State by state variations of laws, compliance protocols, industry transparency, and general regulatory culture 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 sampler 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.
States begin Medicaid disenrollment
In 2020 (we don’t have to tell you what was going on in 2020, do we?), Congress passed the Families First Coronavirus Response Act (FFCRA), which essentially stopped states from disenrolling people from state-run Medicaid and Children’s Health Insurance Program (CHIP) benefits. Thanks to the Consolidated Appropriations Act that Congress signed in the last few days of 2022, the requirement has ended effective in April 2023.
People can be disqualified from Medicaid or CHIP for a number of reasons, most of them related to work and income requirements that vary by state, and Medicaid “churn” – people disenrolling and re-enrolling weeks, months, or even just a year later – is high. In fact, in any given month, 10 percent of Medicaid enrollees are people who have previously been on Medicaid but were disenrolled for a few months because of a temporary increase in income. Much of the time, people who are disenrolled and who then re-enroll just go without health care insurance in the meantime. Another fact: The people who are most likely to experience Medicaid and CHIP program churn are seniors and children.
The Kaiser Family Foundation (KFF) has an excellent brief of what disenrollment might look like, or, as KFF calls it, “the Unwinding of the Medicaid Continuous Enrollment Provision.” The summary: Anywhere from 5 million to 15 million people may be unenrolled over the next several months, many of them will be “churn” enrollees, and generally the net result will be fewer Americans with insurance coverage at any given time. Put another way, many of the people the states will disenroll from their Medicaid programs won’t get insurance through other means.
Delaware issued a bulletin to enact a Special Enrollment Period (SEP) for the approximately 40,000 Delaware residents the state anticipates disenrolling from Medicaid. These individuals will have 60 days from their disenrollment notice to select a Health Insurance Marketplace plan or request enrollment in any employer-based coverage they can access.
The bulletin also opens a Medicare Supplement (also known as Medigap) SEP for Delawareans who qualify to enroll in Original Medicare, allowing them to enroll in gap or supplemental plans without underwriting restrictions. People with disabilities or who are 65 and over can use this SEP, and the state requests health insurers to offer a guaranteed issue period for people who qualify for 63 days from the date the state removes their Medicaid eligibility.
Oklahoma announced similar provisions for the state’s SoonerCare disenrollment. The Oklahoma Health Care Authority will send four letters to disenrolled Oklahomans, one to remind them of renewal season, a second letter to tell them if their coverage is ending and when and why, a third at 45 days from their coverage end, and a fourth 10 days before their coverage ends.
Like Delawareans, Oklahomans will have 60 days from ineligibility to find alternative coverage.
U.S. District Court in Texas rules against ACA preventative care provisions
If 50 states and six departments of insurance aren’t enough disparity for you, let’s add federal regulation, state legislative action, and state court rulings just to keep it interesting.
Despite the glib introduction, though, a decision by the U.S. District Court in the Northern District of Texas to rule against the Affordable Care Act’s mandate of prophylactic care could have an enormous impact on the entire intention and enforceability of the ACA.
In Braidwood Management. Inc. v. Becerra, the plaintiffs argued:
- The body that determines what preventative care services health insurance must cover doesn’t have the authority to do that because they aren’t selected by the president and approved by the Senate.
- The body that determines what preventative care services health insurance must cover doesn’t have the authority to do that because Congress can’t delegate that much power.
- The preventative care services list is in violation of religious freedoms because it requires employers to pay for procedures that are in conflict with their closely held beliefs.
The plaintiffs are Christian business owners who object to paying for a drug that prevents users from contracting HIV. The preventative drugs in this case are more than 90 percent effective in preventing HIV contraction through sexual contact and more than 70 percent effective in preventing HIV contraction through needle use.
