Around the PIA Western Alliance States – Week of November 4, 2024

California — Advisory Board Appointments: Insurance Commissioner Ricardo Lara announced several appointments to help drive forward the California Department of Insurance’s mission to protect California consumers. These appointments include naming new member Claudia Perez and reappointing members Bernardo de la Torre, Cynthia Strathmann, and Doug Heller to the California Automobile Assigned Risk Plan (CAARP) Advisory Committee; naming Deborah La Franchi as the newest member of the California Organized Investment Network (COIN) Advisory Board; reappointing members Todd Anglin and Mark Simmonds to the California Earthquake Authority (CEA) Advisory Panel; and, reappointing members Anne Lintz and Peter Schifrin to the Curriculum Board.

“I am pleased to announce these new appointments to the CAARP Advisory Committee and the COIN Advisory Board, as well as the reappointments to the CEA Advisory Panel and the Curriculum Board,” said Commissioner Lara. “The appointees play an important role in protecting consumers and helping maintain a robust insurance market in our state, and I am grateful they are willing to serve their fellow Californians by lending their considerable experience and knowledge.”

The Governor and California State Legislature created CAARP to provide auto insurance for motorists unable to obtain coverage in the private market due to their driving records or other extraordinary circumstances. One program within the plan – the California Low Cost Auto Program – aims to provide affordable liability insurance to income-eligible good drivers by assigning them to private insurers based upon the companies’ share of the auto insurance market. The CAARP Advisory Committee provides policy advice to Commissioner Lara on matters affecting the operation of its programs.

The CEA provides earthquake insurance for California homeowners, condominium owners, mobile homeowners, and renters. The CEA Advisory Panel advises the Governing Board of the CEA on issues including basic insurance coverage issues, CEA's insurance rates, long-term sustainability and survivability of the CEA, and availability and affordability of earthquake coverage.

The California Organized Investment Network (COIN) was established in 1996 within the Department of Insurance to guide insurers on making financially sound investments that yield environmental benefits throughout California and social benefits within the State’s underserved communities. Commissioner Lara has prioritized COIN investments which drive affordable housing, support small businesses, combat climate change, and encourage investors to utilize diverse investment managers more. The COIN Advisory Board provides guidance to the Commissioner and the COIN program to meet its mission and chief priorities.

The Curriculum Board oversees the development of pre-licensing and continuing education curriculum for agents and brokers to uphold professional standards that protect consumers. This includes a list of preapproved courses of study as well as courses of study for professional designations. This Board also develops standards for providers and instructors who offer courses and other training to licensed agents and brokers.

The next CAARP Advisory Committee meeting will be held on November 19 and November 20, 2024, the next CEA Advisory Panel meeting is December 4, 2024, the next COIN Advisory Board meeting is November 7, 2024, and the next Curriculum Board meeting is February 20, 2025.

More details are available at: www.insurance.ca.gov/boards. Public members of the CAARP Advisory Committee receive $250 per meeting. All other positions are uncompensated.

Idaho — All Pharmacy Benefit Managers, Health Insurers, and Interested Parties: This bulletin provides guidance to Pharmacy Benefit Managers (PBMs), including health insurers who perform the activities of a PBM, regarding the requirements of H596a (2024) and changes to Idaho Code § 41‑349, effective January 1, 2025. Health insurers performing the activities of a PBM must also be registered as a PBM. This is not a comprehensive list of requirements and is intended as a reminder to affected entities about the new expectations. The Department seeks to provide clarifying information to support compliance.

PBMs are required to comply with the contract and reporting requirements of H596a (2024) beginning January 1, 2025. The requirements apply to the PBM’s administration of prescription drug benefits to Idahoans and its contracts with Idaho pharmacies and pharmacy benefit plans or programs. These include, but are not limited to, the requirements that:

A PBM pass along or return one hundred percent of any manufacturer rebate to a pharmacy benefits plan or program, including any payment, discount, incentive, fee, price concession, or other remuneration. See Idaho Code §§ 41‑349(5) and 41‑349(11)(d).

All PBM contracts with pharmacy benefits plans or programs use a pass-through pricing model, as defined in code. See Idaho Code §§ 41‑349(1)(g) and 41‑349(11)(a).

A PBM pay in-network pharmacies a dispensing fee “that reasonably covers the costs of dispensing medications”, where a dispensing fee is defined as “a fee intended to cover reasonable costs associated with providing a drug to a covered person. This cost includes but is not limited to the pharmacist’s services and the overhead associated with maintaining the facility and equipment necessary to operate the pharmacy.” See Idaho Code §§ 41‑349(1)(b) and 41‑349(11)(i).

