TITLE 27
Insurance
CHAPTER 27-50
Small Employer Health Insurance Availability Act
SECTION 27-50-3
§ 27-50-3 Definitions.
(a) "Actuarial certification" means a written statement signed by a member of
the American Academy of Actuaries or other individual acceptable to the
director that a small employer carrier is in compliance with the provisions of
§ 27-50-5, based upon the person's examination and including a review of
the appropriate records and the actuarial assumptions and methods used by the
small employer carrier in establishing premium rates for applicable health
benefit plans.
(b) "Adjusted community rating" means a method used to
develop a carrier's premium which spreads financial risk across the carrier's
entire small group population in accordance with the requirements in §
27-50-5.
(c) "Affiliate" or "affiliated" means any entity or person
who directly or indirectly through one or more intermediaries controls or is
controlled by, or is under common control with, a specified entity or person.
(d) "Affiliation period" means a period of time that must
expire before health insurance coverage provided by a carrier becomes
effective, and during which the carrier is not required to provide benefits.
(e) "Bona fide association" means, with respect to health
benefit plans offered in this state, an association which:
(1) Has been actively in existence for at least five (5)
years;
(2) Has been formed and maintained in good faith for purposes
other than obtaining insurance;
(3) Does not condition membership in the association on any
health-status related factor relating to an individual (including an employee
of an employer or a dependent of an employee);
(4) Makes health insurance coverage offered through the
association available to all members regardless of any health status-related
factor relating to those members (or individuals eligible for coverage through
a member);
(5) Does not make health insurance coverage offered through
the association available other than in connection with a member of the
association;
(6) Is composed of persons having a common interest or
calling;
(7) Has a constitution and bylaws; and
(8) Meets any additional requirements that the director may
prescribe by regulation.
(f) "Carrier" or "small employer carrier" means all entities
licensed, or required to be licensed, in this state that offer health benefit
plans covering eligible employees of one or more small employers pursuant to
this chapter. For the purposes of this chapter, carrier includes an insurance
company, a nonprofit hospital or medical service corporation, a fraternal
benefit society, a health maintenance organization as defined in chapter 41 of
this title or as defined in chapter 62 of title 42, or any other entity subject
to state insurance regulation that provides medical care as defined in
subsection (y) that is paid or financed for a small employer by such entity on
the basis of a periodic premium, paid directly or through an association,
trust, or other intermediary, and issued, renewed, or delivered within or
without Rhode Island to a small employer pursuant to the laws of this or any
other jurisdiction, including a certificate issued to an eligible employee
which evidences coverage under a policy or contract issued to a trust or
association.
(g) "Church plan" has the meaning given this term under
§ 3(33) of the Employee Retirement Income Security Act of 1974 [29
U.S.C. § 1002(33)].
(h) "Control" is defined in the same manner as in chapter 35
of this title.
(i)(1) "Creditable coverage" means, with respect to an
individual, health benefits or coverage provided under any of the following:
(i) A group health plan;
(ii) A health benefit plan;
(iii) Part A or part B of Title XVIII of the Social Security
Act, 42 U.S.C. § 1395c et seq., or 42 U.S.C. § 1395j et seq.,
(Medicare);
(iv) Title XIX of the Social Security Act, 42 U.S.C. §
1396 et seq., (Medicaid), other than coverage consisting solely of benefits
under 42 U.S.C. § 1396s (the program for distribution of pediatric
vaccines);
(v) 10 U.S.C. § 1071 et seq., (medical and dental care
for members and certain former members of the uniformed services, and for their
dependents)(Civilian Health and Medical Program of the Uniformed
Services)(CHAMPUS). For purposes of 10 U.S.C. § 1071 et seq., "uniformed
services" means the armed forces and the commissioned corps of the National
Oceanic and Atmospheric Administration and of the Public Health Service;
(vi) A medical care program of the Indian Health Service or
of a tribal organization;
(vii) A state health benefits risk pool;
(viii) A health plan offered under 5 U.S.C. § 8901 et
seq., (Federal Employees Health Benefits Program (FEHBP));
(ix) A public health plan, which for purposes of this
chapter, means a plan established or maintained by a state, county, or other
political subdivision of a state that provides health insurance coverage to
individuals enrolled in the plan; or
(x) A health benefit plan under § 5(e) of the Peace
Corps Act (22 U.S.C. § 2504(e)).
