

   (viii) Other similar insurance coverage, specified in federalregulations issued pursuant to Pub. L. No. 104-191, under which benefits formedical care are secondary or incidental to other insurance benefits.

   (3) "Health benefit plan" does not include the followingbenefits if they are provided under a separate policy, certificate, or contractof insurance or are otherwise not an integral part of the plan:

   (i) Limited scope dental or vision benefits;

   (ii) Benefits for long-term care, nursing home care, homehealth care, community-based care, or any combination of those; or

   (iii) Other similar, limited benefits specified in federalregulations issued pursuant to Pub. L. No. 104-191.

   (4) "Health benefit plan" does not include the followingbenefits if the benefits are provided under a separate policy, certificate orcontract of insurance, there is no coordination between the provision of thebenefits and any exclusion of benefits under any group health plan maintainedby the same plan sponsor, and the benefits are paid with respect to an eventwithout regard to whether benefits are provided with respect to such an eventunder any group health plan maintained by the same plan sponsor:

   (i) Coverage only for a specified disease or illness; or

   (ii) Hospital indemnity or other fixed indemnity insurance.

   (5) "Health benefit plan" does not include the following ifoffered as a separate policy, certificate, or contract of insurance:

   (i) Medicare supplemental health insurance as defined under§ 1882(g)(1) of the Social Security Act, 42 U.S.C. § 1395ss(g)(1);

   (ii) Coverage supplemental to the coverage provided under 10U.S.C. § 1071 et seq.; or

   (iii) Similar supplemental coverage provided to coverageunder a group health plan.

   (6) A carrier offering policies or certificates of specifieddisease, hospital confinement indemnity, or limited benefit health insuranceshall comply with the following:

   (i) The carrier files on or before March 1 of each year acertification with the director that contains the statement and informationdescribed in paragraph (ii) of this subdivision;

   (ii) The certification required in paragraph (i) of thissubdivision shall contain the following:

   (A) A statement from the carrier certifying that policies orcertificates described in this paragraph are being offered and marketed assupplemental health insurance and not as a substitute for hospital or medicalexpense insurance or major medical expense insurance; and

   (B) A summary description of each policy or certificatedescribed in this paragraph, including the average annual premium rates (orrange of premium rates in cases where premiums vary by age or other factors)charged for those policies and certificates in this state; and

   (iii) In the case of a policy or certificate that isdescribed in this paragraph and that is offered for the first time in thisstate on or after July 13, 2000, the carrier shall file with the director theinformation and statement required in paragraph (ii) of this subdivision atleast thirty (30) days prior to the date the policy or certificate is issued ordelivered in this state.

   (u) "Health maintenance organization" or "HMO" means a healthmaintenance organization licensed under chapter 41 of this title.

   (v) "Health status-related factor" means any of the followingfactors:

   (1) Health status;

   (2) Medical condition, including both physical and mentalillnesses;

   (3) Claims experience;

   (4) Receipt of health care;

   (5) Medical history;

   (6) Genetic information;

   (7) Evidence of insurability, including conditions arisingout of acts of domestic violence; or

   (8) Disability.

   (w) "Late enrollee" means an eligible employee or dependentwho requests enrollment in a health benefit plan of a small employer followingthe initial enrollment period during which the individual is entitled to enrollunder the terms of the health benefit plan, provided that the initialenrollment period is a period of at least thirty (30) days.

   (2) "Late enrollee" does not mean an eligible employee ordependent:

   (i) Who meets each of the following provisions:

   (A) The individual was covered under creditable coverage atthe time of the initial enrollment;

   (B) The individual lost creditable coverage as a result ofcessation of employer contribution, termination of employment or eligibility,reduction in the number of hours of employment, involuntary termination ofcreditable coverage, or death of a spouse, divorce or legal separation, or theindividual and/or dependents are determined to be eligible for RIteCare underchapter 5.1 of title 40 or chapter 12.3 of title 42 or for RIteShare underchapter 8.4 of title 40; and

   (C) The individual requests enrollment within thirty (30)days after termination of the creditable coverage or the change in conditionsthat gave rise to the termination of coverage;

   (ii) If, where provided for in contract or where otherwiseprovided in state law, the individual enrolls during the specified bona fideopen enrollment period;

   (iii) If the individual is employed by an employer whichoffers multiple health benefit plans and the individual elects a different planduring an open enrollment period;

   (iv) If a court has ordered coverage be provided for a spouseor minor or dependent child under a covered employee's health benefit plan anda request for enrollment is made within thirty (30) days after issuance of thecourt order;

   (v) If the individual changes status from not being aneligible employee to becoming an eligible employee and requests enrollmentwithin thirty (30) days after the change in status;

   (vi) If the individual had coverage under a COBRAcontinuation provision and the coverage under that provision has beenexhausted; or

   (vii) Who meets the requirements for special enrollmentpursuant to § 27-50-7 or 27-50-8.

   (x) "Limited benefit health insurance" means that form ofcoverage that pays stated predetermined amounts for specific services ortreatments or pays a stated predetermined amount per day or confinement for oneor more named conditions, named diseases or accidental injury.

