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These rules implement provisions of Chapter 500, Oregon Laws 2011 (Enrolled Senate Bill 89). The rules ensure that the Oregon Insurance Code is consistent with the federal Affordable Care Act, the federal health care reform law signed by President Obama on March 23, 2010. The rules also make changes to Oregon administrative rules to ensure consistency with other state and federal legislation. The changes are generally in these areas:

• Revisions to Oregon's rescission provisions including requirements for the contents of the notice required to be provided to enrollees whose coverage is rescinded, and requirements and timelines for notice of rescissions that insurers must provide to the director of the Department of Consumer and Business Services Division.  
• Clarifying when notice requirements are triggered when an insurer takes administrative action to cancel coverage under an individual health benefit plan.
• Implementing the changes made to the state continuation laws including clarifying the requirements of the notice that insurers must send to covered persons and qualified beneficiaries eligible for state continuation coverage; defining or clarifying statutory terms and explaining circumstances under which a person is not considered to be a qualified beneficiary.
• Defining requirements for cultural and linguistic appropriateness in accordance with federal law.
• Implementing changes to Oregon's internal and external review processes for adverse benefit determinations in a manner that is consistent with and approved by federal regulators.
• A number of changes to clarify and make the rules consistent with the statutory changes enacted by Senate Bill 89.

This rulemaking is necessary to implement the requirements of House Bill 2095 (2011 Session) by which the State of Oregon becomes a member of the Interstate Insurance Product Regulatory Commission (IIPRC) on January 1, 2012.

This rulemaking revises the department's rules to reflect Oregon's new status as a member of the IIPRC. The rules remove obsolete references adopted under previous legislation to life insurance, annuities or disability insurance products that the director need not separately consider or review if the form was already approved by the Interstate Insurance Product Regulation Commission.  This rulemaking reflect Oregon's new status as a member of the Compact. The rules remove the obsolete references to those earlier approved products and clarify that rates and forms approved by the IIPRC are not subject to the department's rate and form review process.

The rules will take effect on and apply to products filed after January 1, 2012, the date Oregon becomes a member of the IIPRC.

The amendments to these rules reflect changes to the National Association of Insurance Commissioners (NAIC) Model Regulation #815. The rules generally specify which mortality table is recognized for use in determining minimum reserve liabilities. Adoption of these amendments to the rules would allow a company to substitute the 2001 CSO Preferred Mortality Tables in place of the 2001 CSO Smoker or Nonsmoker Mortality Tables for policies issued prior to January 1, 2007.  The conditions for use of the preferred tables are also set out in the rules and the use does require the consent of the director of the Department of Consumer and Business Services.

These changes are necessary to maintain Oregon's accreditation.

This rule adopts by reference uniform standards for administrative simplification of health care claims transactions developed and recommended by the Oregon Health Authority under Section 2, chapter 130, Oregon Laws 2011 (replacing Section 1192, Chapter 595, Oregon Laws 2009. The standards adopted by this rulemaking pertain to health care claims and encounter transactions and are set forth in the "Oregon Companion Guide for the Implementation of the EDI Transaction: ASC X12/005010X222 Health Care Claim: Professional (837)," "The Oregon Companion Guide for the Implementation of the EDI Transaction: ASC X12/005010X223 Health Care Claim: Institutional (837)" and "The Oregon Companion Guide for the Implementation of the EDI Transaction: ASC X12/005010X224 Health Care Claim: Dental (837)."

These rules also establish a waiver for plans that are certified by the Council for Affordable Quality Healthcare's (CAQH) Committee on Operating Rules for Information Exchange (CORE).  Because the Oregon Companion Guides have been developed in alignment with CORE and CORE is now recognized by federal agencies as the national standard, meeting either the CORE or the Companion Guide standard will allow for standardization.

The rules also clarify that "health care entity" does not include a pharmacy or a pharmacy benefits manager, thus exempting these entities from the requirements of the rules.

This rule provides the Insurance Division with an additional tool to determine whether a property and casualty insurer falls within a risk based capital (RBC) company action level. Current rules define a company action level as an RBC ratio of 200 percent. This rule requires the Division to take action if a company's RBC falls between 200 and 300 percent and its combined ratio is above 120 percent. This additional tool assists in determining whether an insurer is maintaining adequate capital and surplus to meet statutory requirements and policyholder obligations.

The changes to the rules also correct and update internal references.

This rulemaking corrects an oversight in a rule Amended on February 4, 2011 in a rulemaking to address annual financial statements required for self-insured groups established by three or more public bodies. The rules apply to self-insurance programs that are exempt from the Insurance Code under ORS 30.282 and 731.036. 

In order to be exempt, the self-insurance program must meet certain financial requirements related to reserve adequacy provisions.  To demonstrate compliance with those requirements, a qualified actuary must submit a written actuarial report.  Under the rules as originally Amended, "qualified actuary" defines the qualifications for an actuary submitting a report for property or casualty self-insurance exempt under ORS 30.282(6)(d) and 731.036(4) and (5).  However, the rules failed to define "qualified actuary" for purposes of self-insured health coverage exempt under ORS 731.036 (6).  This is in error as it would be inappropriate for a property or casualty actuary to submit the report for health insurance. This rulemaking adds a definition for a qualified actuary submitting the report for health insurance.

This rule will adopt uniform standards for administrative simplification of health insurance developed by the Office of Oregon Health Policy and Research pursuant to the provisions of Section 1193, Chapter 595, Oregon Laws 2009. Section 2, chapter 130, Oregon Laws 2011 (replacing Section 1192, Chapter 595, Oregon Laws 2009*) requires the Department of Consumer and Business Services to adopt these standards by rule. The standards adopted by this rulemaking pertain to health care benefit eligibility inquiries and responses and are set forth in the "Oregon Companion Guide for the Implementation of the ASC X12N/005010X279, Health Care Eligibility Benefit Inquiry and Response (270/271)."

Senate Bill 94 was enacted into law before the public hearing, so the final rules encompass the changes necessary to reflect the provisions of Senate Bill 94.

*Sections 1192 and 1193 of chapter 595, Oregon Laws 2009 were replaced by sections 2 to 5, chapter 130, Oregon Laws 2011 (Enrolled Senate Bill 94) during the 2011 Legislative Session.  The authority to adopt rules and the directives to the Office of Oregon Health Policy and Research and the Department of Consumer and Business Services did not change except to extend that authority to require additional entities to comply with the uniform standards.