(2) A period of creditable coverage shall not be counted,
with respect to enrollment of an individual under a group health plan, if,
after the period and before the enrollment date, the individual experiences a
significant break in coverage.
(j) "Dependent" means a spouse, child under the age
twenty-six (26) years, and an unmarried child of any age who is financially
dependent upon, the parent and is medically determined to have a physical or
mental impairment which can be expected to result in death or which has lasted
or can be expected to last for a continuous period of not less than twelve (12)
months.
(k) "Director" means the director of the department of
business regulation.
(l) [Deleted by P.L. 2006, ch. 258, § 2, and P.L.
2006, ch. 296, § 2.]
(m) "Eligible employee" means an employee who works on a
full-time basis with a normal work week of thirty (30) or more hours, except
that at the employer's sole discretion, the term shall also include an employee
who works on a full-time basis with a normal work week of anywhere between at
least seventeen and one-half (17.5) and thirty (30) hours, so long as this
eligibility criterion is applied uniformly among all of the employer's
employees and without regard to any health status-related factor. The term
includes a self-employed individual, a sole proprietor, a partner of a
partnership, and may include an independent contractor, if the self-employed
individual, sole proprietor, partner, or independent contractor is included as
an employee under a health benefit plan of a small employer, but does not
include an employee who works on a temporary or substitute basis or who works
less than seventeen and one-half (17.5) hours per week. Any retiree under
contract with any independently incorporated fire district is also included in
the definition of eligible employee, as well as any former employee of an
employer who retired before normal retirement age, as defined by 42 U.S.C.
18002(a)(2)(c) while the employer participates in the early retiree reinsurance
program defined by that chapter. Persons covered under a health benefit plan
pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1986 shall
not be considered "eligible employees" for purposes of minimum participation
requirements pursuant to § 27-50-7(d)(9).
(n) "Enrollment date" means the first day of coverage or, if
there is a waiting period, the first day of the waiting period, whichever is
earlier.
(o) "Established geographic service area" means a geographic
area, as approved by the director and based on the carrier's certificate of
authority to transact insurance in this state, within which the carrier is
authorized to provide coverage.
(p) "Family composition" means:
(1) Enrollee;
(2) Enrollee, spouse and children;
(3) Enrollee and spouse; or
(4) Enrollee and children.
(q) "Genetic information" means information about genes, gene
products, and inherited characteristics that may derive from the individual or
a family member. This includes information regarding carrier status and
information derived from laboratory tests that identify mutations in specific
genes or chromosomes, physical medical examinations, family histories, and
direct analysis of genes or chromosomes.
(r) "Governmental plan" has the meaning given the term under
§ 3(32) of the Employee Retirement Income Security Act of 1974, 29 U.S.C.
§ 1002(32), and any federal governmental plan.
(s)(1) "Group health plan" means an employee welfare benefit
plan as defined in § 3(1) of the Employee Retirement Income Security Act
of 1974, 29 U.S.C. § 1002(1), to the extent that the plan provides medical
care, as defined in subsection (y) of this section, 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.
(2) For purposes of this chapter:
(i) Any plan, fund, or program that would not be, but for
PHSA Section 2721(e), 42 U.S.C. § 300gg(e), as added by P.L. 104-191, an
employee welfare benefit plan and that is established or maintained by a
partnership, to the extent that the 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 paragraph (ii) of this
subdivision, as an employee welfare benefit plan that is a group health plan;
(ii) In the case of a group health plan, the term "employer"
also includes the partnership in relation to any partner; and
(iii) In the case of a group health plan, the term
"participant" also includes an individual who is, or may become, eligible to
receive a benefit under the plan, or the individual's beneficiary who is, or
may become, eligible to receive a benefit under the plan, if:
(A) In connection with a group health plan maintained by a
partnership, the individual is a partner in relation to the partnership; or
(B) In connection with a group health plan maintained by a
self-employed individual, under which one or more employees are participants,
the individual is the self-employed individual.
