Regulates dental health insurers under the Insurance Code. Phases in capital and surplus requirements for dental insurers. Repeals Dental Service Corporations Act and Dental Service Organizations Act. (SB589 HD1)

A BILL FOR AN ACT

SECTION 1. Section 431:1-205, Hawaii Revised Statutes, is amended to read as follows:

"§431:1-205 Disability insurance defined. Disability insurance, also referred to as accident and sickness insurance, is insurance against bodily injury, disablement, or death by accident, or accidental means, or the expense thereof; against disablement or expense resulting from sickness[;] or dental health problems; and every insurance appertaining thereto."

SECTION 2. Section 431:3-207, Hawaii Revised Statutes, is amended to read as follows:

"§431:3-207 Noncompliance as to capital stock and surplus permitted certain insurers [for five years]. (a) A domestic or foreign insurer holding a valid certificate of authority to transact insurance in this State as of July 1, 1988, for a period of five years after that date, may continue to transact the kinds of insurance permitted by the certificate of authority by complying with this code and by maintaining unimpaired not less than the same amount of paid-in capital stock or surplus, if a mutual or reciprocal insurer, as required under the laws of this State immediately prior to July 1, 1988, and as if the laws had continued in force. After the five-year period, the insurer shall have and maintain not less than the same amount of paid-in capital stock and surplus as is then required of domestic stock insurers newly formed.

2. An insurer specified in subsection (a) shall not be granted authority to transact any other or additional kinds of insurance after the five-year period specified unless it then fully complies with the capital and surplus requirements applied to all the kinds of insurance it then proposes to transact, as provided under section 431:3-205 as to new domestic insurers.

(c) The capital and surplus requirements of this chapter for a dental health insurer shall be phased in as follows:

SECTION 3. Section 431:7-202, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) Each authorized insurer, except with respect to all dental health care insurance contracts, life insurance contracts, ocean marine insurance contracts, and real property title insurance contracts, shall pay to the director of finance through the commissioner a tax of 4.265 per cent on the gross premiums received from all risks or property resident, situated, or located within this State, during the year ending on the preceding December 31, less return premiums (but not including dividends paid or credited to policyholders), and less any reinsurance accepted (the tax upon such business being payable by the direct writing insurer).

All premiums written, procured, or received in the State shall be presumed to have been from the risks or property resident, situated, or located within the State. This presumption may be rebutted as to any premium:

1. By showing that it has been properly allocated or apportioned and reported as a taxable premium of another state or other appropriate taxing authority; or
2. By facts as to the residence, situation, or location of the risks or property, conclusively showing the nontaxability of the premium."

SECTION 4. Section 431:13-108, Hawaii Revised Statutes, is amended as follows:

1. By amending subsection (a) to read:

"(a) This section applies to accident and sickness insurance providers under part I of article 10A of chapter 431, mutual benefit societies under article 1 of chapter 432, [dental service corporations under chapter 423,] and health maintenance organizations under chapter 432D."

2. By amending subsection (i) to read:

"(i) As used in this section:

"Claim" means any claim, bill, or request for payment for all or any portion of health care services provided by a health care provider of services submitted by an individual or pursuant to a contract or agreement with an entity.

"Contest", "contesting", or "contested" means the circumstances under which an entity was not provided with, or did not have reasonable access to, sufficient information needed to determine payment liability or basis for payment of the claim.

"Deny", "denying", or "denied" means the assertion by an entity that it has no liability to pay a claim based upon eligibility of the patient, coverage of a service, medical necessity of a service, liability of another payer, or other grounds.

"Entity" means accident and sickness insurance providers under part I of article 10A of chapter 431, mutual benefit societies under article 1 of chapter 432, [dental service corporations under chapter 423,] and health maintenance organizations under chapter 432D.

"Health care facility" shall have the same meaning as in section 327D-2.

"Health care provider" means a Hawaii health care facility, physician, nurse, or any other provider of health care services covered by an entity."

SECTION 5. Section 432D-1, Hawaii Revised Statutes, is amended by amending the definition of "health maintenance organization" to read as follows:

""Health maintenance organization" means any person that undertakes to provide or arrange for the delivery of basic health care services or dental services to enrollees on a prepaid basis, except for enrollee responsibility for copayments, deductibles, or both."

SECTION 6. Section 448-15, Hawaii Revised Statutes, is amended to read as follows:

"§448-15 No corporation to practice dentistry; penalty. No corporation shall practice dentistry or engage therein, or hold itself out as being entitled to practice dentistry, or furnish dental services or dentists, or advertise under or assume the title of dentist or dental surgeon or equivalent title, or furnish dental advice for any compensation, or advertise or hold itself out with any other person or alone, that it has or owns a dental office or can furnish dental service, dentists, or dental surgeons, or solicit through itself, or its agents, officers, employees, directors, or trustees, dental patronage for any dentist or dental surgeon employed by any corporation; provided that nothing in this section shall prohibit a corporation from employing a dentist or dentists to render free dental services to its employees, nor shall it apply to corporations or associations in which the dental services were originated and are being conducted upon a purely charitable basis for the worthy poor, nor shall it apply to corporations or associations furnishing information or clerical services which can be furnished by persons not licensed to practice dentistry, to any person lawfully engaged in the practice of dentistry, when the dentist assumes full responsibility for the information and services, nor shall it apply to dental service corporations formed for the primary purpose of contracting with individuals, groups of individuals, and corporations for defraying or assuming the cost of services of dentists and dental surgeons and of contracting on behalf of dentists and dental surgeons to furnish such services [as provided in chapter 423], nor shall it apply to professional corporations as defined in chapter 415A. Any corporation violating this section shall be fined not less than $200 or more than $500 for each offense, and each day's violation shall be considered a separate offense.

Every association of persons engaged in the practice of dentistry under the name of an association or other title, shall cause to be displayed and kept in a conspicuous place at the entrance to its place of business the names of each and every person employed by the association in the practice of dentistry; and every person so employed by any association shall cause the person's name to be so displayed. Any person employed by the association whose name is not displayed as above provided shall be guilty of a failure to comply with this chapter and shall be punished as in this chapter provided; and the association, and the persons comprising the same, for failure to display the aforesaid names, shall be guilty of a failure to comply with this chapter and shall be punished as in this chapter provided."

SECTION 7. Chapter 423, Hawaii Revised Statutes, is repealed.

SECTION 8. Chapter 448D, Hawaii Revised Statutes, is repealed.

SECTION 9. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 10. This Act shall take effect on January 1, 2050.