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Extension of Transition Plans

To: All Companies Writing Individual & Small Group Health Insurance in Wyoming

From: Jeffrey P. Rude, Insurance Commissioner

Date: May 5, 2022

Subject: Extension of Transition Plans

On March 23, 2022, the Center for Consumer Information and Insurance Oversight (CCIIO) issued guidance that allows states the option to extend transitional policies for individual and small group health insurance plans to policy years beginning after October 1, 2022. The bulletin from CIIO can be found at:

https://www.cms.gov/files/document/extension-limited-non-enforcement-policy-through-calendar-year-2023-and-later-benefit-years.pdf

Under this guidance, states may allow issuers that have renewed coverage under the non-enforcement policy continually since 2014 to renew such coverage for policy years beginning October 1, 2022. The CCIIO guidance further states that the extended non-enforcement policy would remain in effect until Centers for Medicare & Medicaid Services (CMS) announces that coverage renewed under this non-enforcement policy must come into compliance with the relevant requirements.

Pursuant to the option provided to the states by CCIIO, the State of Wyoming will allow transitional policies for both the individual and small group health insurance markets to continue indefinitely until CMS announces that coverage renewed under their non-enforcement policy must come into compliance with the relevant requirements. Carriers who wish to renew coverage under the extended non-enforcement policy must, for each policy year, comply with the notice and rate increase requirements identified in the March 23, 2022 guidance from CCIIO.

A carrier is not required to continue to offer the transitional policies and may discontinue them, subject to state and federal rules on discontinuance, at their discretion. The Department advises insurers to continue to monitor CCIIO’s website for any subsequent guidance that may be issued on this subject and to follow it accordingly. As before, all other plans issued after January 1, 2014 must be compliant with the Affordable Care Act (ACA).

The Department is not requiring insurers to renew their transitional policies. Insurers may determine at their discretion whether to renew transitional policies, so long as the determination is made on a non-discriminatory basis. Furthermore, consumers may not purchase new transitional policies or switch to a different insurer to replace an existing transitional policy. Transitional policies that have been cancelled cannot be reinstated.

Questions regarding this notice can be directed to Tana Howard, Section Manager at Tana.Howard@wyo.gov. The Department’s main desk can be reached at 307-777-7401 and the receptionist will see that your calls are directed to the appropriate person.

New Licensing & Renewal Application Requirements for Pharmacy Benefit Managers

During Wyoming’s 2016 Legislative session, Wyo. Stat. § 26-52-103 and Wyo. Stat. § 26-52-104 were passed, requiring all Pharmacy Benefit Managers (PBMs) operating in Wyoming to establish a written internal appeal process for PBM audits of pharmacies and an internal appeal process for resolution of disputed claims under the PBM’s established Maximum Allowable Cost (MAC) list, respectively. The statute went into effect on July 1, 2016.

In accordance with this statute, the Department has elected, effective July 1, 2022, to begin requiring these procedures to be disclosed upon initial license application or upon application for license renewal by any PBM planning to operate in the state of Wyoming. A new field in the application will allow for upload of any documents related to these internal procedures, which the Department will review for sufficiency under the referenced statutes. An application submitted after the effective date will be deemed incomplete without these documents.

Please contact the Department at 307-777-2450 if you have questions or to obtain more information.

2022 Legislative Updates

A. LEGISLATIVE UPDATE AND BRIEF DESCRIPTION

Listed below is a collection of Acts that passed in the 2022 legislative session which are pertinent to the Insurance Code, the Department’s duties and functions, and/or to the business of insurance in the State of Wyoming. The complete text of recently passed legislation can be found at: https://wyoleg.gov/Legislation/2022. All new laws have an effective date of July 1, 2022, unless otherwise indicated.

1. HB0039 (HEA 0011) – Pre-application determinations for licensing.

Title 33 of the Wyoming Code addresses various aspects of professional licensing boards. Pursuant to changes made during the 2018 legislative session, certain provisions of Wyo. Stat. § 33-1-304 were made applicable to additional agencies, including the Department of Insurance. During the 2022 legislative session, this act made changes to Wyo. Stat. § 7-19-106(a) to add a provision to allow any agency that is entitled to obtain criminal background checks as part of the licensing procedure, such as the Department, to have access to criminal history record information for the purpose of obtaining information for a pre-application determination of whether a criminal conviction would prevent licensing. It also made changes to Wyo. Stat. § 33-1-304 that would allow an individual to request a determination of whether a conviction would prevent receiving a license prior to application. Finally, the act authorized the promulgation of rules to establish and charge a reasonable fee for the costs of researching and developing a determination on the pre–application review of criminal convictions.

2. HB0062 (HEA 0030) – Insurance amendments.

This act has two (2) effective dates.

Effective immediately, the definition of “adjuster” is updated throughout the Insurance Code, and definitions for “appraiser” and “umpire” are added. The requirements for public display of license and return of expired licenses are removed.

Effective January 1, 2023, changes are made to fees, reporting requirements, and continuing education. All non-resident producer, adjuster, consultant, and surplus lines broker initial application fees will be $150. Renewal fees will remain $150 for these lines. Continuing education fees will be removed from resident and DHS licensees and assessed to continuing education providers. Course providers will pay a $100 application fee and a $100 renewal fee every two years. Each course will carry a $50 application fee and a $50 renewal fee every two years. In addition, all of the above license types will have the same 30-day address change reporting requirements, waiver opportunities for military service or long-term disability, criminal and administrative action reporting requirements, and license renewal and reinstatement procedures. Email addresses will be required to be disclosed and updated under address reporting requirements. A definition for “public adjuster,” taken from NAIC model language, was added.

