Health Insurance Laws
Small Employer Health Insurance
Alaska Statute requires insurers who offer health insurance coverage to small employers in the state to offer each small employer (defined as those with 2-50 employees) all the health insurance plans that they offer to other small employers in the state regardless of the health or claims experience of the group. They must offer coverage to all eligible employees and not deny coverage to an employee. This law does not require an employer to purchase coverage for their employees. Alaska law also requires that insurance companies providing coverage to small employers adhere to certain rating restrictions including a maximum annual rate increase of 15% for poor group claims experience.
Large and Small Employer Health Insurance
According to Alaska law, insurance companies that offer health insurance coverage to large and small employer groups:
- May not base eligibility for coverage on health status, claims experience, medical history or condition, disability, receipt of health care, genetic information or any evidence of insurability.
- Must continue to renew the coverage, except in certain specified circumstances such as a failure to pay premiums.
- May not require a preexisting condition waiting period that is longer than 12 months for a health condition that existed prior to the effective date of coverage which is called a preexisting condition waiting period. Pregnancy and genetic information cannot be considered preexisting conditions and therefore no waiting period may be applied.
- Must reduce any preexisting condition waiting period by the amount of time an individual was covered under prior health insurance coverage. However, the insurer is not required to reduce such a waiting period by any periods of health insurance coverage before a 90 day or more break in health insurance coverage. For example:
An individual is covered under employer A’s health insurance plan for 6 months before terminating coverage. The individual then terminates employment and is not covered under any health insurance plan for 100 days. The individual then becomes covered under employer B’s health plan and remains covered for 5 months. The individual terminates employment and is not covered under any health insurance plan for 45 days. The individual then enrolls in employer C’s health insurance plan which has a 12 month preexisting condition waiting period. Since the individual had a break in coverage of more than 90 days between employer A and employer B, the 6 months covered under employer A’s health insurance plan are not used to reduce the 12 month preexisting condition waiting period. Therefore, only 5 months of coverage with employer B will be used to reduce the 12-month preexisting condition waiting period. Employer C’s health insurance plan may only apply a 7-month waiting period (12-months – 5 months).
Patients’ Bill of Rights
This Alaska law applies to health insurance plans that require a covered person to comply with utilization review guidelines. Utilization review is a system of reviewing medical necessity, appropriateness or quality of health care services, and supplies. Examples of utilization review include pre-authorization requirements for services, retrospective claim reviews, preadmission certification requirements, and those items described under the Managed Care section.
The Patients’ Bill of Rights provides significant consumer protections including the following:
- A health care provider cannot be penalized or a contract with an insurer terminated because the provider acts as an advocate for a covered person.
- A contract with a health care provider must protect the ability of the provider to communicate openly with a covered person about appropriate diagnostic testing and treatment options.
- The predominant purpose of a contract with a provider cannot be the creation of direct financial incentives to withhold covered services that are medically necessary.
- An insurer may not retroactively deny a claim for a covered procedure if the insurer preauthorized the procedure on the basis of medical necessity.
- An insurer must make a decision on pre-approval or coverage determination within 72 hours after receiving a request for non-emergency services and no later than 24 hours for emergency services.
- An insurer may not deny payment for a service on the basis of medical necessity unless the decision is made by a licensed health care provider that is an agent or employee of the insurer.
- Emergency room services must be covered if any coverage is provided for treatment of a medical emergency.
- Covered health care services must be reasonably available in the community in which a covered person resides, or, if the health care service is not available in the community, adequate referrals outside the community must be provided if referrals are required.
- If a contract between a health care provider and an insurer is terminated, a covered person may continue to be treated by that health care provider with respect to continuing treatments already being provided at the time of termination as if the contract were still in effect.
- An insurer must provide an internal appeal mechanism for a covered person who disagrees with a decision.
- The insurer must decide within 18 working days after notice of appeal for non-emergency services and within 72 hours for emergency services.
- The decision must be made by a health care provider with same professional license as the provider that treated the covered person.
- A covered person has a right to an external appeal by an independent external appeal agency for claim denials on the basis that an item or service is not medically necessity or appropriate, investigational or experimental or where medical judgment is involved.
- External appeal conducted by a panel of 2 clinical peers.
- A decision must be made with 21 working days after the appeal is filed for non-emergency and 72 hours for emergency care.
- The decision is binding unless the covered person appeals to superior court.
- Coverage may not be limited to services performed by providers under contract with the insurer, but an additional deductible, copayment, or premium may apply for services performed by non-contracted providers.
Comprehensive Health Insurance Association (CHIA)
In 1992, the Alaska legislature established a health insurance program for high-risk individuals. This law allows all individuals who have been refused coverage by at least two insurers, who have a specified medical condition, or who meet certain other criteria, to purchase coverage through the CHIA. Individuals who meet the state definition of a federally defined eligible individual or an individual eligible under the Trade Adjustment Assistance Reform Act of 2002 can receive coverage through the CHIA without a waiting period. A federally defined eligible individual is an individual whose most recent coverage was under a group health plan; who had at least 18 months of health insurance coverage; who has exhausted any available COBRA coverage; whose most recent coverage was not terminated due to nonpayment of premiums or fraud; who does not have other health insurance coverage; and who is not eligible for other coverage.
The premium rates for the program are approximately 145% of the average standard risk rate for health insurance plans sold in Alaska with similar benefits.
For information on this program, contact the Division of Insurance in Anchorage at 1-800-467-8725 (in Alaska only) or (907) 269-7900.