NONGROUP HEALTH INSURANCE

M.G.L. pt. Part I, tit. Title XXII, ch. c. 176M

in effect

M.G.L. c. 176M, § 1 Definitions

c. 176M, § 1. Definitions Section 1. As used in this chapter the following words shall unless the context clearly requires otherwise have the following meanings:— ''Actuarial opinion'', a signed written statement by a member of the American Academy of Actuaries based upon the person's examination, including a review of the appropriate records, of the actuarial assumptions and methods utilized by the carrier in establishing premium rates for guaranteed issue health plans. ''Adjusted composite rate'', the composite rate for each guaranteed issue health plan issued by a carrier adjusted in a consistent manner to be prescribed by the commissioner by regulation to account for differences in premiums between carriers that are the result of (i) geographic differences in the cost of health care; (ii) the average age of eligible individuals enrolled in a carrier's guaranteed issue health plan; and (iii) differences in benefit levels. ''Alternative benefits plans'', a set of benefits offered pursuant to subsection (d) of section 2, to be provided in each alternative guaranteed issue managed care plan, alternative guaranteed issue medical plan, and alternative guaranteed issue preferred provider plan. ''Average adjusted composite rate'', the average of the adjusted composite rates filed by the carriers as calculated by the commissioner of insurance pursuant to the provisions of section 5. ''Base premium rate'', the midpoint rate within a modified community rate band for each rate basis type of each guaranteed issue health plan of a carrier. ''Carrier'', an insurer licensed or otherwise authorized to transact accident and health insurance under chapter one hundred and seventy-five or the laws of any other jurisdiction; a nonprofit hospital service corporation organized under chapter one hundred and seventy-six A or the laws of any other jurisdiction, a nonprofit medical service corporation organized under chapter one hundred and seventy-six B or the laws of any other jurisdiction; a health maintenance organization organized under chapter one hundred and seventy-six G or the laws of any other jurisdiction; and an insured health plan that includes a preferred provider arrangement organized under chapter one hundred and seventy-six I or the laws of any other jurisdiction. For the purposes of this chapter, carriers that are affiliated companies shall be treated as one carrier; provided, however, that a carrier shall offer a guaranteed issue health plan in every geographic area served by one or more of its affiliates. Joint marketing ventures between carriers shall not constitute an affiliation. ''Conversion nongroup health plan'', a nongroup health plan, offered, sold, issued, delivered, made effective or renewed by a carrier to a former employee or member or the dependents, including a spouse of said former employee or member, within or without the commonwealth pursuant to the terms of a group policy, contract or agreement with said former employee's former employer, or through a trust or association; provided, however, that this definition shall not include a group policy, contract, or agreement issued to any natural person eligible for continued group coverage under section four thousand nine hundred and eighty B of the Internal Revenue Code of 1986, as amended, under sections six hundred and one to six hundred and eight, inclusive, of the Employee Retirement Income Security Act of 1974, as amended, under sections two thousand two hundred and one to two thousand two hundred and eight, inclusive, of the Public Health Service Act, as amended, or under section nine of chapter one hundred and seventy-six J. ''Closed guaranteed issue health plan'', a nongroup health plan issued by a carrier to an individual, as well as any covered dependents, after November 1, 1997 but before July 1, 2007. A carrier may permit an individual to continue to add new dependents to a policy issued under a closed guaranteed issue health plan. ''Closed plan'', a nongroup health plan issued by a carrier to a natural person for said person, as well as any covered dependents, prior to the first day of the first open enrollment period specified in subsection (b) of section three. A carrier may permit a natural person to continue to add new dependents to a policy issued under a closed plan. ''Commissioner'', the commissioner of the division of insurance. ''Composite rate'', the average per member per month premium rate for each type of guaranteed issue plan. ''Creditable coverage'', coverage of an individual under any of the following: (a) a group health plan; (b) a health plan, including, but not limited to, a health plan issued, renewed or delivered within or without the commonwealth to a natural person who is enrolled in a qualifying student health insurance program pursuant to section 18 of chapter 15A or a qualifying student health program of another state; (c) Part A or Part B of Title XVIII of the Social Security Act; (d) Title XIX of the Social Security Act, other than coverage consisting solely of benefits under section 1928; (e) 10 U.S.C. chapter 55; (f) a medical care program of the Indian Health Service or of a tribal organization; (g) a state health benefits risk pool; (h) a health plan offered under 5 U.S.C. chapter 89; (i) a public health plan as defined in federal regulations authorized by the Public Health Service Act, section 2701(c)(1)(I), as amended by P.L. 104–191; or (j) a health benefit plan under the Peace Corps Act, 22 U.S.C. 2504(e). ''Eligible dependent'', the spouse or children of an eligible individual, subject to the applicable terms of the health plan covering such individuals. ''Eligible individual'', any natural person who is a resident of the commonwealth and who is not enrolled for coverage under Part A or Part B of Title XVIII of the federal Social Security