Health Insurance Benefit Coverage Law Summaries
Kentucky, Health Insurance Benefit Coverage Law Summaries
Kentucky's mandated health care law is codified in the Kentucky Revised Statutes Annotated at Title XVIII, Chapter 211 and at Title XXV, Chapter 304, Subtitle 18. Coordination of benefits provisions are located in the Kentucky Administrative Regulations at Title 806.
DEFINITIONS
“Utilization review” means a review of the medical necessity and appropriateness of hospital resources and medical services given or proposed to be given to a covered person for purposes of determining the availability of payment (Sec. 304.17A-600, as amended by H. 650, L. 2004).
WHAT THE EMPLOYER MUST DO
Kentucky does not require employers to provide health insurance for their employees. However, if an employer does provide insurance, it must be aware of specific coverage required to be included in health insurance policies and contracts. This coverage is summarized below.
Mandated benefits.- An insurer that issues or renews a health benefit plan on or after January 1, 2005, and before December 31, 2007, shall not be required to include any additional state mandated benefit beyond those statutory requirements in effect for health benefits plans on January 1, 2005. An insurer issuing or renewing a health benefit plan shall not suspend, limit, or modify any state mandated benefit in effect on January 1, 2005 (Sec. 1, H. 650, L. 2004).
Mental health coverage.- Any offer to sell a group policy or contract of general health insurance to be issued, delivered, issued for delivery, amended or renewed in Kentucky after January 1, 1987, must include an offer of coverage for the inpatient and outpatient treatment of mental illness, at least to the same extent and degree as coverage provided by the policy or contract for the treatment of physical illnesses (Sec. 304.18-036).
Dependent care coverage.- All group or blanket health insurance policies and certificates issued under such policies providing coverage on an expense-incurred basis, regardless of whether the policies and certificates are issued for nonfamily or family coverage, must provide that health insurance benefits are payable with respect to a newly born child of the insured or certificate holder from the moment of birth. The coverage for newly born children must consist of coverage of injury or sickness including the necessary care and treatment of medically diagnosed congenital defects and birth abnormalities (Sec. 304.18-032).
All group or blanket health insurance policies providing coverage on an expense-incurred basis that provide maternity benefits must offer the master policyholder the option to purchase coverage to pay for routine nursery care for a well newly born child for up to five full days in a hospital nursery. The coverage for the well newly born child must pay the hospital charges for each day in the hospital nursery (Sec. 304.18-033).
All group health benefit plans that provide dependent benefits shall offer the master policyholder two options to purchase coverage for an unmarried dependent child: (a) coverage until age 19, and coverage to unmarried children from 19 to 25 years of age who are full-time students enrolled in and attending an accredited educational institution and who are primarily dependent on the policyholder for maintenance and support; and (b) coverage until age 25. Coverage under paragraph (b) must include a disclaimer that selecting either option may have tax implications (Sec. 304.17A-08, as added by HB 440, L. 2008).
Hearing aids.- A health benefit plan must provide coverage for the full cost of one hearing aid per hearing impaired ear up to $1,400 every 36 months for hearing aids for insured individuals under 18 years of age and all related services prescribed by an audiologist (Sec. 1, S. 152, L. 2002).
Substance abuse coverage.- No contract providing major medical or outpatient care benefits may be sold or offered for sale in Kentucky, unless such contract offers the master policyholder the option to purchase in new contracts the minimum benefits for treatment of alcoholism as specified below. Coverage for treatment will be divided into three distinct phases: emergency detoxification treatment; residential treatment; and outpatient treatment. Such contracts must contain a stipulation that no payment may be made by the carrier to the provider except upon completion of the phase of program of treatment by the patient, under the guidance and direction of a physician licensed to practice in Kentucky or a professional, designated by such physician, who is a recognized staff member of a licensed or accredited treatment facility. Disability and accident income benefits and basic health care contracts that do not provide major medical or outpatient care are excluded from the alcoholism treatment coverage mandate (Sec. 304.18-130).
Required provisions for the treatment of alcoholism are as follows (Sec. 304.18-140):
The patient must be under the supervision of a physician licensed to practice in Kentucky or a professional designated by such physician who is a recognized staff member of a licensed or accredited treatment facility.
The patient must receive appropriate emergency detoxification treatment, residential treatment and outpatient treatment at licensed or accredited facilities.
The following minimum benefits per patient must be provided: (a) emergency detoxification for three days at $40 per day; (b) residential treatment for 10 days at $50 per day; (c) outpatient treatment for 10 visits at $10 per visit.
Exceptions.- Disability and accident income benefits and basic health care contracts that do not provide major medical or outpatient care are excluded from the alcoholism treatment coverage mandate (Sec. 304.18-130).
