Health Insurance Jurisdiction

·*~ ' . ~ t .... ~ .•·, · The State of New Hampshire Insurance Department 21 Sou'lh Fruh S1nt1. Suhc 14 Concord, NB 03301 Roeer A. ScvlRllY Cofflmiss:lonl.'r Alcxnndcr K. J'eldvebcl Deputy Commissi-on<:r BULLETIN Docket No.: INS No. 08·014-AB TO: All New Hampshire Licensed Health Insurance Companies, Health Maintenance Organizations. Fraternal Benefit Societies und Third Party Administrators FROM: Roger A. Sevigny Insurance Commissioner ,rf DATE: March 4, 2008 RE: Healtb Insurance Jurisdiclion This bulletin is intended to provide guidance on when a can-ier is required to file and obtain approval for a certificate or policy of group insurance that provides coverage for a New Hampshire resident. RSA 415:18 states that no policy or certificate of insurance shall be "delivered or issued for delivery in this state to a resident of this stale without the prior written approval of the commissioner." The question raised is whether this statute requires that a carrier file and obtain approval for all group policies and certificates issued or delivered Lo New Hampshire residents. l.n short, 01e answer is that RSA 415: l 8 applies on.l Y. when the issuance or delivery of a policy or certificate of health insurance would subject the carrier to New Hampshire's licensing jurisdiction. Accordingly, a carrier is not required to file and obtain appr9val before providing group coverage to an out-of-state group, which includes New Hampshire residents whose principal work site location is out of state. Conversely, a carrier is required to file and obtain approval from New Hampshire before providing group coverage to an out-of-state group that has a New Hampshire bra1,ch office where that is the principal work location of New Hampshire residents. In this case, RSA 4 15:18 requires Iha! a carrier submit the policy and certificates of group coverage to New Hampshire for review under RSA 415:18 and obtain approval from the department before issuing and delivering those certificates or policies to the members of that group 01at live and work in New Hampshire. The policies and certificates lhal evidence coverage for the New Hampshire resident employees who work in a New Hampshire branch location must confonn Lo New Hampshire law and coutain all New Hampshire mandates, Interpreting RSA 415: 18 to require that a carrier file and obtain approval of group policy forms and certificates evidencing coverage for New Hampshire residents whose principal place of employment is in New Hampshire is consistent with the intent of New Hampshire's licensing law, the language of New Hampshire insurance mandates, and the New Hampshire Supreme Coul 's decision in Metropolitan Life Insurance Company v. Whaland, 119 N.H. 894 (1979). First, with respect lo New Hampshire's insura11ce licensing law, RS/\ 406-B identifies a primary purpose of the licensing law as that of protecting the residents of New Hampshire from having to seek legal recourse lo protect their rights in ''forums foreign to them under the laws and rules oflhe practice with which they are not familiar." To implement this purpose, New Hampshire's licensing law generally requires that a carrier obtain a license prior to issuing and delivering a contract or certificate of insurance to a resident of New Hampshire or to a person authorized to do business in New Hampshire. RSA 406-8:2. Some carriers have suggested that the issuance and delivery of a master policy to an out-of-state employer that covers employees who live and work at a brMch business location in New Hampshire does not constitute issuance and delivery of an insurance contract or cenificate of insurance in New Hampshire and does not subject that carrier lo New Hampshire's licensing jurisdiction. This is clearly not the case under New Hampshire's licensing statutes, which explicilly describe the activities that a carrier may engage in without obtaining a New Hampshire license. Under the unauthorized insurance statutes set forth in RSA 406-B: 11 and RSA 406-B: 16, the issuance of a master policy lo an our-of-state employer is allowed only when the risk covered by the policy is not located in New Hampshire or anticipated to be located in New Hampshire at the Lime the policy is issued. If the risk is located in New Hampshire at the time the policy is issued, the carrier must obtain a license from New Hampshire and submit its policy fom1s and ccrtificatc.s to tile department ror review and approval. The relevant provision pertaining to the issuance of a master policy to an out-of-state employer is set forth Lil RSA 406-.B: l 6, Ill, which slates that a carrier is not required to obtain a license from New Hampshire for insurance transactions that occur in New Hampshire bul "involve a policy lawfuJly solicited, wrillen, and