Act, or a state plan under Title XIX of such act or any successor program. ''Financial impairment'', a condition in which, as determined by the commissioner, the applicant is, or if subjected to the provisions of this chapter could reasonably be expected to be, insolvent, or otherwise in an unsound financial condition such as to render its further transactions of business hazardous to the public or its policyholders or members, or compelled to compromise or attempt to compromise with its creditors or claimants on the grounds that it is financially unable to pay its claims. ''Group health plan'', an employee welfare benefit plan, as defined in section 3(1) of the Employee Retirement Income Security Act of 1974, 29 U.S.C. section 1002, to the extent that the plan provides medical care, and including items and services paid for as medical care to employees or their dependents, as defined under the terms of the plan directly or through insurance, reimbursement or otherwise. For the purposes of this chapter, medical care means amounts paid for (i) the diagnosis, cure, mitigation, treatment or prevention of disease, or amounts paid for the purpose of affecting any structure or function of the body; (ii) amounts paid for transportation primarily for and essential to medical care referred to in clause (i); and (iii) amounts paid for insurance covering medical care referred to in clauses (i) and (ii). Also, for the purposes of this chapter, (a) any plan, fund or program which would not be, but for section 2721(e) of the federal Public Health Service Act, an employee welfare benefit plan, and which is established or maintained by a partnership, to the extent that such plan, fund or program provides medical care, including items and services paid for as medical care, to present or former partners in the partnership, or to their dependents, as defined under the terms of the plan, fund or program, directly or through insurance, reimbursement or otherwise, shall be treated, subject to clause (b), as an employee welfare benefit plan which is a group health plan; (b) in the case of a group health plan, the term ''employer'' also includes the partnership in relation to any partner; and (c) in the case of a group health plan, the term ''participant'' also includes: (1) in connection with a group health plan maintained by a partnership, an individual who is a partner in relation to the partnership, or (2) in connection with a group health plan maintained by a self-employed individual, under which one or more employees are participants, the self-employed individual; if such individual is, or may become, eligible to receive a benefit under the plan or such individual's beneficiaries may be eligible to receive any such benefit. ''Guaranteed issue health plans'', guaranteed issue managed care plans, guaranteed issue preferred provider plans and guaranteed issue medical plans. ''Guaranteed issue managed care plan'', a nongroup health plan, including a conversion nongroup health plan, sold, issued, delivered, made effective or renewed by a carrier, within or without the commonwealth pursuant to chapter 176G or the laws of any other jurisdiction, to any eligible individual for said individual or his eligible dependents and for which the carrier may not decline to offer to or deny enrollment of such eligible individual or his eligible dependents and which is to be renewed or continued in force at the option of the individual or his eligible dependents, subject to the exclusions set forth in this chapter, that provides the benefits specified in section 2. A carrier may establish no more than one standard guaranteed issue managed care plan and no more than one alternative guaranteed issue managed care plan. ''Guaranteed issue medical plan'', a nongroup health plan, including a conversion nongroup health plan, sold, issued, delivered, made effective or renewed by a carrier, within or without the commonwealth pursuant to either chapter 175, 176A or 176B or the laws of any other jurisdiction, to any eligible individual for said individual or his eligible dependents and for which the carrier may not decline to offer to or deny enrollment of such eligible individual or his eligible dependents and which is to be renewed or continued in force at the option of the individual or his eligible dependents, subject to the exclusions set forth in this chapter, that provides the benefits specified in section 2. A carrier may establish no more than one standard guaranteed issue medical plan and no more than one alternative guaranteed issue medical plan. ''Guaranteed issue preferred provider plan'', a nongroup health plan, including a conversion nongroup health plan, sold, issued, delivered, made effective or renewed by a carrier, within or without the commonwealth pursuant to chapter 176I or the laws of any other jurisdiction, to any eligible individual for said individual or his eligible dependents and for which the carrier may not decline to offer to or deny enrollment of such eligible individual and his eligible dependents and which is to be renewed or continued in force at the option of the individual or his eligible dependents, subject to the exclusions set forth in this chapter, that provides the benefits specified in section 2. A carrier may establish no more than one standard guaranteed issue preferred provider plan and no more than one alternative guaranteed issue preferred provider plan. ''Health plan'', any individual, general, blanket, or group policy of health, accident or sickness insurance issued by an insurer licensed under chapter one hundred and seventy-five or the laws of any other jurisdiction; a hospital service plan issued by a nonprofit hospital service corporation pursuant to chapter one hundred and seventy-six A or the laws of any other jurisdiction; a medical service plan issued by a nonprofit hospital service corporation pursuant to chapter one hundred and seventy-six B or the laws of