Stricken language would be deleted from and underlined language would be added to present law.
*ANS140* 02/03/2025 4:09:03 PM ANS140
State of Arkansas 1
95th General Assembly A Bill 2
Regular Session, 2025 HOUSE BILL 1420 3
4
By: Representative Steimel 5
By: Senator J. Boyd 6
7
For An Act To Be Entitled 8
AN ACT TO ENACT THE STATE INSURANCE DEPARTMENT'S 9
GENERAL OMNIBUS AMENDMENT OF ARKANSAS INSURANCE CODE; 10
TO AMEND THE ARKANSAS WORKERS' COMPENSATION INSURANCE 11
PLAN; TO AMEND THE LAW CONCERNING RECIPROCAL 12
INSURERS; TO CLARIFY AN ATTORNEY'S BOND REQUIREMENT; 13
TO AMEND THE LAW CONCERNING BENEFITS FOR ALCOHOL AND 14
DRUG DEPENDENCY TREATMENT; TO AMEND THE LAW 15
CONCERNING SERVICE OF PROCESS IN SUITS INVOLVING 16
INSURERS; TO REPEAL THE COMPREHENSIVE HEALTH 17
INSURANCE POOL ACT; TO REPEAL THE MINIMUM BENEFITS 18
FOR MENTAL ILLNESS IN GROUP ACCIDENT AND HEALTH 19
INSURANCE POLICIES OR SUBSCRIBER'S CONTRACTS; TO 20
AMEND THE ARKANSAS MENTAL HEALTH PARITY ACT OF 2009; 21
AND FOR OTHER PURPOSES. 22
23
24
Subtitle 25
TO ENACT THE STATE INSURANCE 26
DEPARTMENT'S GENERAL OMNIBUS AMENDMENT 27
OF ARKANSAS INSURANCE CODE. 28
29
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS: 30
31
SECTION 1. Arkansas Code § 23 -67-304(e), concerning the ability of the 32
Insurance Commissioner to delegate responsibility under the Arkansas Workers' 33
Compensation Insurance Plan, is amended to read as follows: 34
(e)(1)(A) At his or her discretion, the The Insurance Commissioner is 35
authorized to may delegate all or any part of the commissioner's 36 HB1420
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responsibility to establish and operate the plan. 1
(B) However, any such plan, or plan of operation, and any 2
amendments thereto must receive the prior approval of the commissioner. 3
(2) Any person or entity to whom the establishment, 4
implementation, or operation of the plan is delegated pursuant to this 5
subsection shall file with and obtain the approval of the commissioner as to 6
all policy forms, rates, or supplementary rate information necessary to 7
effectuate the plan. 8
(3)(A) In delegating all or part of the commissioner's 9
responsibility, the commissioner shall not approve any plan or filing that 10
abrogates or restricts his or her authority to select the plan administrator 11
or servicing carriers. 12
(B) The commissioner shall competitively select the 13
organization or organizations to whom the responsibility of plan 14
administrator shall be delegated. 15
(C) If the administration of the plan is delegated, the 16
plan administrator or administrators shall have an office in Arkansas be 17
adequately staffed, outfitted, and maintained to provide the plan services 18
delegated. 19
(D) The commissioner shall specify duties and functions of 20
plan administrators and may structure and delegate administrative functions 21
separately such as, but not limited to, rates, forms, and statistics for the 22
best operation of the plan. 23
(4) Under the provisions of this subsection, the commissioner 24
shall vigorously promote competition for the designation of the plan 25
administrator and servicing carrier for the most effective operation of the 26
plan. 27
(5)(A) The office plan administrator and personnel in Arkansas 28
is established are placed in their positions to improve services provided by 29
the plan, to promote and secure courteous and timely service, and to assure 30
that the minimum standards as provided under subdivision (f)(2) of this 31
section are met. 32
(B) The office plan administrator and personnel in 33
Arkansas shall also assist employers or agents with questions, problems, or 34
complaints pertaining to the servicing carriers and secure and expedite 35
prompt and fair treatment to employers for servicing carrier errors and 36 HB1420
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service failures. 1
(6)(A) The Arkansas office manager shall have the authority to 2
intervene with servicing carriers to secure an adequate level of service and 3
prevent servicing carriers from imposing unreasonable demands or actions. 4
(B) The office manager shall keep a record of all employer 5
or agent problems and complaints by a servicing carrier, including a 6
description of the problem. This record shall be provided to the commissioner 7
within sixty (60) days of each calendar year or upon the request of the 8
commissioner. 9
(C) The manager shall promptly notify the commissioner of 10
any problems upon a request by an employer. 11
12
SECTION 2. Arkansas Code § 23 -70-110(a)(1), concerning the attorney's 13
bond required of a domestic reciprocal insurer, is amended to read as 14
follows: 15
(a)(1)(A) Concurrently with the filing of the declaration provided for 16
in § 23-70-106, the attorney of a domestic or foreign reciprocal insurer 17
shall file with the Insurance Commissioner a bond in favor of this state for 18
the benefit of all persons damaged as a result of breach by the attorney of 19
the conditions of his or her bond as set forth stated in subdivision (a)(2) 20
of this section. 21
(B) The bond under subdivision (a)(1)(A) of this section 22
shall be: 23
(i) executed Executed by the attorney and by an 24
authorized corporate surety ; and 25
(ii) shall be subject Subject to the commissioner's 26
approval. 27
28
SECTION 3. Arkansas Code § 23 -79-139 is repealed. 29
23-79-139. Benefits for alcohol or drug dependency treatment — 30
Definition. 31
(a)(1) Every insurer, hospital and medical service corporation, and 32
health maintenance organization transacting accident and health insurance in 33
this state shall offer and make available under all group policies, 34
contracts, and plans providing hospital and medical coverage on an expense 35
incurred, service, or prepaid basis benefits for the necessary care and 36 HB1420
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treatment of alcohol and other drug dependency that are not less favorable 1
than for physical illness generally, subject to the same durational limits, 2
dollar limits, deductibles, and coinsurance factors, except as provided in 3
this section. 4
(2)(A) The offer for these benefits shall be subject to the 5
right of the policy or contract holder to reject the coverage or select any 6
alternative level of benefits. 7
(B) The rejection by the policy or contract holder shall 8
be in writing. 9
(b) Any benefits provided under alcohol or drug dependency coverage 10
shall be determined as necessary care and treatment in an alcohol or drug 11
dependency treatment facility or care and treatment in a hospital. 12
(c) Treatment may include detoxification, administration of a 13
therapeutic regimen for the treatment of alcohol or drug dependent or 14
substance abusing persons, and related services. 15
(d) The facility or unit may be: 16
(1) A unit within a general hospital or an attached or 17
freestanding unit of a general hospital; 18
(2) A unit within a psychiatric hospital or an attached or 19
freestanding unit of a psychiatric hospital; or 20
(3) A freestanding facility specializing in treatment of persons 21
who are substance abusers or are alcohol or drug dependent, and may be 22
identified as “chemical dependency, substance abuse, alcoholism, or drug 23
abuse facilities”, “social setting detoxification facilities”, and “medical 24
detoxification facilities”, or by other names if the purpose is to provide 25
treatment of alcohol or drug dependent or substance abusing persons, but 26
shall not include halfway houses or recovery farms. 27
(e) Every policy or contract of insurance that provides benefits for 28
alcohol or drug dependency treatment and that provides total annual benefits 29
for all illnesses in excess of six thousand dollars ($6,000) is subject to 30
the following conditions: 31
(1) The policy or contract shall provide, for each twenty -four-32
month period, a minimum benefit of six thousand dollars ($6,000) for the 33
necessary care and treatment of alcohol or drug dependency; 34
(2) No more than one -half (½) of the policy's or contract's 35
maximum benefits for alcohol or drug dependency for a twenty -four-month 36 HB1420
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period shall be paid for the necessary care and treatment of alcohol or drug 1
dependency in any thirty -consecutive-day period; and 2
(3) The policy or contract shall provide a minimum benefit of 3
twelve thousand dollars ($12,000) for the necessary care and treatment of 4
alcohol or drug dependency for the life of the recipient of benefits. 5
(f) For the purposes of this section, the term “alcohol or drug 6
dependency treatment facility” means a public or private facility or unit in 7
a facility that provides treatment twenty -four (24) hours a day for alcohol 8
or drug dependency or substance abuse, that provides a program for the 9
treatment of alcohol or other drug dependency under a written treatment plan 10
approved and monitored by a physician, and that is also properly licensed or 11
accredited to provide those services by the Division of Aging, Adult, and 12
Behavioral Health Services of the Department of Human Services. 13
(g) Nothing in this section shall prohibit any certificate or contract 14
from requiring the most cost -effective treatment setting to be utilized by 15
the person undergoing necessary care and treatment for alcohol or drug 16
dependency. 17
(h) As used in this section, “alcohol or drug dependency” means the 18
pathological use or abuse of alcohol or other drugs in a manner or to a 19
degree that produces an impairment in personal, social, or occupational 20
functioning and that may, but need not, include a pattern of tolerance and 21
withdrawal. 22
(i) This section shall apply to group policies or contracts delivered 23
or issued for delivery or renewed in this state after November 17, 1987, but 24
shall not apply to blanket short -term travel accident only, limited or 25
specified disease, conversion policies or contracts, nor to policies or 26
contracts referred to as Medicare supplement policies, designed for issuance 27
to persons eligible for coverage under Title XVIII of the Social Security 28
Act. 29
30
SECTION 4. Arkansas Code § 23 -79-205(a), concerning service of process 31
against an insurer, is amended to read as follows: 32
(a) In any suit brought in this state against an insurer, process may 33
be served upon the insurer as follows: 34
(1) As to domestic insurers, service of process may be had only 35
in the manner as provided by § 16-58-124 the Arkansas Rules of Civil 36 HB1420
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Procedure; 1
(2) As to licensed foreign or alien insurers, service on and 2
after January 1, 2003, may be made as provided in § 23 -63-301 et seq.; and 3
(3) As to suits against unauthorized insurers, service of 4
process shall be made as provided in §§ 23 -65-101 — 23-65-104, § 23-65-201 et 5
seq., and §§ 23-65-301 — 23-65-318 for unauthorized insurers and surplus 6
lines. 7
8
SECTION 5. Arkansas Code Title 23, Chapter 79, Subchapter 5, is 9
repealed. 10
Subchapter 5 — Comprehensive Health Insurance Pool Act 11
12
23-79-501. Purpose. 13
(a)(1) Acts 1995, No. 1339, established the Arkansas Comprehensive 14
Health Insurance Pool as a state program that was intended to provide an 15
alternate market for health insurance for certain uninsurable Arkansas 16
residents, and further this subchapter is intended to provide for the 17
successor entity that will provide the acceptable alternative mechanism as 18
described in the Health Insurance Portability and Accountability Act of 1996 19
for providing portable and accessible individual health insurance coverage 20
for federally eligible individuals as defined in this subchapter. 21
(2) This subchapter further is intended to provide a health 22
insurance coverage option for persons eligible for a federal income tax 23
credit under section 35 of the Internal Revenue Code, as created by the Trade 24
Adjustment Assistance Reform Act of 2002 or as subsequently amended. 25
(b) The General Assembly declares that it intends for this program to 26
provide portable and accessible individual health insurance coverage for 27
every individual who qualifies for coverage in accordance with § 23 -79-509(b) 28
as a federally eligible individual or as a qualified trade adjustment 29
assistance eligible person but does not intend for every eligible person who 30
qualifies for pool coverage in accordance with § 23 -79-509 to be guaranteed a 31
right to be issued a policy under this pool as a matter of entitlement. 32
33
23-79-502. Short title. 34
This subchapter may be cited as the “Comprehensive Health Insurance 35
Pool Act”, and is amendatory to the Arkansas Insurance Code and the 36 HB1420
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provisions of the Arkansas Insurance Code which are not in conflict with this 1
