Insurance Legislation to Watch in 2011

By Marla B. Matthews
February 2011

The November 2010 election brought significant change to the New Hampshire legislature. Although Republicans were expected to pick up seats in both the House and Senate, the magnitude of the change in control was somewhat unexpected. In the House, Republicans now hold approximately 300 of the 400 seats. In the Senate, Republicans enjoy a 19 to 5 majority.

The Republican-controlled House and Senate will have the opportunity to consider a variety of bills over the next several months that could impact the insurance industry. The following is an overview of some of the key bills that auto, workers’ compensation and health carriers should watch in 2011.

Auto Insurance

It seems that every session at least one bill is introduced that would prohibit the use of credit information. This session, that bill is . If HB359 is enacted, auto insurers would not be allowed to use credit information in the underwriting or rating of insurance products. HB359 would also prohibit insurers from requesting or using education level or occupation as part of the rating and underwriting process.

Another perennial favorite is . This bill would require people registering their vehicle in New Hampshire to provide proof of motor vehicle liability insurance for the duration of the registration period. At the public hearing on this bill, the Department of Insurance testified that even though New Hampshire is one of the few states that does not mandate auto insurance coverage, approximately 90 percent of New Hampshire residents carry it.

addresses nonresident registration of motor vehicles. Under current law, a nonresident may register a vehicle in New Hampshire if the vehicle is garaged primarily in New Hampshire. A vehicle is garaged primarily in New Hampshire if it is garaged in the state for at least 350 days a year. HB399 amends the nonresident registration statute so that a nonresident would be permitted to register a vehicle in New Hampshire only if it is garaged “exclusively” in the state.

Another auto bill, , would require residents of foreign countries to have auto insurance in order to drive or rent a motor vehicle in New Hampshire.

Workers’ Compensation Insurance

2011 could bring significant change to the workers’ compensation market. SB71 directs the Commissioner of Labor to establish a fee schedule for health care services provided to injured workers. The fee schedule would be tied to Medicare coding and reimbursement rules. The rules establishing a fee schedule would become effective in 2012.

Over the last several years, New Hampshire has established task forces and commissions to address the issue of employee misclassification. seeks to remedy the misclassification problem by establishing a voluntary registration process for independent contractors. If an individual voluntarily registered as an independent contractor and was subsequently injured on the job, the individual would not be eligible for workers’ compensation benefits.

If is enacted, it would erode the employer’s lien on damages in third party actions. Specifically, HB499 would require the judge or arbitrator in any suit against a third party to order a division of the recovery between the employee and the carrier. Under current law, only the expenses and costs of the action are divided and the carrier is entitled to a full lien on any recovery.

Finally, under , an employer or carrier could be responsible for an illegal alien’s medical, hospital and remedial care if the employer knew or should have known that the employee was illegal and the employee suffers an injury on the job.

Health Insurance

All health insurance carriers doing business in New Hampshire will watch closely. This bill would eliminate mandated coverage for certified midwives, testing for bone marrow donation, children’s early intervention therapy services, obesity, autism, and hearing aids. In addition, the bill would eliminate the continuation of coverage requirements that apply in the event of divorce or legal separation.

Purchasing insurance from out-of-state carriers will also be a hot topic at the state house. would allow individuals and employers with under 100 employees to purchase health insurance from out-of-state carriers. Policies offered by out-of-state carriers would not have to include state mandated coverages.

A number of bills introduced in the House and Senate will address federal reform. establishes the New Hampshire health benefits exchange. The exchange would facilitate the purchase and sale of health plans by individuals and small employers. Under , any insurance mandate required by state law that exceeds the essential benefits provided under federal health reform would be “unavailable to the insured.”

makes it clear that the legislature retains the authority to refuse to participate in some or all of the federal health reform requirements. rejects the individual mandate included in federal health reform and directs the attorney general to join the lawsuit challenging the federal health care law. and also direct the attorney general to join the lawsuit challenging federal reform.

New Hampshire is one of only a few states that does not use managed care services as part of its Medicaid program. directs the Department of Health and Human Services to develop a Medicaid managed care program. The Department could contract for managed care services related to care coordination, utilization management, disease management, pharmacy benefits management, provider network management, quality management and customer services.

Consumer Protection

The legislature will consider several consumer protection bills that could impact all insurance carriers.

repeals the general exemption that currently exists for insurers under the consumer protection act and replaces it with a more limited exemption. If HB607 is enacted, only those transactions that are expressly permitted by the laws, rules, standards, or regulations that are administered and enforced by the Insurance Department would be exempt under the Consumer Protection Act.

In an effort to improve consumer protection and provide greater efficiency, HB102 establishes a legislative committee to study merging the Insurance Department with the Banking Department and the Securities Division of the Secretary of State’s Office. The committee would be required to issue a report with its findings and any recommendations for proposed legislation by November 1, 2011.

Given the number of insurance-related bills that will be debated by the New Hampshire House and Senate this session, it is important that all insurers keep an eye on the legislature.