(t)(1) "Health benefit plan" means any hospital or medical
policy or certificate, major medical expense insurance, hospital or medical
service corporation subscriber contract, or health maintenance organization
subscriber contract. Health benefit plan includes short-term and catastrophic
health insurance policies, and a policy that pays on a cost-incurred basis,
except as otherwise specifically exempted in this definition.
(2) "Health benefit plan" does not include one or more, or
any combination of, the following:
(i) Coverage only for accident or disability income
insurance, or any combination of those;
(ii) Coverage issued as a supplement to liability insurance;
(iii) Liability insurance, including general liability
insurance and automobile liability insurance;
(iv) Workers' compensation or similar insurance;
(v) Automobile medical payment insurance;
(vi) Credit-only insurance;
(vii) Coverage for on-site medical clinics; and
(viii) Other similar insurance coverage, specified in federal
regulations issued pursuant to Pub. L. No. 104-191, under which benefits for
medical care are secondary or incidental to other insurance benefits.
(3) "Health benefit plan" does not include the following
benefits if they are provided under a separate policy, certificate, or contract
of insurance or are otherwise not an integral part of the plan:
(i) Limited scope dental or vision benefits;
(ii) Benefits for long-term care, nursing home care, home
health care, community-based care, or any combination of those; or
(iii) Other similar, limited benefits specified in federal
regulations issued pursuant to Pub. L. No. 104-191.
(4) "Health benefit plan" does not include the following
benefits if the benefits are provided under a separate policy, certificate or
contract of insurance, there is no coordination between the provision of the
benefits and any exclusion of benefits under any group health plan maintained
by the same plan sponsor, and the benefits are paid with respect to an event
without regard to whether benefits are provided with respect to such an event
under any group health plan maintained by the same plan sponsor:
(i) Coverage only for a specified disease or illness; or
(ii) Hospital indemnity or other fixed indemnity insurance.
(5) "Health benefit plan" does not include the following if
offered as a separate policy, certificate, or contract of insurance:
(i) Medicare supplemental health insurance as defined under
§ 1882(g)(1) of the Social Security Act, 42 U.S.C. § 1395ss(g)(1);
(ii) Coverage supplemental to the coverage provided under 10
U.S.C. § 1071 et seq.; or
(iii) Similar supplemental coverage provided to coverage
under a group health plan.
(6) A carrier offering policies or certificates of specified
disease, hospital confinement indemnity, or limited benefit health insurance
shall comply with the following:
(i) The carrier files on or before March 1 of each year a
certification with the director that contains the statement and information
described in paragraph (ii) of this subdivision;
(ii) The certification required in paragraph (i) of this
subdivision shall contain the following:
(A) A statement from the carrier certifying that policies or
certificates described in this paragraph are being offered and marketed as
supplemental health insurance and not as a substitute for hospital or medical
expense insurance or major medical expense insurance; and
(B) A summary description of each policy or certificate
described in this paragraph, including the average annual premium rates (or
range of premium rates in cases where premiums vary by age or other factors)
charged for those policies and certificates in this state; and
(iii) In the case of a policy or certificate that is
described in this paragraph and that is offered for the first time in this
state on or after July 13, 2000, the carrier shall file with the director the
information and statement required in paragraph (ii) of this subdivision at
least thirty (30) days prior to the date the policy or certificate is issued or
delivered in this state.
(u) "Health maintenance organization" or "HMO" means a health
maintenance organization licensed under chapter 41 of this title.
(v) "Health status-related factor" means any of the following
factors:
(1) Health status;
(2) Medical condition, including both physical and mental
illnesses;
(3) Claims experience;
(4) Receipt of health care;
(5) Medical history;
(6) Genetic information;
(7) Evidence of insurability, including conditions arising
out of acts of domestic violence; or
(8) Disability.