subchapter are applicable to this subchapter. 2
3
23-79-503. Definitions. 4
As used in this subchapter: 5
(1) “Agent” means any person who is licensed to sell health 6
insurance in this state; 7
(2) “Board” means the Board of Directors of the Arkansas 8
Comprehensive Health Insurance Pool; 9
(3) “Church plan” has the same meaning given that term in the 10
Health Insurance Portability and Accountability Act of 1996; 11
(4) “Commissioner” means the Insurance Commissioner; 12
(5) “Continuation coverage” means continuation of coverage under 13
a group health plan or other health insurance coverage for former employees 14
or dependents of former employees that would otherwise have terminated under 15
the terms of that coverage pursuant to any continuation provisions under 16
federal or state law, including the Consolidated Omnibus Budget 17
Reconciliation Act of 1985 (COBRA), as amended, § 23 -86-114 of the Arkansas 18
Insurance Code, or any other similar requirement in another state; 19
(6) “Covered person” means a person who is and continues to 20
remain eligible for pool coverage and is covered under one (1) of the plans 21
offered by the pool; 22
(7)(A) “Creditable coverage” means, with respect to a federally 23
eligible individual or a qualified trade adjustment assistance eligible 24
person, coverage of the individual under any of the following: 25
(i) A group health plan; 26
(ii) Health insurance coverage, including group 27
health insurance coverage; 28
(iii) Medicare; 29
(iv) Medical assistance; 30
(v) 10 U.S.C. § 1071 et seq.; 31
(vi) A medical care program of the Indian Health 32
Service or of a tribal organization; 33
(vii) A state health benefits risk pool; 34
(viii) A health plan offered under 5 U.S.C. § 8901 et 35
seq.; 36 HB1420
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(ix) A public health plan, as defined in regulations 1
consistent with section 104 of the Health Insurance Portability and 2
Accountability Act of 1996 that may be promulgated by the Secretary of the 3
United States Department of Health and Human Services; and 4
(x) A health benefit plan under section 5(e) of the 5
Peace Corps Act, 22 U.S.C. § 2504(e). 6
(B) “Creditable coverage” does not include: 7
(i) Coverage consisting solely of coverage of 8
excepted benefits as defined in section 2791(C) of Title XXVII of the Public 9
Health Service Act, 42 U.S.C. § 300gg -91; or 10
(ii)(a) Any period of coverage under 11
subdivisions (7)(A)(i) -(x) of this section that occurred before a break of 12
more than sixty-three (63) days during all of which the individual was not 13
covered under subdivisions (7)(A)(i) -(x) of this section. 14
(b) Any period that an individual is in a 15
waiting period for any coverage under a group health plan or for group health 16
insurance coverage or is in an affiliation period under the terms of health 17
insurance coverage offered by a health maintenance organization shall not be 18
taken into account in determining if there has been a break of more than 19
sixty-three (63) days in any creditable coverage; 20
(8) “Department” means the State Insurance Department; 21
(9) “Excess or stop -loss coverage” means an arrangement whereby 22
an insurer insures against the risk that any one (1) claim will exceed a 23
specific dollar amount or that the entire loss of a self -insurance plan will 24
exceed a specific amount; 25
(10) “Federally eligible individual” means an individual resident 26
of Arkansas: 27
(A) For whom: 28
(i) As of the date on which the individual seeks 29
pool coverage under § 23 -79-509, the aggregate of the periods of creditable 30
coverage is eighteen (18) or more months; and 31
(ii) The most recent prior creditable coverage was 32
under group health insurance coverage offered by an insurer, a group health 33
plan, a governmental plan, a church plan, or health insurance coverage 34
offered in connection with any such plans; 35
(B) Who is not eligible for coverage under: 36 HB1420
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(i) A group health plan; 1
(ii) Part A or Part B of Medicare; or 2
(iii) Medical assistance and does not have other 3
health insurance coverage; 4
(C) With respect to whom the most recent coverage within 5
the coverage period described in subdivision (10)(A)(i) of this section was 6
not terminated based upon a factor related to nonpayment of premiums or 7
fraud; 8
(D) If the individual has been offered the option of 9
continuation coverage under a Consolidated Omnibus Budget Reconciliation Act 10
of 1985 (COBRA) continuation provision or under a similar state program, who 11
elected such coverage; and 12
(E) Who, if the individual elected the continuation 13
coverage, has exhausted the continuation coverage under such a provision or 14
program; 15
(11) “Governmental plan” has the same meaning given that term in 16
the federal Health Insurance Portability and Accountability Act of 1996; 17
(12) “Group health plan” has the same meaning given that term in 18
the federal Health Insurance Portability and Accountability Act of 1996; 19
(13)(A) “Health insurance” means any hospital and medical 20
expense-incurred policy, certificate, or contract provided by an insurer, 21
hospital or medical service corporation, health maintenance organization, or 22
any other healthcare plan or arrangement that pays for or furnishes medical 23
or healthcare services whether by insurance or otherwise and includes any 24
excess or stop-loss coverage. 25
(B) “Health insurance” does not include long -term care, 26
disability income, short -term, accident, dental -only, vision-only, fixed 27
indemnity, limited-benefit or credit insurance, coverage issued as a 28
supplement to liability insurance, insurance arising out of workers' 29
compensation or similar law, automobile medical -payment insurance, or 30
insurance under which benefits are payable with or without regard to fault 31
and that is statutorily required to be contained in any liability insurance 32
policy or equivalent self -insurance; 33
(14) “Health maintenance organization” shall have the same 34
meaning as defined in § 23 -76-102; 35
(15) “Hospital” shall have the same meaning as defined in § 20 -9-36 HB1420
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201; 1
(16) “Individual health insurance coverage” means health 2
insurance coverage offered to individuals in the individual market but does 3
not include short-term, limited-duration insurance; 4
(17)(A) “Insurer” means any entity that provides health 5
insurance, including excess or stop -loss health insurance, in the State of 6
Arkansas. 7
(B) For the purposes of this subchapter, “insurer” 8
includes an insurance company, medical services plans, hospital plans, 9
hospital medical service corporations, health maintenance organizations, 10
fraternal benefits society, or any other entity providing a plan of health 11
insurance or health benefits subject to state insurance regulation; 12
(18) “Medical assistance” means the state medical assistance 13
program provided under Title XIX of the Social Security Act or under any 14
similar program of healthcare benefits in a state other than Arkansas; 15
(19)(A)(i) “Medically necessary” means that a service, 16
drug, supply, or article is necessary and appropriate for the diagnosis or 17
treatment of an illness or injury in accord with generally accepted standards 18
of medical practice at the time the service, drug, or supply is provided. 19
(ii) When specifically applied to a confinement, 20
“medically necessary” further means that the diagnosis or treatment of the 21
covered person's medical symptoms or condition cannot be safely provided to 22
that person as an outpatient. 23
(B) A service, drug, supply, or article shall not be 24
medically necessary if it: 25
(i) Is investigational, experimental, or for 26
research purposes; 27
(ii) Is provided solely for the convenience of the 28
patient, the patient's family, physician, hospital, or any other provider; 29
(iii) Exceeds in scope, duration, or intensity that 30
level of care that is needed to provide safe, adequate, and appropriate 31
diagnosis or treatment; 32
(iv) Could have been omitted without adversely 33
affecting the covered person's condition or the quality of medical care; or 34
(v) Involves the use of a medical device, drug, or 35
substance not formally approved by the United States Food and Drug 36 HB1420
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Administration; 1
(20) “Medicare” means coverage under Part A and Part B of Title 2
XVIII of the Social Security Act, 42 U.S.C. § 1395 et seq.; 3
(21) “Physician” means a person licensed to practice medicine as 4
duly licensed by the State of Arkansas; 5
(22) “Plan” means the comprehensive health insurance plan as 6
adopted by the board or by rule; 7
(23) “Plan administrator” means the insurer designated under § 8
23-79-508 to carry out the provisions of the plan of operation; 9
(24) “Plan of operation” means the plan of operation of the pool, 10
including articles, bylaws, and operating rules adopted by the board pursuant 11
to this subchapter; 12
(25) “Provider” means any hospital, skilled nursing facility, 13
hospice, home health agency, physician, pharmacist, or any other person or 14
entity licensed in Arkansas to furnish medical care, articles, and supplies; 15
(26) “Qualified high -risk pool” has the same meaning given that 16
term in the Health Insurance Portability and Accountability Act of 1996; 17
(27) “Qualified trade adjustment assistance eligible person” 18
means a person who is a trade adjustment assistance eligible person as 19
defined by this section and for whom, on the date an application for the 20
individual is received by the pool under § 23 -79-509, has an aggregate of at 21
least three (3) months of creditable coverage without a break in coverage of 22
sixty-three (63) days or more; 23
(28) “Resident eligible person” means a person who: 24
(A) Has been legally domiciled in the State of Arkansas 25
for a period of at least: 26
(i) Ninety (90) days and continues to be domiciled 27
in Arkansas; or 28
(ii) Thirty (30) days, continues to be domiciled in 29
Arkansas, and was covered under a qualified high -risk pool in another state 30
up until sixty-three (63) days or less prior to the date that the pool 31
receives his or her application for coverage; and 32
(B) Is not eligible for coverage under: 33
(i) A group health plan; 34
(ii) Part A or Part B of Medicare; or 35
(iii) Medical assistance as defined in this section 36 HB1420
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and does not have other health insurance coverage as defined in this section; 1
and 2
(29) “Trade adjustment assistance eligible person” means a person 3
who is legally domiciled in the State of Arkansas on the date of application 4
to the pool and is eligible for the tax credit for health insurance coverage 5
premiums under section 35 of the Internal Revenue Code of 1986. 6
7
23-79-504. Arkansas Comprehensive Health Insurance Pool. 8
(a) There is created a nonprofit legal entity to be known as the 9
“Arkansas Comprehensive Health Insurance Pool” as the successor entity to the 10
nonprofit legal entity established by Acts 1995, No. 1339. 11
(b)(1) The pool shall operate subject to the supervision and control 12
of the Board of Directors of the Arkansas Comprehensive Health Insurance 13
Pool. The pool is created as a political subdivision, instrumentality, and 14
body politic of the State of Arkansas, and, as such, is not a state agency. 15
(2) Except to the extent defined in this subchapter, the pool 16
will be exempt from: 17
(A) All state, county, and local taxes; 18
(B) The Arkansas Procurement Law, § 19 -11-201 et seq.; 19
(C) The Freedom of Information Act of 1967, § 25 -19-101 et 20
seq.; and 21
(D) The Arkansas Administrative Procedure Act, § 25 -15-201 22
et seq. 23
(3) The board shall consist of the following seven (7) members 24
to be appointed by the Insurance Commissioner: 25
(A) Two (2) current or former representatives of insurance 26
companies licensed to do business in the State of Arkansas; 27
(B) Two (2) current or former representatives of health 28
maintenance organizations licensed to do business in the State of Arkansas; 29
(C) One (1) member of a health -related profession licensed 30
in the State of Arkansas; 31
(D) One (1) member from the general public who is not 32
associated with the medical profession, a hospital, or an insurer; and 33
(E) One (1) member to represent a group considered to be 34
uninsurable. 35
(4) In making appointments to the board, the commissioner shall 36 HB1420
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strive to ensure that at least one (1) person serving on the board is at 1
least sixty (60) years of age. 2
(5) All terms shall be for three (3) years. 3
