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General Laws

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.

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