A PBM provide a reasonable administrative appeal process for pharmacies to challenge reimbursements and respond promptly to such appeals. See Idaho Code § 41‑349(13).

A PBM must not prohibit, restrict, terminate contract(s), or penalize pharmacies or pharmacists for disclosing information to authorized departments, law enforcement, or government officials, provided the information is marked as confidential and the recipient can maintain its confidentiality as per state or federal law. See Idaho Code § 41‑349(14).

All required reporting should be sent via email to pbm@doi.idaho.gov. Failure to submit timely reporting may result in administrative action, including penalties per Idaho Code § 41‑349.

The below list of reporting is not all encompassing. PBMs should review Idaho Code § 41‑349 in its entirety for the specific requirements.

REPORTING REQUIREMENTS

Idaho Code § 41‑349(10)

(a) PBMs are required to report to the Idaho Department of Insurance January 1, 2025, and then annually:

(i.) The difference in the amount paid to each pharmacy and the amount charged to health plans, aggregated by each pharmacy.

Comparing what pharmacies are paid vs. what they charge health plans, helps understand financial dynamics and ensures transparency in drug pricing; reporting will be for but not limited to:

Amount paid to each pharmacy on behalf of the health plan for prescription drugs

This refers to how much money each pharmacy received for the prescription drugs they dispense

Amount charged to each health plan

This refers to the amount the PBM charged to the health plan for prescription drugs

Aggregated by each pharmacy

All financial data collected for prescription drugs, and

All financial data combined for each individual pharmacy for prescription drugs

(ii.) Transparently, disclose why a drug was moved to a tier that results in higher costs to a consumer or lower reimbursement to a pharmacy.

(b) A PBM that owns, controls, or is affiliated with a pharmacy must report differences paid between affiliated and nonaffiliated pharmacies:

in reimbursement rates or practices,

direct and indirect remuneration fees or other price concessions, and

the number and amount of clawbacks.

Idaho Code § 41‑349(13)

(d) PBMs are required to submit quarterly reports to the Department of Insurance on appeals and denial outcomes including reasons for each denial, for each specific drug for which an appeal was submitted.

All information containing PII, PHI, and/or of a confidential nature should be transmitted securely and marked accordingly.

This Bulletin is not new law but is an agency interpretation of existing law, except as authorized by law or as incorporated into a contract. Requests for additional information or other inquiries regarding this Bulletin can be directed to Deputy Director Wes Trexler at 208-334-4214 or weston.trexler@doi.idaho.gov.

Idaho — Wildfires and property insurance: This from the Idaho Department of Insurance: It found 91 insurers offering homeowners coverage in 2023. They issued 674,000 policies. Non-renewal notices have been issued to homeowners by 17 insurers since the start of 2023.

Total acres burned in 2023: 84,287

Total acres burned in 2024: 836,453 and counting

Structures burned in 2023: less than 5

Structures burned in 2024: 191 and counting

Surplus lines premiums nearly doubled since 2020.

Idaho — Open Enrollment Medicare: The Idaho Department of Insurance (DOI) and Senior Health Insurance Benefits Advisors (SHIBA) encourage consumers eligible for Medicare to review their plan options and costs during this year’s open enrollment. From October 15 through December 7, Idahoans can make changes to existing Prescription Drug or Medicare Advantage plans or enroll in new plans.

SHIBA representatives are available to talk with Medicare beneficiaries and provide free Medicare information, including reviewing Medicare coverage options. They are offering a Medicare Review Workshop on Thursday, November 7, 2024, at the Orofino Senior Center (930 Michigan Avenue), from 2:00 pm to 3:00 pm.

“It is important to review your Medicare plan annually,” says DOI Director Dean Cameron. “Medicare Advantage and Prescription Drug plans can change each year, including premiums, provider networks, co-pays / co-insurance, pharmacy networks, covered drugs and extra benefits. The SHIBA Medicare Review Workshop is a free opportunity for consumers to ensure their plan is the best plan for their current health needs.”

Anyone interested in attending this free workshop please contact SHIBA at 1-800-247-4422 to register.

Oregon — Gender Affirming Treatment: The Oregon Division of Financial Regulation recently announced the following proposed rulemaking:

Filing Caption: 2025 Gender-Affirming Treatment Rule

Adopt Rules: OAR 836-053-0441

Rule Summary: A carrier offering a health benefit plan may not deny or limit coverage under the plan, including, but not limited to denying or limiting coverage of a claim, issuing automatic denials of coverage or imposing additional cost sharing or other limitations or restrictions on coverage for gender-affirming treatment that is:

(a) Medically necessary, as determined by the physical or behavioral health care provider who prescribes the treatment; and

(b) Prescribed in accordance with accepted standards of care.

