The 2000 Regular Session of the Alabama Legislature ended at midnight on May 15, 2000. After delivery to him, the Governor had until midnight on May 25, 2000, to sign bills that passed on the final day, veto them, or "pocket veto" by not signing them.
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(To View a Bill, Click on the Bill or Act Number)
Insurance Department legislation that passed:
MEDICARE SUPPLEMENT / LONG-TERM CARE INSURANCE MINIMUM STANDARDS
Act No. 2000-795, H-170 (Newton, C)
Current Status: PASSED HOUSE 2/24; PASSED SENATE 5/15; Signed by Governor 5/25. Becomes effective August 1, 2000. The companion bill was S-187 (Butler).
Summary - This bill amends the Alabama Medicare Supplement Policy Minimum Standards Act and adopts the Alabama Long-Term Care Insurance Policy Minimum Standards Act, so as to make Alabama law substantially similar to the uniform standards developed by the National Association of Insurance Commissioners and required by the Federal Health Care Financing Authority.
Insurance Department legislation that did not pass:
INSURANCE FRAUD UNIT
Current Status: PASSED HOUSE 3/21; Pending in Senate Judiciary Committee since 4/20
Summary - This bill included a legislative finding that insurance fraud is a problem and that the Insurance Department should be enabled to investigate and prosecute insurance fraud. The bill establishes the crime of "Insurance Fraud" punishable as either a Class B felony, if the loss or potential loss exceeds $1,000, or a Class C felony, if the loss or potential loss is less than $1,000, or a Class A misdemeanor, if transacting the business of insurance without a required license. Additionally, there are licensing penalties, including suspension or revocation of insurance license, plus $1,000 per violation, plus restitution to victim. The bill includes provisions designed to help prevent insurance fraud, including a requirement for licensed insurers to display a fraud warning and to notify Department of suspected fraud. The bill would create an "Insurance Fraud Unit" within the Department of Insurance, to be funded by assessments to all licensed insurers (annual minimum of $100, maximum of 0.025% of gross business written in Alabama in previous year, credited against premium tax liability). The total amount of the assessment is limited by the Legislature. Up to three investigators could have been employed to work in the Insurance Fraud Unit.
H-463 (Newton, C)
Current Status: PASSED HOUSE 4/4; On Senate Calendar since 4/27
Summary - The referenced bill was introduced at the request of the Department of Insurance to further the enforcement of the federal Health Insurance Portability and Accountability Act of 1996 (HIPAA). The Alabama Legislature passed an act in 1997 creating the Alabama Health Insurance Plan and the Alabama Small Employer Allocation Program. The 1997 act was intended to apply to all health insurers in this state, including Health Care Service Plans operating pursuant to Sections 10-4-100, et seq., Code of Alabama 1975. Unfortunately, this is not clear in the original act. This bill would have made it clear that these laws apply to Health Care Service Plans.
This bill also would have changed the name of the “Alabama Small Employers Allocation Program” to the “Alabama Small Employers Health Insurance Program.” This change is to help remove some of the confusion caused by this non-descriptive title.
In the 2001 Legislative Session, we will again seek to pass this legislation. This bill will be combined with House Bill 874, resulting in a bill similar to this: HIPAA 2001.
SERVICE CONTRACT LAW AMENDMENTS
Current Status: On House Calendar since 3/23
Current Status: On Senate Calendar since 4/27
Summary - This bill proposed revisions to the laws pertaining to service contracts so as to better enable the regulation of this industry. The bill would have strengthened certain registration and reporting requirements and added a requirement that service contract forms be filed with and approved by the Department of Insurance. It would have required registration by providers that sell service contracts in another state from a facility located in this state and would have improved the requirements relating to notice of cancellation. The bill would have increased the reserve required for certain providers and would have stipulated that the 20-day cancellation right of the service contract holder also applies to renewals if the service contract is amended, but not to renewals without amendments. This bill would have permited the provider to retain an administrative fee where the provider cancels the service contract because of nonpayment of any portion of the purchase price because of certain material misrepresentations made by the service contract holder.
ADDITIONAL HIPAA AMENDMENTS (Specific Contract Language)
H-695 (Newton, C)
Current Status: Pending in House Health Committee since 3/14 [We have asked for this bill to be Indefinitely Postponed and will instead push for H-874.]
Summary - This bill was requested by the Insurance Department in furtherance of enforcing the following federal laws: Health Insurance Portability and Accountability Act of 1996 (HIPAA), the Mental Health Parity Act of 1996 (MHPA), and the Women’s Health and Cancer Rights Act of 1998 (WHCRA). The bill seeks to enact into state law specific contract language conforming to the federal laws.
ADDITIONAL HIPAA AMENDMENTS (General Reference to Federal Requirements)
H-874 (Newton, C)
Current Status: On House Calendar since 4/19 [We are pushing this bill in lieu of H-695.]
Summary - This bill was requested by the Insurance Department in furtherance of enforcing the following federal laws: Health Insurance Portability and Accountability Act of 1996 (HIPAA), the Mental Health Parity Act of 1996 (MHPA), and the Women’s Health and Cancer Rights Act of 1998 (WHCRA). However, instead of duplicating federal law into state law with specific contract language, this bill would have simply permitted the Alabama Commissioner of Insurance to disapprove of the use of an insurance policy in this state if it did not comply with applicable federal laws and federal regulations.
In the 2001 Legislative Session, we will again seek to pass this legislation. This bill will be combined with House Bill 463, resulting in a bill similar to this: HIPAA 2001.
Other insurance legislation that passed:
The following bills relate to insurance (to view a bill, click on the bill number):
Act No. 2000-327, H-111 (Beasley)
Relating to health benefit plans and delivery of prescriptions drugs. Becomes effective October 1, 2000.
Act No. 2000-554, H-134 (Hubbard)
Amendments to the Compulsory Automobile Insurance Law. Parts of the bill become effective June 1, 2000. Other parts become effective January 1, 2001.
Act No. 2000-392, H-275 (Beasley)
Relating to health benefit plans providing coverage for prescription drugs. Becomes effective August 1, 2000, and applies to health benefit plans delivered, issued for delivery or renewed on and after January 1, 2001.
Act No. 2000-692, H-478 (McClammy)
To exempt certain fraternal benefit societies from regulation. Became effective May 23, 2000.
Act No. 2000-690, H-493 (Hubbard)
To provide for a limited license as an insurance agent for a motor vehicle rental company, authorizing the sale of insurance incidental to the rental of motor vehicles. Becomes effective August 1, 2000.
Act No. 2000-386, H-677 (Black, M)
To require every group health benefit plan issued or renewed in this state to offer coverage for mental illness on the same basis as for physical illness. Becomes effective January 1, 2001.
Act No. 2000-743, S-145 (Mitchell)
To amend Sections 27-42-5, 27-42-8, and 27-42-11, Code of Alabama 1975, relating to insurance and the Alabama Insurance Guaranty Association. Becomes effective August 1, 2000.
Act No. 2000-432, S-149 (Denton)
To provide an appropriate reduction in premiums for a person 55 years of age or older who completes an approved accident prevention course. Becomes effective December 1, 2000.
Act No. 729, S-294 (Clay)
To prohibit an automobile insurance carrier of a full-time law enforcement officer or firefighter from considering motor vehicle accidents in government vehicles that occur while the full-time law enforcement officer or firefighter are enroute or in the performance of their duties. Becomes effective August 1, 2000.
Act No. 2000-595, S-348 (Enfinger)
To prohibit insurance companies from engaging in an unfair discriminatory act or practice on the basis of an applicant's or insured's abuse status. Becomes effective August 1, 2000.