(w)(1) "Late enrollee" means an eligible employee or
dependent who requests enrollment in a health benefit plan of a small employer
following the initial enrollment period during which the individual is entitled
to enroll under the terms of the health benefit plan, provided that the initial
enrollment period is a period of at least thirty (30) days.
(2) "Late enrollee" does not mean an eligible employee or
dependent:
(i) Who meets each of the following provisions:
(A) The individual was covered under creditable coverage at
the time of the initial enrollment;
(B) The individual lost creditable coverage as a result of
cessation of employer contribution, termination of employment or eligibility,
reduction in the number of hours of employment, involuntary termination of
creditable coverage, or death of a spouse, divorce or legal separation, or the
individual and/or dependents are determined to be eligible for RIteCare under
chapter 5.1 of title 40 or chapter 12.3 of title 42 or for RIteShare under
chapter 8.4 of title 40; and
(C) The individual requests enrollment within thirty (30)
days after termination of the creditable coverage or the change in conditions
that gave rise to the termination of coverage;
(ii) If, where provided for in contract or where otherwise
provided in state law, the individual enrolls during the specified bona fide
open enrollment period;
(iii) If the individual is employed by an employer which
offers multiple health benefit plans and the individual elects a different plan
during an open enrollment period;
(iv) If a court has ordered coverage be provided for a spouse
or minor or dependent child under a covered employee's health benefit plan and
a request for enrollment is made within thirty (30) days after issuance of the
court order;
(v) If the individual changes status from not being an
eligible employee to becoming an eligible employee and requests enrollment
within thirty (30) days after the change in status;
(vi) If the individual had coverage under a COBRA
continuation provision and the coverage under that provision has been
exhausted; or
(vii) Who meets the requirements for special enrollment
pursuant to § 27-50-7 or 27-50-8.
(x) "Limited benefit health insurance" means that form of
coverage that pays stated predetermined amounts for specific services or
treatments or pays a stated predetermined amount per day or confinement for one
or more named conditions, named diseases or accidental injury.
(y) "Medical care" means amounts paid for:
(1) The diagnosis, care, mitigation, treatment, or prevention
of disease, or amounts paid for the purpose of affecting any structure or
function of the body;
(2) Transportation primarily for and essential to medical
care referred to in subdivision (1); and
(3) Insurance covering medical care referred to in
subdivisions (1) and (2) of this subsection.
(z) "Network plan" means a health benefit plan issued by a
carrier under which the financing and delivery of medical care, including items
and services paid for as medical care, are provided, in whole or in part,
through a defined set of providers under contract with the carrier.
(aa) "Person" means an individual, a corporation, a
partnership, an association, a joint venture, a joint stock company, a trust,
an unincorporated organization, any similar entity, or any combination of the
foregoing.
(bb) "Plan sponsor" has the meaning given this term under
§ 3(16)(B) of the Employee Retirement Income Security Act of 1974, 29
U.S.C. § 1002(16)(B).
(cc)(1) "Preexisting condition" means a condition, regardless
of the cause of the condition, for which medical advice, diagnosis, care, or
treatment was recommended or received during the six (6) months immediately
preceding the enrollment date of the coverage.
(2) "Preexisting condition" does not mean a condition for
which medical advice, diagnosis, care, or treatment was recommended or received
for the first time while the covered person held creditable coverage and that
was a covered benefit under the health benefit plan, provided that the prior
creditable coverage was continuous to a date not more than ninety (90) days
prior to the enrollment date of the new coverage.
(3) Genetic information shall not be treated as a condition
under subdivision (1) of this subsection for which a preexisting condition
exclusion may be imposed in the absence of a diagnosis of the condition related
to the information.
(dd) "Premium" means all moneys paid by a small employer and
eligible employees as a condition of receiving coverage from a small employer
carrier, including any fees or other contributions associated with the health
benefit plan.
(ee) "Producer" means any insurance producer licensed under
chapter 2.4 of this title.
