2007 DOI Life and Health Legislative and Regulatory Year in Review

The Life and Health Division of the NC Department of Insurance recently published its Summary of 2007 Regular Session Legislation. The document outlines all statutory changes from the 2007 General Assembly that have some impact on life and health insurance within North Carolina. While the full document is attached, highlights of the changes are listed below along with the effective dates for each amendment:

Amendments related to Health Insurance

• Establishment of an individual health insurance high risk pool to assist individuals with high risk conditions to obtain health insurance coverage at more affordable premium rates. (To begin no later than 1/1/2009)
  
• Repeal of the provision that a chiropractic co-payment be equal to the co-payment for Primary Care Physicians. (Effective for plans after 10/1/2007)
  
• Updated state HIPAA laws to reflect changes in Federal HIPAA guidelines last year. (Effective 7/28/07)
  
• New statute providing for the waiver of limitations on prescription refills during a state of emergency or disaster. (Effective 6/27/07)
  
• Mental Health Equitable Coverage rules providing that coverage for certain mental health conditions are equal to or greater than other medical conditions. (Effective 7/1/2008)
  
• Health Insurance prompt payment timelines providing statute of limitations for insurers and health care providers for recovering overpayment and underpayment. (Effective 1/1/2009)
  
• New statute outlining requirements for health insurance ID cards provided to members. Each card must contain certain information as outlined in statute. (Effective 1/1/2009)
  
  

Amendments related to Life, Annuities, and Credit Insurance

• Suitability in Annuity Transaction Act provides standards and procedures that producers and insurers should follow when recommending the purchase of an annuity. (Effective 1/1/2008)
  
• Portability in Life Insurance statute prohibits the use of health questions, underwriting or eligibility requirements that pertain to health status to access the portability provision. (Effective 7/28/07)
  
• Clarified definition of LTC insurance to include group and individual annuities, life insurance policies, or riders that supplement or directly provide LTC coverage. (Effective 10/1/07)
  
• The requirement that a group life insurance contract have at least 10 lives covered at date of issue was repealed. (Effective 10/1/2007)
  
• New regulations aimed at protecting military personnel from dishonest and predatory life insurance and annuity sales practices. (i.e., life policy cannot have war-related death exclusion if the individual is known at time of sale to be an active military service member). (Effective 1/1/2008)
  
  

What must you do now?

While we feel it is important for plan administrators to be aware of these changes, there is no action required on your part at this time. The new regulations affecting benefits apply to fully insured life and health plans; therefore, the issuing carriers will make the appropriate changes in their policies and procedures. In the future, if any action becomes necessary on the part of your plan, Hill, Chesson & Woody will work with the carriers and keep you informed. If you have any questions regarding any of these changes, please contact our office at 919-403-1986.

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Important Notice: Hill, Chesson & Woody does not engage in the practice of law, accounting, or medicine. Therefore, the contents of this communication should not be regarded as a substitute for legal, tax, or medical advice.

January 8, 2008

Hill, Chesson & Woody Employee Benefit Services

194 Finley Golf Course Rd, Suite 200,
Chapel Hill, NC 27517
Phone: 919.403.1986
Fax: 919.913.0237

www.hcwbenefits.com