3. HB0064 (HEA 0055) – Vehicle service contracts.

This act expands the allowed service contract coverages outlined in Chapter 49 of the Insurance Code, including windshield replacement, key fob replacement, excess wear for leased vehicles, and a more comprehensive road hazard definition. It also allows theft protection program warranties to be included in a service contract and defines what these programs may include. Lastly, it clarifies that these programs are only subject to Chapter 49 of the Insurance Code.

4. HB0087 (HEA 0015) – Insurance investment amendments.

This act updates Chapter 7 of the Insurance Code, which governs the types and amounts of investments that Wyoming domestic insurers can hold in their portfolios. In particular, it adds the following types of investment products as allowable investments: 1) obligations issued by solvent corporations in foreign jurisdictions that are subject to U.S. securities laws and issued in U.S. dollars, 2) interests in limited liability companies or partnerships provided the domestic insurer meets specified capitalization levels, and 3) securities issued by exchange traded funds. The act also includes specific limitations on the investments listed above. In addition, this act increases the amount that a domestic insurer can invest in any individual diversified mutual fund from 5% to 10%, and increases the limit on miscellaneous loans and investments for larger, well-capitalized domestic insurers. This legislation also allows Wyoming domestic insurers to request an exemption from holding their assets in Wyoming financial institutions if certain criteria are met.

5. SF0049 (SEA 0023) – Repeal of specified state boards and commissions.

This act both modifies duties of and repeals a number of State boards, commissions, and committees which were no longer considered necessary. Particular to the Department, in setting minimum standards for benefits under the Wyoming Health Insurance Pool (WHIP), the Commissioner need no longer consider the advice and recommendations of the Health Benefit Plan Committee established pursuant to Wyo. Stat. § 26-2-132. The Commissioner may now rely upon the advice and recommendations of the WHIP board.

6. SF0075 (SEA 0017) – Deferred annuities- minimum nonforfeiture.

This act updates Wyo. Stat. § 26-16-404(e)(ii) to reduce the allowed minimum nonforfeiture rate for annuity contracts from 1% to 0.15%. This change is consistent with the model law passed by rate will only apply to new contracts entered into on or after July 1, 2022.

B. RULES/REGULATIONS UPDATE

The Department continues to revise and update its regulations. The updates to regulations this year are being done for a variety of reasons, including clarifying the language of existing regulations, and implementing regulatory changes as a result of legislative changes. Since the last letter update regarding changes being made to Department regulations, the Department has made changes to Chapters 35, 50 and 71 as described in more detail below.

Chapter 35 Medicare Supplement Insurance

The language of Chapter 35 is largely based on an NAIC model regulation. In 2020, the Department revised Chapter 35 to make it consistent with revised NAIC model language, including changes to the continuous period of creditable coverage, and making it consistent with legislation regarding MACRA. The most recent changes to Chapter 35 were made to Sections 9, 9.1 and 11. The changes to Sections 9 and 9.1 were made to clarify and refine the internal paragraph references in those Sections. In addition, changes were made to Section 11 to update the period of creditable coverage from sixty three (63) days to six (6) months, and to revise the look back period for pre-existing conditions to ninety (90) days.

Chapter 50 Credit for Reinsurance

This regulation was updated in order to adopt the 2019 revisions to the NAIC’s Credit for Reinsurance Model Regulation #786. This update is required for the Department to maintain its NAIC Accreditation and also to comply with international agreements in order to avoid federal preemption. This regulation allows Wyoming domestic insurers to take credit for reinsurance that is ceded to reinsurers that are domiciled in Reciprocal Jurisdictions provided those reinsurers meet certain requirements, including specified capitalization levels. Reciprocal Jurisdictions include those jurisdictions that have signed a covered agreement with the U.S. Reinsurers domiciled in Reciprocal Jurisdictions are not required to post collateral provided they are in compliance with specific requirements.

Chapter 71 Multiple Employer Welfare Arrangements (MEWAs)

During the 2019 legislative session, SF0044 (SEA49) was passed. This legislation clarified the Department’s oversight of Multiple Employer Welfare Arrangements (MEWAs), required all MEWAs to be licensed by the Department, and allowed for the promulgation of regulations regarding the licensing procedures. After the original promulgation of Chapter 71, the Department became aware of areas of the regulation that needed to be clarified or streamlined. The areas that needed to be clarified included the definition of Third Party Administrator, and the documents necessary for licensing. Additional changes were made to clarify when plan documents were required to be filed with the Department, and requiring a claims appeal process be implemented consistent with other provisions of the Insurance Code.

Information regarding the Department’s regulations may be obtained directly from the Wyoming Secretary of State’s website at: https://rules.wyo.gov/. You may also subscribe to the Secretary of State’s website to receive automatic electronic notification of any new or revised regulations.

The mission of this agency is to enforce the insurance laws and regulations of the State impartially, honestly, and expeditiously; to serve the consumer of insurance; to encourage a healthy insurance marketplace; and to promote change to better serve the public interest. To this end, the highest ethical, professional, and work quality standards will be exercised in all formal and informal relationships with individuals, agencies, and companies affected by the policies and actions of the department. It is our commitment to be the best insurance regulatory agency in the United States.