(6) The board shall elect one (1) of its members as chair. 4
(7) Any vacancy in the board occurring for any reason other than 5
the expiration of a term shall be filled for the unexpired term in the same 6
manner as the original appointment. 7
(8) Members of the board may be reimbursed from moneys of the 8
pool for actual and necessary expenses incurred by them in the performance of 9
their official duties as members of the board but shall not otherwise be 10
compensated for their services. 11
(c) All insurers, as a condition of doing business in the State of 12
Arkansas, shall participate in the pool by paying the assessments, submitting 13
the reports, and providing the information required by the board or the 14
commissioner to implement the provisions of this subchapter. 15
(d)(1) Neither the board nor its employees shall be liable for any 16
obligations of the pool. 17
(2) No board member or employee of the board shall be liable, 18
and no cause of action of any nature may arise against them, for any act or 19
omission related to the performance of their powers and duties under this 20
subchapter. 21
(3) The board may provide in its bylaws or rules for 22
indemnification of, and legal representation for, the board members and 23
employees. 24
25
23-79-505. Plan of operation. 26
(a)(1) The Board of Directors of the Arkansas Comprehensive Health 27
Insurance Pool shall adopt a plan of operation pursuant to this subchapter 28
and shall submit to the Insurance Commissioner for approval the plan of 29
operation including the Arkansas Comprehensive Health Insurance Pool's 30
articles, bylaws and operating rules, and any amendments thereto necessary or 31
suitable to assure the fair, reasonable, and equitable administration of the 32
pool. The plan of operation shall become effective upon approval in writing 33
by the commissioner. 34
(2) If the board fails to submit a suitable plan of operation 35
within one hundred eighty (180) days after the appointment of the board of 36 HB1420
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directors, or at any time thereafter fails to submit suitable amendments to 1
the plan of operation, the commissioner shall adopt and promulgate such rules 2
as are necessary or advisable to effectuate the provisions of this section. 3
The rules shall continue in force until modified by the commissioner or 4
superseded by a plan of operation submitted by the board and approved by the 5
commissioner. 6
(b) The plan of operation shall: 7
(1) Establish procedures for operation of the pool; 8
(2) Establish procedures for selecting a plan administrator in 9
accordance with § 23-79-508; 10
(3) Create a fund, under management of the board, to pay 11
administrative claims and other expenses of the pool; 12
(4) Establish procedures for the handling, accounting, and 13
auditing of assets, moneys, and claims of the pool and the plan 14
administrator; 15
(5) Develop and implement a program to publicize the existence 16
of the plan, the eligibility requirements, and the procedures for enrollment 17
and to maintain public awareness of the plan; 18
(6)(A) Establish procedures under which applicants and 19
participants may have grievances reviewed by a grievance committee appointed 20
by the board. The grievances shall be reported to the board after completion 21
of the review. 22
(B) The board shall retain all written complaints 23
regarding the plan for at least three (3) years; and 24
(7) Provide for other matters as may be necessary and proper for 25
the execution of the board's powers, duties, and obligations under this 26
subchapter. 27
28
23-79-506. Powers. 29
(a)(1) The Arkansas Comprehensive Health Insurance Pool shall have the 30
general powers and authority granted under the laws of the State of Arkansas 31
to health insurers and, in addition thereto, the specific authority to: 32
(A) Enter into contracts as are necessary or proper to 33
carry out the provisions and purposes of this subchapter; 34
(B) Sue or be sued, including taking any legal actions 35
necessary or proper; 36 HB1420
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(C) Take such legal action as necessary, including without 1
limitation: 2
(i) Avoiding the payment of improper claims against 3
the pool or the coverage provided by or through the pool; 4
(ii) Recovering any amounts erroneously or improperly 5
paid by the pool; 6
(iii) Recovering any amounts paid by the pool as a 7
result of mistake of fact or law; 8
(iv) Recovering other amounts due the pool; or 9
(v) Coordinating legal action with the Insurance 10
Commissioner to enforce the provisions of this subchapter; 11
(D)(i) Establish and modify from time to time as 12
appropriate, rates, rate schedules, rate adjustments, expense allowances, 13
agent referral fees, claim reserve formulas, deductibles, copayments, 14
coinsurance, and any other actuarial function appropriate to the operation of 15
the pool. 16
(ii) Rates and rate schedules may be adjusted for 17
appropriate factors such as age, sex, and geographical variation in claim 18
costs and shall take into consideration appropriate factors in accordance 19
with established actuarial and underwriting practices; 20
(E) Issue policies of insurance in accordance with the 21
requirements of this subchapter. All policy forms shall be subject to the 22
approval of the commissioner; 23
(F) Authorize the plan administrator to prepare and 24
distribute certificate of eligibility forms and enrollment instruction forms 25
to agents and to the general public; 26
(G) Provide and employ cost-containment measures and 27
requirements, including without limitation preadmission screening, second 28
surgical opinion, concurrent utilization review, and individual case 29
management for the purposes of making the plan more cost effective; 30
(H) Design, utilize, contract, or otherwise arrange the 31
delivery of cost-effective healthcare services, including establishing or 32
contracting directly or through the plan administrator with preferred 33
provider organizations, health maintenance organizations, physician hospital 34
organizations, or other limited network provider arrangements; 35
(I) Borrow money to effect the purposes of the pool. Any 36 HB1420
16 02/03/2025 4:09:03 PM ANS140
notes or other evidence of indebtedness of the pool not in default shall be 1
legal investments for insurers and may be carried as admitted assets; 2
(J) Pledge, assign, and grant a security interest in any 3
of the assessments authorized by this subchapter or other assets of the pool 4
in order to secure any notes or other evidences of indebtedness of the pool; 5
(K) Provide reinsurance of risks incurred by the pool; 6
(L) Provide additional types of plans to provide optional 7
coverages, including Medicare supplement health insurance and health savings 8
accounts that comply with applicable federal law as in effect January 1, 9
2005; 10
(M) Enter into reciprocal agreements with other comparable 11
state plans in order to provide coverage for persons who move between states 12
and are covered by such other states' plans; and 13
(N) Establish lifetime maximum benefits under § 23 -79-14
510(a)(2)(W) for any person covered by a plan. 15
(2) In addition to the other powers granted by the Arkansas 16
Insurance Code, the commissioner may impose, after notice and hearing in 17
accordance with the provisions of the Arkansas Insurance Code, a monetary 18
penalty upon any insurer or suspend or revoke the certificate of authority to 19
transact insurance in the State of Arkansas of any insurer that fails to pay 20
an assessment or otherwise file any report or furnish information required to 21
be filed with the Board of Directors of the Arkansas Comprehensive Health 22
Insurance Pool pursuant to the board's direction that the board believes is 23
necessary in order for the board to perform its duties under this subchapter. 24
(b) All outstanding contracts executed by the Board of Directors of 25
the State Comprehensive Health Insurance Pool created by Acts 1995, No. 1339, 26
shall be deemed continuing obligations of the board created by this 27
subchapter. 28
(c) As provided for in § 23 -79-502, any health insurance benefit not 29
provided for in this subchapter shall be deemed to be in conflict with and 30
therefore inapplicable to the provisions of this subchapter. 31
32
23-79-507. Funding of pool. 33
(a) Premiums. 34
(1) (A) The Arkansas Comprehensive Health Insurance Pool shall 35
establish premium rates for plan coverage as provided in subdivision (a)(2) 36 HB1420
17 02/03/2025 4:09:03 PM ANS140
of this section. 1
(B) Separate schedules of premium rates based on age, sex, 2
and geographical location may apply for individual risks. 3
(C) Premium rates and schedules shall be submitted to the 4
Insurance Commissioner for approval prior to use. 5
(2)(A)(i) With the assistance of the commissioner, the pool 6
shall determine a standard risk rate by considering the premium rates charged 7
by other insurers offering health insurance coverage to individuals in 8
Arkansas. 9
(ii) The standard risk rate shall be established 10
using reasonable actuarial techniques and shall reflect anticipated 11
experience and expenses for the coverage. 12
(B)(i) Rates for plan coverage shall not exceed one 13
hundred fifty percent (150%) of rates established as applicable for 14
individual standard risks in Arkansas. 15
(ii) Subject to the limits provided in this 16
subdivision (a)(2), subsequent rates shall be established to help provide for 17
the expected costs of claims, including recovery of prior losses, expenses of 18
operation, investment income of claim reserves, and any other cost factors 19
subject to the limitations described in this section. 20
(b) Sources of Additional Revenue. 21
(1) In addition to the powers enumerated in § 23-79-506, the 22
pool shall have the authority to: 23
(A) Assess insurers in accordance with the provisions of 24
this section; and 25
(B)(i) Make advance interim assessments as may be 26
reasonable and necessary for the pool's organizational and interim operating 27
expenses. 28
(ii) Any such interim assessments may be credited as 29
offsets against any regular assessments due following the close of the fiscal 30
year. 31
(2)(A) Following the close of each fiscal year, the plan 32
administrator shall determine the net premiums, that is, premiums less 33
administrative expense allowances, the pool expenses of administration and 34
operation, and the incurred losses for the year, taking into account 35
investment income and other appropriate gains and losses. 36 HB1420
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(B) The deficit incurred by the pool not otherwise 1
recouped under either subdivision (b)(9) of this section or subsection (e) of 2
this section [repealed], or both, shall be recouped by assessments 3
apportioned among insurers by the Board of Directors of the Arkansas 4
Comprehensive Health Insurance Pool. 5
(3) Each insurer's assessment shall be determined by multiplying 6
the total assessment of all insurers as determined in subdivision (b)(2) of 7
this section by a fraction, the numerator of which equals that insurer's 8
premium and subscriber contract charges for health insurance written in the 9
state during the preceding calendar year and the denominator of which equals 10
the total of all health insurance premiums by all insurers. 11
(4)(A) If assessments or other funds received under either 12
subdivision (b)(9) of this section or subsection (e) of this section 13
[repealed], or both, or any combination of the assessments and funds exceed 14
the pool's actual losses and administrative expenses, the excess shall be 15
held at interest and used by the board to offset future losses or to reduce 16
future assessments. 17
(B) As used in this subsection, “future losses” includes 18
reserves for incurred but not reported claims. 19
(5) Each insurer's assessment shall be determined annually by 20
the board based on annual statements and other reports deemed necessary by 21
the board and filed by the insurer with the board or the commissioner. 22
(6)(A)(i) An insurer may petition the commissioner for an 23
abatement or deferment of all or part of an assessment imposed by the board. 24
(ii) The commissioner may abate or defer, in whole or 25
in part, the assessment if, in the opinion of the commissioner, payment of 26
the assessment would endanger the ability of the insurer to fulfill its 27
contractual obligations. 28
(B)(i) In the event an assessment against an insurer is 29
abated or deferred, in whole or in part, the amount by which the assessment 30
is abated or deferred shall be assessed against the other insurers in a 31
manner consistent with the basis for assessments set forth in this 32
subsection. 33
(ii) The insurer receiving the abatement or deferment 34
