As Amended by Senate Committee
Session of 2024
SENATE BILL No. 553
By Committee on Federal and State Affairs
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AN ACT concerning insurance; relating to health insurance; permitting a
plan sponsor to authorize electronic delivery of plan documents and
identification cards for certain insured individuals covered by a health
benefit plan; amending K.S.A. 40-5801, 40-5803 and 40-5804 and
repealing the existing sections; also repealing K.S.A. 40-5802.
Be it enacted by the Legislature of the State of Kansas:
New Section 1. (a) Each utilization review entity, certified pursuant
to K.S.A. 40-22a04, and amendments thereto, shall implement and
maintain a prior authorization application programming interface,
pursuant to 45 C.F.R. 156.223 (b), as in effect on January 1, 2028.
(b) Nothing in this section shall be construed to apply to a prior
authorization request for coverage of drugs.
(c) As used in this section, "drug" means the same as defined in 45
C.F.R. 156.221 (b)(1)(v), as in effect on January 1, 2028.
(d) This section shall be a part of and supplemental to the
utilization review organization act.
(e) This section shall be effective on January 1, 2028.
New Section 1. Sec. 2. (a) The plan sponsor of a health benefit plan
may, on behalf of health benefit plan covered persons, provide the consent
to the delivery of all communications related to the plan by electronic
means, otherwise required by K.S.A. 40-5804, and amendments thereto,
and to the electronic delivery of any health insurance identification cards.
(b) Before providing consent on behalf of a health benefit plan
covered person, pursuant to subsection (a), a plan sponsor shall confirm
that such health benefit plan covered person routinely, at least once every
24 hours during the work week, uses electronic communications during the
normal course of employment of such health benefit plan covered person.
(c) Before utilizing electronic means to deliver any plan
communications or health insurance identification cards, the health benefit
plan shall:
(1) Provide the health benefit plan covered person with an
opportunity to opt out of electronic delivery and select United States mail
as the preferred method of delivery for such health benefit plan covered
person; and
(2) document that all applicable requirements under K.S.A. 40-5804,
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and amendments thereto, have been satisfied.
Sec. 2. 3. K.S.A. 40-5801 is hereby amended to read as follows: 40-
5801. The provisions of K.S.A. 40-5801 through 40-5804 and section 1 2,
and amendments thereto, shall be known and may be cited as the
electronic notice and document act.
Sec. 3. 4. K.S.A. 40-5803 is hereby amended to read as follows: 40-
5803. For the purposes of this act:
(a) "Delivered by electronic means" includes:
(1) Delivery to an electronic mail address at which a party has
consented to receive notices or documents; or
(2) posting on an electronic network or site accessible via the internet,
mobile application, computer, mobile device, tablet or any other electronic
device, together with separate notice of the posting, which shall be
provided by electronic mail to the address at which the party has consented
to receive notice or by any other delivery method that has been consented
to by the party.
(b) "Party" means any recipient of any notice or document required as
part of an insurance transaction, including, but not limited to, an applicant,
an insured, a policyholder or an annuity contract holder. "Party" does not
include a "health benefit plan covered person."
(c) "Health benefit plan" means the same as in K.S.A. 40-4602, and
amendments thereto. "Health benefit plan" shall also include any:
(1) Individual health insurance policy;
(2) individual or group dental insurance policy; or
(3) nonprofit dental services corporation.
(d) "Health benefit plan covered person" means a policyholder,
subscriber, enrollee or other individual participating in a health benefit
plan.
(e) "Insured" means an individual who is covered by an insurance
policy, including a health benefit plan.
(f) "Nonprofit dental services corporation" means a nonprofit
corporation organized pursuant to the nonprofit dental service corporation
act, K.S.A. 40-19a01 et seq., and amendments thereto.
(g) "Plan sponsor" means the:
(1) Employer in the case of an employee benefit plan established or
maintained by a single employer;
(2) employee organization in the case of a plan established or
maintained by an employee organization; or
(3) association, committee, joint board of trustees or similar group of
representatives of the parties who establish or maintain the plan in the
case of a plan established or maintained by two or more employers or
jointly by one or more employers and one or more employee
organizations.
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Sec. 4. 5. K.S.A. 40-5804 is hereby amended to read as follows: 40-
5804. (a) Subject to subsection (c), or section 1 2, and amendments
thereto, any notice to a party or any other document required under
applicable law in an insurance transaction or that is to serve as evidence of
insurance coverage may be delivered, stored and presented by electronic
means so long as it meets the requirements of this act.
(b) Delivery of a notice or document in accordance with this section
shall be considered equivalent to any delivery method required under
applicable law, including delivery by first class mail; first class mail,
postage prepaid; certified mail; certificate of mail; or certificate of mailing.
