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					                          CAPITOL NEWS
                                   March 25, 2005

Federal – Congress in Recess, Bills of Interest

Congress is currently in recess, and is scheduled to reconvene on Tuesday, April 5th.
Two pieces of legislation have been recently introduced that Assurant Health will
The “Genetic Information Nondiscrimination Act" (H.R. 1227) was recently introduced in
the House. The bill is identical to the Senate’s bill passed in February. This legislation
would establish new federal requirements that prohibit insurer and employer
discrimination, whether providing coverage or setting rates, on the basis of genetic
The Senate has re-introduced legislation (S. 637) which proposes the establishment of
a Small Employers Health Benefits Program (SEHBP). Under this legislation, the
SEHBP would be administered by the federal Office of Personnel Management. The bill
would authorize OPM to enter into “risk corridor” arrangements with plans during the
first five years of SEHBP implementation. All employers with fewer than 100 workers
would be eligible to participate in the new program and a tax credit would be available to
employers willing to pay at least 60% of the premiums for their employees.

For more information, please contact Laurel Call.

Arkansas – Discount Medical Card Bill Passes

HB 1209 was signed by Governor Mike Huckabee and makes changes to the State’s
existing discount medical card law regarding disclosure and termination practices. The
bill was pushed by the State Attorney General’s office. Our national trade association
(America’s Health Insurance Plans - AHIP) was unable to secure an exemption for
insurers from discount medical card licensing requirements. However, AHIP was
able to reduce the time period for cancellation from 45 days to 30 days.

For more information, please contact Laura Riske.

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Arkansas – Pharmacy Benefit Manager Bill Fails to Pass

HB 2845, a proposed bill that would regulate pharmacy benefit managers (PBMs) failed
to move out of a key House committee. The bill would limit the terms of business
contracts used by PBMs, which could impact Assurant Health’s affiliation with Medco
(our PBM).
Some legislators had reservations about HB 2845 based on input they received from
employers, carriers and PBMs. With the bill’s failure to be passed out of the committee,
it is unlikely to continue moving forward through the legislative process.

For more information, please contact Laura Riske.

Colorado – Bill Update

On March 22nd, the legislature passed a bill (HB 1060) which eliminates an annual
deadline for insurance companies to apply tax credits for its contributions to the state’s
high risk pool, allows insurance companies to transfer unused tax credits, and prohibits
retaliatory tax on carriers.
On March 23rd, a House committee that deals with proposed insurance legislation
passed SB 103, a Multiple Employer Welfare Arrangement (MEWA) bill. The bill would
exempt small employers seeking coverage in the small group market who have
previously participated in a MEWA from the up-to-35 percent increased rate that carriers
may charge. Additionally, another MEWA bill that would require small employer carriers
doing business in the state to offer to underwrite MEWAs and to offer standard and
basic health benefit plans to MEWAs at the same rates charged to small employers was
“laid over” (request from sponsor to work on the bill prior to a legislative body’s
consideration for a specified limited amount of time) for a second time.
As one of the company’s priority states, Assurant Health will continue to work with its
retained lobbyist, AHIP, and other Colorado partners to protect the small group market.
For more information, please contact Scot Zajic.

Florida – List Billing Passes House Insurance Committee

HB 811, proposed legislation that would allow list billing has passed the House
Insurance Committee.
List billing enables small employers to facilitate their employees’ purchase of individual
coverage through bookkeeping services. Under the bill, the employer would be able to
deduct the insurance premium from the employees’ payroll check and submit the
payment to the insurance company. The employer would have no financial obligation
toward the employees’ premium.

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Many small employers regret that they are unable to provide group coverage, and list
billing gives them a way to offer a service to those employees who must seek individual

Assurant Health is currently working with retained counsel in Florida to improve the bill
by removing the requirement that an employer must be uninsured for the prior three
months in order to be eligible to list bill.

For more information, please contact Laura Riske.

Georgia - Commissioner Will Not Run for Lieutenant Governor
Insurance Commissioner John Oxendine pulled out of the 2006 race for lieutenant
governor saying he preferred to instead run for a fourth term as insurance
commissioner. He believes he can better serve the people as commissioner rather
than as lieutenant governor.
For more information, please contact Scot Zajic.

Georgia – High Risk Pool Update

A Georgia Senate committee did not debate HB 320, the Georgia Health Insurance Risk
Pool bill, as the governor’s office had concerns regarding a provision within the bill
allowing for an insurance industry tax cut. However, the Governor's Office has stated
that they are committed to establishing a high risk pool and wanted to work on
developing a viable policy over the summer.

