State by state variations of laws, compliance protocols, industry transparency, and general regulatory cultures can lend one the impression that keeping up with industry changes is a little bit like herding cats. So, what better way to wrangle some of the more localized insurance news than in a Regulatory Roundup?
On an ongoing basis, in no particular order or rank, we’re wrestling the various regulatory changes, compliance actions, and commissioner decisions into our roundup. As a disclaimer: There’s a lot going on at any given time in these here United States, so this isn’t a comprehensive picture of state-level action by any means. Think of it as, instead, a sample platter of regulation.
Also important to note: If we’re recapping interpretations of legal decisions, this is some armchair insurance speculation and not at all legal advice. If you need legal advice, get a lawyer.
Colorado Option has standout enrollment at 13 percent
Now that open enrollment season is closed, states are tallying up their relative success in enrolling state residents for health insurance they otherwise might not have.
For the first year, Colorado’s Department of Insurance rolled out the “Colorado Option” health insurance, a program that standardizes benefits across individual and small group health insurance companies, expanding upon the Affordable Care Act’s mandated coverage to give consumers and businesses standard baselines for coverage. The Colorado Option standardization applies to small group plans – for businesses with under 100 employees – and individual plans (plans that aren’t offered through employers).
As of Jan. 10, 2023, around 35,000 people have enrolled in Colorado Option plans, 25,000 of which enrolled through the state’s health insurance marketplace, Connect for Health Colorado. A news release from the Colorado Division of Insurance (CDOI) notes the 25,000 enrollees constitute 13 percent of eligible open enrollment enrollees. Since this is the first year the Colorado Option has been available, the uptake is remarkable – for perspective, the CDOI reports Washington’s state standard options had a 1 percent enrollment rate.
“I am extremely proud of the work of our team at the Division of Insurance. Kyle Brown, Kyla Hoskins and the rest of the DOI team built a Colorado Option plan that people are obviously excited about,” said Colorado Insurance Commissioner Michael Conway in a news release. “In Washington state, their public option only had approximately 1 percent of total enrollment in its first year. The fact that we are at 13 percent far surpassed my hopes for what we would achieve in our first year.”
The Colorado Option expands ACA standards to offer no-cost primary care, no-cost mental health visits, and, in a first for state standard health plans, explicit benchmarks for covered care for transgender patients.
Although a state news release acknowledged obtaining gender-affirming health care for transgender patients under the Colorado Option could still be a bureaucratic morass, the CDOI compiled the Gender-Affirming Care Coverage Guide to help people understand their health plan benefits if they have a standardized plan.
Requirements for health insurance carriers under the Colorado Option
While these myriad changes may be hailed as a win for consumers, other states will likely watch to see how insurance carriers approach the regulatory changes in that state. While most Americans obtain health insurance through employment, about 4 percent of the Medicare-ineligible population gets insurance through their state exchange.
In addition to extending coverage requirements for carriers, the CDOI also has requirements that premiums will adjust downward (with a caveat for inflation) over the next few years.
According to the CDOI: “For this year, insurance companies were required to have premiums for Colorado Option plans that are 5 percent lower than 2021 premiums (with adjustments for inflation). For the 2024 Colorado Option plans, premiums must be 10 percent lower than 2021 premiums and for 2025 plans, they must hit a 15 percent reduction target. And starting this year, the DOI will have the ability to hold the industry accountable for meeting the target, set by the legislature, through hearings if the industry fails to do so.”
The CDOI asserts that the commissioner’s office has the authority to enforce these premium reduction expectations using the rate review process. If a company fails to meet the reduction standard for a Colorado Option plan, the news release says, “the Commissioner of Insurance will hold public hearings during the summer of 2023 for the plans for 2024.”
Texas overhauls administrative text to reflect actual laws
The Texas Department of Insurance (TDI) made a few updates to its insurance regulations in late 2021 to make it simpler to maintain a license, track carrier appointments, and generally stay compliant as an insurance business.
Among the changes were measures such as:
- Ending some unique license types that made it hard to establish reciprocity
- Establishing easier reciprocity for adjuster licensees
- Ending the practice of requiring a letter of clearance for non-residents who are relocating to Texas
- No longer requiring branch locations to register individually with the Texas Secretary of State
Many of these measures were intended to make it easier for producers and adjusters to do business in Texas, while changing little in the way of consumer protections. Yet, by continuing to have differing standards pop up in online searches and internal documentation, both those trying to follow the rules and those trying to enforce them faced confusion and headaches.
So, in January 2023, the TDI issued a 63-page list of administrative changes to its legal code, from simplifying the language used in the laws to reflecting rule changes to correcting new mailing addresses and contact information.
While this seems like a rather banal procedure, it’s a reminder of two things:
- Laws don’t exist in a self-encapsulated, insular form. They’re part of a network of integrated ideas and definitions, and changing them has ripple effects.
- Updating the ticky-tacky administrative stuff is boring and time consuming and frustrating, but not updating the boring stuff can cause utter chaos as people grapple with different interpretations and conflicting information.
So, Texas, our hats are off to you. Fortunately, for agencies and carriers, AgentSync’s up- and downstream integrations can reduce the amount of manual input and data conflicts you might otherwise endure in your tech stack.
Other state changes
Delaware issued a bulletin to inform pharmacy benefits managers of changes wrought by new regulations, including annual network adequacy reporting, which is due May 1, and other reporting deadlines and form requirements. Another release from Commissioner Trinidad Navarro opened state regulations to allow licensed captive insurers to hold some of their capital and surplus in brokerage accounts.
Wisconsin Insurance Commissioner Nathan Houdek announced the state’s enrollment for Healthcare.gov during the 2022-2023 open enrollment period increased to more than 221,000 Wisconsinites. Gov. Tony Evers took a keen interest in increasing public awareness of enrollment options, including building an access website in English, Spanish, and Hmong.
Pennsylvania’s Insurance Department has published the state list of surplus lines insurers that are eligible to transact business in the state. The Eligible Surplus Lines Insurer List is available at the Pennsylvania Bulletin website.
Minnesota Department of Commerce has done a total glow-up, announcing a new website designed to make it easier for consumers to find information and services. New year, new you, we’re always fans of modernizing your tech.
Alabama Gov. Kay Ivey appointed Mark Fowler to serve as the official insurance commissioner – he’s been the acting commissioner since July 2022, so he’s already got hands-on experience in the role.
Michigan Department of Insurance and Financial Services Director Anita Fox issued a bulletin to alert the industry that the Michigan Property and Casualty Guaranty Association limits to net worth for 2023 are set at $36,290,000, and the state’s covered claim cap is $7,260,000.
Maryland has put the industry on notice that any insurance carrier, plan, or finance company operating in the state must supply the state with emergency contact information and particulars about who will be the state’s point of contact in the case of a disaster, health emergency, or severe event data call. Contacts are due by April 14, 2023. The Maryland Insurance Department has also proposed updating their CE laws to require producers who sell homeowners and commercial property insurance to take at least two hours of flood-related CE.
Utah is adding a limited line individual license for those who sell pet insurance.
While these points of interest aren’t comprehensive, our knowledge of producer license and compliance maintenance is. See how AgentSync can help make you look smarter today.