Judge Reed O’Connor initially ruled partially in favor of the plaintiffs in the case, and partially in favor of the U.S. Department of Health and Human Services in September 2022 – Judge O’Connor upheld that Congress can delegate the authority of deciding preventative care. Then, on March 30, 2023, he issued a ruling for the remedy of the case. His ruling would essentially limit the list of preventative services the ACA can require health insurance plans to cover to the list of preventative care services as it read in March 2010. He also decided the plaintiff’s stance that requiring their businesses to pay for plans with HIV preventative services is a violation of their religious freedoms.
Yet, some state DOIs stand directly in opposition to this ruling, with Washington, Connecticut, Maryland, and Michigan Commissioners of Insurance specifically directing their markets to ignore this ruling until the appeals process has been exhausted.
Oklahoma DOI brings administrative actions against PBM
Oklahoma Commissioner Glen Mulready announced April 3, 2023, that he would bring administrative actions against a pharmacy benefits manager (PBM) in the state. The DOI is seeking to revoke or suspend the PBM’s license.
Mulready said the PBM told consumers they couldn’t fill 90-day prescriptions in person, and that pharmacy-filled prescriptions could only be 30 days’ worth. Mulready’s filing said the PBM advised consumers they could, however, still get 90-day prescriptions filled through its affiliated mail-in pharmacy service.
The state informed the company that this communication, directly steering consumers to its parent company, was in violation of the state’s Patient’s Right to Pharmacy Choice Act. The company took steps to fix this, and then notified their large client employers that filling 90-day prescriptions is prohibited under Oklahoma’s regulations, which Mulready says is untrue and a second violation against the company.
An administrative judge will hear the case May 25, 2023.
Other state changes
Wyoming is looking for a Senior Financial Examiner, Senior Policy & Planning Analyst, Licensing Specialist, and Office Support Specialist for the Wyoming Department of Insurance. The state also released its summary of the last years’ worth of regulatory and legislative changes.
Florida Office of Insurance Regulation has more than 50 active investigations open into the way property and casualty insurers have handled consumer claims in the state following Hurricane Ian. The state has issued a memorandum to reiterate carrier duties in the wake of disasters to facilitate an expedient claims process.
Colorado has closed the comment period on a proposal to amend state health insurance regulations to reflect compliance with the federal No Surprises Act. Additionally, another draft regulation would change the state’s filing requirements for network adequacy standards for stand-alone dental care plans.
Delaware Commissioner Trinidad Navarro has requested that all insurance carriers that market health insurance plans in the state submit a survey about what plans they offer and basic contact information to the DOI by Sept. 15, 2023. The department also reminded the industry that, since the Delaware Department of Insurance moved to its current location – 1351 West North St., Suite 101, Dover, DE 19904 – the U.S. Postal Service isn’t forwarding mail anymore. Don’t send checks or money orders to the department’s old address!
Texas has changed its fingerprint rules to require people and companies to apply for a service code from www.tdi.texas.gov/agent/fingerprinting-process.html before they can apply for a license, registration, certification, or association with a regulated agency or company.
Connecticut issued a reminder to adjusters and motor vehicle physical damage (MVPD) appraisers to renew their licenses by June 30, 2023.
South Dakota enacted legislation that tightens rules around rebating, raffles, and other inducements to buy insurance, as well as the advertisements of those inducements. The premise is that producers shouldn’t incentivize insurance policies beyond the straightforward benefits of the policy – nothing that indicates “if you buy insurance you get something else free.”
Mississippi has added a provision to the state’s insurance code to allow anyone with a major lines license to sell pet insurance if they’re appointed by a pet insurance provider, as well as a provision that allows the commissioner to add CE requirements for pet insurance at their discretion.
California issued its annual reminder to the industry that all licensees or applicants that have any change in their background information need to report it (either via the state’s portal or via NIPR) within 30 days.
Tennessee no longer requires producers to have a pre-licensing course certificate of completion to qualify to take the state’s insurance licensing exams.
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; head over to the Compliance Library and wrastle up some state-by-state regulation and more jurisdictional updates.