any other jurisdiction; a health maintenance contract issued by a health maintenance organization pursuant to chapter one hundred and seventy-six G or the laws of any other jurisdiction; and an insured health benefit plan that includes a preferred provider arrangement issued pursuant to chapter one hundred and seventy-six I or the laws of any other jurisdiction. The words ''health plan'' shall not include accident only, credit-only, limited scope dental or vision benefits if offered separately, hospital indemnity insurance policies if offered as independent, noncoordinated benefits which for the purposes of this chapter shall mean policies issued pursuant to chapter 175 which provide a benefit not to exceed $500 per day, as adjusted on an annual basis by the amount of increase in the average weekly wages in the commonwealth as defined in section 1 of chapter 152, to be paid to an insured or a dependent, including the spouse of an insured, on the basis of a hospitalization of the insured or a dependent, disability income insurance, coverage issued as a supplement to liability insurance, specified disease insurance that is purchased as a supplement and not as a substitute for a health plan and meets any requirements the commissioner by regulation may set, insurance arising out of a workers' compensation law or similar law, automobile medical payment insurance, insurance under which benefits are payable with or without regard to fault and which is statutorily required to be contained in a liability insurance policy or equivalent self insurance, long-term care if offered separately, coverage supplemental to the coverage provided under 10 U.S.C. chapter 55 if offered as a separate insurance policy, or any policy subject to the provisions of chapter 176K. The commissioner may by regulation define other health coverage as a health plan for the purposes of this chapter. ''Intermediary'', a chamber of commerce, trade association, or other organization formed for purposes other than obtaining insurance, as determined by the commissioner, which offers as a service to its members the option of purchasing a health plan. ''Member'', any and all individuals enrolled in a health plan. ''Modified community rate'', a rate resulting from a rating methodology in which the premium for all persons within the same rate basis type who are covered under a guaranteed issue health plan is the same without regard to health status; provided, however, that premiums may vary due to age, geographic area, or benefit level for each rate basis type as permitted by this chapter. ''Nongroup health plan'', any health plan, issued, renewed or delivered within or without the commonwealth to a natural person who is a resident of the commonwealth, including a certificate issued to an eligible natural person which evidences coverage under a policy or contract issued to a trust or association, for said natural person and his dependents, including said person's spouse; provided, however, that a health plan issued, renewed or delivered within or without the commonwealth to a natural person who is enrolled in a qualifying student health insurance program pursuant to section eighteen of chapter fifteen A shall not be considered a nongroup health plan for the purposes of this chapter and shall be governed by the provisions of said chapter fifteen A and the regulations promulgated thereunder. The term nongroup health plan shall not include a health benefit plan issued or renewed to a natural person pursuant to chapter one hundred and seventy-six J. ''Pre-existing condition exclusion'', with respect to coverage, a limitation or exclusion of benefits relating to a condition based on the fact that the condition was present before the date of enrollment for such coverage, whether or not any medical advice, diagnosis, care or treatment was recommended or received before such date. Genetic information shall not be treated as a condition in the absence of a diagnosis of the condition related to such information. ''Rating factor'', characteristics including, but not limited to age, occupation, sex, geography, actual or expected health condition, medical history, claims history, or duration of coverage. ''Rate basis type'', each category of individual or family composition for which separate rates are charged for a guaranteed issue health plan as determined by the carrier. ''Rating period'', the period for which premium rates established by carrier are in effect, as determined by the carrier. ''Resident'', a natural person living in the commonwealth; provided, however, that the confinement of a person in a nursing home, hospital or other institution shall not by itself be sufficient to qualify such person as a resident. ''Standard benefits plans'', a set of benefits to be determined pursuant to subsection (c) of section 2, which sets a minimum level of benefits to be provided in each standard guaranteed issue managed care plan, standard guaranteed issue medical plan, and standard guaranteed issue preferred provider plan on an actuarially equivalent basis. ''Subscriber'', an eligible individual who has enrolled alone, or with his or her eligible dependents, in a guaranteed issue health plan. ''Trade Act/HCTC–Eligible Persons'', any eligible Trade Adjustment Assistance recipient as defined in 35(c)(2) of section 201 of Title II of Public Law 107–210, eligible alternative Trade Adjustment Assistance recipient as defined in section 35(c)(2) of section 201 of Title II of Public Law 107–210, or an eligible Pension Benefit Guarantee Corporation pension recipient that is at least 55 years old and who has qualified health coverage, does not have other specified coverage, and is not imprisoned, under Public Law 107–210. ''Waiting period'', a period immediately subsequent to the effective date of a person's coverage under a guaranteed issue health plan during which the plan does not pay for some or all hospital or medical expenses.