   (y) "Medical care" means amounts paid for:

   (1) The diagnosis, care, mitigation, treatment, or preventionof disease, or amounts paid for the purpose of affecting any structure orfunction of the body;

   (2) Transportation primarily for and essential to medicalcare referred to in subdivision (1); and

   (3) Insurance covering medical care referred to insubdivisions (1) and (2) of this subsection.

   (z) "Network plan" means a health benefit plan issued by acarrier under which the financing and delivery of medical care, including itemsand services paid for as medical care, are provided, in whole or in part,through a defined set of providers under contract with the carrier.

   (aa) "Person" means an individual, a corporation, apartnership, an association, a joint venture, a joint stock company, a trust,an unincorporated organization, any similar entity, or any combination of theforegoing.

   (bb) "Plan sponsor" has the meaning given this term under§ 3(16)(B) of the Employee Retirement Income Security Act of 1974, 29U.S.C. § 1002(16)(B).

   (cc) "Preexisting condition" means a condition, regardless ofthe cause of the condition, for which medical advice, diagnosis, care, ortreatment was recommended or received during the six (6) months immediatelypreceding the enrollment date of the coverage.

   (2) "Preexisting condition" does not mean a condition forwhich medical advice, diagnosis, care, or treatment was recommended or receivedfor the first time while the covered person held creditable coverage and thatwas a covered benefit under the health benefit plan, provided that the priorcreditable coverage was continuous to a date not more than ninety (90) daysprior to the enrollment date of the new coverage.

   (3) Genetic information shall not be treated as a conditionunder subdivision (1) of this subsection for which a preexisting conditionexclusion may be imposed in the absence of a diagnosis of the condition relatedto the information.

   (dd) "Premium" means all moneys paid by a small employer andeligible employees as a condition of receiving coverage from a small employercarrier, including any fees or other contributions associated with the healthbenefit plan.

   (ee) "Producer" means any insurance producer licensed underchapter 2.4 of this title.

   (ff) "Rating period" means the calendar period for whichpremium rates established by a small employer carrier are assumed to be ineffect.

   (gg) "Restricted network provision" means any provision of ahealth benefit plan that conditions the payment of benefits, in whole or inpart, on the use of health care providers that have entered into a contractualarrangement with the carrier pursuant to provide health care services tocovered individuals.

   (hh) "Risk adjustment mechanism" means the mechanismestablished pursuant to § 27-50-16.

   (ii) "Self-employed individual" means an individual or soleproprietor who derives a substantial portion of his or her income from a tradeor business through which the individual or sole proprietor has attempted toearn taxable income and for which he or she has filed the appropriate InternalRevenue Service Form 1040, Schedule C or F, for the previous taxable year.

   (jj) "Significant break in coverage" means a period of ninety(90) consecutive days during all of which the individual does not have anycreditable coverage, except that neither a waiting period nor an affiliationperiod is taken into account in determining a significant break in coverage.

   (kk) "Small employer" means, except for its use in §27-50-7, any person, firm, corporation, partnership, association, politicalsubdivision, or self-employed individual that is actively engaged in businessincluding, but not limited to, a business or a corporation organized under theRhode Island Non-Profit Corporation Act, chapter 6 of title 7, or a similar actof another state that, on at least fifty percent (50%) of its working daysduring the preceding calendar quarter, employed no more than fifty (50)eligible employees, with a normal work week of thirty (30) or more hours, themajority of whom were employed within this state, and is not formed primarilyfor purposes of buying health insurance and in which a bona fideemployer-employee relationship exists. In determining the number of eligibleemployees, companies that are affiliated companies, or that are eligible tofile a combined tax return for purposes of taxation by this state, shall beconsidered one employer. Subsequent to the issuance of a health benefit plan toa small employer and for the purpose of determining continued eligibility, thesize of a small employer shall be determined annually. Except as otherwisespecifically provided, provisions of this chapter that apply to a smallemployer shall continue to apply at least until the plan anniversary followingthe date the small employer no longer meets the requirements of thisdefinition. The term small employer includes a self-employed individual.

   ( ll ) "Waiting period" means, with respect to a group healthplan and an individual who is a potential enrollee in the plan, the period thatmust pass with respect to the individual before the individual is eligible tobe covered for benefits under the terms of the plan. For purposes ofcalculating periods of creditable coverage pursuant to subsection (j)(2) ofthis section, a waiting period shall not be considered a gap in coverage.

   (mm) "Wellness health benefit plan" means a plan developedpursuant to § 27-50-10.

   (nn) "Health insurance commissioner" or "commissioner" meansthat individual appointed pursuant to § 42-14.5-1 of the general laws andafforded those powers and duties as set forth in §§ 42-14.5-2 and42-14.5-3 of title 42.

   (oo) "Low-wage firm" means those with average wages that fallwithin the bottom quartile of all Rhode Island employers.

   (pp) "Wellness health benefit plan" means the health benefitplan offered by each small employer carrier pursuant to § 27-50-7.

   (qq) "Commissioner" means the health insurance commissioner.

   (rr) "Basic benefit health plan" means a lower cost healthbenefit plan developed pursuant to § 27-50-10.1.

   (ss) "Uninsured small employer" means a small employer asdefined in subsection 27-50-3(kk) that has not provided health insurancecoverage to its employees within the last twelve (12) months. A small employershall be considered to have provided health insurance coverage if the smallemployer has both arranged for such coverage and contributed toward healthinsurance coverage.