Updates to the Balance Billing Protection Act (HB 1688 and SB 5618 Protecting consumers from charges for out-of-network health care services)
In 2019, the Washington state Legislature enacted the Balance Billing Protection Act (BBPA) which took effect on Jan. 1, 2020. This law prohibits balance billing for emergency services and for non-emergency “surgical and ancillary services” provided at in-network hospitals and ambulatory surgical facilities.
In December 2020, Congress enacted the No Surprises Act (NSA), as part of the Consolidated Appropriations Act of 2021 (P.L. 116-260). This law takes effect on Jan. 1, 2022, and applies to health plans issued or renewed on or after Jan. 1, 2022. It overlaps with and is similar to Washington’s Balance Billing Protection Act.
The overlap between provisions of the BBPA and NSA would result in two different laws applying to a single episode of care. For example, the BBPA would apply to a consumer’s emergency care until they are stabilized, and then the NSA would apply to services the consumer receives once they are stabilized. Or, the BBPA would apply to a set of “surgical and ancillary services” provided during a planned surgery, but the NSA would apply to additional services received by the consumer during that same procedure. This could result in unnecessary confusion for consumers, providers and insurers, as well as increased administrative costs for providers and insurers.
Insurance Commissioner Kreidler is proposing legislation to align state and federal law, while preserving critical consumer protections in Washington’s Balance Billing Protection Act.
The prime sponsor of this legislation in the Senate is Sen. Annette Cleveland.
The prime sponsor of this legislation in the House is Rep. Eileen Cody.
E2SHB as amended by Senate status: Governor signed on March 31, 2022.
- SB 5618 bill history (leg.wa.gov)
- SB status: Public hearing was held in the Senate Committee on Health & Long-Term Care at 8:00 a.m. on Jan. 21, 2022.
Washington Life and Disability Insurance Guaranty Association (SB 5508 Concerning the insurance guaranty fund)
Commissioner Kreidler's proposal offers protections to consumers who have purchased long-term care insurance if their insurer fails or becomes insolvent.
The OIC’s proposal expands the Washington State Life and Disability Guaranty Association membership and provides equitable distributions of assessments, in order to protect Washington state insurance policyholders. Long-term care insurance companies have impending insolvencies that threaten benefits due to policyholders in Washington. The OIC’s proposal is a fair way to ensure that seniors and people living with disabilities who have purchased insurance and paid their premiums in good faith can rely on their benefits if their insurer fails or becomes insolvent.
The prime sponsor this legislation is Sen. Marko Liias.
- SB 5508 bill history (leg.wa.gov)
- SB status: Governor signed on March 24, 2022.
Prohibiting the use of credit scoring in insurance (SB 5010 Prohibiting the use of credit scores to determine rates for personal lines of insurance)
In 2021, the Office of the Insurance Commissioner requested legislation to ban the insurance industry’s use of credit scoring in setting premiums for auto, homeowner, renters and boat insurance. The reason for this change in state law is simple: the use of credit-based insurance scores has historically and disproportionately penalized communities of color and low-income communities through inequities embedded in our credit system.
Ample studies indicate that low-income people in Washington state are more likely to struggle with their credit and pay higher insurance premiums for reasons that have nothing to do with their insurance risk. Data indicates that communities of color are disproportionally represented in low-income demographics and saddled with higher insurance premiums.
A 2015 report by the Consumer Federation of America showed that, on average, drivers with a good credit score paid $214 more per year than drivers with the best credit score, without factoring in their driving record. The study also found that in Washington state, drivers with excellent credit and a conviction for driving under the influence (DUI) paid $847 less in premiums than a driver with a clean driving record and poor credit.
In recent months, the insurance industry voiced overwhelming support for action to promote racial and economic justice. By supporting this legislation, the industry has the opportunity to put that support into action to end the discriminatory practice of using credit scoring to set insurance premiums.
OIC supported this bill in its original form, but not as amended.
The prime sponsor of SB 5010 is Sen. Mona Das.
SB status: The Senate Rules Committee placed the substitute bill in the X-file on March 17, 2021.
Insurance data security (SB 5956 Concerning insurance data security)
Insurance Commissioner Mike Kreidler is proposing legislation to increase consumer protection as it relates to insurance data and cybersecurity events.
This proposal has been carefully crafted with the assistance of the National Association of Insurance Commissioners (NAIC) and is recommended by the U.S. Treasury Department for adoption by states prior to October 2022. Similar legislation has been adopted in 18 other states that aligns with the NAIC Model Law. If the states are unable to implement uniform data security regulations by that date, the U. S. Treasury Department will urge Congress to take action on behalf of the states.
Commissioner Kreidler’s legislative proposal ensures consumer insurance data is protected from future cybersecurity events or data breaches through thorough information security programs, based on proper risk assessments, and with annual certification requirements, while allowing adequate time for compliance.
The prime sponsor of this legislation is Sen. Derek Stanford.