20-1379

20-1379. Guaranteed availability of individual
health insurance coverage; prior group coverage;
definitions

A. Every health care insurer that offers individual health insurance coverage in
the individual market in this state shall provide guaranteed availability of coverage to
an eligible individual who desires to enroll in individual health insurance coverage and
shall not:

1. Decline to offer that coverage to, or deny enrollment of, that individual.

2. Impose any preexisting condition exclusion for that coverage.

B. Every health care insurer that offers individual health insurance coverage in
the individual market in this state shall offer all policy forms of health insurance
coverage that are designed for, that are made generally available and actively marketed
to and that enroll both eligible or other individuals. A health care insurer that offers
only one policy form in the individual market complies with this section by offering that
form to eligible individuals. A health care insurer also may comply with the
requirements of this section by electing to offer at least two different policy forms to
eligible individuals as provided by subsection C of this section.

C. A health care insurer shall meet the requirements prescribed in subsection B of
this section if:

1. The health care insurer offers at least two different policy forms, both of
which are designed for, are made generally available and actively marketed to and enroll
both eligible and other individuals.

2. The offer includes at least either:

(a) The policy forms with the largest and next to the largest earned premium volume
of all policy forms offered by the health care insurer in this state in the individual
market during a period not to exceed the preceding two calendar years.

(b) A choice of two policy forms with representative coverage, consisting of a
lower level of coverage policy form and a higher level of coverage policy form, each of
which includes benefits that are substantially similar to other individual health
insurance coverage offered by the health care insurer in this state and each of which is
covered by a method that provides for risk adjustment, risk spreading or a risk spreading
mechanism among the health care insurer's policies.

D. The health care insurer's election pursuant to subsection C of this section is
effective for policies offered during a period of at least two years.

E. If a health care insurer offers individual health insurance coverage in the
individual market through a network plan, the health care insurer may do both of the
following:

1. Limit the individuals who may be enrolled under health insurance coverage to
those who live, reside or work within the service area for a network plan.

2. Within the service area of a network plan, deny health insurance coverage to
individuals if the health care insurer has demonstrated, if required, to the director
that both:

(a) The health care insurer will not have the capacity to deliver services
adequately to additional individual enrollees because of the health care insurer's
obligations to existing group contract holders and enrollees and individual enrollees.

(b) The health care insurer is applying this paragraph uniformly to individuals
without regard to any health status-related factor of the individuals and without regard
to whether the individuals are eligible individuals.

F. A health care insurer may deny individual health insurance coverage in the
individual market to an eligible individual if the health care insurer demonstrates to
the director that the health care insurer:

1. Does not have the financial reserves necessary to underwrite additional
coverage.

2. Is denying coverage uniformly to all individuals in the individual market in
this state pursuant to state law and without regard to any health status-related factor
of the individuals and without regard to whether the individuals are eligible
individuals.

G. If a health care insurer denies health insurance coverage in this state pursuant
to subsection F of this section, the health care insurer shall not offer that coverage in
the individual market in this state for one hundred eighty days after the date the
coverage is denied or until the health care insurer demonstrates to the director that the
health care insurer has sufficient financial reserves to underwrite additional coverage,
whichever is later.

H. An accountable health plan as defined in section 20-2301 that offers conversion
policies on an individual or group basis in connection with a health benefits plan
pursuant to this title is not a health care insurer that offers individual health
insurance coverage solely because of the offer of a conversion policy.

I. Nothing in this section:

1. Creates additional restrictions on the amount of the premium rates that a health
care insurer may charge an individual for health insurance coverage provided in the
individual market.

2. Prevents a health care insurer that offers health insurance coverage in the
individual market from establishing premium rates or modifying otherwise applicable
copayments or deductibles in return for adherence to programs of health promotion and
disease prevention.

3. Requires a health care insurer that offers only short-term limited duration
insurance limited benefit coverage or to individuals and no other coverage to individuals
in the individual market to offer individual health insurance coverage in the individual
market.

4. Requires a health care insurer offering health care coverage only on a group
basis or through one or more bona fide associations, or both, to offer health insurance
coverage in the individual market.

J. A health care insurer shall provide, without charge, a written certificate of
creditable coverage as described in this section for creditable coverage occurring after
June 30, 1996 if the individual:

1. Ceases to be covered under a policy offered by a health care insurer. An
individual who is covered by a policy that is issued on a group basis by a health care
insurer, that is terminated or not renewed at the choice of the sponsor of the group and
where the replacement of the coverage is without a break in coverage is not entitled to
receive the certification prescribed in this paragraph but is instead entitled to receive
the certification prescribed in paragraph 2 of this subsection.