M.G.L. c. 176M, § 2 Participation in nongroup health insurance market; requirements; recommendations by contractors and board; standard health plans and alternative health plans

c. 176M, § 2. Participation in nongroup health insurance market; requirements; recommendations by contractors and board; standard health plans and alternative health plans Section 2. (a) Any nongroup health plan offered, sold, issued, delivered, made effective, or renewed by any carrier on or after August fifteenth, nineteen hundred and ninety-six shall comply with the provisions of this chapter; provided, however, that the offer, sale, issue, renewal or delivery of a conversion nongroup health plan shall not obligate the carrier to otherwise offer, sell, issue, renew or deliver a nongroup health plan to any person to whom it does not have such an obligation pursuant to a group policy, contract or agreement with an employer or through a trust or association; provided, however, that a conversion nongroup health plan shall be subject to all other requirements of this chapter. (b) (1) As a condition of doing business in the commonwealth, a carrier that offers health benefit plans to qualified small businesses, as defined by chapter one hundred and seventy-six J, shall participate in the nongroup health insurance market. A carrier shall be exempt from this requirement if, as of the close of the preceding calendar year, the combined total of eligible employees and eligible dependents, as defined by chapter one hundred and seventy-six J, enrolled in health benefit plans offered by it to qualified small businesses does not exceed five thousand individuals. (2) A carrier that, as of the close of the preceding calendar year, has a combined total of five thousand or more eligible employees and eligible dependents, as defined by chapter one hundred and seventy-six J, who are residents of the commonwealth and who are enrolled in health benefit plans sold, issued, delivered, made effective or renewed to qualified small businesses pursuant to its license under chapter one hundred and seventy-six G, shall be considered to be participating in the nongroup health insurance market only if it offers for sale, issue, delivery, effectuation or renewal, including renewal through the connector, to any eligible individual a guaranteed issue managed care plan, subject to the exceptions set forth in this chapter. (3) A carrier that, as of the close of the preceding calendar year, has a combined total of five thousand or more eligible employees and eligible dependents, as defined by chapter one hundred and seventy-six J, who are residents of the commonwealth and who are enrolled in health benefit plans sold, issued, delivered, made effective or renewed to qualified small businesses pursuant to its license or licenses under chapter one hundred and seventy-five, chapter one hundred and seventy-six A or chapter one hundred and seventy-six B, shall be considered to be participating in the nongroup health insurance market only if it offers for sale, issue, delivery, effectuation or renewal, including renewal through the connector, to any eligible individual a guaranteed issue medical plan, subject to the exceptions set forth in this chapter. For the purposes of this section, neither an eligible employee, nor an eligible dependent, shall be considered to be enrolled in a health benefit plan issued pursuant to a carrier's license under chapter one hundred and seventy-five if said health benefit plan is sold, issued, delivered, made effective or renewed to said eligible employee or eligible dependent as a supplement to a health benefit plan subject to licensure under chapter one hundred and seventy-six G. (4) A carrier that is required, pursuant to subsection (3), to offer for sale to any eligible individual a guaranteed issue medical plan may instead offer for sale, issue, delivery, effectuation or renewal to any eligible individual a guaranteed issue preferred provider plan, subject to the exceptions set forth in this chapter; provided, however, that nothing in this chapter shall prohibit a carrier from offering both a guaranteed issue medical plan and a guaranteed issue preferred provider plan should it so choose. (c) Notwithstanding the requirements of section four and section twenty-two of chapter seven and section twenty-seven B and section twenty-nine A of chapter twenty-nine, no later than sixty days after August fifteenth, nineteen hundred and ninety-six, the executive office for administration and finance shall contract with a total of three contractors, including a certified employee health benefits plan specialist, an associate in risk management or licensed life and health insurance advisor. One of the three contractors hired shall be an actuary, who shall be a member of the American Academy of Actuaries. The contractors hired shall be members in good standing of their respective local or national accrediting bodies, shall specialize in health care, and shall not be employees of any licensed carrier or the commonwealth. (1) Said contractors shall develop recommendations consistent with this section relative to the benefits to be provided by, and the cost sharing requirements of, the standard guaranteed issue managed care plan, the standard guaranteed issue medical plan, and the standard guaranteed issue preferred provider plan. Said recommendations shall be based upon the prototype for small group plans under chapter one hundred and seventy-six J, modified to provide for a co-payment for outpatient benefits which is no greater than three-fifths of the co-payment applicable to the small group prototype. The standard plans shall include at least the following medically necessary services: reasonably comprehensive physician services, inpatient and outpatient hospital services, emergency health services, the full range of effective clinical preventive care, and prescription drugs administered on an outpatient basis. For each thirty day supply of generic prescription drugs, a guaranteed issue health plan shall require a twenty dollar co-payment. For each thirty day supply of brand name prescription drugs, a guaranteed issue health plan shall require a twenty-five dollar co-payment. Any insured individual who incurs fifty co-payments for prescription drugs in a calendar year shall not be required to make any additional co-payments for prescription drugs in that calendar year. Each health plan that provides for the purchase of prescription drugs by mail order shall provide a financial incentive to insured individuals who purchase their drugs by mail order. Each of the standard guaranteed issue health plans shall be reasonably actuarially equivalent to each other. The contractors shall report their recommendations, upon which at least two of them shall agree, to the nongroup health insurance advisory board no later than thirty days after their hire. (2) After due consideration of the recommendations of the contractors, and no later than fourteen days after the submission of said recommendations, said board shall make final recommendations, upon which a majority of the members shall agree and which are consistent with the standards established in paragraph (1), to the commissioner relative to the benefits to be provided by, and the cost sharing requirements of, the standard guaranteed issue health plans. The commissioner shall, no later than fourteen days after the submission of the board's recommendations, either approve or disapprove said recommendations. The commissioner shall not modify the recommendations of said board. If the commissioner does not approve the recommendations of said board, said board shall, after consulting with the contractors, submit new recommendations, upon which a majority of the members agree and which are consistent with the standards established in said paragraph (1), to the commissioner no later than fourteen days following his decision to disapprove the standard benefit plans. (3) Said board shall review the benefits to be provided by, and the cost sharing requirements of, the standard guaranteed issue health plans on an annual basis. In making its recommendations, the board shall ensure that actuarial equivalence is maintained between the standard guaranteed issue plans. Said board shall make pertinent recommendations to the commissioner who shall approve or disapprove said recommendations within fourteen days. The commissioner shall then take the appropriate steps to ensure the implementation of the standard benefits plans. (4) A carrier may establish as its guaranteed issue managed care, guaranteed issue medical, or guaranteed issue preferred provider plan a plan with additional benefits or lower cost-sharing requirements than those contained in the standard plans defined by the commissioner pursuant to subsection (a); provided, however, that any such enhanced plan includes the benefits contained in the comparable type of standard plan, that the carrier establishes only one form, whether standard or enhanced, of each type of managed care, medical, or preferred provider guaranteed issue plan or plans that it offers; and provided, further, that such enhanced plan or plans shall be subject to all of the requirements of this chapter applicable to guaranteed issue health plans. A federally qualified health plan provided by a health maintenance organization which provides, at a minimum, the benefits contained in the comparable type of standard plan, including prescription drugs, and is the only form, whether standard or enhanced, which the health maintenance organization offers shall be deemed to meet the requirements of this section. The commissioner may prohibit a carrier from offering an enhanced plan if he finds that the design of the plan may have the effect of discouraging enrollment by eligible individuals. (d) A carrier that participates in the nongroup health insurance market shall make available to eligible individuals a standard guaranteed issue health plan established pursuant to subsection (c) and may additionally make available to eligible individuals one alternative guaranteed issue health plan with benefits and cost-sharing requirements, including deductibles, that differ from the said standard guaranteed issue health plan. A carrier shall not make available an alternative plan unless said plan has been filed with and approved by the commissioner of insurance. The commissioner shall approve of an alternative plan if said plan: (1) includes at least the following medically necessary services: reasonably comprehensive physician services; inpatient and outpatient hospital services; emergency health care services; and a full range of effective, clinical preventive care administered on an outpatient basis; and (2) contains a disclosure form, which shall be provided to any potential insured, that clearly and concisely states the limitations on the scope of health services and any other benefits to be provided, including an explanation of any deductible or copayment feature; and (3) offers a ten day free look period in compliance with chapter 176D and any regulations promulgated thereunder. A carrier shall adhere to all other provisions of this chapter when offering any guaranteed issue health plan. The commissioner shall promulgate regulations relative to the guaranteed issue health plans permissible pursuant to this section.