Filed: October 30, 2024

Hearing Date/Time: November 19, 2024, 11 AM - 12:00 PM

This is a hybrid meeting conducted in-person and virtually via Microsoft Teams. See Notice of Proposed Rulemaking for Teams meeting instructions.

Last day/time to offer comment: November 26, 2024, 5:00 PM  OREGON

ORP PAYMENT PERAMETERS:

The Oregon Division of Financial Regulation recently announced the following proposed rulemaking:

Filing Caption: Amending OAR 836-150-0040 to add ORP payment parameters for plan year 2025

Amend Rule: OAR 836-150-0040

Rule Summary: The amended rule will include payment parameters for plan year 2025 (attachment point of $103,000; reinsurance cap of $1,000,000; and coinsurance rate of 50%), while deleting the provisions related to plan year 2020.

Filed: October 30, 2024

Hearing Date/Time: November 19, 2024, 10:30 - 11:00 AM

This is a hybrid meeting conducted in-person and virtually via Microsoft Teams. See Notice of Proposed Rulemaking for Teams meeting instructions.

Last day/time to offer comment: November 26, 2024, 5:00 PM 

Washington —Changes to the premium transparency rule to be considered: Washington state Insurance Commissioner Mike Kreidler is considering a change to the state’s recently adopted premium change transparency rule.

The change would be specific to Phase 2 of the rule — the automatic inclusion of reasons for premium increases in policy renewals — and would move the timing of that action from June 2027 to June 2029. 

Phase 1, which went into effect this June, requires insurance companies to disclose to policyholders why their premiums had gone up when asked by the consumer.

“This transparency rule is important to consumers and insurers alike and is helping people get clear answers about why they are paying what they pay for insurance,” Kreidler said. “Moving the Phase 2 timing allows us to collect more data on Phase 1 and work with industry to better understand the technical and administrative impacts of implementing Phase 2.”

Kreidler added that his office will be initiating a data call with insurance companies as part of the Phase 1 assessment.   

The current premium change transparency rule covers auto and homeowner insurance policies for people in Washington. The Office of the Insurance Commissioner held five interested-party meetings to gather input from consumers and the insurance industry prior to finalizing the rule. The rule is the first of its kind in the country.

During Phase 1 (effective now):

    Insurance companies must include a disclaimer on the first page or view of renewal notices or billing statements that lets the policyholder know they can request more details about their premium increase. 

    These notices must be in 12-point bold font and must include contact information.

    The insurance company then has 20 days from receiving a written request (through the mail or email) to deliver a clear, concise statement, in writing, providing a reasonable explanation for the premium increase. 

During Phase 2 (effective June 2027):

    Starting June 1, 2027, insurance companies must send a notice at least 20 days before renewing a policy with a 10% (or more) increase.

    The requirements for explanations get more specific in Phase 2: Insurance companies must provide a clear explanation and include the primary factors that caused the increase. 

    Those factors can include claims history, discounts, fees and surcharges, premium capping, base rate changes, and demographic factors — like the policyholder’s age, credit history, education, gender, marital status, and occupation. 

    For auto insurance, factors can also include the vehicle’s garaging location, driving record, miles driven, the number of drivers, and the number of vehicles on the policy.

    For homeowner insurance, factors can also include the property’s age, location, and value.

If you have received a recent rate increase and have questions for your insurer, send a message to your insurance company using the contact information on your renewal notice or billing statement. Visit OIC’s Premium Increase Transparency page for more information.

Washington — Premium change transparency (R 2024-07): We are starting rulemaking R 2024-07 to propose a delay to the premium change transparency rule phase two until 2029. The delay would allow the OIC to collect additional data from insurers, consumers, and other interested parties on the effectiveness of the rule’s phase one. Among other factors, the OIC will look at phase two insurer implementation challenges and the number of consumers who have requested premium change transparency from their insurer.

The comment period for this rule’s CR-101 will begin on November 1, 2024 and will close on December 20, 2024. Please submit comments to rulescoordinator@oic.wa.gov.

For more information, including the notice to start rulemaking (CR-101), please visit the premium change transparency (R 2024-07) webpage.

Washington — Public rate database update: The 2024 Legislature enacted Substitute Senate Bill 5986 (SSB 5986). The new law includes ground ambulance service organizations (GASO) in the Balance Billing Protection Act (BBPA), effective January 1, 2025. It also requires all local governmental entities to report their established or contracted GASO rates to the OIC. The OIC is required to maintain a publicly accessible database of GASO locally set rates.

The ground ambulance locally set rates public database is now available.