2. Requests certification from the health care insurer within twenty-four months
after the coverage under a health insurance coverage policy offered by a health care
insurer ceases.

K. The certificate of creditable coverage provided by a health care insurer is a
written certification of the period of creditable coverage of the individual under the
health insurance coverage offered by the health care insurer. The department may enforce
and monitor the issuance and delivery of the notices and certificates by health care
insurers as required by this section, section 20-1380, the health insurance portability
and accountability act of 1996 (P.L. 104-191; 110 Stat. 1936) and any federal regulations
adopted to implement the health insurance portability and accountability act of 1996.

L. Any health care insurer, accountable health plan or other entity that issues
health care coverage in this state, as applicable, shall issue and accept a certificate
of creditable coverage of the individual that contains at least the following
information:

1. The date that the certificate is issued.

2. The name of the individual or dependent for whom the certificate applies and any
other information that is necessary to allow the issuer providing the coverage specified
in the certificate to identify the individual, including the individual's identification
number under the policy and the name of the policyholder if the certificate is for or
includes a dependent.

3. The name, address and telephone number of the issuer providing the certificate.

4. The telephone number to call for further information regarding the certificate.

5. One of the following:

(a) A statement that the individual has at least eighteen months of creditable
coverage. For the purposes of this subdivision, "eighteen months" means five hundred
forty-six days.

(b) Both the date that the individual first sought coverage, as evidenced by a
substantially complete application, and the date that creditable coverage began.

6. The date creditable coverage ended, unless the certificate indicates that
creditable coverage is continuing from the date of the certificate.

7. The consumer assistance telephone number for the department.

8. The following statement in at least fourteen point type:

Important Notice!

Keep this certificate with your important personal records to protect your
rights under the health insurance portability and accountability act of 1996
("HIPAA"). This certificate is proof of your prior health insurance coverage.
You may need to show this certificate to have a guaranteed right to buy new
health insurance ("Guaranteed issue"). This certificate may also help you
avoid waiting periods or exclusions for preexisting conditions. Under HIPAA,
these rights are guaranteed only for a very short time period. After your
group coverage ends, you must apply for new coverage within 63 days to be
protected by HIPAA. If you have questions, call the Arizona department of
insurance.

M. A health care insurer has satisfied the certification requirement under this
section if the insurer offering the health benefits plan provides the certificate of
creditable coverage in accordance with this section within thirty days after the event
that triggered the issuance of the certificate.

N. Periods of creditable coverage for an individual are established by the
presentation of the certificate described in this section and section 20-2310. In
addition to the written certificate of creditable coverage as described in this section,
individuals may establish creditable coverage through the presentation of documents or
other means. In order to make a determination that is based on the relevant facts and
circumstances of the amount of creditable coverage that an individual has, a health care
insurer shall take into account all information that the insurer obtains or that is
presented to the insurer on behalf of the individual.

O. A health care insurer shall calculate creditable coverage according to the
following rules:

1. The health care insurer shall allow an individual credit for each day the
individual was covered by creditable coverage.

2. The health care insurer shall not count a period of creditable coverage for an
individual enrolled under any form of health insurance coverage if after the period of
coverage and before the enrollment date there were sixty-three consecutive days during
which the individual was not covered by any creditable coverage.

3. The health care insurer shall not include any period that an individual is in a
waiting period or an affiliation period for any health coverage or is awaiting action by
a health care insurer on an application for the issuance of health insurance coverage
when the health care insurer determines the continuous period pursuant to paragraph 1 of
this subsection.

4. The health care insurer shall not include any period that an individual is
waiting for approval of an application for health care coverage, provided the individual
submitted an application to the health care insurer for health care coverage within
sixty-three consecutive days after the individual's most recent creditable coverage.

5. The health care insurer shall not count a period of creditable coverage with
respect to enrollment of an individual if, after the most recent period of creditable
coverage and before the enrollment date, sixty-three consecutive days lapse during all of
which the individual was not covered under any creditable coverage. The health care
insurer shall not include in the determination of the period of continuous coverage
described in this section any period that an individual is in a waiting period for health
insurance coverage offered by a health care insurer, is in a waiting period for benefits
under a health benefits plan offered by an accountable health plan or is in an
affiliation period.

6. In determining the extent to which an individual has satisfied any portion of
any applicable preexisting condition period the health care insurer shall count a period
of creditable coverage without regard to the specific benefits covered during that
period.