M.G.L. c. 176M, § 3 Exclusion from coverage; open enrollment period

c. 176M, § 3. Exclusion from coverage; open enrollment period Section 3. (a) No carrier, with respect to an eligible individual or eligible dependent desiring to enroll in any guaranteed issue health plan, may decline to offer such coverage to, or deny enrollment of, any such individual or dependent except as otherwise allowed in this section, nor impose any pre-existing condition exclusion with respect to any guaranteed issue health plan except as otherwise allowed in this section, nor impose any waiting period in any guaranteed issue health plan except as otherwise allowed in this section through June 30, 2007. A carrier shall not impose a preexisting condition exclusion or waiting period for Trade Act/HCTC–Eligible Persons. (b) In calendar year nineteen hundred and ninety-seven, the carrier shall enroll eligible individuals into guaranteed issue health plans during an open enrollment period commencing June first and ending July thirty-first with coverage to become effective September first. The commissioner may postpone said open enrollment period and effective date of coverage should a substantial number of carriers, due to substantial administrative delay, be unable to enroll eligible individuals into a guaranteed issue health plan during the open enrollment period commencing June first and ending July thirty-first; provided, however, that any carrier that is unable to enroll eligible individuals into a guaranteed issue health plan during the open enrollment period beginning June first and ending July thirty-first, for reasons other than substantial administrative delay, may be subject to a fine of one thousand dollars for every day in which it is unable to enroll such eligible individuals in said guaranteed issue health plan and any other penalties available under this chapter. (1) A carrier shall enroll any person who meets the requirements of an eligible individual as defined in section 2741 of the Health Insurance Portability and Accountability Act of 1996, 42 U.S.C. section 300gg–41(b), into a guaranteed issue health plan if such person requests guaranteed issue coverage within 63 days of termination of any prior creditable coverage. Coverage shall become effective within 30 days of the date of application, subject to reasonable verification of eligibility. (2) A carrier shall enroll any eligible individual who does not meet the requirements of an eligible individual as defined in section 2741 of the Health Insurance Portability and Accountability Act of 1996, 42 U.S.C. section 300gg–41(b), into a guaranteed issue health plan; provided, however, that a carrier may impose a pre-existing condition exclusion for no more than six months or a waiting period, which shall be applied uniformly without regard to any health status-related factors, for no more than six months following the individual's effective date of coverage. If a policy includes a waiting period, emergency services shall be covered to the same extent that emergency services are covered during a waiting period under chapter 176J. In determining whether a pre-existing condition exclusion or a waiting period applies, all health benefit plans shall credit the time such person was covered under prior creditable coverage provided by a carrier if the previous coverage was continuous to a date not more than 63 days prior to the date of the request for the new coverage and if the previous coverage was reasonably actuarially equivalent to the new coverage. Coverage shall become effective within 30 days of the date of application. The commissioner shall promulgate regulations relative to pre-existing condition exclusions and waiting periods permissible pursuant to this section. (c) Carriers may utilize intermediaries, as defined in section one, to offer guaranteed issue health plans to eligible individuals. Fees charged by such intermediaries shall be reasonable and shall not serve as a barrier to the purchase of insurance under this chapter. (d) A carrier shall no longer offer, sell or deliver a health plan to a person to whom it does not have such an obligation under an individual policy, contract or agreement with an employer or through a trust or association; provided, however, that a closed guaranteed issue plan or a closed health plan shall be subject to all the other requirements of this chapter. A carrier shall be obligated to renew a closed guarantee issue health plan and a closed plan. A carrier may discontinue a closed guarantee issue health plan or a closed under regulations promulgated by the commissioner. (e) Carriers shall notify all members, at the direction of the commissioner, at least once annually, of all health benefit plans and pursuant premiums for which the member is eligible under chapter 176J. (f) A carrier shall not be required to issue or renew a guaranteed issue health plan to any eligible individual if the carrier can demonstrate any of the following (1) that the acceptance of applications would create for the carrier a condition of financial impairment, and the carrier demonstrates the same to the commissioner; (2) that the eligible individual does not meet a health maintenance organization's requirements regarding residence or employment within the health maintenance organization's approved service area; or (3) that within an area, where the health maintenance organization reasonably anticipates, and demonstrates to the satisfaction of the commissioner, that it will not, within that area, have the capacity in its network of providers to deliver services adequately to the individual because of its obligation to existing contract holders and enrollees; provided, however, that such a health maintenance organization shall not offer coverage in the applicable area to any new applicants for coverage, whether they be applicants for group or nongroup coverage, until the later of ninety days after each such refusal or the date on which the health maintenance organization notifies the commissioner that it has regained capacity to deliver services to eligible individuals. (g) A carrier shall not be required to issue or renew a guaranteed issue health plan to an eligible individual, and may cancel a previously issued guaranteed issue health plan, if (1) the individual failed to pay the required premium for any health benefit plan on a timely basis, (2) the individual committed fraud or misrepresented whether he qualifies as an eligible individual, (3) the individual failed to comply in a material way with the provisions of the health benefit plan, the member contract, or the subscriber agreement, or (4) the individual failed to comply with the carrier's reasonable request for information in accordance with subsection (d) of section four in the application for coverage under a guaranteed issue health plan. A premium shall be considered to have been paid on a timely basis if it is paid within sixty days. (h) A carrier that decides to terminate coverage for all eligible individuals enrolled in a specific guaranteed issue plan shall notify the commissioner of insurance no later than 180 days prior to terminating coverage under that guaranteed issue health benefit plan. A carrier may not terminate a guaranteed issue health plan if such termination would cause the carrier to violate subsection (b) of section two. A carrier who terminates guaranteed issue health plans pursuant to this subsection shall not issue any guaranteed issue health benefit plans pursuant to this subsection for a period of five years; provided, however, that the commissioner, in his discretion, may allow a carrier to re-enter the nongroup market sooner.