shall remain liable to the plan for the deficiency for four (4) years. 35
(7) For all assessments issued by the board, beginning January 36 HB1420
19 02/03/2025 4:09:03 PM ANS140
1, 1998, only those individuals, corporations, associations, or other 1
entities defined as an insurer in § 23 -79-503 shall be subject to assessment. 2
(8) In the event the board fails to act within a reasonable 3
period of time to recoup by assessment any deficit incurred by the pool, the 4
commissioner shall have all the powers and duties of the board under this 5
chapter with respect to assessing insurers. 6
(9) The General Assembly further intends that the pool be 7
eligible for, and for the pool, its board, or other officers of state 8
government, as appropriate, to take steps necessary to obtain federal grant 9
funds to offset losses of the pool, including any funds made available under 10
the Trade Adjustment Assistance Reform Act of 2002. 11
(c) Assessment Offsets. 12
(1) Any assessment may be offset in an amount equal to the 13
amount of the assessment paid to the pool against the premium tax payable by 14
that insurer for the year in which the assessment is levied or for the four 15
(4) years subsequent to that year. 16
(2) No offset shall be allowed for any penalty assessed under 17
subdivision (d)(1) of this section. 18
(d)(1) All assessments and fees shall be due and payable upon receipt 19
and shall be delinquent if not paid within thirty (30) days of the receipt of 20
the notice by the insurer. 21
(2) Failure to timely pay the assessment will automatically 22
subject the insurer to a ten percent (10%) penalty, which will be due and 23
payable within the next thirty -day period. 24
(3) The board and the commissioner shall have the authority to 25
enforce the collection of the assessment and penalty in accordance with the 26
provisions of this subchapter and the Arkansas Insurance Code. 27
(4) The board may waive the penalty authorized by this 28
subsection if it determines that compelling circumstances exist that justify 29
such a waiver. 30
31
23-79-508. Plan administrator. 32
(a) The Board of Directors of the Arkansas Comprehensive Health 33
Insurance Pool shall select an insurer through a competitive bidding process 34
to administer the plan. However, the administering insurer designated by the 35
board created by Acts 1995, No. 1339, shall serve as the plan administrator 36 HB1420
20 02/03/2025 4:09:03 PM ANS140
under this subchapter until the expiration of the current contract of the 1
administering insurer. The board shall evaluate bids submitted under this 2
section based upon criteria established by the board which shall include, but 3
not be limited to, the following: 4
(1) The plan administrator's proven ability to handle large 5
group accident and health benefit plans; 6
(2) The efficiency and timeliness of the plan administrator's 7
claim processing procedures; 8
(3) An estimate of total charges for administering the plan; 9
(4) The plan administrator's ability to apply effective cost 10
containment programs and procedures and to administer the plan in a cost 11
efficient manner; and 12
(5) The financial condition and stability of the plan 13
administrator. 14
(b)(1) The plan administrator shall serve for a period of three (3) 15
years subject to removal for cause and subject to the terms, conditions, and 16
limitations of the contract between the board and the plan administrator. 17
(2) The board shall advertise for and accept bids to serve as 18
the plan administrator for the succeeding three -year periods. 19
(c) The plan administrator shall perform functions related to the plan 20
as may be assigned to it, including: 21
(1) Determination of eligibility; 22
(2) Payment and processing of claims; 23
(3) Establishment of a premium billing procedure for collection 24
of premiums. Billings shall be made on a periodic basis as determined by the 25
board; and 26
(4) Other necessary functions to assure timely payment of 27
benefits to covered persons under the plan, including: 28
(A) Making available information relating to the proper 29
manner of submitting a claim for benefits under the plan and distributing 30
forms upon which submissions shall be made; and 31
(B) Evaluating the eligibility of each claim for payment 32
under the plan. 33
(d)(1) The plan administrator shall submit regular reports to the 34
board regarding the operation of the plan. 35
(2) Frequency, content, and form of the report shall be 36 HB1420
21 02/03/2025 4:09:03 PM ANS140
determined by the board. 1
(e)(1) The plan administrator shall pay claim expenses from the 2
premium payments received from or on behalf of plan participants and 3
allocated by the board for claim expenses. 4
(2) If the plan administrator's payments for claims expenses 5
exceed the portion of premiums allocated by the board for payment of claims 6
expenses, the board shall provide additional funds to the plan administrator 7
for payment of claims expenses. 8
(f) The plan administrator shall be governed by the requirements of 9
this subchapter and shall be compensated as provided in the contract between 10
the board and the plan administrator. 11
12
23-79-509. Plan eligibility. 13
(a) General Eligibility Requirements. The following requirements 14
apply to a resident eligible person or a trade adjustment assistance eligible 15
person in order for the person to be eligible for plan coverage: 16
(1) Except as provided in subdivision (a)(2) of this section or 17
subsection (b) of this section, any individual person who meets the 18
definition of resident eligible person as defined by § 23 -79-503 or a trade 19
adjustment assistance eligible person as defined by § 23 -79-503 and is either 20
a citizen of the United States or an alien lawfully admitted for permanent 21
residence who continues to be a resident of this state shall be eligible for 22
plan coverage if evidence is provided of: 23
(A) A notice of rejection or refusal by an insurer to 24
issue substantially similar individual health insurance coverage by reason of 25
the existence or history of a medical condition or upon such other evidence 26
that the Board of Directors of the Arkansas Comprehensive Health Insurance 27
Pool deems sufficient in order to verify that the applicant is unable to 28
obtain the coverage from an insurer due to the existence or history of a 29
medical condition; 30
(B)(i) A refusal by an insurer to issue individual health 31
insurance coverage except at a rate that the board determines is 32
substantially in excess of the applicable plan rate. 33
(ii) A rejection or refusal by a group health plan or 34
insurer offering only stop -loss or excess-of-loss insurance or contracts, 35
agreements, or other arrangements for reinsurance coverage with respect to 36 HB1420
22 02/03/2025 4:09:03 PM ANS140
the applicant shall not be sufficient evidence under this subsection; 1
(C)(i) Until September 30, 2011, a refusal by an insurer 2
to issue individual health insurance coverage to a child under nineteen (19) 3
years of age. 4
(ii) After September 30, 2011, the eligibility of a 5
child under nineteen (19) years of age for individual health insurance 6
coverage shall be determined by the board; or 7
(D) Evidence that the applicant was covered under a 8
qualified high-risk pool of another state, provided that the coverage 9
terminated no more than sixty -three (63) days prior to the date the pool 10
receives the applicant's application for coverage and the other state's 11
qualified high-risk pool did not terminate the person's coverage for fraud; 12
(2) A person shall not be eligible for coverage under the plan 13
if: 14
(A) The person has or obtains health insurance coverage 15
substantially similar to or more comprehensive than a plan policy or would be 16
eligible to have coverage if the person elected to obtain it except that: 17
(i) A person may maintain other coverage for the 18
period of time the person is satisfying any waiting period for a preexisting 19
condition under a plan policy; and 20
(ii) A person may maintain plan coverage for the 21
period of time the person is satisfying a waiting period for a preexisting 22
condition under another health insurance policy intended to replace the plan 23
policy; 24
(B) The person is determined to be eligible for healthcare 25
benefits under Title XIX of the Social Security Act; 26
(C) The person has previously terminated plan coverage 27
unless twelve (12) months have elapsed since termination of coverage; 28
(D) The person fails to pay the required premium under the 29
covered person's terms of enrollment and participation, in which event the 30
liability of the plan shall be limited to benefits incurred under the plan 31
for the same period for which premiums had been paid and the covered person 32
remained eligible for plan coverage; 33
(E) The plan has paid on behalf of the covered person the 34
maximum lifetime benefit established by the board in accordance with § 23 -79-35
510(a)(2)(W); 36 HB1420
23 02/03/2025 4:09:03 PM ANS140
(F) The person is a resident of a public institution; 1
(G) All or part of the person's premium is paid for or 2
reimbursed: 3
(i) By one (1) of the following in connection with a 4
group health plan: 5
(a) The person’s current employer; 6
(b) If the person is retired, by the person's 7
former employer; or 8
(c) If the person is a dependent of an 9
employee or retiree, by the current or former employer of the employee or 10
retiree; or 11
(ii) Under any government-sponsored program or by any 12
government agency, foundation, healthcare facility, or healthcare provider 13
except for premiums paid on behalf of: 14
(a) A trade adjustment assistance eligible 15
person or a qualified trade adjustment assistance eligible person in 16
accordance with section 35 of the Internal Revenue Code; or 17
(b) An otherwise qualifying full -time employee 18
or dependent of a qualifying full -time employee of a government agency, 19
foundation, healthcare facility, or healthcare provider; or 20
(H) The person commits a fraudulent insurance act as 21
defined in § 23-66-501(4) against the Arkansas Comprehensive Health Insurance 22
Pool; 23
(3) The board or the plan administrator shall require 24
verification of residency and may require any additional information, 25
documentation, or statements under oath whenever necessary to determine plan 26
eligibility or residency; 27
(4) Coverage shall cease: 28
(A) On the date a person is no longer a resident of the 29
State of Arkansas; 30
(B) On the date a person requests coverage to end; 31
(C) On the death of the covered person; 32
(D) On the date state law requires cancellation of the 33
policy; or 34
(E) At the plan's option, thirty (30) days after the plan 35
makes any written inquiry concerning a person's eligibility or place of 36 HB1420
24 02/03/2025 4:09:03 PM ANS140
residence to which the person does not reply; and 1
(5) Except under the conditions set forth in subdivision (a)(4) 2
of this section, the coverage of any person who ceases to meet the 3
eligibility requirements of this section terminates at the end of the month 4
that the person ceases to meet the eligibility requirements of this section. 5
(b) Persons Eligible for Guaranteed Issuance of Coverage. The 6
following requirements apply to a federally eligible individual or a 7
qualified trade adjustment assistance eligible person in order for such an 8
individual to be eligible for plan coverage: 9
(1) Notwithstanding the requirements of subsection (a) of this 10
section, any federally eligible individual or a qualified trade adjustment 11
assistance eligible person for whom a plan application and such enclosures 12
and supporting documentation as the board may require is received by the 13
board within sixty-three (63) days after the termination of prior creditable 14
coverage for reasons other than nonpayment of premium or fraud that covered 15
the applicant shall qualify to enroll in the plan under the portability 16
provisions of this subsection; 17
(2) Any individual seeking plan coverage under this subsection 18
must submit with his or her application evidence, including acceptable 19
written certification of previous creditable coverage, that will establish to 20
the board's satisfaction that he or she meets all of the requirements to be a 21
federally eligible individual or a qualified trade adjustment assistance 22
eligible person and is currently and permanently residing in the State of 23
Arkansas as of the date his or her application was received by the board; 24
(3) A period of creditable coverage shall not be counted, with 25
respect to qualifying an applicant for plan coverage as an individual under 26
this subsection, if after such a period and before the application for plan 27
coverage was received by the board, there was at least a sixty -three-day 28