P. An individual is an eligible individual if, on the date the individual seeks
coverage pursuant to this section, the individual has an aggregate period of creditable
coverage as defined and calculated pursuant to this section of at least eighteen months
and all of the following apply:

1. The most recent creditable coverage for the individual was under a plan offered
by:

(a) An employee welfare benefit plan that provides medical care to employees or the
employees' dependents directly or through insurance, reimbursement or otherwise pursuant
to the employee retirement income security act of 1974 (P.L. 93-406; 88 Stat. 829; 29
United States Code sections 1001 through 1461).

(b) A church plan as defined in the employee retirement income security act of
1974.

(c) A governmental plan as defined in the employee retirement income security act
of 1974, including a plan established or maintained for its employees by the government
of the United States or by any agency or instrumentality of the United States.

(d) An accountable health plan as defined in section 20-2301.

(e) A plan made available to a person defined as eligible pursuant to section
36-2901, paragraph 6, subdivision (d) or a dependent pursuant to section 36-2901,
paragraph 6, subdivision (e) of a person eligible under section 36-2901, paragraph 6,
subdivision (d), provided the person was most recently employed by a business in this
state with at least two but not more than fifty full-time employees.

2. The individual is not eligible for coverage under:

(b) A health benefits plan issued by an accountable health plan as defined in
section 20-2301.

(d) Title 36, chapter 29, except coverage to persons defined as eligible under
section 36-2901, paragraph 6, subdivisions (b), (c), (d) and (e), or any other plan
established under title XIX of the social security act, and the individual does not have
other health insurance coverage.

3. The most recent coverage within the coverage period was not terminated based on
any factor described in section 20-2309, subsection B, paragraph 1 or 2 relating to
nonpayment of premiums or fraud.

4. The individual was offered and elected the option of continuation coverage under
a COBRA continuation provision pursuant to the consolidated omnibus budget reconciliation
act of 1985 (P.L. 99-272; 100 Stat. 82) or a similar state program.

5. The individual exhausted the continuation coverage pursuant to the consolidated
omnibus budget reconciliation act of 1985.

Q. Notwithstanding subsection P of this section, an individual is an eligible
individual if:

1. The individual is an individual enrollee in a health care services organization
that is domiciled in this state on the date that the health care services organization is
declared insolvent, including any health care services organization that is not an
accountable health plan as defined in section 20-2301.

2. The individual's coverage terminates during the delinquency proceeding, after
the health care services organization is declared insolvent.

3. The individual satisfies the requirements of an eligible individual as
prescribed in this section other than the required period of creditable coverage.

R. Notwithstanding subsection P of this section, a newborn child, adopted child or
child placed for adoption is an eligible individual if the child was timely enrolled and
otherwise would have met the definition of an eligible individual as prescribed in this
section other than the required period of creditable coverage and the child is not
subject to any preexisting condition exclusion or limitation if the child has been
continuously covered under health insurance coverage or a health benefits plan offered by
an accountable health plan since birth, adoption or placement for adoption.

S. If a health care insurer imposes a waiting period for coverage of preexisting
conditions, within a reasonable period of time after receiving an individual's proof of
creditable coverage and not later than the date by which the individual must select an
insurance plan, the health care insurer shall give the individual written disclosure of
the insurer's determination regarding any preexisting condition exclusion period that
applies to that individual. The disclosure shall include all of the following
information:

1. The period of creditable coverage allowed toward the waiting period for coverage
of preexisting conditions.

2. The basis for the insurer's determination and the source and substance of any
information on which the insurer has relied.

3. A statement of any right the individual may have to present additional evidence
of creditable coverage and to appeal the insurer's determination, including an
explanation of any procedures for submission and appeal.

T. This section and section 20-1380 apply to all health insurance coverage that is
offered, sold, issued, renewed, in effect or operated in the individual market after June
30, 1997, regardless of when a period of creditable coverage occurs.

U. For the purposes of this section and section 20-1380 as applicable:

1. "Affiliation period" has the same meaning prescribed in section 20-2301.

2. "Bona fide association" means, for health care coverage issued by a health care
insurer, an association that meets the requirements of section 20-2324.

3. "Creditable coverage" means coverage solely for an individual, other than
limited benefits coverage, under any of the following:

(b) A church plan as defined in the employee retirement income security act of
1974.

(d) Part A or part B of title XVIII of the social security act.

(e) Title XIX of the social security act, other than coverage consisting solely of
benefits under section 1928.

