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Regular Session, 2010
SENATE BILL NO. 705
BY SENATOR DONAHUE
HEALTH/ACC INSURANCE. Provides for group health insurance coverage involving a
trust for multiple associations and members and employees of these associations. (8/15/10)
AN ACT1
To amend and reenact R.S. 22:1000(A)(1), relative to health and accident insurance; to2
provide for group policies issued to trusts for multiple associations; to provide for3
coverage involving such associations and their members and employees; and to4
provide for related matters.5
Be it enacted by the Legislature of Louisiana:6
Section 1. R.S. 22:1000(A)(1) is hereby amended and reenacted to read as follows:7
ยง1000. Group, family group, blanket, and association health and accident insurance8
A. Any insurer authorized to write health and accident insurance in this state9
shall have power to issue policies described in this Section.10
(1) Group health and accident insurance is any policy of health and accident11
insurance, or similar coverage issued by a health maintenance organization, covering12
more than one person, except family group, and blanket policies hereinafter13
specifically provided for, which shall conform to the following requirements:14
(a)(i) The policy shall be issued to an employer or association, or trustees of15
a fund established by an employer , or association, or a trust for multiple16
associations who shall be deemed the policyholder, covering one or more employees17 SB NO. 705
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of such employer or one or more members or employees of members of such1
association or multiple associations, for the benefit of persons other than the2
employer, or the association, or the multiple associations, as well as their its3
officers or trustees, upon some plan which will preclude individual selection.4
(ii) The premium may be paid by the employer , or association or multiple5
associations, by the employees , or members or employees of members, or by the6
two parties jointly. An insurer may but shall not be required to establish a percentage7
of eligible employees who are required to enroll and participate in a group health and8
accident policy if the entire premium is not paid by the employer , or association or9
multiple associations.10
(iii) If the policy is issued to any employer, any class or classes of employees11
eligible for coverage must be determined by conditions pertaining to their12
employment or age.13
(iv) No such policy issued under individual certificates and considered as14
individual insurance coverage for purposes of this Subpart and R.S. 22:984, 106115
through 1079, and 2247 may be issued to an association or trust for multiple16
associations unless such association or each participating association in the17
multiple associations, having had an active existence for at least five years, has a18
constitution and bylaws and has been organized and is maintained in good faith for19
purposes other than those of obtaining insurance, does not condition membership20
in the association or multiple associations on any health status-related factor21
relating to an individual, including an employee of an employer or a dependent22
of an employee, and does not make health insurance coverage offered through23
the association or multiple associations available other than in connection with24
a member of the association or multiple associations. No such policy, issued and25
considered as group health insurance, as defined under R.S. 22:1061(2)(c), may be26
issued to an association, trust for an association or multiple associations unless27
it is a bona fide association as defined under R.S. 22:1061(5)(b) it or each28
participating association has been actively in existence for at least five years, has29 SB NO. 705
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been formed and maintained in good faith for purposes other than obtaining1
insurance, does not condition membership in the association or multiple2
associations on any health status-related factor relating to an individual,3
including an employee of an employer or a dependent of an employee, and does4
not make health insurance coverage offered through the association or multiple5
associations available other than in connection with a member of the6
association. Such individual or group policy may be issued to a trust established7
by an association or associations to allow multiple associations to participate.8
(v) The insurer shall issue to the employer , or association or the multiple9
associations for delivery to each employee or member insured under such group10
policy, an individual certificate containing a statement as to the insurance protection11
to which he is entitled and to whom payable.12
(vi) The policy may be issued to an employer, association, a trust for13
multiple associations or to the trustees of a fund established by two or more14
employers in the same industry or by one or more labor unions, or by one or more15
employers and one or more labor unions or by an association or multiple16
associations, or to a multiple employer trust or multiple association trust17
established by an insurer on behalf of participating employers or participating18
associations in the multiple associations, provided all participating employers and19
employees or members, or employees of members of one of the multiple20
participating associations have the same statutory protections that would apply if21
such policy was purchased by the employer , association or multiple associations22
directly from the insurer, which trustees shall be deemed the policyholder, to insure23
with or without any eligible family members including spouse, unmarried children24
under twenty-one years of age, and unmarried grandchildren who are in the legal25
custody of and residing with the grandparent under twenty-one years of age,26
employees of the employers, or members of the association or employees of27
members of a multiple association, or of the unions for the benefit of persons other28
than the employers or the unions.29 SB NO. 705
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(b) The benefits payable under any policy or contract of group health and1
accident insurance shall be payable to the employee , or members or employees of2
members of multiple associations or to some beneficiary or beneficiaries3
designated by him, other than the employer or association or multiple associations,4
but if there is no designated beneficiary as to all or any part of the insurance at the5
death of the employee , or member or employee of members, then the amount of6
insurance payable for which there is no designated beneficiary shall be payable to7
the estate of the employee , or member or employee of members, except that the8
insurer may in such case, at its option, pay such insurance to any one or more of the9
following surviving relatives of the employee , or member or employee of members:10
wife, husband, mother, father, child, or children, brothers or sisters; and except that11
payment of benefits for expenses incurred on account of hospitalization or medical12
or surgical aid, may be made by the insurer to the hospital or other person or persons13
furnishing such aid. Payment so made shall discharge the insurer's obligations with14
respect to the amount of insurance so paid.15
(d) (c) Except as may otherwise be provided in the policy or contract of16
group health and accident insurance or by R.S. 22:1012, the policyholder and the17
insurer may agree to modify, amend, or cancel the group policy, and such agreement18
shall be binding upon the employee , or member or employee of members insured19
under the group policy, provided that the modification, amendment, or cancellation20
shall be without prejudice to any claim for benefits accrued, or for expenses incurred21
for services rendered, prior to such modification, amendment, or cancellation.22
Benefits and expenses incurred shall be as defined and limited by the terms of the23
policy; however, upon cancellation by the insurer, the insurer shall only be liable for24
any claim for benefits accrued, or for expenses incurred for services rendered,25
subsequent to the cancellation date if the subsequent claim is for an illness or26
condition which was the basis of any claim prior to cancellation and for which the27
insurer had notice. Any cancellation pursuant to this Paragraph shall also comply28
with the provisions of R.S. 22:887(F).29 SB NO. 705
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(e) (d) Except as may otherwise be provided in the policy or contract of1
group health and accident insurance, the insurer shall not be liable for benefits2
accrued, or for expenses incurred for services rendered, subsequent to the3
termination date where the policy of insurance terminates for failure of the group4
policyholder to pay premiums or where the employee's , or member's or member's5
employee's coverage terminated for failure of the employee, or member or6
employee of members to maintain eligibility as provided in the policy or contract7
of group health and accident insurance.8
The original instrument and the following digest, which constitutes no part
of the legislative instrument, were prepared by Thomas L. Tyler.