period during all of which the individual was not covered under any 29
creditable coverage; 30
(4) Any individual who the board determines qualifies for plan 31
coverage under this subsection shall be offered his or her choice of 32
enrolling in one (1) of the alternative portability plans that the board is 33
authorized under this subsection to establish for those individuals; 34
(5)(A)(i) The board shall offer a choice of healthcare coverages 35
consistent with major medical coverage under the alternative plans authorized 36 HB1420
25 02/03/2025 4:09:03 PM ANS140
by this subsection to every individual qualifying for coverage under this 1
subsection. 2
(ii) The coverages to be offered under the plans, the 3
schedule of benefits, deductibles, copayments, coinsurance, exclusions, and 4
other limitations shall be approved by the board. 5
(B) One (1) optional form of coverage shall be comparable 6
to comprehensive health insurance coverage offered in the individual market 7
in the State of Arkansas or a standard option of coverage available under the 8
individual health insurance laws of the State of Arkansas. The standard plan 9
that is authorized by § 23 -79-510 may be used for this purpose. 10
(C) The board also may offer a preferred provider option 11
and such other options as the board determines may be appropriate for 12
individuals who qualify for plan coverage pursuant to this subsection; 13
(6) Notwithstanding the requirements of § 23 -79-510(f), any plan 14
coverage that is issued to individuals who qualify for plan coverage pursuant 15
to the portability provisions of this subsection shall not be subject to any 16
preexisting conditions exclusion, waiting period, or other similar limitation 17
on coverage; 18
(7) Individuals who qualify and enroll in the plan pursuant to 19
this subsection shall be required to pay such premium rates as the board 20
shall establish and approve in accordance with the requirements of § 23-79-21
507(a); 22
(8) The total premium, without regard to any subsidy of premium, 23
for individuals who qualify and enroll in the plan pursuant to this 24
subsection shall not be greater than a similarly situated individual 25
qualifying for pool coverage under subsection (a) of this section; and 26
(9) A federally eligible individual who qualifies and enrolls in 27
the plan pursuant to this subsection must continue to satisfy all of the 28
other eligibility requirements of this subchapter to the extent not 29
inconsistent with the Health Insurance Portability and Accountability Act of 30
1996 in order to maintain continued eligibility for coverage under the plan. 31
(c) Any person who was issued a policy pursuant to the provisions of 32
Acts 1995, No. 1339, shall be deemed continuously covered consistent with the 33
terms of this subchapter and reissued a new policy in accordance with the 34
provisions of this subchapter. 35
36 HB1420
26 02/03/2025 4:09:03 PM ANS140
23-79-510. Outline of benefits. 1
(a)(1) Subject to the contractual policy form language adopted by the 2
Board of Directors of the Arkansas Comprehensive Health Insurance Pool, 3
expenses for the following services, supplies, drugs, or articles when 4
prescribed by a physician and determined by the plan to be medically 5
necessary shall be covered, subject to provisions of subsection (b) of this 6
section: 7
(A) Hospital services; 8
(B) Professional services for the diagnosis or treatment 9
of injuries, illnesses, or conditions, other than mental or dental, that are 10
rendered by a physician or by other licensed professionals at his or her 11
direction; 12
(C) Drugs requiring a physician's prescription; 13
(D) Skilled nursing services of a licensed skilled nursing 14
facility for not more than one hundred twenty (120) days during a policy 15
year; 16
(E) Services of a home health agency up to a maximum of 17
two hundred seventy (270) services per year; 18
(F) Use of radium or other radioactive materials; 19
(G) Oxygen; 20
(H) Prostheses other than dental; 21
(I) Rental of durable medical equipment, other than 22
eyeglasses and hearing aids, for which there is no personal use in the 23
absence of the conditions for which such equipment is prescribed; 24
(J) Diagnostic X rays and laboratory tests; 25
(K) Oral surgery for excision of partially or completely 26
unerupted, impacted teeth or the gums and tissues of the mouth when not 27
performed in connection with the extraction or repair of teeth; 28
(L) Services of a physical therapist; 29
(M) Emergency and other medically necessary transportation 30
provided by a licensed ambulance service to the nearest facility qualified to 31
treat a covered condition; 32
(N) Services for diagnosis and treatment of mental and 33
nervous disorders or chemical and drug dependency, provided that a covered 34
person shall be required to make a fifty percent (50%) copayment and that the 35
plan's payment shall not exceed four thousand dollars ($4,000) annually; and 36 HB1420
27 02/03/2025 4:09:03 PM ANS140
(O) Such additional benefits deemed appropriate by the 1
board in accordance with the provisions of subsection (b) of this section. 2
(2) Exclusions. Unless the contractual policy form language 3
adopted by the board provides otherwise, the following services, supplies, 4
drugs, or articles whether or not prescribed by a physician, shall not be 5
covered: 6
(A) Any charge for treatment for cosmetic purposes other 7
than surgery for the repair or treatment of an injury or a congenital bodily 8
defect to restore normal bodily functions; 9
(B) Care that is primarily for custodial or domiciliary 10
purposes; 11
(C) Any charge for confinement in a private room to the 12
extent it is in excess of the institution's charge for its most common 13
semiprivate room unless a private room is medically necessary; 14
(D) That part of any charge for services rendered or 15
articles prescribed by a physician, dentist, or other healthcare personnel 16
that exceeds the prevailing charge in the locality or for any charge not 17
medically necessary; 18
(E) Any charge for services or articles the provision of 19
which is not within the scope of authorized practice of the institution or 20
individual providing the services or articles; 21
(F) Any expense incurred prior to the effective date of 22
coverage by the plan for the person on whose behalf the expense is incurred; 23
(G) Dental care except as provided in subdivision 24
(a)(1)(K) of this section; 25
(H) Eyeglasses and hearing aids; 26
(I) Illness or injury due to acts of war; 27
(J) Services of blood donors and any fee for failure to 28
replace the first three (3) pints of blood provided to a covered person each 29
policy year; 30
(K) Personal supplies or services provided by a hospital 31
or nursing home or any other nonmedical or nonprescribed supply or service; 32
(L) Any expense or charge for services, articles, drugs, 33
or supplies that are not provided in accord with generally accepted standards 34
of current medical practice; 35
(M) Any expense for which a charge is not made in the 36 HB1420
28 02/03/2025 4:09:03 PM ANS140
absence of insurance or for which there is no legal obligation on the part of 1
the patient to pay; 2
(N) Any expense incurred for benefits provided under the 3
laws of the United States and the State of Arkansas, including Medicare and 4
Medicaid and other medical assistance, military service -connected disability 5
payments, medical services provided for members of the armed forces and their 6
dependents or employees of the United States Armed Forces, and medical 7
services financed on behalf of all citizens by the United States; 8
(O) Any expense or charge for in vitro fertilization, 9
artificial insemination, or any other artificial means used to cause 10
pregnancy; 11
(P) Any expense or charge for oral contraceptives used for 12
birth control or any other temporary birth control measures; 13
(Q) Any expense or charge for sterilization or 14
sterilization reversals; 15
(R) Any expense or charge for weight -loss programs, 16
exercise equipment, or treatment of obesity except when certified by a 17
physician as morbid obesity, i.e., at least two (2) times normal body weight; 18
(S) Any expense or charge for acupuncture treatment unless 19
used as an anesthetic agent for a covered surgery; 20
(T) Any expense or charge for organ or bone marrow 21
transplants other than those performed at a hospital with a board -approved 22
organ transplant program that has been designated by the board as a preferred 23
provider organization for that specific organ or bone marrow transplant; 24
(U) Any expense or charge for procedures, treatments, 25
equipment, or services that are provided in special settings for research 26
purposes or in a controlled environment, are being studied for safety, 27
efficiency, and effectiveness, and are awaiting endorsement by the 28
appropriate national medical specialty college for general use within the 29
medical community; 30
(V) Such additional exclusions deemed appropriate by the 31
board in accordance with the provisions of subsection (b) of this section; 32
and 33
(W)(i) Any benefits that exceed the maximum lifetime 34
benefit for plan coverage established by the board under § 23 -79-35
506(a)(1)(N). 36 HB1420
29 02/03/2025 4:09:03 PM ANS140
(ii) The maximum lifetime benefit shall not be less 1
than one million dollars ($1,000,000) and shall not exceed three million 2
dollars ($3,000,000). 3
(b) In establishing the plan coverage, the board shall take into 4
consideration the levels of health insurance provided in the state and 5
medical economic factors as may be deemed appropriate and promulgate 6
benefits, deductibles, copayments, coinsurance factors, exclusions, and 7
limitations determined to be generally reflective of and commensurate with 8
health insurance provided through a representative number of large employers 9
in the state. 10
(c) The board may adjust any deductibles, copayments, and coinsurance 11
factors annually according to the medical component of the Consumer Price 12
Index for All Urban Consumers. 13
(d) Nonduplication of Benefits. 14
(1)(A) The pool shall be payer of last resort of benefits 15
whenever any other benefit or source of third -party payment is available. 16
(B) Benefits otherwise payable under plan coverage shall 17
be reduced by all amounts paid or payable through any other health insurance 18
or any other source providing benefits because of a sickness or injury and by 19
all hospital and medical expense benefits paid or payable under any workers' 20
compensation coverage, automobile medical payment, or liability insurance 21
whether provided on the basis of fault or nonfault and by any hospital or 22
medical benefits paid or payable under or provided pursuant to any state or 23
federal law or program. 24
(2) The pool shall have a cause of action against a covered 25
person for the recovery of the amount of benefits paid that are not covered 26
by the pool. Benefits due from the pool may be reduced or refused as a set -27
off against any amount recoverable under this subdivision (d)(2). 28
(e) Right of Subrogation — Recoveries. 29
(1)(A) Whenever the pool has paid benefits because of sickness 30
or an injury to any covered person resulting from a third party's wrongful 31
act or negligence or for which an insurance company or self -insured entity is 32
liable in accordance with the provisions of any policy of insurance, and the 33
covered person has recovered or may recover damages from a third party that 34
is liable for damages, the pool shall have the right to recover the benefits 35
it paid from any amounts that the covered person has received or may receive 36 HB1420
30 02/03/2025 4:09:03 PM ANS140
regardless of the date of the sickness or injury or the date of any 1
settlement, judgment, or award resulting from the sickness or injury. 2
(B) The pool shall be subrogated to any right of recovery 3
the covered person may have under the terms of any private or public 4
healthcare coverage or liability coverage including coverage under a workers' 5
compensation act without the necessity of assignment of claim or other 6
authorization to secure the right of recovery. 7
(C) To enforce its subrogation right, the pool may: 8
(i) Intervene or join in an action or proceeding 9
brought by the covered person or his or her personal representative, 10
including his or her guardian, conservator, estate, dependents, or survivors, 11
against any third party or the third party's insurance carrier or self -12
insured entity that may be liable; or 13
(ii) Institute and prosecute legal proceedings 14
against any third party or the third party's insurance carrier or self -15
insured entity that may be liable for the sickness or injury in an 16
appropriate court either in the name of the pool or in the name of the 17