Assurant Health has been supportive of establishing a high risk pool in Georgia.
Through the company’s advocacy and grassroots efforts, the government relations
department has developed strong working relationships with legislative leadership, the
Governor's Office and the agents' community. Assurant Health will provide our
expertise on high risk pools, and discuss the pools’ ability to increase access to
affordable health insurance for consumers.

Assurant Health Government Relations staff would like to thank all those who
participated in our grassroots efforts in Georgia. The constituents’ voice has helped
Assurant Health continue its dialogue with policymakers about establishing a Georgia
high risk pool.

For more information, please contact Scot Zajic.

Indiana – Rider Bill, Tax Credit Bill and Heartland Institute Event

Thanks to all our grassroots partners in Indiana who took action and made their voice
heard in support of HB 1075, which permits the use of modification riders with an
indefinite period of time.

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On March 24th, the Senate companion bill (SB 222) was amended and passed by the
House Insurance Committee on a 5-3 vote. The newly-amended Senate bill now reflects
the language of it companion bill, which Assurant Health supports. Government
Relations will keep you informed as the bill continues to move through the legislative
Also, SB 459, a bill that would allow employers with 10 or more full-time employees to
take a health insurance tax credit passed the Senate. Government Relations is working
with the state and national trade associations to lower the threshold to 2 employees to
be consistent with the federal HIPAA definition of small employer.

On March 23rd, Government Relations Director Laura Riske attended the Heartland
Capitol Forum in Indianapolis sponsored by the Heartland Institute, a well-respected
think tank on health policy issues. Dr. Merrill Matthews (Director for the Council for
Affordable Health Insurance) provided a presentation where he recommended various
ways to make health insurance more affordable in Indiana including: reducing or
eliminating health insurance mandates, permitting indefinite modification riders such as
HB 1075, supporting public funding of high risk pools, and allowing insurer assessments
for health care to go for health care and ensure tax equity.

For more information, please contact Laura Riske.

Kansas – HSA Bill Passes Both Chambers

HB 2098 has passed both the House and the Senate. This bill allows a bank to conduct
trust business and to act as a custodian or trustee of MSA and HSA accounts without
being issued a special permit. Assurant Health supports legislation which facilitates the
sale and administration of Health Savings Accounts (HSAs).

For more information, please contact Laura Riske.

Louisiana - Prompt Pay
Recently, providers and health insurers held their first negotiating session on a broad
range of prompt pay issues that were the subject of a fierce legislative battle in the 2004
session. Assurant Health provided AHIP with our position and our experience regarding
prompt pay legislation and viable solutions to address concerns.
Negotiations between the provider community and insurance industry are expected to
occur weekly over the next month. The goal is to reach agreement on comprehensive
prompt pay legislation prior to this year’s legislative session, which convenes on April
25. Assurant Health will continue to work with the national trade and the provider
community to develop prompt claims processing and payment for clean claims.
Restrictive prompt payment legislation forces insurers to pay claims that have not been
fully reviewed; they may be excessive, improper, or fraudulent. The result is payment of
improper claims, and increased insurance premium costs. Health insurers need
adequate time to investigate and process claims to protect consumers from errors and
fraud-based inflated costs.
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Assurant Health supports high levels of efficiency for providers and insurers to
exchange accurate and complete information.

For more information, please contact Scot Zajic.

Mississippi – Premium Tax Bill Dies in Committee

SB 3023, a bill that would have increased the current 3% premium tax to 4%, died in the
Senate Finance Committee due to the lack of support from the Chairman (Senator
Tommy Robertson). Government Relations worked closely with the American Council of
Life Insurers (ACLI) to defeat this bill. We will continue to align our efforts in other
states such as Michigan where onerous proposals similar to this bill have recently been

For more information, please contact Laura Riske.

Missouri – Tax/Wages Statement Legislation

Government Relations and its state trade association (Missouri Insurance Coalition)
continue to oppose SB 244, which limits an insurer’s ability to use tax and wages
statements in the underwriting process. The bill has had one hearing in the Senate, but
no vote was taken.
Insurers use this information to determine if an employer/employee relationship exists
and which employees on a census are to be included in coverage. In addition, the
information can be used to determine if an employee works enough hours to be
considered a full time employee for insurance purposes. The forms also help verify that
the group is meeting the minimum participation requirement.
The absence of these forms could potentially open up the insurance industry to fraud.

For more information, please contact Laura Riske.