(c) A notice or document may be delivered by electronic means by an
insurer to a party under this section if:
(1) The party has affirmatively consented to that method of delivery
and has not withdrawn the consent;
(2) the party, before giving consent, is provided with a clear and
conspicuous statement informing the party of:
(A) Any right or option of the party to have the notice or document
provided or made available in paper or another non-electronic form;
(B) the right of the party to withdraw consent to have a notice or
document delivered by electronic means and any fees, conditions or
consequences imposed in the event consent is withdrawn;
(C) whether the party's consent applies: (i) Only to the particular
transaction as to which the notice or document must be given; or (ii) to
identified categories of notices or documents that may be delivered by
electronic means during the course of the parties' relationship;
(D) (i) the means, after consent is given, by which a party may obtain
a paper copy of a notice or document delivered by electronic means; and
(ii) the fee, if any, for the paper copy; and
(E) the procedure a party must follow to withdraw consent to have a
notice or document delivered by electronic means and to update
information needed to contact the party electronically;
(3) the party, before giving consent, is provided with a statement of
the hardware and software requirements for access to and retention of a
notice or document delivered by electronic means; and consents
electronically, or confirms consent electronically, in a manner that
reasonably demonstrates that the party can access information in the
electronic form that will be used for notices or documents delivered by
electronic means as to which the party has given consent; and
(4) after consent of the party is given, the insurer, in the event a
change in the hardware or software requirements needed to access or retain
a notice or document delivered by electronic means creates a material risk
that the party will not be able to access or retain a subsequent notice or
document to which the consent applies, provides the party with a statement
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of: (A) The revised hardware and software requirements for access to and
retention of a notice or document delivered by electronic means; and (B)
the right of the party to withdraw consent without the imposition of any
fee, condition, or consequence that was not disclosed under subsection (c)
(2).
(d) This act does not affect requirements related to content or timing
of any notice or document required under applicable law.
(e) If a provision of this act or applicable law requiring a notice or
document to be provided to a party or health benefit plan covered person
expressly requires verification or acknowledgment of receipt of the notice
or document, the notice or document may be delivered by electronic
means only if the method used provides for verification or
acknowledgment of receipt.
(f) The legal effectiveness, validity, or enforceability of any contract
or policy of insurance executed by a party or health benefit plan covered
person may not be denied solely because of the failure to obtain electronic
consent or confirmation of consent of the party in accordance with
subsection (c)(3) or section 1 2, and amendments thereto.
(g) A withdrawal of consent by a party does or health benefit plan
covered person shall not affect the legal effectiveness, validity, or
enforceability of a notice or document delivered by electronic means to the
party or health benefit plan covered person before the withdrawal of
consent is effective. A withdrawal of consent by a party or health benefit
plan covered person is effective within a reasonable period of time after
receipt of the withdrawal by the insurer. Failure by an insurer to comply
with subsection (c)(4) may be treated, at the election of the party or health
benefit plan covered person, as a withdrawal of consent for purposes of
this section.
(h) This section does not apply to a notice or document delivered by
an insurer in an electronic form before the effective date of this act to a
party or health benefit plan covered person who, before that date, has
consented to receive a notice or document in an electronic form otherwise
allowed by law.
(i) If the consent of a party to receive certain notices or documents in
an electronic form is on file with an insurer before the effective date of this
act, and pursuant to this section, an insurer intends to deliver additional
notices or documents to such party in an electronic form, then prior to
delivering such additional notices or documents electronically, the insurer
shall notify the party of the notices or documents that may be delivered by
electronic means under this section that were not previously delivered
electronically and the party's right to withdraw consent to have notices or
documents delivered by electronic means.
(j) Notwithstanding any other provisions of this section, insurance
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policies and endorsements that do not contain personally identifiable
information may be mailed, delivered or posted on the insurer's website. If
the insurer elects to post insurance policies and endorsements on its
website in lieu of mailing or delivering such policies and endorsements to
the insured, such insurer shall comply with all of the following conditions:
(1) The policy and endorsements shall be easily accessible and
remain that way for as long as the policy is in force;
(2) after the expiration of the policy, the insurer shall archive its
expired policies and endorsements for five years and make them available
upon request;
(3) the policies and endorsements shall be posted in a manner that
enables the insured to print and save the policy and endorsements using
programs or applications that are widely available on the internet and free
to use;
(4) the insurer shall provide notice, at the time of issuance of the
initial policy forms and any renewal forms, of a method by which insureds
may obtain, upon request and without charge, a paper or electronic copy of
their policy or endorsements;
(5) on each declarations page issued to an insured, the insurer shall
clearly identify the exact policy and endorsement forms purchased by the
insured; and
(6) the insurer shall provide notice of any changes to the forms or
endorsements, and of the insured's right to obtain, upon request and
without charge, a paper or electronic copy of such forms or endorsements.
(k) Except as otherwise provided by law, if an oral communication or
a recording of an oral communication from a party can be reliably stored
and reproduced by an insurer, the oral communication or recording may
qualify as a notice or document delivered by electronic means for purposes
of this section. If a provision of this title or applicable law requires a
signature or notice or document to be notarized, acknowledged, verified or
made under oath, the requirement is satisfied if the electronic signature of
the person authorized to perform those acts, together with all other
information required to be included by the provision, is attached to or
logically associated with the signature, notice or document.
(l) This section shall not affect any obligation of the insurer to
provide notice to any person other than the insured of any notice provided
to the insured.
(m) This section shall not be construed to modify, limit or supersede
the provisions of the federal electronic signatures in global and national
commerce act, public law 106-229, or the provisions of the uniform
electronic transactions act, K.S.A. 16-1601 et seq., and amendments
thereto.
(n) The provisions of the electronic notice and document act shall not
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apply to any mutual insurance company organized pursuant to article 12a
of chapter 40 of the Kansas Statutes Annotated, and amendments thereto.
(o) The provisions of this section shall not apply to the electronic
delivery of explanation of benefits and policies, including federally
required summary of benefit and coverage documents, to a party by a
health benefit plan.
Sec. 5. 6. K.S.A. 40-5801, 40-5802, 40-5803 and 40-5804 are hereby
repealed.
Sec. 6. 7. This act shall take effect and be in force from and after its
publication in the statute book.
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