Insurance Law

Insurers Should Keep Their Eye on the Legislature in 2010

January 2010

While most discussions about insurance in recent months have focused on health care reform at the federal level, important insurance decisions are being made right here in New Hampshire. The Legislature will be considering a number of bills in 2010 that could have an impact on insurers doing business in the Granite State.

Consumer Protection Act

Under New Hampshire law, insurers are exempt from the provisions of the Consumer Protection Act. HB1253 seeks to repeal this exemption. The insurance exemption was included in the Consumer Protection Act to recognize the fact that insurers are heavily regulated by the Insurance Department and subject to sanctions and other penalties under the Unfair Insurance Trade Practices Act. HB1253 would subject insurers to class actions as well as private rights of action. Moreover, since the Consumer Protection Act provides for double and treble damages as well as attorney’s fees and costs, insurance premiums are likely to increase in New Hampshire if HB1253 is enacted.

Health Insurance

New Hampshire health carriers are familiar with the New Hampshire HealthFirst legislation that was enacted in 2008 and requires carriers writing in the small group market to offer a standard wellness plan. HB1488 will require carriers to offer a “basic” wellness plan in addition to the “standard” wellness plan. The bill calls for the “basic” wellness plan to be designed so that premiums are comparable to or below the lowest cost major medical health insurance presently offered in the small group market.

HB1309 and SB423 are the latest bills that include mandated insurance coverage. HB1309 would require carriers to provide coverage for the diagnosis and treatment of infertility, including but not limited to diagnostic tests, procedures and medications. SB423 would mandate coverage for services provided by athletic trainers.

In an effort to expand health insurance coverage, SB390 would require small employers with 5 or more employees that do not offer employer-sponsored health insurance to all employees to establish a health coverage premium only cafeteria plan. An employee who works over 15 hours per week and who is not eligible for an employer-sponsored plan could purchase small group coverage on an individual basis through a payroll deduction.

As the cost of prescription medications continues to rise, two bills have been introduced to address this issue. HB1426 would allow patients to bring their own medications to a hospital or health care facility as long as the prescriptions are valid and used in accordance with the hospital physician’s instructions. HB1444 would allow patients to purchase prescription drugs from Canada. The prescription drugs must be approved by Health Canada and come from a licensed and otherwise legitimate source.

SB420 prohibits carriers that provide prescription drug benefits from requiring insureds to use mail-order pharmacies.

In an effort to improve transparency and increase consumer awareness, HB1438 creates the Patient’s Right to Know Act. If this bill is enacted, health care providers would be required to provide patients with an estimate of any charge for a health care service that exceeds a minimum cost of $500 or any higher amount specified by rule. Similar disclosure requirements would be imposed upon carriers.

Relative to rating practices, HB1545 would prohibit carriers from using “group size” as a rating factor to establish premiums in the small group market.

Property and Casualty Insurance

Credit continues to be a hot topic on the property and casualty side. SB340 would prohibit carriers from charging a higher premium for auto or homeowners insurance on the basis of information obtained from a credit rating, credit history, or credit scoring model. Another credit bill, HB1268, seeks to ban the use of information concerning a person’s trade or occupation to rate or underwrite insurance coverage. The debate on these bills should take into consideration the revised credit rules adopted by the Insurance Department that will become effective on July 1 and recent NAIC activity on credit.

Two House bills that would increase the scope and duration of medical payments (“MedPay”) coverage have also been introduced. HB1233 would require auto policies to include MedPay coverage of at least $5,000 per person. Currently, auto policies must include MedPay coverage of at least $1,000 per person. Additionally, under current law, MedPay coverage applies to medical costs incurred in the year following the date of injury. HB1252 extends MedPay coverage to apply to medical costs incurred in the three years following the date of injury. A related bill, HB1342, requires health care providers to inform insureds of their right to submit a claim for medical expenses under MedPay coverage or a health insurance policy, or both.

HB1365 was introduced at the request of the Insurance Department. It establishes a commission to study all issues related to the licensing of motor vehicle appraisers. Two carriers licensed to write auto insurance would be appointed to the commission.

Workers’ Compensation Insurance

Several bills have been introduced in the House that amend the Workers’ Compensation Law. Two bills, HB1163 and HB1368, amend the definition of “employee” that is used to determine whether persons are entitled to the protections of the workers’ compensation statutes.

Independent medical examinations (“IMEs”) are the focus of HB1370 and HB1371. HB1370 would require any health care provider that performs 10 or more IMEs to file an annual report with the Insurance Department. HB1371 would give an injured employee the right to record an IME or have a witness present during the examination.

SB374 would require carriers or other entities requesting medical information from a provider regarding a workers’ compensation claim to provide “reasonable compensation” to the provider.

These bills have been introduced in the House or Senate and referred to the appropriate committee. Hearings will be scheduled over the next several weeks. If you have questions about any of these bills, please contact Marla Matthews or Donald Pfundstein.

*Marla Matthews is admitted in New Hampshire.

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