HEALTH MANDATES BACKGROUND BRIEF LPRO: Legislative Policy and Research Office

The law requires that most group and reviews policies to ensure they comply with individual plans include state law and monitors policy issues such as coverage for certain illnesses or conditions; health insurance mandates. that care by certain providers be reimbursed by insurance; and that certain populations, TYPES OF MANDATES such as newborns, be covered. These The applicability and operation of the requirements are called “health insurance mandates vary and may, in some cases, depend mandates.” Mandates also address other areas, on the health plan. Most of ’s such as requiring coverage or continuation of mandates require either that the specified coverage, coverage regardless condition, illness or service of pre-existing conditions be covered to the same and requirements that CONTENTS extent as other benefits, or health insurance carriers TYPES OF MANDATES that the services by the undertake certain duties specified provider be covered such as utilization review. FEDERAL VERSUS STATE to the same extent as services Mandatory condition/ provided by a physician. All illness and provider COSTS AND BENEFITS mandates apply to health reimbursement tend to benefit plans (major receive the most attention PROPOSING NEW MANDATES medical), but some have because these areas comprise broader application to other the largest segment of AUTOMATIC REPEAL health insurance. Some mandates and impact the mandates apply to all health costs of health insurance STAFF CONTACT insurance, but some apply coverage the most. only to group plans. The Department of Consumer and Business For example, in the individual market, Services (DCBS) Division of Financial coverage for treatment of alcoholism must be Regulation is responsible for consumer offered to an applicant for insurance. protection and regulation of the more than However, an insurer may charge an additional 1,500 insurance companies doing business in premium for providing this coverage and may Oregon. The Division investigates and deny such coverage according to the insurers resolves complaints against insurance usual underwriting standards. Treatment of companies and producers, investigates alcoholism in the group market is required violations of Oregon insurance law and takes under Oregon’s Mental Health Parity appropriate enforcement actions when mandate, and an applicant cannot be denied necessary, monitors companies selling such coverage or charged an additional insurance to ensure they are financially sound,

HEALTH INSURANCE MANDATES PAGE 1 OF 3 UPDATED: FEBRUARY 2017 HEALTH INSURANCE MANDATES premium. The cost for this coverage in the insurance, spending more for coverage and/or group market is included into the total passing costs on to their employees. premium. Under federal law, if a state mandates a health FEDERAL VERSUS STATE coverage or treatment that is above and beyond those included in federal law as an The federal Employee Retirement Income Security essential health benefit, or that is not already Act (ERISA) generally exempts self-insured required by state law before 2010, or included employers (employers that use their own funds in the state benchmark plan, the costs of the to pay employee medical claims rather than mandated coverage must be borne by the state purchase employee health insurance) from rather than the insurer. Essentially, if a state regulation. However, self-insured mandated benefit is established after 2010, employers are regulated by the United States the state may be required to pay the increased Department of Labor and must provide cost to insurers for providing the mandated coverage for federally mandated benefits, benefit. This requirement would only apply to including coverage for reconstructive breast qualified health plans sold inside the surgery for women after covered exchange. mastectomies, minimum hospital stays after childbirth and mental health treatment (if PROPOSING NEW MANDATES mental health services are covered by the ORS 171.875 requires that every proposed plan). A group health insurance policy that is legislative measure containing health governed by Oregon law and issued to an insurance coverage mandates is accompanied employer will include the statutorily by a report that assesses both the social and mandated benefits as well as any applicable financial effects of the coverage. Areas that federal health insurance mandates. must be addressed in this report include the Oregon’s mandates may be affected by the following: federal health care reform bill, the Patient  The extent to which treatment or service Protection and (ACA), will be used in Oregon; which could change the applicability or operation of the Oregon mandates.  The extent of coverage already available in Oregon; COSTS AND BENEFITS  The proportion of Oregonians who There is debate around the issues of health already have such coverage; insurance mandates. Proponents contend that mandates are necessary to ensure that insured  The extent to which lack of coverage individuals have adequate access to a broad results in financial hardship in Oregon; spectrum of health care and do not have to  Evidence of medical need in Oregon for turn to public-sector health care because they the proposed treatment or services; and have insufficient private health insurance coverage. However, opponents state that  The financial effect of the proposed excessive mandates add to the cost of health measure, including the increase/decrease insurance for everyone and result in of costs of treatment, the extent to which employers dropping employee health coverage will increase treatment, the

HEALTH INSURANCE MANDATES PAGE 2 OF 3 UPDATED: FEBRUARY 2017 HEALTH INSURANCE MANDATES extent to which mandated treatment is mandate. However, the exception to the rule expected to be a substitute for more is when “substantial or material changes” are expensive treatment, the impact on amended into current law on health insurance administrative expenses of the insurer and mandates, and that the six-year automatic premiums/administrative expenses of repeal (unless noted otherwise in the amended policyholders and the overall impact on bill) starts from the effective date of the newly total cost of health care. amended law.

AUTOMATIC REPEAL In 1985, legislation was enacted that automatically repealed health insurance mandates effective on or after July 13, 1985, STAFF CONTACT that do not specify a repeal date (ORS Sandy Thiele-Cirka 743A.001). This “automatic repeal” Legislative Policy and Research Office eliminates such statutes on the sixth 503-986-1286 anniversary of each law’s effective date. The [email protected] law applies to individual or group health

insurance mandates that do any of the following: Please note that the Legislative Policy and Research Office provides centralized, nonpartisan research  Require coverage of specific physical or mental health conditions or specific and issue analysis for Oregon’s legislative branch. hospital, medical, surgical or dental The Legislative Policy and Research Office does not services; provide legal advice. Background Briefs contain general information that is current as of the date of  Require coverage for specific people; publication. Subsequent action by the legislative,  Require carriers to reimburse specific executive or judicial branches may affect accuracy. providers;  Require insurers to provide coverage on a nondiscriminatory basis;  Forbid insurers from excluding covered services from payment or reimbursement; and  Forbid excluding people due to their medical history. In 2002, the Division received an Attorney General’s (AG) opinion regarding two mandates that were revised in 1999. The AG stated that, as a general rule, subsequent amendments to a health insurance mandate do not modify the automatic repeal date of a

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