covered person or his or her personal representative including his or her 18
guardian, conservator, estate, dependents, or survivors. 19
(2)(A)(i) If any action or claim is brought by or on behalf of a 20
covered person against a third party or the third party's insurance carrier 21
or self-insured entity, the covered person or his or her personal 22
representative, including his or her guardian, conservator, estate, 23
dependents, or survivors, shall notify the pool by personal service or 24
registered mail of the action or claim and of the name of the court in which 25
the action or claim is brought, filing proof thereof in the action or claim. 26
(ii) The pool may, at any time thereafter, join in 27
the action or claim upon its motion so that all orders of court after hearing 28
and judgment shall be made for its protection. 29
(B) No release or settlement of a claim for damages and no 30
satisfaction of judgment in the action shall be valid without the written 31
consent of the pool to the extent of its interest in the settlement or 32
judgment and of the covered person or his or her personal representative. 33
(3)(A) In the event that the covered person or his or her 34
personal representative fails to institute a proceeding against any 35
appropriate third party before the fifth month before the action would be 36 HB1420
31 02/03/2025 4:09:03 PM ANS140
barred, the pool, in its own name or in the name of the covered person or 1
personal representative, may commence a proceeding against any appropriate 2
third party for the recovery of damages on account of any sickness, injury, 3
or death to the covered person. 4
(B) The covered person shall cooperate in doing what is 5
reasonably necessary to assist the pool in any recovery and shall not take 6
any action that would prejudice the pool's right to recovery. 7
(C) The pool shall pay to the covered person or his or her 8
personal representative all sums collected from any third party by judgment 9
or otherwise in excess of amounts paid in benefits under the pool and amounts 10
paid or to be paid as costs, attorney's fees, and reasonable expenses 11
incurred by the pool in making the collection or enforcing the judgment. 12
(4)(A)(i) In the event of judgment or award in either a suit or 13
claim against a third party, the court shall first order paid from any 14
judgment or award the reasonable litigation expenses incurred in preparation 15
and prosecution of the action or claim, together with reasonable attorney's 16
fees. 17
(ii) After payment of those expenses and attorney's 18
fees, the court shall apply out of the balance of the judgment or award an 19
amount sufficient to reimburse the pool the full amount of benefits paid on 20
behalf of the covered person under this subchapter, provided that the court 21
may reduce and apportion the pool's portion of the judgment proportionately 22
to the recovery of the covered person. 23
(B)(i) The burden of producing sufficient evidence to 24
support the exercise by the court of its discretion to reduce the amount of a 25
proven charge sought to be enforced against the recovery shall rest with the 26
party seeking the reduction. 27
(ii) The court may consider the nature and extent of 28
the injury, economic and noneconomic loss, settlement offers, comparative or 29
contributory negligence as it applies to the case at hand, hospital costs, 30
physician costs, and all other appropriate costs. 31
(C) The pool shall pay its pro rata share of the 32
attorney's fees based on the pool's recovery as it compares to the total 33
judgment. 34
(D) Any reimbursement rights of the pool shall take 35
priority over all other liens and charges existing under the laws of the 36 HB1420
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State of Arkansas. 1
(5) The pool may compromise or settle and release any claim for 2
benefits provided under this subchapter or waive any claims for benefits, in 3
whole or in part, for the convenience of the pool or if the pool determines 4
that collection will result in undue hardship upon the covered person. 5
(f) Preexisting Conditions. 6
(1) Except for federally eligible individuals or qualified trade 7
adjustment assistance eligible persons qualifying for plan coverage under § 8
23-79-509(b) or resident eligible persons or trade adjustment assistance 9
eligible persons who qualify for and elect to purchase the waiver authorized 10
in subdivision (f)(2) of this section, plan coverage shall exclude charges or 11
expenses incurred during the first six (6) months following the effective 12
date of coverage as to any condition if: 13
(A) The condition has manifested itself within the six -14
month period immediately preceding the effective date of coverage in such a 15
manner as would cause an ordinary prudent person to seek diagnosis, care, or 16
treatment; or 17
(B) Medical advice, care, or treatment was recommended or 18
received within the six -month period immediately preceding the effective date 19
of the coverage. 20
(2) Waiver. The preexisting condition exclusions as set forth 21
in subdivision (f)(1) of this section will be waived to the extent to which 22
the resident eligible person or trade adjustment assistance eligible person: 23
(A) Has satisfied similar exclusions under any prior 24
individual health insurance coverage that was involuntarily terminated; and 25
(B)(i) Has applied for plan coverage not later than thirty 26
(30) days following the involuntary termination. 27
(ii) For each resident eligible person or trade 28
adjustment assistance eligible person who qualifies for and elects this 29
waiver, there shall be added on a prorated basis to each payment of premium a 30
surcharge of up to ten percent (10%) of the otherwise applicable annual 31
premium for as long as that individual's coverage under the plan remains in 32
effect or sixty (60) months, whichever is less. 33
(3)(A) Whenever benefits are due from the plan because of 34
sickness or an injury to a covered person resulting from a third party's 35
wrongful act or negligence and the covered person has recovered or may 36 HB1420
33 02/03/2025 4:09:03 PM ANS140
recover damages from a third party or its insurance carrier or self -insured 1
entity, the plan shall have the right to reduce benefits or to refuse to pay 2
benefits that otherwise may be payable in the amount of damages that the 3
covered person has recovered or may recover regardless of the date of the 4
sickness or injury or the date of any settlement, judgment, or award 5
resulting from that sickness or injury. 6
(B)(i) During the pendency of any action or claim that is 7
brought by or on behalf of a covered person against a third party or its 8
insurance carrier or self -insured entity, any benefits that would otherwise 9
be payable except for the provisions of this subsection shall be paid if 10
payment by or for the third party has not yet been made and the covered 11
person or, if capable, that person's legal representative agrees in writing 12
to pay back properly the benefits paid as a result of the sickness or injury 13
to the extent of any future payments made by or for the third party for the 14
sickness or injury. 15
(ii) This agreement is to apply whether or not 16
liability for the payments is established or admitted by the third party or 17
whether those payments are itemized. 18
(C) Any amounts due the plan to repay benefits may be 19
deducted from other benefits payable by the plan after payments by or for the 20
third party are made. 21
(4) Benefits due from the plan may be reduced or refused as an 22
offset against any amount otherwise recoverable under this section. 23
24
23-79-511. Confidentiality. 25
(a)(1) All steps necessary under state and federal law to protect 26
confidentiality of applicants and covered persons shall be undertaken by the 27
Board of Directors of the Arkansas Comprehensive Health Insurance Pool to 28
prevent the identification of individual records of covered persons under the 29
plan, rejected by the plan, or who may become ineligible for further 30
participation in the plan. 31
(2) Procedures shall be written by the board to assure the 32
confidentiality of records of persons covered under, rejected by, or who 33
became ineligible for further participation in the plan when gathering and 34
submitting data to the board or any other entity. 35
(b) Any information submitted to the board by hospitals or any other 36 HB1420
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provider pursuant to this subchapter from which the identity of a particular 1
individual can be determined shall be privileged and confidential and shall 2
not be disclosed in any manner. The foregoing includes, but shall not be 3
limited to, disclosure, inspection, or copying under the Freedom of 4
Information Act of 1967, § 25 -19-101 et seq. 5
6
23-79-512. Collective action. 7
Neither the participation in the plan as insurers, the establishment of 8
rates, forms, or procedures nor any other joint or collective action required 9
by this subchapter shall be the basis of any legal action, criminal or civil 10
liability, or penalty against the plan or any insurer. 11
12
23-79-513. Unfair referral to plan — Prohibited practices by 13
employers. 14
(a) It shall constitute an unfair trade practice under the Trade 15
Practices Act, § 23-66-201 et seq., for an insurer, agent, broker, or third-16
party administrator to refer an individual to the Arkansas Comprehensive 17
Health Insurance Pool or arrange for an individual to apply to the pool for 18
the purpose of: 19
(1) Separating the individual from group health insurance 20
coverage provided by a group health plan; or 21
(2) Facilitating enrollment in the pool by any of the following 22
individuals associated with an employer, with the knowledge that the employer 23
intends to pay or is paying all or part of the premium payments owed by the 24
individual for pool coverage: 25
(A) An employee of the employer; 26
(B) A retired employee of the employer; or 27
(C) A dependent of an employee or retired employee of the 28
employer. 29
(b) Because pool coverage is not intended to cover participants who 30
are eligible for a group health plan, an individual described in subdivision 31
(a)(2) of this section is not eligible: 32
(1) For pool coverage if the employer associated with the 33
applicant intends to pay for all or part of the pool premium payments for the 34
individual; or 35
(2) To continue pool coverage if the employer associated with 36 HB1420
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the individual directly or indirectly pays all or part of the pool premium 1
payments for the individual. 2
3
23-79-514. [Repealed.] 4
5
23-79-515. Orderly cessation of operations. 6
(a)(1) The Arkansas Comprehensive Health Insurance Pool shall cease 7
enrollment and coverage under the plan on and after January 1, 2014, as 8
required by federal law. 9
(2) After taking all reasonable steps, including those specified 10
in this section, to timely and efficiently assist in the transition of 11
individuals receiving plan coverage to the individual health insurance 12
market, the Board of Directors of the Arkansas Comprehensive Health Insurance 13
Pool shall cease operating the pool after paying health insurance claims for 14
plan coverage and meeting all other obligations of the board under this 15
section. 16
(b) The board may take all actions it deems necessary to: 17
(1) Cease enrollment for plan coverage effective December 1, 18
2013; 19
(2)(A) Terminate all existing plan coverage effective at the end 20
of the calendar day on December 31, 2013. 21
(B) The board shall provide at least ninety (90) days 22
notice to current policyholders of the termination; and 23
(3) Amend plan policies and provide adequate notice to 24
policyholders, agents, and providers that to be paid or reimbursed, a claim 25
for plan services is required to be filed by the earlier of one hundred 26
eighty (180) days after plan coverage ends or three hundred sixty -five (365) 27
days after the date of service giving rise to the claim. 28
(c) This section does not require the board to revise plan benefits to 29
comply with federal law or to maintain plan coverage for any individual after 30
December 31, 2013. 31
(d)(1) After all plan coverage terminates under this section, the 32
board shall take reasonable steps to wind up all significant operations of 33
the pool by December 31, 2014. 34
(2) Notwithstanding any other provision of this subchapter, to 35
facilitate an efficient cessation of operations: 36 HB1420
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(A) The board may continue to use existing contractors 1
until cessation of operations without the need to issue competitive requests 2
for proposals; 3
(B) The board may continue to fund operations of this 4
subchapter under § 23 -79-507; 5