M.G.L. c. 176M, § 4 Guaranteed issue health plans; premiums

c. 176M, § 4. Guaranteed issue health plans; premiums Section 4. (a) Premiums charged to eligible individuals for guaranteed issue health plans issued or renewed after August fifteenth, nineteen hundred and ninety-six, shall satisfy the requirements of this section. (1) Each carrier shall establish a base premium rate for each rate basis type within each guaranteed issue health plan it offers. The premium charged to any eligible purchaser shall be limited to the base premium rate multiplied by the factors specified in paragraphs (2), (3) and (4). (2) A carrier may establish a premium rate adjustment based upon the age of an insured individual. Such an adjustment shall be known as the age rate adjustment. A carrier may establish an age rate adjustment, the value of which may range from 0.67 to 1.33. If a carrier chooses to establish age rate adjustments, the premium charged to every individual enrolled in a guaranteed issue health plan shall be subject to the applicable age rate adjustment. (3) The commissioner shall annually establish not fewer than five distinct regions of the state for the purpose of area rate adjustments. A carrier may establish an area rate adjustment for each different region, the value of which shall range from 0.8 to 1.2. If a carrier chooses to establish area rate adjustments, the premium charged for a guaranteed issue health plan to each eligible individual who resides within each geographic area shall be subject to the applicable area rate adjustment. (4) A carrier may establish a benefit level rate adjustment for each type of approved alternative guaranteed issue health plan. The benefit level rate adjustment shall be expressed as a number and shall only represent the actuarial value of the benefit level of the alternative guaranteed issue health plan authorized by subsection (d) of section 2 as compared to the actuarial value of the benefit level of the standard guaranteed issue health plan authorized by subsection (c) of section 2, assuming no difference in expected cost and utilization for those in the standard guaranteed issue health plans as compared to those in the alternative guaranteed issue health plans, as certified in an actuarial opinion and memorandum signed by a member of the American Academy of Actuaries, which includes sufficient documentation to support the benefit level rate adjustment. The benefit level rate adjustment may not reflect the nature of the actual populations covered by the guaranteed issue health plans. The premium charged to every individual enrolled in an alternative guaranteed issue health plan shall be subject to the applicable benefit level rate adjustment. There shall be no benefit level rate adjustment to a standard guaranteed issue health plan. (5) The premium rate charged by a carrier to each individual on the date of the individual's guaranteed issue health policy is issued or renewed shall be the base premium rate charged for that rate basis type, multiplied by the age rate adjustment, multiplied by the area rate adjustment, multiplied by the benefit level rate adjustment as may be applicable pursuant to this section. (6) Nothing shall preclude a carrier from directly subsidizing the premium rate established pursuant to this section charged to eligible individuals who meet eligibility criteria established by the carrier, including individual or household income and asset tests, to assess economic need.

M.G.L. c. 176M, § 5 Filing of rates; determination of average composite rate; review of filings

