The 2019 Kansas legislative session introduced several changes to the state’s health and life insurance laws. Below, BCBSKS vice president of government and community relations Sunee Mickle provides an update on how they will affect our members.
Every year, Blue Cross and Blue Shield of Kansas is active at the Kansas Statehouse to help educate lawmakers about new health and life insurance legislation. Our goal is to explain how each bill may have a positive or negative impact on consumer protections and the affordability of insurance for Kansans and our members. This legislative session was no different, and lawmakers had over a dozen health and life insurance bills before them to consider. By the end of the legislative session, only a few health and life insurance provisions were passed, but these legislative changes are important for BCBSKS health insurance members and our Advance Insurance Company of Kansas (AICK) life insurance policyholders.
One of the most discussed health insurance issues this year pertained to association health plans (AHPs). AHPs offer small employers the opportunity to band together for the purpose of purchasing a large group-style health insurance plan for their employees. Since AHPs are closely regulated by the U.S. Department of Labor (DOL) and the Kansas Insurance Department, they must include certain consumer protections. For example, AHPs cannot exclude an employee or employer group from coverage due to pre-existing health conditions. Plus, fully-insured AHPs in Kansas must include coverage for state mandated health benefits such as mental health services, immunizations, and maternity coverage. BCBSKS has offered fully-insured health plan coverage to AHPs and managed self-funded AHPs for many years. When an AHP is managed well, it can provide its small employer group members with a great health plan coverage option.
During the 2019 legislative session, BCBSKS worked closely with several business associations and entities to update Kansas’ existing association health plan laws. This initiative began primarily to ensure our state laws worked in conjunction with the DOL’s 2018 expanded AHP rules. But there was also a need to modernize our existing state AHP laws to allow an AHP with 51 or more employees to obtain a large group benefit plan and rate.
When the DOL’s new rules were struck down by the Federal District Court for the District of Columbia this past March, there was some concern that the Kansas lawmakers would delay making any changes to the state’s AHP laws. Fortunately, legislators continued moving ahead with the Kansas AHP amendments, since the legislative changes would apply under the pre-2018 federal AHP rule. The Kansas AHP legislative language was rolled into a combination bill known as HB 2209 which passed in the Kansas House and Senate (84-39 and 28-12 respectively). The new AHP provisions in the law went into effect when it was published in the Kansas Register on May 9, 2019.
Kansas HB 2209 also included two provisions that apply to companies that offer life insurance policies. One of the provisions protects a person from being turned down for life insurance solely because that person has joined an organ donor registry. This underwriting practice hasn’t been documented in Kansas before, but legislators passed this language with the support of life insurers to prevent bad actors from using donor registries to reject applicants in the future.
The final life insurance provision in HB 2209 creates the Unclaimed Life Insurance Benefits Act. The Act requires life insurers to implement steps to locate and notify life insurance beneficiaries when a policyholder has passed away. Insurers must conduct a review of the U.S. Social Security Administration’s Death Master File at least twice a year. If a match is made, insurers have 90 days to follow up with beneficiaries. AICK, a life insurance subsidiary of BCBSKS, has had a long-standing process to locate and notify life insurance beneficiaries so we can follow through on their loved ones’ final wishes. But this Act ensures that other life insurers are also following through on their commitment to Kansans and life insurance policyholders. The Unclaimed Life Insurance Benefits Act went into effect on July 1, 2019.