304.17A-430 Criteria for program plan -- Alternative underwriting. (Effective until January 1, 2020) (1) A health benefit plan shall be considered a program plan and is eligible for inclusion in calculating assessments and refunds under the program risk adjustment process if it meets all of the following criteria: (a) The health benefit plan was purchased by an individual to provide benefits for only one (1) or more of the following: the individual, the individual's spouse, or the individual's children. Health insurance coverage provided to an individual in the group market or otherwise in connection with a group health plan does not satisfy this criteria even if the individual, or the individual's spouse or parent, pays some or all of the cost of the coverage unless the coverage is offered in connection with a group health plan that has fewer than two (2) participants as current employees on the first day of the plan year; (b) An individual entitled to benefits under the health benefit plan has been diagnosed with a high-cost condition on or before the effective date of the individual's coverage for coverage issued on a guarantee-issue basis after July 15, 1995; (c) The health benefit plan imposes the maximum pre-existing condition exclusion permitted under KRS 304.17A-200; (d) The individual purchasing the health benefit plan is not eligible for or covered by other coverage; and (e) The individual is not a state employee eligible for or covered by the state employee health insurance plan under KRS Chapter 18A. (2) Notwithstanding the provisions of subsection (1) of this section, if the total claims paid for the high-cost condition under a program plan for any three (3) consecutive years are less than the premiums paid under the program plan for those three (3) consecutive years, then the following shall occur: (a) The policy shall not be considered to be a program plan thereafter until the first renewal of the policy after there are three (3) consecutive years in which the total claims paid under the policy have exceeded the total premiums paid for the policy and at the time of the renewal the policy also qualifies under subsection (1) as a program plan; and (b) Within the last six (6) months of the third year, the insurer shall provide each person entitled to benefits under the policy who has a high-cost condition with a written notice of insurability. The notice shall state that the recipient may be able to purchase a health benefit plan other than a program plan and shall also state that neither the notice nor the individual's actions to purchase a health benefit plan other than a program plan shall affect the individual's eligibility for plan coverage. The notice shall be valid for six (6) months. (3) (a) There is established within the guaranteed acceptance program the alternative underwriting mechanism that a participating insurer may elect to use. An insurer that elects this mechanism shall use the underwriting criteria that the insurer has used for the past twelve (12) months for purposes of the program plan requirement in paragraph (b) of subsection (1) of this section for high- risk individuals rather than using the criteria established in KRS 304.17A- 005(24) and 304.17A-280 for high-cost conditions. (b) An insurer that elects to use the alternative underwriting mechanism shall make written application to the commissioner. Before the insurer may implement the mechanism, the insurer shall obtain approval of the commissioner. Annually thereafter, the insurer shall obtain the commissioner's approval of the underwriting criteria of the insurer before the insurer may continue to use the alternative underwriting mechanism. Effective: July 15, 2010 History: Amended 2010 Ky. Acts ch. 24, sec. 1228, effective July 15, 2010. -- Amended 2006 Ky. Acts ch. 253, sec. 5, effective July 12, 2006. -- Amended 2005 Ky. Acts ch. 144, sec. 9, effective June 20, 2005. -- Amended 2000 Ky. Acts ch. 521, sec. 10, effective July 14, 2000. -- Created 1998 Ky. Acts ch. 496, sec. 18, effective April 10, 1998.