c. 176M, § 5. Filing of rates; determination of average composite rate; review of filings Section 5. (a) (1) No later than seventy-five days after the commissioner has approved the standard benefits plans pursuant to section two and no later than May first of each year thereafter, each carrier shall submit a nongroup rate filing to the commissioner. Each carrier shall also submit a copy of its nongroup rate filing to the nongroup health insurance advisory board. The board may include information from nongroup rate filings in its annual consumer's guide. (2) Nongroup rate filings shall contain the following information: (i) the base premium rate to be charged within each rate basis type for each guaranteed issue health plan and for each closed plan; (ii) the age, geographic and benefit level adjustments to be charged within each rate basis type for each guaranteed issue health plan and for each closed plan. (iii) the composite rate for each guaranteed issue health plan; (iv) the adjusted composite rate for each guaranteed issue health plan and documentation reasonably necessary to substantiate the adjustments made; (v) a memorandum signed by an actuary certifying that the rates for each guaranteed issue health plan have been developed in accordance with section four, including the rate bands and multipliers specified therein and that the proposed rates are reasonable in relation to the benefits provided; (vi) for each guaranteed issue health plan and each closed plan, the actual loss ratio for the previous year and the projected loss ratios for the present year and the year for which the rate is being filed. Loss ratio shall be defined as the ratio of the incurred costs for hospital, medical or health care services for the relevant period to the premium earned for that same period; (vii) a comparison of current and proposed rates for each guaranteed issue health plan which shows premium cost components, including but not limited to the cost of prescription drugs administered on an outpatient basis, stated as a percentage of premium; (viii) a copy of its annual report; and (ix) for the filing in calendar year nineteen hundred and ninety-seven only, the total number of insured, the total number of policies issued, the total number of policies issued within each rate basis type, and the rates charged for each closed plan offered by the carrier as of August fifteenth, nineteen hundred and ninety-six. (b) No later than forty-five days after carriers are required to submit their nongroup rate filings, the commissioner shall determine the average adjusted composite rate for each type of guaranteed issue health plan. The commissioner shall determine whether the adjusted composite rate filed by each carrier exceeds the average adjusted composite rate for that type of guaranteed issue health plan by more than two standard deviations. Carriers shall submit data reasonably necessary to substantiate the adjustments made. For purposes of this chapter, standard deviation shall be defined as the square root of the average of the squares of the differences between each adjusted composite rate and the average adjusted composite rate. The commissioner shall also examine the design of the benefits of each guaranteed issue health plan to determine if it complies with applicable laws and regulations and to determine whether its design may have the effect of minimizing the number of eligible individuals who will enroll in said plan. The commissioner shall also determine the average rate of closed plans in effect as of August fifteenth, nineteen hundred and ninety-six. The commissioner shall report this average rate to the board created under section seven. (c) If a filing is the carrier's initial filing for a newly offered guaranteed issue health plan and if the adjusted composite rate for said plan exceeds the average adjusted composite rate for such type of plan by more than two standard deviations then the filing shall be subject to further review pursuant to subsection (e). No later than forty-five days after the date upon which the carriers are required to submit their initial filing of the rates for a newly offered guaranteed issue health plan after August fifteenth, nineteen hundred and ninety-six under subsection (a) and no later than June fifteenth of each year thereafter, the commissioner shall notify such carrier in writing that the filing is subject to further review pursuant to said subsection (e). No filing shall be subject to further review pursuant to said subsection (e) unless the commissioner has sent the notice required under this subsection within forty-five days of the date that the carriers are required to submit their rates under subsection (a) in the first year or by said June fifteenth of each year thereafter. (d) In the case of a filing for an existing guaranteed issue health plan, if the adjusted composite rate for said plan exceeds the average adjusted composite rate for such type of plan by more than two standard deviations and the proposed composite rate also exceeds one hundred and ten percent of the carrier's current composite rate for such plan, then no later than said June fifteenth of each year, the commissioner shall notify such carrier in writing that the filing is subject to further review pursuant to subsection (e). No filing shall be subject to further review pursuant to said subsection (e) unless the commissioner has sent the required notice on or before said June fifteenth. (e) If a carrier's rate filing for a guaranteed issue health plan is subject to further review pursuant to subsection (c) or (d), then the commissioner shall give the carrier twenty-one days to submit additional evidence that shows either that the rate filed is reasonable in relation to the benefits provided, or that its adjusted composite rate would not have exceeded the average adjusted composite rate for that type of guaranteed issue health plan by more than two standard deviations if its adjusted composite rate had been further adjusted for the case mix of persons insured in that carrier's nongroup health plans in operation as of August fifteenth, nineteen hundred and ninety-six, whom the carrier anticipates will be covered in its guaranteed issue health plan during the period of the proposed rates. The case mix adjustment shall be based upon the diagnosis related group grouper selected by the center for health information and analysis established under chapter 12C and associated diagnosis related group weights calculated from Massachusetts data, and shall measure the differential case mix compared to the case mix of all privately insured persons discharged from hospitals from the commonwealth, as determined by said center of health care finance and policy. The commissioner shall have the authority to review and make any necessary changes to this methodology to ensure that the methodology used is consistent with the most current knowledge and methodologies used for such purposes. The commissioner shall have the authority to request that the carrier submit additional information reasonably necessary to make his determination. The commissioner shall have the authority to conduct an informational public hearing if he deems it reasonably necessary to make his determination. No later than ten days after the commissioner has received further information from the carrier, the commissioner shall make a written determination (1) as to whether the adjusted composite rate filed, further adjusted for case mix if the carrier so proposes, would not have exceeded the average adjusted composite rate for that type of guaranteed issue health plan by more than two standard deviations or (2) in the case of an adjusted composited rate that exceeds the average adjusted composite rate by more than two standard deviations either because the rate, although further adjusted for case mix would still have exceeded the two standard deviation test or because the carrier dose not propose an adjustment for case mix, as to whether the rate filed is reasonable in relation to the benefits provided. If the commissioner determines either that the adjusted composite rate, further adjusted for case mix, would not have exceeded the average adjusted composite rate for that type of guaranteed issue health plan by more than two standard deviations under clause (1) of the preceding sentence or that the rate is reasonable under clause (2) of the preceding sentence, he shall notify the carrier that the rate is approved. If the commissioner determines that the adjusted composite rate or that rate further adjusted for case mix, if the carrier so proposes, would have exceeded the average adjusted composite rate for that type of guaranteed issue health plan by more than two standard deviations and that the rate is not reasonable, he shall notify the carrier that the rate is disapproved and that the carrier has the right to request an adjudicatory hearing pursuant to chapter thirty A within twenty-one days of the commissioner's decision. Said hearing shall be conducted within thirty days of the carrier's request. The commissioner shall issue a written decision within thirty days of the conclusion of the hearing. The rate shall be effective not earlier than thirty days subsequent to the commissioner's written decision. A carrier aggrieved by said written decision may, within twenty days of said decision, file a petition in the supreme judicial court for Suffolk county for a review of such decision. Review by the supreme judicial court on the merits shall be limited to the record of the proceedings before the commissioner and shall be based upon the standards set forth in paragraph (7) of section fourteen of chapter thirty A. (f) A carrier whose rate filing is subject to further review or who has exercised its right to an administrative hearing shall, for purposes of section two, be deemed to be offering guaranteed issue health plans and shall be allowed to continue to offer health benefit plans to eligible small businesses, provided that it is exercising good faith in its participation in said further review or hearing. (g) A carrier whose initial rate filing is subject to further review or who has exercised its right to a hearing may implement an interim composite rate no greater than the average proposed composite rate, provided that it is exercising good faith in its participation in said further review or hearing. (h) The commissioner shall promulgate regulations to enforce this section. (i) Nothing in this section shall be construed to limit the commissioner's authority to disapprove rates pursuant to chapter one hundred and seventy-five, one hundred and seventy-six A, one hundred and seventy-six B, one hundred and seventy-six G, or one hundred and seventy-six I.

