Insurance Law

New Hampshire Changes Health Insurance Laws

July 2008

By Donald J. Pfundstein*

It was a busy session for the New Hampshire legislature this year, with several bills that will impact health insurance coverage enacted into law. The legislature also referred a number of health insurance bills for interim study.

New Health Insurance Laws Enacted

Creation of New Hampshire HealthFirst (SB540). SB540 was touted by Governor John Lynch as a way to provide small businesses with more affordable health insurance options. Beginning on October 1, 2009 (or as soon thereafter as practicable), every health carrier that has at least 1,000 covered lives in the small group market must offer New Hampshire HealthFirst, which is a standard wellness plan, to small employers.

At least once every three years, an advisory committee will make recommendations to the Insurance Commissioner regarding requirements for the standard wellness plan. According to SB540, the plan requirements must be established so that carriers will be “reasonably expected” to set plan rates that are at or below 10% of the prior year’s median statewide wage. An actuary will be engaged to confirm that the plan requirements proposed by the advisory committee are reasonable in relation to the target rate before carriers will be required to make rate filings.

Termination of the Small Employer Reinsurance Pool (SB468). In 2005, legislation creating the small employer reinsurance pool was enacted. The reinsurance pool was designed to promote competition by giving New Hampshire health carriers writing in the small group market the option to reinsure certain risks with the pool. By 2008, it was clear that the reinsurance pool was not accomplishing these goals and a legislative fix was needed. Under SB468, coverage through the small employer reinsurance pool will terminate on December 31, 2008. Like carriers writing other lines of business, health carriers writing in the small group market will now be required to purchase reinsurance coverage in the private marketplace. Even though this is a significant shift for health insurance carriers, the only change that consumers are likely to notice is that the employees of small employers will no longer be required to fill out medical underwriting forms.

Coverage for Obesity and Morbid Obesity, Including Bariatric Surgery (SB312). Under SB312, health carriers must provide coverage for the diseases and ailments caused by obesity and morbid obesity and for the treatment of those diseases and ailments, including bariatric surgery. Coverage is required if the treating physician has issued a written order stating that a particular treatment is medically necessary and the patient is at least 18 years old. In addition, the treatment must be provided in accordance with the patient qualification and treatment standards set forth by the American Society for Metabolic and Bariatric Surgery or the American College of Surgeons. The treatment standards that may be required before bariatric surgery or other treatments will be covered may include pre-operative psychological screening and counseling, behavior modification, weight loss, exercise regimens, and nutritional counseling.

Coverage for the Services of Midwives (SB131). Prior to the enactment of SB131, health carriers were required to provide coverage for services rendered by a certified midwife only if the services were provided in a licensed health care facility. Under SB131, health insurance carriers will be required to provide coverage for the services of a certified midwife if the services are provided in a licensed health care facility or at home.

Charges for Filling a Prescription (HB1230). Under this bill, health carriers must make certain that contracted pharmacies are charging the usual and customary price of filling a prescription or the contracted copayment, whichever is less. Thus, if an insured who is covered by a health plan with a $10 copayment fills a prescription that costs $3, the insured will only be required to pay $3, since the price of filling the prescription is less than the copayment.

Durable Medical Equipment (SB301). This bill requires the New Hampshire Insurance Department (“Department”) to establish standards for access to the provision of durable medical equipment requiring a prescription. However, the standards developed by the Department will not apply to durable medical equipment used exclusively for the administration of medication. In addition, health carriers will be allowed to continue the practice of providing prescriptions for durable medical equipment that are shipped to the patient’s home.

Bills Referred for Interim Study

The legislature also referred several health insurance related bills for interim study. The House Commerce Committee will study a bill that would require health carriers to provide coverage for bariatric surgery for diabetics. The House Health and Human Services Committee is scheduled to study a bill that extends Medicaid to prevent gaps in coverage under the Healthy Kids program and a bill dealing with data collection practices of health care providers.

The House Health and Human Services Committee is also studying a controversial bill that seeks to extend privacy protections beyond those provided by HIPAA. Because this bill would allow a patient to elect not to disclose protected health information for the purpose of treatment, payment or essential health care operations, it has garnered a significant amount of attention from the medical community as well as insurers.

One recent study suggests that healthcare is the number one domestic policy issue on the minds of Americans. With the presidential and state elections heating up, health insurance coverage and healthcare are likely to receive continued attention, making the 2009 legislative session one to watch.

*Donald Pfundstein is admitted in New Hampshire.

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