(C) The board shall remain in effect: 6
(i) As provided by § 23-79-504(b); and 7
(ii) Until a judgment, order, or decree in any 8
action, suit, or proceeding commenced against or by the pool is fully 9
executed; and 10
(D)(i) The term of each current board member shall be 11
extended until the date the pool concludes all business as provided under 12
this section and the Insurance Commissioner certifies the cessations of 13
operations under subsection (g) of this section. 14
(ii) The term of a board member expires when the 15
commissioner certifies the cessations of operations under subsection (g) of 16
this section. 17
(e) On or before June 30, 2013, the board shall amend the plan of 18
operation to reflect the actions necessary to implement this section. 19
(f) If the board has excess funds after the cessation of operations of 20
the pool, the funds shall be returned to the general revenue funds of the 21
state. 22
(g)(1) On or before March 1, 2016, or a later date if necessary to 23
complete the cessation of operations of the pool, the board shall file a 24
report with the General Assembly and commissioner that reflects completion of 25
the requirements of this section and includes an independent auditor's report 26
on the financial statements of the pool. 27
(2) If satisfied upon review of the report that the board has 28
complied with this section and accomplished the pool's cessation of 29
operations in a reasonable manner, the commissioner shall certify that the 30
business of the pool has concluded in accordance with this section and 31
publish the certification on the State Insurance Department website. 32
(h) Upon certification under subsection (g) of this section, the 33
operations of the pool are suspended indefinitely unless reactivated by the 34
General Assembly. 35
(i) The commissioner may address any matters regarding the pool 36 HB1420
37 02/03/2025 4:09:03 PM ANS140
arising after the certification under subsection (g) of this section, and the 1
Attorney General shall defend a legal action filed after the certification, 2
including seeking the dismissal of the action under § 23 -79-516 or for any 3
other purpose. 4
(j) Unless inconsistent with this section, the remainder of this 5
subchapter continues to apply to the pool and the board. 6
7
23-79-516. Statute of limitations and repose. 8
Because winding up the operations of the Arkansas Comprehensive Health 9
Insurance Pool requires the expeditious determination of its outstanding 10
liabilities, a cause of action against the pool or the Board of Directors of 11
the Arkansas Comprehensive Health Insurance Pool shall be commenced within 12
the earlier of one (1) year after the cause of action accrues or December 31, 13
2015. 14
15
23-79-517. Individuals moving to Arkansas and previously covered by 16
another qualified high -risk pool. 17
(a) Notwithstanding § 23 -79-510(f), if a resident eligible person is 18
eligible for plan coverage because the person previously was covered under a 19
qualified high-risk pool of another state, a preexisting condition exclusion 20
otherwise applicable to the resident eligible person: 21
(1) Shall be reduced by each month of coverage in which the 22
resident eligible person was subject to a preexisting condition exclusion in 23
the other state's qualified high -risk pool; or 24
(2) Does not apply if the resident eligible person was not 25
subject to a preexisting condition exclusion in the other state's qualified 26
high-risk pool. 27
(b) This section expires on the last day an individual may be enrolled 28
into plan coverage under this subchapter. 29
30
SECTION 6. Arkansas Code § 23 -86-113 is repealed. 31
23-86-113. Minimum benefits for mental illness in group accident and 32
health insurance policies or subscriber's contracts — Definition. 33
(a) Unless refused in writing, every group accident and health 34
insurance policy or group contract of hospital and medical service 35
corporations issued or renewed after July 1, 1983, providing hospitalization 36 HB1420
38 02/03/2025 4:09:03 PM ANS140
or medical benefits to Arkansas residents for conditions arising from mental 1
illness shall provide the following minimum benefits on and after July 1, 2
1983: 3
(1) In the case of benefits based upon confinement as an 4
inpatient in a hospital, psychiatric hospital, or outpatient psychiatric 5
center licensed by the Department of Health or a community mental health 6
center certified by the Division of Aging, Adult, and Behavioral Health 7
Services of the Department of Human Services, the benefits shall be as 8
defined in subsection (b) of this section; 9
(2)(A) In the case of benefits provided for partial 10
hospitalization in a hospital, psychiatric hospital, or outpatient 11
psychiatric center licensed by the department or a community mental health 12
center certified by the division as defined in subsection (b) of this 13
section. 14
(B) For the purpose of this section, “partial 15
hospitalization” means continuous treatment for at least four (4) hours, but 16
not more than sixteen (16) hours in any twenty -four-hour period; and 17
(3) In the case of outpatient benefits, the benefits shall cover 18
services furnished by: 19
(A) A hospital, a psychiatric hospital, or an outpatient 20
psychiatric center licensed by the department; 21
(B) A physician licensed under the Arkansas Medical 22
Practices Act, § 17-95-201 et seq., § 17-95-301 et seq., and § 17 -95-401 et 23
seq.; 24
(C) A psychologist licensed under § 17 -97-201 et seq.; or 25
(D) A community mental health center or other mental 26
health clinic certified by the division to furnish mental health services as 27
defined in subsection (b) of this section. 28
(b) The insurer or hospital and medical service corporation may 29
establish a copayment requirement for mental illness benefits paid for 30
inpatient, partial hospitalization, or outpatient care described in 31
subsection (a) of this section, which may or may not differ from the 32
copayment requirements for any other condition or illness, except that 33
copayment requirements for mental illness shall not exceed a twenty percent 34
(20%) copayment requirement. 35
(c)(1) For accident and health insurance sold to employers of fifty 36 HB1420
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(50) or fewer employees, the insurer or hospital and medical service 1
corporation shall not impose limits on benefits under subsection (a) of this 2
section with regard to deductible amounts, lifetime maximum payments, 3
payments per outpatient visit, or payments per day of partial hospitalization 4
which differ from benefits for any other condition or illness, provided that 5
the insurer or hospital and medical service corporation may impose an annual 6
maximum benefit payable, which shall not be less than seven thousand five 7
hundred dollars ($7,500) per calendar year. 8
(2) For accident and health insurance sold to employers of 9
fifty-one (51) or more employees, the insurer or hospital and medical service 10
corporation shall not impose limits on benefits under subsection (a) of this 11
section with regard to deductible amounts, lifetime maximum payments, 12
payments per outpatient visit, or payments per day of partial hospitalization 13
which differ from benefits for any other condition or illness, provided that 14
the insurer or hospital and medical service corporation may impose an annual 15
maximum of eight (8) inpatient or partial hospitalization days together with 16
forty (40) outpatient visits. 17
(d) No person shall disclose mental health history, diagnosis, or 18
treatment services information received in an initial application for 19
coverage or subsequent claims for benefits to any person, group, 20
organization, or governmental agency without written consent of the insured, 21
except for purposes of: 22
(1) Obtaining professional review and judgments of quality and 23
appropriateness of treatment rendered; 24
(2) Litigation proceedings involving the insured and when 25
ordered by a court; 26
(3) Reinsurance, when required; 27
(4) Applying over-insurance provisions or for purposes of 28
claiming benefits for services on behalf of the insured; or 29
(5) Underwriting applications for insurance coverage. 30
(e) Nothing in this section shall be construed to prohibit an insurer, 31
a hospital and medical service corporation, a healthcare plan, a health 32
maintenance organization, or other person providing accident and health 33
insurance or medical benefits to Arkansas residents from issuing or 34
continuing to issue an accident and health insurance benefit plan, policy, or 35
contract that provides benefits greater than the minimum benefits required to 36 HB1420
40 02/03/2025 4:09:03 PM ANS140
be made available under this section or from issuing any plans, policies, or 1
contracts that provide benefits that are generally more favorable to the 2
insured than those required to be made available under this section. 3
(f) The requirements of this section with respect to a group or 4
blanket accident and health insurance benefit plan, policy, or subscriber 5
contract shall be satisfied, if the coverage specified is made available to 6
the master policyholder of the plan, policy, or contract. 7
(g)(1)(A) Every insurer or hospital and medical service corporation 8
that issues a group accident and health insurance policy, contract, or 9
agreement in this state that provides for mental health coverage shall offer 10
coverage for the payment of services rendered by licensed professional 11
counselors. 12
(B) The offer shall be made either at the time of 13
application for, or upon the first renewal of, the policy, contract, or 14
agreement after April 1, 1995. 15
(C) If the offer is accepted, the amount paid for services 16
provided by licensed professional counselors shall be subject to the same 17
limitations as set forth in the policy for mental health coverage. 18
(2) Nothing in this subsection shall be deemed to expand the 19
scope of the practice of licensed professional counselors currently licensed 20
by the Arkansas Board of Examiners in Counseling and possessing the 21
qualifications set forth in § 17 -27-301 et seq., or other applicable laws. 22
23
SECTION 7. Arkansas Code § 23 -99-502 is amended to read as follows: 24
23-99-502. Legislative findings and intent. 25
It is the intent of this state that if a health benefit plan provides 26
insurance coverage for a mental illness or substance abuse health and 27
substance use disorder, the treatment of the mental illness or substance 28
abuse disorder the benefits shall be as available as and at parity with that 29
for other medical illnesses other medical and surgical benefits . 30
31
SECTION 8. Arkansas Code § 23 -99-503 is amended to read as follows: 32
23-99-503. Definitions. 33
As used in this subchapter: 34
(1) "Carve-out arrangement" means an arrangement in which a 35
healthcare insurer contracts with a separate person or entity to arrange for 36 HB1420
41 02/03/2025 4:09:03 PM ANS140
the delivery of specific types of healthcare benefits under a health benefit 1
plan; 2
(2) “Commissioner” means the Insurance Commissioner; 3
(3)(2)(A) "Financial requirements" means copayments, 4
deductibles, out-of-network charges, out -of-pocket contributions or fees, 5
annual limits, lifetime aggregate limits imposed on individual patients, and 6
other patient cost-sharing amounts. 7
(B) "Financial requirements" does not include aggregate 8
lifetime or annual dollar limits ; 9
(4)(3) “Health benefit plan” means any individual, group, or 10
blanket plan, policy, or contract for healthcare services issued or delivered 11
in this state by healthcare insurers, including indemnity and managed care 12
plans and the plans providing health benefits to state and public school 13
employees pursuant to § 21 -5-401 et seq., but excluding plans providing 14
health care healthcare services pursuant to Arkansas Constitution, Article 5, 15
§ 32, the Workers' Compensation Law, § 11 -9-101 et seq., and the Public 16
Employee Workers' Compensation Act, § 21 -5-601 et seq.; 17
(5)(4) “Healthcare insurer” means any insurance company, 18
hospital and medical service corporation, or health maintenance organization 19
issuing or delivering health benefit plans in this state and subject to any 20
of the following laws: 21
(A) The Arkansas Insurance Code; 22
(B) Section 23-75-101 et seq., pertaining to hospital and 23
medical service corporations; 24
(C) Section 23-76-101 et seq., pertaining to health 25
maintenance organizations; and 26
(D) Any successor law of the foregoing; 27
(6)(A)(5)(A) “Mental illnesses” and “substance use disorders” 28
mean those illnesses and disorders that are covered by a health benefit plan 29
listed in the International Classification of Diseases manual and the 30