DIGEST
Present law provides that insurers authorized to write health and accident insurance policies
in the state be allowed to issue policies described in present law. Provides that group health
and accident insurance is any policy of health and accident insurance, or similar coverage
issued by a health maintenance organization (HMO), covering more than one person, except
family group, and blanket policies specifically provided in law, and that the group health and
accident policy conforms to certain requirements.
Present law requires that the policy be issued to an employer or association, or trustees of
a fund established by an employer or association who is deemed the policyholder and that
it covers one or more employees or members of the employer/association for the benefit of
persons other than the employer/association, its officers or trustees, upon some plan which
precludes individual selection.
Proposed law retains these provisions but authorizes a trust for multiple associations to issue
group health and accident policies and requires that the policy cover one or multiple
associations or members and employees of members of these multiple associations.
Present law requires that the premium be paid by the employer or association, by the
employees or members, or the two parties jointly. Proposed law retains these provisions but
includes payment of the premium by multiple associations or members of multiple
associations, or employees of members of multiple associations.
Present law prohibits an insurer from being required to establish a percentage of eligible
employees who are required to enroll and participate in the group if the entire premium is
not paid by the employer or association. Proposed law retains this provision but includes
multiple associations when the entire premium is not paid by them.
Present law provides that no policy issued under individual certificates and considered as
individual coverage for purposes of health insurance, a health benefit plan, or a community-
based health care access program is to be issued to an association unless the association,
having been in active existence for at least five years, has a constitution and bylaws, and has
been organized and maintained in good faith for purposes other than for obtaining insurance.
Proposed law includes a trust for multiple associations in present law provisions and adds
provisions that the membership in the association or multiple associations is not conditioned
on any health status-related factor relating to an individual, including an employee or his SB NO. 705
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dependent, and does not make coverage offered through the association or multiple
associations available other than through connection with a member of the association or
associations.
Present law prohibits group health insurance policies being issued to an association unless
the association is a bona fide association as defined by law requiring that it be actively in
existence for at least five years, have been formed and maintained in good faith for purposes
other than obtaining insurance, does not condition membership on any health status-related
factor, makes coverage available to all association members regardless of any health status-
related factor, and does not make coverage available other than in connection with a member
of the association. Proposed law retains these provisions but includes a trust for an
association or multiple associations.
Present law requires issuance of individual certificates to the employer or association for
delivery to their employees or members that contain statements as to the insurance protection
to which they are entitled and to whom payable. Proposed law retains this requirement but
includes issuance to multiple associations for delivery to their employees or members, or
employees of members.
Present law authorizes issuance of policies to an employer, association, or the trustees of a
fund established by two or more employers in the same industry or by one or more labor
unions or to a multiple employer trust provided all participating employers and employees
have the same protections that would apply if the policy were purchased by the employee
directly from the insurer, which trustees are deemed the policyholde r to insure with or
without eligible family members including a spouse, unmarried children under age 21, and
unmarried grandchildren under age 21 who are in the legal custody and residing with the
grandparent, employees of the employers, or members of the association or union for the
benefit of persons other than employers or unions. Proposed law retains these provisions but
includes a trust for multiple associations, members of multiple associations, and employees
of members of multiple associations.
Present law requires that benefits under a policy or contract of group health and accident
insurance be payable to the employee or members or to a beneficiary designated by him
other than the employer or, if no designated beneficiary, then to the estate of the
employee/member. Provides that if no designated beneficiary, the insurer may, at its option,
pay benefits to one or more of the following surviving relatives of the employee/member:
wife, husband, mother, father, child, or children, brothers or sisters; and except that payment
of benefits for expenses incurred on account of hospitalization or medical or surgical aid,
may be made by the insurer to the hospital or other person or persons furnishing such aid.
Provides that payment so made shall discharge the insurer's obligations with respect to the
amount of insurance paid. Proposed law retains these provisions but includes multiple
associations and employees or members of multiple associations.
Present law authorizes agreements between the policyholder and the insurer to modify,
amend, or cancel the group policy and that the agreement is binding on the
employee/member of the group. Proposed law retains these provisions but provides that
such agreements are also binding on employees of members of the insured group.
Present law provides that except as provided under the insurance policy or contract, the
insurer is not liable for benefits accrued or expenses incurred for services rendered
subsequent to termination of the group policy due to failure of the group policyholder to pay
premiums or when coverage is terminated due to failure to maintain eligibility in the group
as provided in the policy or contract of group health and accident insurance. Proposed law
retains present law but includes the member's employees in these provisions.
Effective August 15, 2010.
(Amend R.S. 22:1000(A)(1))