From: Katherine Melton [Katherine.Melton@Insurance.ohio.

gov] Sent: Tuesday, November 23, 2010 2:18 PM To: OCIIO Oversight Cc: Mary Jo Hudson Subject: Ohio Annual Limit Restriction Waiver Request Follow Up Flag: Follow up Flag Status: Red Attachments: Ohio Annual Limit Waiver Request-112310.pdf
Pursuant to your offices Supplemental Sub-Regulatory Guidance of November 5, 2010 (OCIIO 2010-1A), please find attached Ohios request for a waiver of the annual limit restriction for 2010.
Katherine J. Melton Staff Counsel Ohio Department of Insurance

50 W. Town Street - Third Floor - Suite 300

Columbus, Ohio 43215 614-644-2640 (telephone) 614-644-3742 (fax) katherine.melton@insurance.ohio.gov

In an effort to provide maximum customer service while remaining cost conscious, the Ohio Department of Insurance will be

My email address has changed to Katherine.melton@insurance.ohio.gov. While my old email address will continue to be active for a few more months, I ask that you please update my contact email address in your contact records to reflect my new email address. Thank you!

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IMPORTANT DISCLOSURE: Although the Ohio Department of Insurance makes every effort to assist consumers, it does not have the authority to provide legal advice or opinions to the general public. As the Department is prohibited from giving or providing legal advice or opinions to the general public, any information contained in this e-mail should not be construed as legal advice to any public person or entity.

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utilizing a Cost Savings Day on Friday, November 26 after being closed to celebrate Thanksgiving on Thursday, November 25. The agency will re-open Monday, November 29. Have a safe and happy holiday!

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file:////co-adshare/...%20[GREEN]/Ohio-Dept%20of%20Insurance/Ohio%20Annual%20Limit%20Restriction%20Waiver%20Request.htm[11/10/2011 11:01:14 AM]

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OHIO DOI:000001

Ted Strickland, Governor Mary Jo Hudson, Director

50 West Town Street Third Floor Suite 300 Columbus, OH 43215-4186 (614) 644-2658 www.insurance.ohio.gov

November 23, 2010 James Mayhew Office of Consumer Information and Insurance Oversight Office of Oversight Room 737-F-04 200 Independence Avenue SW Washington, D.C. 20101 Re: Waiver of Annual Limits Restriction for 2010 Dear Mr. Mayhew,

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The Department has determined that requesting a waiver on behalf of the many insurers in our individual market that issue Basic and Standard policies would result in a more organized HIPAA alternative mechanism market in Ohio and fewer individual requests for waiver that must be reviewed by HHS. We are applying for this waiver because we are concerned that Ohioans not be denied access to coverage due to the impact on premium that an increase in benefits may bring. At the same time, we support the Affordable Care Act goal of requiring policies to include certain minimum benefits to better protect consumers, therefore, if granted this waiver for our Basic and Standard plan design, we intend to require all of our carriers to offer both the current coverage which does not meet the minimum annual limit design as well as coverage that does meet the Affordable Care Act. In this way, Ohio consumers will have a choice of a lower cost policy with a $Ex. 4 annual maximum or a policy with a higher premium and a $750,000 annual maximum from each company that offers Basic and Standard policies, whether to comply with open enrollment or conversion statutes. 1. The terms of the Basic and Standard policies for which we seek a waiver are attached. 2. The number of individuals covered by the policies: a canvass of Ohio insurers as of June 2010 reported that there were Ex. 4 lives covered by Basic or Standard policies for open enrollment. For calendar year 2009, Ohio insurers reported Ex. 4 lives covered by the Basic or Standard policy forms or an equivalent coverage for conversion. We estimate Ex. % of conversion policies 4 are statutorily mandated offerings to FEIs. 3. The annual limit(s):

Accredited by the National Association of Insurance Commissioners (NAIC)

Consumer Hotline: 1-800-686-1526 TDD Line: (614) 644-3745 Fraud Hotline: 1-800-686-1527 (Printed in house) OSHIIP Hotline: 1-800-686-1578 OHIO DOI:000002

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The Ohio Department of Insurance (the Department) hereby respectfully requests a waiver of the requirements in Section 2711, of the Patient Protection and Affordable Care Act,(Affordable Care Act) which restrict annual limits to certain set minimum levels for essential health benefits for the policies which form its HIPAA alternative mechanism. The Department is requesting a waiver for the prescribed policy forms created under statutory authority in Ohio Revised Code Section (R.C.) 3924.10 et seq. by the Ohio Reinsurance Board. These policies, known as Ohios Basic and Standard policy forms, are required to be offered by all carriers operating in the individual market to insure those who have been denied coverage elsewhere, including Federally Eligible Individuals (FEIs) and others who do not meet that definition, pursuant to R.C. 3923.58 and R.C. 3923.581, and also pursuant to R. C. Section 3923.122 as conversion policies offered to FEIs. Carriers and related data concerning these policies are attached.