M.G.L. c. 176M, § 6 Massachusetts nongroup health reinsurance plan

c. 176M, § 6. Massachusetts nongroup health reinsurance plan Section 6. (a) There is hereby established a nonprofit entity to be known as the Massachusetts Nongroup Health Reinsurance Plan. Any carrier issuing or renewing a guaranteed issue health plan shall be a member of the plan. (b) The plan shall be prepared and administered by a five member governing committee to be appointed by the governor. Such appointees shall represent carriers selling nongroup health plans in the commonwealth, of which at least one appointee shall represent a foreign nongroup carrier. The initial appointment of two such appointees shall be for a term of three years. The initial appointment of two such appointees shall be for a term of two years. The initial appointment of the remaining appointee shall be for a term of one year. All appointments thereafter shall be for a term of three years. The governing committee shall be responsible for the hiring of any employees or contractors of the plan. (c) On or before January 1, 2001, the governing committee shall submit to the commissioner a plan of operation. The commissioner shall, after notice and hearing, approve, disapprove or modify the plan of operation. Subsequent amendments to the plan shall be deemed approved by the commissioner if not expressly disapproved in writing by the commissioner within 30 days from the date of the filing. The commissioner shall establish the plan of operation by March 1, 2001, if the governing committee does not propose such a plan. (d) Meetings of the governing committee of the plan shall be conducted in accordance with the provisions of section 11A1/2 of chapter 30A. (e) The plan shall not reimburse a carrier with respect to the claims of a reinsured individual or dependent in any calendar year until the carrier has paid an amount determined by the governing board and approved by the commissioner for benefits otherwise covered by the plan during the calendar year. (f) Premium rates charged for coverage reinsured by the plan shall be established by the governing committee and shall be subject to the approval of the commissioner. (g) Any member of the reinsurance plan may only reinsure the coverage of an eligible individual, or any eligible dependent of such an individual, who enrolls in a guaranteed issue health plan on or after November 1, 2001. The reinsurance plan shall reinsure the level of coverage provided by the guaranteed issue health plan. (h) Following the close of the fiscal year established in the plan of operation, the governing committee shall determine the premiums charged for reinsurance coverage, the reinsurance plan expenses for administration and the incurred losses, if any, for the fiscal year, taking into account investment income and other appropriate gains and losses. Any net loss for the year shall be recouped by assessment of the members which shall be apportioned in proportion to each such members' respective shares of the total premiums earned in the commonwealth from health plans, but in no event shall such assessments exceed 1 per cent of the premiums earned from such health plans. (i) If the assessment level is inadequate, the governing committee may adjust reinsurance thresholds, retention levels or consider other forms of reinsurance. The governing committee shall report annually to the commissioner and the joint committee on insurance on its experience, the effect of the reinsurance plan on nongroup rates and shall make recommendations, if necessary, relative to sustaining the viability of the reinsurance plan. The committee may enter into negotiations with plan members to resolve any deficit through reductions in future payment levels for reinsurance plans. Any such recommendations shall take into account the findings of an actuarial study to be undertaken after the first three years of the plan's operation to evaluate and measure the relative risks assumed by differing types of carriers. The study shall be conducted by three actuaries appointed by the commissioner, one of whom shall represent risk assuming carriers, one of whom shall represent reinsuring carriers and one of whom shall represent the commissioner. By no later than July 1, 2006, the governing committee shall establish a proposal to phase-out the operations of the plan and submit a copy of said proposal to the commissioner for approval. The proposal shall include a method for closing the plan by June 30, 2007. The governing committee shall execute the phase-out of the plan.

M.G.L. c. 176M, § 7 Rules and regulations

c. 176M, § 7. Rules and regulations Section 7. The commissioner may promulgate rules and regulations as are necessary or proper to carry out the provisions of this chapter.

Source: Massachusetts General Court (malegislature.gov)URL: https://malegislature.gov/Laws/GeneralLaws/PartI/TitleXXII/Chapter176MFetched: 10/20/2026