(f) Title 10, chapter 55 of the United States Code.

(g) A medical care program of the Indian health service or of a tribal
organization.

(h) A health benefits risk pool operated by any state of the United States.

(i) A health plan offered pursuant to title 5, chapter 89 of the United States
Code.

(j) A public health plan as defined by federal law.

(k) A health benefit plan pursuant to section 5(e) of the peace corps act (P.L.
87-293; 75 Stat. 612; 22 United States Code sections 2501 through 2523).

(l) A policy or contract, including short-term limited duration insurance, issued
on an individual basis by an insurer, a health care services organization, a hospital
service corporation, a medical service corporation or a hospital, medical, dental and
optometric service corporation or made available to persons defined as eligible under
section 36-2901, paragraph 6, subdivision (b), (c), (d) or (e).

(m) A policy or contract issued by a health care insurer or an accountable health
plan to a member of a bona fide association.

4. "Delinquency proceeding" has the same meaning prescribed in section 20-611.

5. "Different policy forms" means variations between policy forms offered by a
health care insurer, including policy forms that have different cost sharing arrangements
or different riders.

6. "Genetic information" means information about genes, gene products and inherited
characteristics that may derive from the individual or a family member, including
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.

7. "Health care insurer" means a disability insurer, group disability insurer,
blanket disability insurer, health care services organization, hospital service
corporation, medical service corporation or a hospital, medical, dental and optometric
service corporation.

8. "Health status-related factor" means any factor in relation to the health of the
individual or a dependent of the individual enrolled or to be enrolled in a health care
services organization including:

(a) Health status.

(b) Medical condition, including physical and mental illness.

(d) Receipt of health care.

(e) Medical history.

(f) Genetic information.

(g) Evidence of insurability, including conditions arising out of acts of domestic
violence as defined in section 20-448.

(h) The existence of a physical or mental disability.

9. "Higher level of coverage" means a policy form for which the actuarial value of
the benefits under the health insurance coverage offered by a health care insurer is at
least fifteen per cent more than the actuarial value of the health insurance coverage
offered by the health care insurer as a lower level of coverage in this state but not
more than one hundred twenty per cent of a policy form weighted average.

10. "Individual health insurance coverage" means health insurance coverage offered
by a health care insurer to individuals in the individual market but does not include
limited benefit coverage or short-term limited duration insurance. A health care insurer
that offers limited benefit coverage or short-term limited duration insurance to
individuals and no other coverage to individuals in the individual market is not a health
care insurer that offers health insurance coverage in the individual market.

11. "Limited benefit coverage" has the same meaning prescribed in section 20-1137.

12. "Lower level of coverage" means a policy form offered by a health care insurer
for which the actuarial value of the benefits under the health insurance coverage is at
least eighty-five per cent but not more than one hundred per cent of the policy form
weighted average.

13. "Network plan" means a health care plan provided by a health care insurer under
which the financing and delivery of health care services are provided, in whole or in
part, through a defined set of providers either under contract with a health care insurer
licensed pursuant to chapter 4, article 3 of this title or under contract with a health
care insurer in accordance with the determination made by the director pursuant to
section 20-1053 regarding the geographic or service area in which a health care insurer
may operate.

14. "Policy form weighted average" means the average actuarial value of the benefits
provided by a health care insurer that issues health coverage in this state that is
provided by either the health care insurer or, if the data are available, by all health
care insurers that issue health coverage in this state in the individual health coverage
market during the previous calendar year, except coverage pursuant to this section,
weighted by the enrollment for all coverage forms.

15. "Preexisting condition" means a condition, regardless of the cause of the
condition, for which medical advice, diagnosis, care or treatment was recommended or
received within not more than six months before the date of the enrollment of the
individual under the health insurance policy or other contract that provides health
coverage benefits. A genetic condition is not a preexisting condition in the absence of a
diagnosis of the condition related to the genetic information and shall not result in a
preexisting condition limitation or preexisting condition exclusion.

16. "Preexisting condition limitation" or "preexisting condition exclusion" means a
limitation or exclusion of benefits for a preexisting condition under a health insurance
policy or other contract that provides health coverage benefits.

17. "Short-term limited duration insurance" means health insurance coverage that is
offered by a health care insurer, that remains in effect for no more than one hundred
eighty-five days, that cannot be renewed or otherwise continued for more than one hundred
eighty days and that is not intended or marketed as health insurance coverage subject to
guaranteed issuance or guaranteed renewal provisions of the laws of this state but that
is creditable coverage within the meaning of this section and section 20-2301.