(ff) "Rating period" means the calendar period for which
premium rates established by a small employer carrier are assumed to be in
effect.
(gg) "Restricted network provision" means any provision of a
health benefit plan that conditions the payment of benefits, in whole or in
part, on the use of health care providers that have entered into a contractual
arrangement with the carrier pursuant to provide health care services to
covered individuals.
(hh) "Risk adjustment mechanism" means the mechanism
established pursuant to § 27-50-16.
(ii) "Self-employed individual" means an individual or sole
proprietor who derives a substantial portion of his or her income from a trade
or business through which the individual or sole proprietor has attempted to
earn taxable income and for which he or she has filed the appropriate Internal
Revenue Service Form 1040, Schedule C or F, for the previous taxable year.
(jj) "Significant break in coverage" means a period of ninety
(90) consecutive days during all of which the individual does not have any
creditable coverage, except that neither a waiting period nor an affiliation
period is taken into account in determining a significant break in coverage.
(kk) "Small employer" means, except for its use in §
27-50-7, any person, firm, corporation, partnership, association, political
subdivision, or self-employed individual that is actively engaged in business
including, but not limited to, a business or a corporation organized under the
Rhode Island Non-Profit Corporation Act, chapter 6 of title 7, or a similar act
of another state that, on at least fifty percent (50%) of its working days
during the preceding calendar quarter, employed no more than fifty (50)
eligible employees, with a normal work week of thirty (30) or more hours, the
majority of whom were employed within this state, and is not formed primarily
for purposes of buying health insurance and in which a bona fide
employer-employee relationship exists. In determining the number of eligible
employees, companies that are affiliated companies, or that are eligible to
file a combined tax return for purposes of taxation by this state, shall be
considered one employer. Subsequent to the issuance of a health benefit plan to
a small employer and for the purpose of determining continued eligibility, the
size of a small employer shall be determined annually. Except as otherwise
specifically provided, provisions of this chapter that apply to a small
employer shall continue to apply at least until the plan anniversary following
the date the small employer no longer meets the requirements of this
definition. The term small employer includes a self-employed individual.
(ll ) "Waiting period" means, with respect to a group health
plan and an individual who is a potential enrollee in the plan, the period that
must pass with respect to the individual before the individual is eligible to
be covered for benefits under the terms of the plan. For purposes of
calculating periods of creditable coverage pursuant to subsection (j)(2) of
this section, a waiting period shall not be considered a gap in coverage.
(mm) "Wellness health benefit plan" means a plan developed
pursuant to § 27-50-10.
(nn) "Health insurance commissioner" or "commissioner" means
that individual appointed pursuant to § 42-14.5-1 of the general laws and
afforded those powers and duties as set forth in §§ 42-14.5-2 and
42-14.5-3 of title 42.
(oo) "Low-wage firm" means those with average wages that fall
within the bottom quartile of all Rhode Island employers.
(pp) "Wellness health benefit plan" means the health benefit
plan offered by each small employer carrier pursuant to § 27-50-7.
(qq) "Commissioner" means the health insurance commissioner.
History of Section.
(P.L. 2000, ch. 200, § 9; P.L. 2000, ch. 229, § 10; P.L. 2002, ch.
292, § 90; P.L. 2003, ch. 119, § 1; P.L. 2003, ch. 120, § 1;
P.L. 2003, ch. 286, § 1; P.L. 2003, ch. 375, § 1; P.L. 2004, ch. 269,
§ 1; P.L. 2006, ch. 258, § 2; P.L. 2006, ch. 273, § 5; P.L.
2006, ch. 296, § 2; P.L. 2006, ch. 297, § 5; P.L. 2006, ch. 377,
§ 6; P.L. 2006, ch. 469, § 6; P.L. 2007, ch. 164, § 1; P.L.
2007, ch. 221, § 1; P.L. 2011, ch. 131, § 1; P.L. 2011, ch. 146,
§ 1; P.L. 2012, ch. 256, § 11; P.L. 2012, ch. 262, §
11.)