Diagnostic and Statistical Manual of Mental Disorders "Mental health 31
benefits" means benefits with respect to items or services for mental health 32
conditions, as defined under the terms of the health benefit plan or health 33
insurance coverage and according to applicable federal and state law . 34
(B) Unless specifically otherwise stated, “mental illness” 35
includes substance use disorders "Mental health benefits" that are defined by 36 HB1420
42 02/03/2025 4:09:03 PM ANS140
a health benefit plan or health insurance coverage as being or not being a 1
mental health condition shall be defined to be consistent with generally 2
recognized independent standards of current medical practice, including 3
conditions that are listed in the Diagnostic and Statistical Manual of Mental 4
Disorders, the International Classification of Diseases, or state guidelines ; 5
(7)(6) “Person” or “entity” means and includes, individually and 6
collectively, any individual, corporation, partnership, firm, trust, 7
association, voluntary organization, or any other form of business enterprise 8
or legal entity; and 9
(8)(7)(A) “Small employer” means any person or entity actively 10
engaged in business who, on at least fifty percent (50%) of its working days 11
during the preceding year, employed no more than fifty (50) eligible 12
employees "Substance abuse disorder benefits" means benefits with respect to 13
items or services for substance use disorders, as defined under the terms of 14
the health benefit plan or health insurance coverage and according to 15
applicable federal and state law . 16
(B) "Substance abuse disorder benefits" that are defined 17
by a health benefit plan or health insurance coverage as being or not being a 18
mental health condition shall be defined to be consistent with generally 19
recognized independent standards of current medical practice, including 20
conditions that are listed in the Diagnostic and Statistical Manual of Mental 21
Disorders, the International Classification of Diseases, or state guidelines. 22
23
SECTION 9. Arkansas Code § 23 -99-504 is amended to read as follows: 24
23-99-504. Exclusions. 25
This subchapter does not apply to: 26
(1) Dental insurance plans; 27
(2) Vision insurance plans; 28
(3) Specified-disease insurance plans; 29
(4) Accidental injury insurance plans; 30
(5) Long-term care plans; 31
(6) Disability income plans; and 32
(7) Individual health benefit plans if the healthcare insurers 33
offer individuals who satisfy the healthcare insurer's underwriting standards 34
the option of purchasing a plan that, other than being optional, meets all 35
the other requirements of this subchapter; 36 HB1420
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(8) Health benefit plans for small employers if the healthcare 1
insurers offer purchasers the option of purchasing a plan that, other than 2
being optional, meets all the other requirements of this subchapter; and 3
(9) Medicare supplement plans, as subject to section 1882(g)(1) 4
of the Social Security Act. 5
6
SECTION 10. Arkansas Code § 23 -99-505 is amended to read as follows: 7
23-99-505. Increased cost exemption. 8
(a)(1) This subchapter does not apply to a health benefit plan during 9
the health benefit plan's following health benefit plan year if the 10
application of this subchapter to the health benefit plan in a health benefit 11
plan year resulted in an increase in the actual costs of coverage with 12
respect to medical and surgical benefits and mental illness health benefits 13
and substance abuse disorder benefits under the health benefit plan as 14
determined and certified under subsection (b) of this section by an amount 15
that exceeds: 16
(A) Two percent (2%) for the first health benefit plan 17
year in which this section is applied; or 18
(B) One percent (1%) for each subsequent health benefit 19
plan year. 20
(2) The exemption provided by subdivision (a)(1) of this section 21
applies to a health benefit plan for one (1) year. 22
(3) A healthcare insurer may elect to continue to apply mental 23
health parity under this subchapter to its health benefit plans regardless of 24
any increase in its total costs of coverage. 25
(b)(1) A determination under this section of increases to the actual 26
costs of coverage of a health benefit plan shall be made and certified by a 27
qualified and licensed actuary who is a member in good standing of the 28
American Academy of Actuaries. 29
(2) The determination shall be in a written report prepared by 30
the actuary. 31
(3) The report and all underlying documentation relied upon by 32
the actuary shall be maintained by the healthcare insurer for a period of six 33
(6) years following the notification required by subsection (d) of this 34
section. 35
(c) To obtain an exemption under this section, a healthcare insurer 36 HB1420
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shall make the increased cost determination required by this section after 1
the health benefit plan has complied with this section for the first six (6) 2
months of the health benefit plan year. 3
(d)(1) A healthcare insurer that elects to claim an exemption for a 4
qualifying health benefit plan under this section based upon a certification 5
under subsection (b) of this section shall promptly notify the Insurance 6
Commissioner, the policyholder or contract holder, and the certificate 7
holders, subscribers, and enrollees covered by the health benefit plan of its 8
election. 9
(2)(A) The notification to the commissioner under subdivision 10
(d)(1) of this section shall include: 11
(A)(i) A description of the number of covered lives 12
under the health benefit plan at the time of the notification and, if 13
applicable, at the time of any prior election of the increased cost exemption 14
under this section; and 15
(B)(ii) For the current and previous health benefit 16
plan year: 17
(i)(a) A description of the actual total costs 18
of coverage for medical and surgical benefits and mental illness health and 19
substance use benefits under the health benefit plan; and 20
(ii)(b) The actual total costs of coverage 21
with respect to mental illness benefits under the health benefit plan. 22
(3)(A) A notification under this subsection is 23
confidential. 24
(B) The commissioner shall make available upon request, 25
but not more than annually, an anonymous itemization of notifications under 26
this section that includes a summary of the data received under this 27
subdivision (d)(2) of this section. 28
(3) The notification to the policyholder or contract holder and 29
certificate holders, subscribers, and enrollees shall comply with the 30
requirements of 45 C.F.R. § 146.136(g)(6)(i), as it existed on May 23, 2024. 31
(4) A notification provided under this subsection is 32
confidential. 33
(e) To determine compliance with this section, the commissioner may 34
audit the books and records of a healthcare insurer relating to an exemption, 35
including without limitation any actuarial reports prepared pursuant to 36 HB1420
45 02/03/2025 4:09:03 PM ANS140
subsection (b) of this section during the six -year period following the 1
notification required by subsection (d) of this section. 2
(f) The commissioner may promulgate rules to implement this section. 3
4
SECTION 11. Arkansas Code § 23 -99-506 is amended to read as follows: 5
23-99-506. Parity requirements. 6
(a) Except as provided in § 23 -99-504, if a health benefit plan that 7
provides benefits for the diagnosis and treatment of mental illnesses shall 8
provide the benefits under the same terms and conditions as provided for 9
covered benefits offered under the health benefit plan for the treatment of 10
other medical illnesses and conditions, including without limitation: 11
(1) The duration or frequency of coverage; 12
(2) The dollar amount of coverage; or 13
(3) Financial requirements insurance coverage for mental health 14
and substance use, the benefits shall be as available as and at parity with 15
other medical and surgical benefits . 16
(b) Except as provided under this section, a health carrier that 17
offers or issues individual or group health benefit plans that are delivered, 18
issued for delivery, continued, or renewed in this state and that provide 19
coverage for mental health and substance use shall comply with the 20
requirements of the Mental Health Parity and Addiction Equity Act of 2008, 42 21
U.S.C. Section 300gg -26, as it existed on January 1, 2025, and the federal 22
regulations promulgated thereunder. 23
(c) This subchapter does not: 24
(1) Require equal coverage between treatments for a mental 25
illness with mental health and substance use benefits and coverage for 26
preventive care benefits; 27
(2) Prohibit a healthcare insurer from: 28
(A) Negotiating separate reimbursement rates and service 29
delivery systems, including without limitation a carve -out arrangement; or 30
(B) Managing the provision of mental health benefits for 31
mental illnesses by common methods used for other medical conditions, 32
including without limitation preadmission screening, prior authorization of 33
services, or other mechanisms designed to limit coverage of services or 34
mental illnesses to mental illnesses that are deemed medically necessary; 35
(C) Limiting covered services to covered services 36 HB1420
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authorized by the health benefit plan, if the limitations are made in 1
accordance with this subchapter and federal law; 2
(D) Using separate but equal cost -sharing features for 3
mental illnesses; or 4
(E) Using a single lifetime or annual dollar limit as 5
applicable to other medical illness; and 6
(3) Include a Medicare or Medicaid plan or contract or any 7
privatized risk or demonstration program for Medicare or Medicaid coverage. 8
9
SECTION 12. Arkansas Code § 23 -99-507 is amended to read as follows: 10
23-99-507. Medical necessity. 11
(a) The criteria for medical necessity determinations for mental 12
illness health benefits and substance abuse disorder benefits made under a 13
health benefit plan shall be made available by the healthcare insurer in 14
accordance with according to rules established by the Insurance Commissioner 15
to any current or potential covered individual or contracting provider upon 16
request. 17
(b) On request, the reason for a denial of reimbursement or payment 18
for services to diagnose or treat mental illness with respect to mental 19
health benefits or substance abuse disorder benefits under a health benefit 20
plan shall be made available by the healthcare insurer to a covered 21
individual in accordance with according to the rules of the commissioner. 22
23
SECTION 13. Arkansas Code § 23 -99-508 is repealed. 24
23-99-508. Permitted provisions. 25
(a) A healthcare insurer may at the healthcare insurer's option 26
provide coverage for a health service, such as intensive case management, 27
community residential treatment programs, or social rehabilitation programs, 28
that is used in the treatment of mental illnesses but is generally not used 29
for other injuries, illnesses, and conditions if the other requirements of 30
this subchapter are met. 31
(b) Healthcare insurers providing educational remediation may, but are 32
not required to, comply with the terms of this subchapter in regard to the 33
treatment or remediation. 34
(c) A healthcare insurer may provide coverage for a health service, 35
including without limitation physical rehabilitation or durable medical 36 HB1420
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equipment, which generally is not used in the diagnosis or treatment of 1
serious mental illnesses but is used for other injuries, illnesses, and 2
conditions if the other requirements of this subchapter are met. 3
(d) A healthcare insurer may utilize common utilization management 4
protocols, including without limitation preadmission screening, prior 5
authorization of service, or other mechanisms designed to limit coverage of 6
service for mental illness to individuals whose diagnosis or treatment 7
coverage is considered medically necessary although the protocols are not 8
used in conjunction with other medical illnesses or conditions covered by the 9
health benefit plan. 10
11
SECTION 14. Arkansas Code § 23-99-512 is amended to read as follows: 12
23-99-512. Out-of-network providers. 13
In the case of a health benefit plan that provides both medical 14
benefits and mental illness health benefits and substance abuse disorder 15
benefits, if the health benefit plan provides coverage for medical benefits 16
provided by out-of-network providers, the health benefit plan shall provide 17
coverage for mental illness health benefits and substance abuse disorder 18
benefits provided by out -of-network providers pursuant to under this 19
subchapter. 20
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