With the recently completed legislative session, a number of bills affecting insurance activities in the state were passed. Below is a brief summary of each of the changes and the impact on OCI and the industry.
It is each insurer's responsibility to ensure its policy forms comply with new laws. Some of the changes noted below amend legislation that was recently enacted. Copies of the legislation are available from Legislative Documents, 1 East Main Street, Madison WI 53703, (608) 266-2400.
The changes listed below are individually approved legislation from the 1997-98 session.
Act 89 - Wrongful Death Caps - s. 655.016 and s. 895.04(4), Wis. Stat.
This bill raises the judgement for damages for pecuniary injury from wrongful death that may be awarded to any person entitled to bring wrongful death action to $500,000 for the death of a child and $350,000 for the death of an adult and expands the potential claimants to include minor siblings.
Effective Date: Affects actions commenced in court on or after April 28, 1998.
Act 215 - Certified Capital Corporations - s. 76.635 and Subch. II Ch. 560, Wis. Stat.
Act 215 allows insurance companies that pay a fee based on gross premium rather than income tax to claim a credit against their license fees their investments in certified capital corporations. A certified capital corporation provides venture capital financing to small businesses with 100 or fewer employees and annual revenues of less than $6 million. The Department of Commerce establishes and reviews the certification and is responsible for oversight of the certified capital corporation.
Effective Date: May 12, 1998
Act 93 - Hospital Acquisitions - s. 165.40, Wis. Stat.
This bill regulates the sale or lease of a non-profit hospital to a for-profit entity. A 3-person review panel, comprised of representatives from the Department of Justice, DHFS and OCI, must be satisfied that the sale meets the standards in the bill.
Effective Date: April 28, 1998
Act 79 - Non Stock Corporation Law - Ch. 181, Wis. Stat.
This act amends Ch. 181, Wis. Stat., the non-stock corporations law, to be consistent with the American Bar Association model act for non-stock corporations. Chs. 611, 612, 613 and 614, Wis. Stat., have been updated to be consistent with the new language.
Effective Date: April 28, 1998
Act 191 - Child Support Enforcement - s. 628.04, 628.09, and 632.68, Wis. Stat.
This bill makes a number of changes to child support enforcement practices, enabling the State to deny, suspend, or cancel business and professional licenses for individuals who are not current on child support payments. Insurance licensees are among those subject to these requirements. OCI is working with the Department of Workforce Development (DWD) on implementation of the requirements of this bill.
Effective Date: May 1, 1998
Act 51 - Notification to Employees of Termination of Health Insurance - s. 109.07 and 601.41, Wis. Stat.
Act 51 requires OCI to provide information and technical assistance to employees groups whose health insurance benefits have been terminated by their employer. OCI will be working with DWD to implement this requirement.
Effective Date: January 9, 1998
Act 74 - Use of Genetic Test Results - s. 631.89, Wis. Stat.
Act 74 clarifies the non-permissible uses of genetic test results by insurers. This bill expands on current law by prohibiting an insurer, as part of its health insurance underwriting procedures, from requesting or requiring a health care provider to reveal either that an individual or family member had a genetic test or the results of a genetic test. Insurers should review their underwriting and post-claims underwriting practices and procedures to verify that genetic test results are not included in any medical reports submitted to the insurer by health care providers.
Effective Date: April 24, 1998
Act 155 - Emergency Room Treatment - s. 632.85, Wis. Stat.
Act 155 requires health care plans or self-insured state, county, city, village, town or school district health plans that cover emergency medical services to provide coverage of emergency medical services in a hospital emergency facility that are needed to evaluate or stabilize an emergency medical condition. Health care plans may not require prior authorization for the provision or coverage of emergency medical services.
An emergency medical condition is defined as a medical condition involving acute symptoms that would lead a prudent layperson who possesses an average knowledge of health and medicine to reasonably conclude that a lack of immediate medical attention would result in serious jeopardy to the person's health, impairment to bodily functions or serious dysfunction to one or more organ parts.
Health plan is defined in s. 628.36 (2)(a)1., Wis. Stat., as an insurance contract providing coverage of health care expenses.
Effective Date: For policies that are issued or renewed on or after November 1, 1998. For self funded plans that are established, extended, modified or renewed on or after November 1, 1998.
Act 227 - Mutual Holding Companies - Ch. 644, Wis. Stat.
This bill allows for the conversion of a mutual insurance company into a stock insurance company and the formation of a mutual holding company in Wisconsin.