delivered outside of this state covering only subjects of insurance not resident, located, or expressly lo be perfom1ed in this stale at the time of issuance, and which transactions are subsequent to the issuance of such policy." See also, RSA 406-B: l 0, ll. T his exemption from New Hampshire's licensing law and regulatory approval process does not allow a carrier to issue a master policy to an out-of-state employer when tl1at policy is, at the time of issuance, intended 10 cover employees who live in New Hampshire and have a work location in New Hampshire. Where an out-of-state employer has a branch business location ii, New Hampshire, certificates issued on policies 10 employees who reside and work in New Hampshire must contain the New Hampshire mandates and confom1 Lo New Hampshire law. In lhal situation, the unauthorized insurance statutes do not relieve the carrier from complying with all requirements that apply to policies issued and delivered in New Hampshire. In short, a policy or certificate that covers employees, who are, al the time or policy issuance, known by the carrier to live in New Hampshire and have a physical work location in New Hampshire, must be submitted for fonn approval pursuant to RSA 415:18. 2 The requirement that a carrier obtaiJ1 a license and submit the policies and certificates for fom1 review is necessary to ensme that New Hampshire residents are accorded the protections afforded by New Hampshire's benefit and eligibility mandates. New Hampshire mandates generally fall into three types of categories: one extends the mandate to all residents who are members of tl1e group and whose principal place of employment is in New Hampshire; the second extends the mandate to all residents who are members of a group; and the third extends the mandate to all residents of New Hampshire regardless of where the policy was issued or delivered. An example of the first type of mandate is RSA 415: 18-a, which requires that a carrier provide coverage for mental health services. In Metropolitan Li fe Insurance v. Whaland case, the New Hampshire Supreme Court held that this mandate required a carrier to provide mental health services to a New Hampshire resident employed at a New Hampshire branch local ion where the master policy had issued in New York to General Electric. RSA 415: 18-a states lhat it shall apply lo residents of New HampshiJe whose principal place of employment is in New Hampshire. By its express language, the mandate requires that: "Each insurer that issues or renews any policy of group or blanket accident or health insurance providing benefits for medical or hospital expenses, shall provide to each group, or to the portion of each group comprised of certi ficale holders of such insurance whn are residents of this stale and whose principal place of employment is in this state ... " To ensure that New Hampshire residents who work in New Hampshire obtain the benefit of these mandates, the department requires that when a cairier provides coverage to an out-of state group that has members who are employed at a branch location in New Hampshire U1at the carrier submit its certificate and policy fom1s that evidence coverage for those New H,impshire residents 10 the department for review and approval. Although otber mandates extend the protection oftlie mandate to all residents regardless of where the underlying policy is issued or delivered, constitutional and regulatory constraints prohibit the department from enforcing the review requirement for policies issued out of state for residents who do not work in New Hampshire. \Vhilc the department's interpretation of its regulatory review requirements does not provide regulatory oversight for all policies and certificates that evidence coverage covering New Hampshire residents, it is consistent with New Hampshire's licensing jurisdiction and with the New Hampshire Supreme Court's mling in the Whaland·case. In that case, the court held that a policy issued to an out-of-state employer covering a New Hampshire resident must include New Hmnpshire mandated mental health benefits for coverage issued to New Hampshire residents employed at a New Hampshire location. The Court stated: "The above requirements apply equally to policies issued in and outside of the State. The State has a valid and substantial interest in the availability of mental health benefits and treatment to the members of a sizeable portion of its population who must rely on group policies for mental health treatment." Accordingly, tlie departmenl will require that all group policies and certificates of health insurance that are written lo cover employees who live and work at a branch business location in New Hampshire be submitted for fotm approval and comply fully with New Hampshire law. 3 •