Bulletin, December 19, 2007, Enacted Legislation - 2007 Wisconsin Act 20 and Act 36

​Last Updated: December 21, 2007

Date: December 19, 2007
To: All Insurers Authorized to do Business in Wisconsin
From: Sean Dilweg, Commissioner of Insurance
Subject: Enacted Legislation - 2007 Wisconsin Act 20 and Act 36

​This bulletin contains a summary of the provisions of 2007 Wisconsin Acts 20 and 36. You should review the bulletin and determine which laws apply to your company. This bulletin is for informational purposes and is not to be considered the office's interpretation of these laws. It is highly recommended that the readers of this bulletin obtain copies of those laws determined to be applicable to their situation or operations. You may obtain copies of any legislation from Legislative Documents, 1 East Main Street, Madison, WI 53703, and (608) 266-2400 or through the Legislature's Web page at www.legis.state.wi.us.

2007 WISCONSIN ACT 20

1. 601.415 (8) Long-Term Care Partnership Program. Created to provide for the certification of Long-Term Care (LTC) partnership policies and to cooperate with the Department of Health and Family Services in approving the training program for agents who sell LTC insurance policies. Certified policies must satisfy all the following criteria:

   • Meet the definition of a qualified LTC insurance policy under 26 USC 7702B (b).
   • Meet the LTC insurance model regulations and the requirements of the LTC insurance model act promulgated by the National Association of Insurance Commissioners that are specified in 42 USC 1396p (b) (5).
   • The policy includes the applicable inflation protection specified in 42 USC 1396p (b) (1) (C) (iii) (IV).
   
   

   628.348 Sale of Long-Term Care Insurance. In order to sell LTC insurance policies in Wisconsin persons must be licensed intermediaries and must complete an approved training program in order to understand the relation of LTC insurance to the Medical Assistance program and are able to explain to consumers the protections offered by LTC insurance and how this type of insurance relates to private and public financing of LTC. The approved training program under s. 49.45(31) (c), Wis. Stat., shall include the following:

   • Initial training that is not less than 8 hours, by January 1, 2009.
   • Ongoing training of not less than 4 hours per session every 24 months after the initial training.
   • Training shall cover, at a minimum, LTC insurance, LTC services, qualified partnerships, and the relationship between qualified partnerships and other public and private coverage of LTC services.
   
   

   The Commissioner may approve the initial and ongoing training sessions for continuing education requirements.

   Individuals may not solicit, negotiate or sell long-term care insurance after January 1, 2009, unless they are duly licensed and have completed the training program in accordance with s. 628.348, Wis. Stat.

   Insurers providing LTC insurance are required to obtain from agents selling LTC insurance policies verification that the agents are in compliance with the training requirements, maintain records related to the training verifications, and to make these training records available to the Commissioner upon request.

   The effective date for these provisions of Act 20 is October 27, 2007. However, Wisconsin is required to submit for approval to the federal DHHS a state plan amendment (SPA) to its medical assistance plan that establishes, in Wisconsin, a Long-Term Care Partnership Program. Implementation of the components regulated by OCI will require amendments to our administrative rules. Additional information will be provided when available.

   OCI Contacts:

   LTC Partnership: Guenther Ruch, Administrator, Division of Regulation and Enforcement. guenther.ruch@wisconsin.gov

   Agent Training: Susan Ezalarab, Director, Bureau of Market Regulation. sue.ezalarab@wisconsin.gov

2. 2007 Wisconsin Act 20 created ss. 632.726, 632.857 and modified s. 632.875 (g), Wis. Stat. As described below, these newly created and modified sections apply to disability insurers offering health care, health benefit and Medicare supplement plans.

   632.726 Current procedural terminology code changes. Requires that an insurer include additional information when it changes a current procedural terminology code (CPT code). The Act requires that the insurer provide the reason and the source for its change to the CPT code if an insurer changes a CPT code submitted by a health care provider on a health insurance claim form. Regardless if the claim is filed electronically or on paper, insurers need to explain the change. The information may be provided in written form whether added to an existing communication or separate document to providers and to insureds.