Effective Date: May 14, 1998
Act 177 - Fraternals - s. 614.19, Wis. Stat.
Act 177 is a technical amendment to the fraternals law, s. 614.19, Wis. Stat., so that it defines employees of fraternals to include retirees and dependents.
Effective Date: May 12, 1998
Act 237 - Budget Repair Bill
On June 2, 1998, Governor Thompson signed the budget repair bill into law as 1997 Act 237 with an effective date of June 17, 1998. The bill includes several provisions pertaining to insurance including:
Managed Care Plans - Ch. 609, Wis. Stat.
A new definition of managed care plan expands the requirement for grievance and complaint procedures to most health benefit plans that require or create incentives for enrollees to use plan providers. Limited scope policies or certificates covering dental, vision, long term care, and hospital indemnity are exempt from the requirements. The Commissioner is required to promulgate rules relating to preferred provider plans and managed care plans regarding excessive travel distances, continuity of care, and adequate notice of the opportunity to enroll in plans offered. Additional regulation of managed care plans including provider access standards, adequate provider choice, primary provider selection, specialist providers, second opinions, coverage of emergency care, telephone access, and access for members of underserved populations is contained in the law. Managed care plans are required to develop comprehensive quality assurance standards, a process for selection and evaluation of providers, clinical decision making and data systems and confidentiality.
Effective Date: Policies renewed or issued on or after January 1, 1999.
Income Tax Delinquencies - s. 632.68, 633.14 and 633.15, Wis. Stat.
Similar to Act 191, OCI is barred from issuing, and must revoke insurance licenses for individuals who are delinquent on income tax payments.
Effective Date: With licenses that renew on or after June 17, 1998.
Short-Term Health Insurance Coverage - s. 632.7495 (4), Wis. Stat.
Insurers are not required to renew individual health benefit plans coverage that is marketed and designed to provide short-term coverage.
Effective Date: With policies that are issued or renewed on or after June 17, 1998.
Coverage of Drugs and Devices - s. 632.853, Wis. Stat.
All health care plans that provide coverage of only certain specified prescription drugs or devices must develop a process through which a physician may present evidence to obtain an individual patient exception for a prescription drug or device not routinely covered by the plan. The process shall include both urgent and non-urgent review timelines.
Effective Date: For policies issued or renewed on or after January 1, 1999.
Requirements for Experimental Treatment Limitations - s. 632.855, Wis. Stat.
Health care plans that limit coverage for experimental treatment shall define the limitation and disclose the limits in the policy or certificate, and shall disclose who is authorized to make the determination and the criteria the plan uses. Health care plans receiving requests for prior authorization of experimental treatments must make a decision within 5 working days after receipt of a completed request.
Effective Date: For policies that are issued or renewed on or after January 1, 1999.
TMJ Mandate - s. 632.895 (11) and (12), Wis. Stat.
The TMJ mandate is amended to cap coverage of non-surgical diagnosis and treatment of TMJ at $1250 per year. Dental-only and medicare supplement policies are exempt from the mandate and dental plans are also now exempt from the anesthesia coverage requirement. Plans are now permitted to impose a prior authorization requirement on surgical or non-surgical TMJ services, but not diagnosis.
Effective Date: Policies issued or renewed on or after June 17, 1998.
Overinsurance - s. 632.897(4), Wis. Stat.
The standards for overinsurance are changed so that insurers may no longer terminate individual conversion policies due to overinsurance.
Effective Date: Policies issued or renewed on or after June 17, 1998
For more information, please contact the following individuals:
| Health Mandates | Diane Dambach, Health and Life Section,
Market Regulation Bureau |
| Managed Care | Barbara Belling, Health and Life Section,
Market Regulation Bureau |
| Agent Licensing Issues | Laurna Landphier, Chief,
Agent Licensing |
| Mutual Holding Companies | Guenther Ruch, Administrator,
Regulation and Enforcement Division |
| Certified Capital Corporations | Bud Mandt, Director,
Financial Analysis and Examinations Bureau |
| Non Stock Corporations | Bud Mandt, Director,
Financial Analysis and Examinations Bureau |
As indicated above, some of these provisions may require changes to an insurer's policy forms or operating procedures. It is the responsibility of the insurer to be in compliance with the insurance laws. Should you have any questions regarding these new laws or law changes, feel free to contact the OCI staff listed above.
Thank you for your cooperation.