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James Mayhew November 23, 2010 Page 2

The calendar year maximum for a Basic plan per insured is $Ex. 4 . There are other internal, per service maximums for both plans listed on page 2 and 3 of the attachment, including: a) b) c) d) Mental, nervous ($Ex. 4 inpatient and $Ex. 4 outpatient); Organ transplant ($ Ex. 4 ); Nursing or convalescent home ($Ex. 4 ); Outpatient prescription drugs ($Ex. 4 ).

Not allowing a blanket waiver for all companies for Basic and Standard Open Enrollment and Group Conversion options would lead to an unlevel playing field. Some companies will seek waivers while others wont. Ultimately, adverse selection for some plans will result and premiums will increase even more for those plans, causing market disruption. At this point, most carriers have not yet filed for a rate increase. We have approved four filings to date which have increase amounts attributable to PPACA mandates quantified. The average amounts of increase solely attributable to PPACA for Basic and Standard Open Enrollment for the four filings are as follows: Basic:
Ex. 4

Standard:

Ex. 4

Sample monthly premium rates for non-smoker residents in Columbus, OH, for the four carriers by Open Enrollment plan type:

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Male
Ex. 4

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As stated above, we are requesting a waiver because we are concerned that the increase in the annual limit will cause a significant increase in premium for those covered by the Basic and Standard plans which tend to have high premiums already because they are sold on a guaranteed issue basis to people with significantly worse than average health status. These policies are also used as conversion policies for both FEIs by law and others who are eligible for conversion when leaving their group health policy. If conversion policy premiums are increased due to PPACA requirements, we have the same concern. We believe granting a waiver for Open Enrollment without also granting it for conversion would shift enrollment from the conversion market and fill Open Enrollment quotas. This would result in fewer policies of this type being available to persons unable to get basic health insurance coverage by any other means.

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Carrier A B C D A B C D Plan Basic Basic Basic Basic Standard Standard Standard Standard

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Female

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OHIO DOI:000003

James Mayhew November 23, 2010 Page 3

Thank you for your assistance with this matter. Please contact Kathy Melton at 614-644-2548 or Katherine.Melton@insurance.ohio.gov if you have any questions.

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Mary Jo Hudson Director

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OHIO DOI:000004

Best regards,

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4. The below signer certifies and attests that, to their knowledge based on reports by the issuers of such Ohio policies: 1) Ex. 4 lives were covered by Basic and Standard Open Enrollment Policies and Ex. 4 lives were covered by Basic and Standard Conversion Policies or an equivalent coverage prior to September 23, 2010; and 2) the application of restricted annual limits to such policies would result in a significant increase in premiums. In addition, the absence of a blanket waiver for both the open enrollment and conversion use of these Basic and Standard forms would likely result in making this coverage unavailable to a number of applicants that would otherwise be able to obtain it.

OHIOOPENENROLLMENTENROLLEEDATA
(PERJUNE2010CANVASOFCARRIERSREQUIREDTOOFFEROPENENROLLMENTCOVERAGE)

NAIC 60054 97179 71773 60836 80799 10345 77828 81973 62324 62286 95677 73288 26581 65080 95204 65781 77216 29076 57991 66087 98205 67628 68462 86355 69078 10649 69477 70629

COMPANYNAME AetnaLifeInsCo AmericanMedicalSecurityLifeInsC AmericanNatlLifeInsCoOfTX AmericanRepublicInsCo CelticInsCo CommunityInsCo CompanionLifeInsCo CoventryHlth&LifeInsCo* FreedomLifeInsCoOfAmer GoldenRuleInsCo HealthPlantheUpperOHValleyIn HumanaInsCo IndependenceAmericanInsCo JohnAldenLifeInsCo KaiserFoundationHealthPlanofOhio MadisonNationalLifeInsCo MckinleyLifeInsCo MedicalMutOfOH MennoniteMutAidAssn MidWestNatlLifeInsCoOfTN NationalFoundLifeInsCo PekinLifeInsCo ReserveNatlInsCo StandardLife&AccidentInsCo StandardSecurityLifeInsCoOfNY SummaInsCoInc TimeInsCo WorldInsCo TOTALS:
Ex. 4

NUMBEROFCOVEREDLIVES

TOTALS

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OHIO DOI:000005 06/18/2010 CDWright