   632.857 Explanation required for restriction or termination of coverage. Provides that if an insurer restricts or terminates an insured's coverage for reasons other than in accordance with the terms of the contract for insurance, and as a result the insured becomes liable for payment for all of the treatment then the insurer shall provide a detailed explanation of the clinical rationale and the basis in the policy, plan, or contract or in applicable law for the insurer's restriction or termination of coverage. The detailed explanation may be provided in written form whether added to an existing communication or separate document to insureds. For purposes of this section payment of co-payments, deductibles or other cost-sharing arrangements does not necessitate a detailed explanation.

   632.875 (2) (g). Provides that for chiropractic services when an insurer restricts or terminates coverage the insurer shall provide a detailed explanation of the clinical rationale and of the basis in the policy, plan, contract or in applicable law. Insurers may provide the explanation in written form whether added to an existing communication or separate document to providers and to insureds. For purposes of this section payment of co-payments, deductibles or other cost-sharing arrangements does not necessitate a detailed explanation.

   The effective date for these provisions of Act 20 is October 27, 2007. If a health insurance policy or plan that is in effect on the effective date of this paragraph contains a provision that is inconsistent with the treatment of section 632.726, 632.857, or 632.875 (2) (g) of the statutes, the treatment of section 632.726, 632.857, or 632.875 (2) (g) of the statutes, whichever is applicable, first applies to that health insurance policy or plan on the date on which it is renewed.

   OCI Contact:

   Diane Dambach, Chief, Accident & Health Insurance Section, Bureau of Market Regulation. diane.dambach@wisconsin.gov

2007 WISCONSIN ACT 36

3. 632.895 (15) COVERAGE OF STUDENT ON MEDICAL LEAVE. Sections 40.51 (8), 40.51 (8m), 66.0137 (4), 111.91 (2) (nm), 120.13 (2) (g), 185.981 (4t), 185.983 (1) (intro.), 609.76, and 632.895 (15), Wis. Stat. Requires every disability insurance policy and every self-insured health plan of the state or a county, city, town, village, or school district, that provides coverage for a person as a dependent of the insured because the person is a full-time student shall continue to provide dependent coverage for the person if, due to a medically necessary leave of absence, he or she ceases to be a full-time student.

   A student is required to submit documentation and certification of the medical necessity of the leave of absence from the person's attending physician.

   A policy or plan is required to continue coverage only until any of the following occurs:

   1. The person advises the policy or plan that he or she does not intend to return to school full time.
   2. The person becomes employed full time.
   3. The person obtains other health care coverage.
   4. The person marries and is eligible for coverage under his or her spouse's health care coverage.
   5. The person reaches the age at which coverage as a dependent who is a full-time student would otherwise end under the terms and conditions of the policy or plan.
   6. Coverage of the insured through which the person has dependent coverage under the policy or plan is discontinued or not renewed.
   7. One year has elapsed since the person's coverage continuation began and the person has not returned to school full time.
   
   

   The Act applies to insurance policies issued or renewed on or after July 1, 2008, and self-insured health plans of the state, county, city, village, town, or school district, established, extended, modified, or renewed on or after July 1, 2008. However, if an insurance policy covers employees under a collective bargaining agreement containing provisions inconsistent with the Act, the Act first applies to a policy issued or renewed on the earlier of: (a) the date the collective bargaining agreement expires; or (b) the date the collective bargaining agreement is extended, modified, or renewed. If a self-insured plan covers employees under a collective bargaining agreement containing provisions inconsistent with the Act, the Act first applies to a plan established, extended, modified, or renewed on the earlier of: (a) the date the collective bargaining agreement expires; or (b) the date the collective bargaining agreement is extended, modified, or renewed.

   OCI Contact:

   Diane Dambach, Chief, Accident & Health Insurance Section, Bureau of Market Regulation. diane.dambach@wisconsin.gov