Date:January 19, 2012
To:All Insurers Authorized to Write Group and Individual Health Insurance
From:Theodore K. Nickel, Commissioner of Insurance
Subject:2011 Wisconsin Act 32, Biennial Budget Bill

2011 Wisconsin Act 32, the biennial budget bill, contained several amendments to the insurance statutes summarized below. You should review the bulletin and determine which laws apply to your company. This bulletin is for informational purposes and is not to be considered the office's interpretation of these laws. It is highly recommended that the readers of this bulletin obtain copies of those laws determined to be applicable to their situation or operations. You may obtain copies of any legislation from Legislative Documents, 1 East Main Street, Madison, WI 53703, and (608) 266-2400 or through the Legislature's Web page at http://legis.wisconsin.gov.

Section 632.797, Stats., Disclosure of Group Health Claims Experience, has been amended to prohibit insurers from changing the rating methodology between community rating and experience rating or from otherwise penalizing a policyholder or employer for requesting an employer's aggregate group health claims experience. Reference s. 632.797 (1) (d), Stats.

The above change took effect on July 1, 2011.

Section 632.885, Stats., Coverage of Dependents, has been amended to be consistent with federal provisions. Wisconsin law continues to provide eligibility for a full-time student of any age who, before age 27, was called to active duty while attending an institution of higher education.

Amendments include clarification that insurers and self-insured health plans of the state or a county, city, village, town or school district that provide dependent coverage shall provide coverage to a child of an applicant or insured if the child is under the age of 26. Insurers and self-insured health plans may only define dependents in terms of the relationship between a child and an applicant or insured and may not vary the terms of coverage on the basis of age except for children 26 years of age and older.

Effective Date: The above changes to the dependent child law are applicable to health insurance policies that are issued or renewed, and self-insured governmental or school district health plans that are newly established, extended, modified, or renewed, on or after January 1, 2012.

However, if an insurance policy covers employees under a collective bargaining agreement that contains provisions inconsistent with this Act, the changes first apply to a policy issued or renewed on the earlier of: (a) the date the collective bargaining agreement expires or (b) the date the collective bargaining agreement is extended, modified, or renewed.

If a self-insured plan covers employees under a collective bargaining agreement that contains provisions inconsistent with this Act, the changes first apply to a plan newly established, extended, modified, or renewed on the earlier of: (a) the date the collective bargaining agreement expires or (b) the date the collective bargaining agreement is extended, modified, or renewed.

Questions concerning the changes to the dependent child law can be e-mailed to:

Mike Honeck, Chief
Health and Life Section
mike.honeck@wisconsin.gov