New Hampshire - Pull Back to Current Small Group Law

SB 125, small group reform bill passed the full Senate on March 24. Provisions include:
   •   prohibiting claim experience, health status, geographic location, and duration of
       coverage since issue as case characteristics;
   •   establishing a reinsurance mechanism, in which all health insurers are members
       for assessment.

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HB 611, the companion bill to SB 125, was reported out of the House Commerce
Committee. It too eliminates the use of health status and geography as permissible
rating case characteristics and establishes a reinsurance mechanism in which insurers
writing small employer coverage are included as members.
Assurant Health has worked with its retained lobbyist and AHIP to defeat efforts to
repeal the small group reforms the company gained just last year.
Assurant Health advocated for rating based on health history, age, gender, industry,
group size and geographic area. Demographic rating is critical for carriers to effectively
manage health insurance risks and to keep premiums at appropriate levels. Assurant
Health supports laws that give health insurers flexibility to rate risk accurately by using
accepted actuarial principles.

Restrictions such as community rating, adjusted community rating, and compressed
rate bands passed in the early-to-mid 1990’s have proven to restrict competition in the
marketplace, thereby driving up premiums and increasing the states’ uninsured

For more information, please contact Scot Zajic.

New Mexico – Session Adjourns

The legislature adjourned on March 19th. On March 17th, Governor Bill Richardson (D)
signed HB 394, which removes the rating flexibility for health plans sold through the
New Mexico Health Insurance Alliance. All health insurers doing business in the state
of New Mexico are assessed by the Alliance, but are not required to offer health plans
through the Alliance. Assurant Health does not currently offer health plans through the
For more information, please contact Laura Riske.

North Dakota - Governor Signs HSA Legislation

H.B. 1208, HSA legislation, was signed by Governor John Hoeven. HB 1208 excludes
high-deductible health plans from mental health and substance abuse mandates;
making them meet federal requirements for tax qualification of health savings accounts.
For more information, please contact Scot Zajic.

North Dakota – Update on Discount Medical Plans Bill

H.B. 1376, proposed discount medical plan legislation, was amended to remove a
prohibition against insurers selling discount medical plans. As originally introduced, the
bill prohibited selling discount medical plans or cards together with health insurance.

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America’s Health Insurance Plans worked with legislators, the Insurance Department,
and the attorney general advocating the removal of the prohibition on insurers.
Insurers will be able to sell and bundle insurance and discount cards as long as the
materials "clearly and conspicuously disclose that the plan is not insurance."
The bill unanimously passed the Senate on March 22. It now heads back to the House
for final consideration.
For more information, please contact Scot Zajic.

South Dakota - Legislature Adjourns - Bills of Interest
The legislature adjourned on March 22. Of interest to Assurant Health, AHIP helped
defeat a bill that would have required that closed blocks of business carry a loss ratio of
90 percent unless a medical management program was implemented.
Wins in the 2005 session include:
   •   H.B. 1047 – a small group insurance bill signed by the governor that authorizes
       premium discounts for small employers that meet certain carrier participation
       requirements; and
   •   H.B. 1148 – a tort reform bill signed by the governor that provides that certain
       statements and actions made by health care providers are not admissible to
       prove negligence or culpable conduct in medical malpractice actions.
For more information, please contact Scot Zajic.

Tennessee – Feds Approve Governor’s TennCare Plan

The federal government approved Governor Phil Bredesen's (D) reforms to the
TennCare program, which he says will save the state $350 million in the first year. The
state can now move forward with the first phase of its overhaul of the program.
While approval from the U.S. Department of Health and Human Services is a necessary
first step to make cuts to TennCare, the state remains under a federal judge's order that
prohibits cuts before a hearing, scheduled to begin March 28, to review the state's
decision. In an advance hearing, U.S. District Court Judge William J. Haynes Jr. urged
the parties to try to settle the dispute before the trial begins.

For more information, please contact Laura Riske.

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Utah – Session Adjourns

The legislature adjourned on March 2nd. On March 17th, Governor John Huntsman, Jr.
signed SB 61; creating a task force to study:
   •   market penetration, geographic distribution, and contracting arrangements of
       integrated health care systems in the health insurance and health care markets;
   •   policies that promote competition in the health care market; and
   •   patient choice of, and access to, health care providers including the impact of
       any willing provider laws as applied to HMOs and PPOs.

In addition, Governor Huntsman signed HB 70; enacting the State’s “Health Discount
Program Consumer Protection Act”, which will regulate the offer and marketing of
discount medical programs in Utah. The bill provides that licensed insurers are not
required to obtain a license to operate a discount medical program.

For more information, please contact Laura Riske.

Call LeClair’s Health Team at 1-877-532-5247 with any questions.

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