Filed Under:Health Insurance, Individual Health

NAIC approves two health models

NAIC President James Donelon (NAIC photo)
NAIC President James Donelon (NAIC photo)

Members of the National Association of Insurance Commissioners approved two major health insurance models Friday during a conference call meeting. 

The plenary -- the body that includes representatives from all NAIC member jurisdictions -- voted to approve the Individual Health Insurance Coverage Model Act and the Small Group Market Health Insurance Coverage Model Act after a brief discussion.

The NAIC is a group for insurance regulators. The NAIC has no official, direct authority to change state's insurance laws and regulations, but state regulators and legislators often base their insurance regulatory proposals and bills on the NAIC models.

The NAIC's Regulatory Framework Task Force began developing the models in early 2011, to reflect the effects of the federal Patient Protection and Affordable Care Act of 2010 (PPACA).

The Health Insurance and Managed Care Committee approved the models in November 2012.

The final versions deal with matters such as guaranteed availability of coverage, guaranteed renewability, and premium rating changes in the individual and small group markets.

In both the individual model and the small group model, Section 19 covers "Standards to Assure Fair Marketing."

In the individual model, for example, the model states that a health carrier or producer "shall not, directly or indirectly ... encourage or direct individuals to refrain from filing an application for coverage with the carrier because of any health status-related factor or because of the industry, occupation or geographic location of the individual."

The model also states that a health insurer may not tie producer compensation to a consumer's "health status-related factor, industry, occupation or geographic location."

The U.S. Department of Health and Human Services (HHS) and other federal departments are still racing to complete the federal regulations needed to implement PPACA, and the drafters of the new NAIC health models have included warnings to users about the need for flexibility.

In a drafting note in the individual model, officials have suggested that regulators might want to wait to address the topic of association plans in a regulation after HHS issues its final regulations on that topic.

In the small group model, officials have noted that proposed HHS regulations seem to require health insurers to apply guaranteed-availability rules to closed-block plans.

"Given this provision the proposed regulations, states may want to consider not addressing this issue in statute and consider, instead, addressing it by regulation after final [HHS] regulations are issued on the subject," officials said.

Allison Bell contributed information to this report.

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