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2009OHIOCONVERSIONHEALTHPLANDATA ASREPORTEDBYCARRIERSINTHEOHIOANNUALREPORTOFHEALTHINSURANCEBUSINESS (NOTINDEPENDENTLYVERIFIED) NAIC 95109 60054 90611 60305 60836 80799 10345 62308 62375 62413 13935 69140 62286 64246 95677 95348 73288 95204 77216 95828 29076 97055 66168 95189 68241 25178 60016 69744 95186 COMPANYNAME AETNAHEALTHINC(PA) ALLIANZLIFEINSURANCECOMPANYOFNORTHAMERICA AMERICANCOMMUNITYMUTUALINSURANCECOMPANY AMERICANREPUBLICINSURANCECOMPANY CELTICINSURANCECOMPANY COMMUNITYINSURANCECOMPANY CONNECTICUTGENERALLIFEINSURANCECOMPANY CONSUMERSLIFEINSURANCECOMPANY CONTINENTALASSURANCECOMPANY FEDERATEDMUTUALINSURANCECOMPANY FIRSTALLMERICAFINANCIALLIFEINSURANCECOMPANY GOLDENRULEINSURANCECOMPANY GUARDIANLIFEINSURANCECOMPANYOFAMERICA HEALTHPLANOFUPPEROHVALLEYINC HUMANAHEALTHPLANOFOHIOINC HUMANAINSURANCECOMPANY McKINLEYLIFEINSURANCECOMPANY MEDICALMUTUALOFOHIO POLICIES LIVES PREMIUM CLAIMS DIRECTLOSS RATIO
Ex. 4

KAISERFOUNDATIONHEALTHPLANOFOHIO

MEGALIFEANDHEALTHINSURANCECOMPANY,THE MINNESOTALIFEINSURANCECOMPANY PARAMOUNTCAREINC

PRUDENTIALINSURANCECOMPANYOFAMERICA STATEFARMMUTUALAUTOMOBILEINSURANCECOMPANY THPINSURANCECOMPANYINC UNIONLABORLIFEINSURANCECOMPANY,THE UNITEDHEALTHCAREOFOHIOINC TOTALS:

OHIO DOI:000006

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MEDICALHEALTHINSURINGCORPORATIONOFOHIO

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AETNALIFEINSURANCECOMPANY

ThefollowingcarriershaveconversionproductsfiledwithODIbutdidnotreportanyconversion businessinthe2009OhioAnnualReportofHealthInsuranceBusiness: NAIC COMPANYNAME

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OHIO DOI:000007

19720 71773 81973 57991 74209 71218 26581 11518 61271 69078 10649 95202 79413

AmericanAltInsCorp AmericanNatlLifeInsCoOfTX CoventryHlth&LifeInsCo EverenceAssnInc EverenceInsCo GrangeLifeInsCo IndependenceAmerInsCo ParamountInsCo PrincipalLifeInsCo StandardSecurityLifeInsCoOfNY SummaInsCoInc SummacareInc UnitedHealthcareInsCo

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OHIO DOI:000008

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OHIO DOI:000009

From: Botwinick, Alexandra (HHS/OCIIO) Sent: Monday, January 03, 2011 11:03 AM To: 'Katherine.Melton@insurance.ohio.gov' Subject: Ohio Waiver of the Annual Limits Requirements 1-3-2011 Importance: High Attachments: Ohio Letter .pdf Good Morning, Thank you for submitting an application for a Waiver of the Annual Limits Requirements of the PHS Act Section 2711 for Ohio. HHS has reviewed your application and made its determination. Please see the attached letter. Please confirm receipt of this letter by replying to this e-mail. Please let me know if I can be of further assistance. Sincerely,

alexandra.botwinick@hhs.gov

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OHIO DOI:000010

Alexandra Botwinick Office of Oversight HHS/OCIIO

file:////co-adshare/...o-Dept%20of%20Insurance/Ohio%20Waiver%20of%20the%20Annual%20Limits%20Requirements%201-3-2011.htm[11/10/2011 11:01:15 AM]

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INFORMATION NOT RELEASABLE TO THE PUBLIC UNLESS AUTHORIZED BY LAW: This information has not been publicly disclosed and may be privileged and confidential. It is for internal government use only and must not be

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extent of the law.

disseminated, distributed, or copied to persons not authorized to receive the information. Unauthorized disclosure may result in prosecution to the full

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Dear Ms. Melton, Pursuant to a question from another State waiver grantee, OCIIO has determined that the model language posted in the December 9, 2010 Supplemental Guidance may be modified slightly for carriers who receive waivers of annual limits for State-mandated policies. The notice language may be amended in the third paragraph to read The State, on behalf of your health plan, requested a waiver instead of your health plan requested a waiver However, this is the only change HHS will permit. The notice language must be displayed on all materials without any other changes or it will not be in compliance with the Bulletin. Kind Regards, Erika M. Kottenmeier Division of Enforcement Office of Oversight HHS/OCIIO (301) 492-4170 erika.kottenmeier@hhs.gov

From: Kottenmeier, Erika (HHS/OCIIO) Sent: Thursday, January 13, 2011 9:57 AM To: 'katherine.melton@insurance.ohio.gov' Cc: Habit, Sandra (HHS/OCIIO); Combs, Darrell (HHS/OCIIO) Subject: Modification of Notice Language for State Waiver Recipients

file:////co-adshare/...O%20Withholding%20Concerns%20[GREEN]/Ohio-Dept%20of%20Insurance/Question%20response%201.13.11.htm[11/10/2011 11:01:16 AM]

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OHIO DOI:000011