Coordination of benefits.- An employer or the insurer, managed care plan, or third-party administrator that manages a health benefit plan for an employer may share the payment of expenses with another benefit plan sponsored by another employer, with the government through Medicare benefits, or with another type of insurance company through automobile or homeowners' insurance (subrogation). To determine which plan has primary responsibility for payment, coordination of benefits (COB) language specifies the order of benefit payments. Preserving cost management initiatives, such as deductibles and coinsurance, is known as maintenance of benefits. The National Association of Insurance Commissioners (NAIC) has established model guidelines for COB which many states apply to insurance companies, health maintenance organizations, or other health care benefit providers. Self-insured employee benefit plans are not required to adopt coordination of benefits language; however, most self-insured health plans do specify how they will coordinate benefit payments with other plans.
The following types of plans must specify how benefits will be coordinated: group insurance, group subscriber contracts, uninsured arrangements of group or group-type coverages, group or group-type coverage through a health maintenance organization (HMO), and other prepayment, group practice, and individual practice plans, group-type contracts available to a membership in a particular organization or group if the individual does not have a right to maintain or renew the policy independent of continued employment with an employer, group or group-type excess hospital indemnity benefits exceeding $100 per day, group or group-type or individual “no fault” and “fault” contracts, or Medicare or other governmental benefits. A plan shall not include: individual or family insurance or subscriber contracts, individual HMO coverage, individual or family coverage through prepayment, group practice, or individual practice plans, group or group-type hospital indemnity benefits of $100 per day or less, school accident-type coverages, or a state plan under Medicaid (Kentucky Administrative Regulations, Title 806, Ch. 18, Sec. 806 KAR 18:030, as authorized by Kentucky Revised Statutes Secs. 304.2-110, 304.32-250, and 304.38-150).
Order of benefits.- The following priority applies when coordinating health benefit payments (Kentucky Administrative Regulations, Title 806, Ch. 18, Sec. 806 KAR 18:030):
Employee/Dependent: Benefits will be paid first by a health benefit plan, health maintenance organization, or health insurance policy that covers the individual as an employee, subscriber, or member before a plan or policy that covers the individual as a dependent;
Dependent Child/Birthday Rule: For a dependent child whose parents are not separated or divorce and who is covered by two health benefit plans, health maintenance organizations, or health insurance policies, benefits will be paid first by the plan that covers the parent whose birthday month and day is earlier in the calendar year. If both parents have the same birthday, benefits will be paid first by the plan that covered a parent for a longer period of time. If only one plan specifies the birthday rule and the other specifies priority of payment based on the gender of the parent, benefits will be paid first according to the order of benefits specified in the plan without the birthday rule;
Dependent Child/Divorced or Separated Parents: For a dependent child whose parents are separated or divorced and who is covered by two health benefit plans, health maintenance organizations, or health insurance policies, benefits will be paid first by the plan that covers the custodial parent, second by the plan of the spouse of the custodial parent, and third by the plan of the noncustodial parent. If a court decree states that one of the parents is responsible for health care expenses of the child, benefits will be paid first by the plan of that parent;
Active/Inactive Employee: Benefits will be paid first by a health benefit plan, health maintenance organization, or health insurance policy that covers the individual as an employee who is neither laid off or retired or as that person's dependent before a plan or policy that covers the individual as a laid-off or retired employee or dependent. If only one of the two plans specifies this rule, this standard is ignored;
Longer/Shorter Length of Coverage: Benefits will be paid first by a health benefit plan, health maintenance organization, or health insurance policy that has covered the individual as an employee, subscriber, or member for a longer period of time before a plan or policy that covered the individual for a shorter period of time; and
Excess Benefits: A complying plan may coordinate its benefits with a plan that is “excess” or “always secondary” or that uses an order of benefit determination provision that is inconsistent with that contained in this rule (called a noncomplying plan), on the following basis: if the complying plan is the primary plan, it must pay or provide its benefits on a primary basis. If the complying plan is the secondary plan, it must still pay or provide its benefits first, as the secondary plan. In such a situation, such payment is the limit of the complying plan's liability, except if the noncomplying plan does not provide the information needed by the complying plan to determine its benefits within a reasonable time after it is requested to do so, the complying plan may assume that the benefits of the noncomplying plan are identical to its own and pay its benefits accordingly. The complying plan must adjust any payments it makes based on such assumption when information becomes available about the actual benefits of the noncomplying plan. If the noncomplying plan pays less in benefits than it would have if the noncomplying plan paid or provided its benefits as the primary plan, the complying plan must advance an amount equal to such difference.
Maintenance of benefits.- A plan may use one of three alternatives as the secondary plan to reduce benefits. Alternative one allows reduction so that total benefits paid by all plans are not more than allowable expenses. Alternative two allows reduction of benefits so that total benefits paid by all plans are not more than a stated percentage but not less than 80 percent of total allowable expenses to preserve the coinsurance responsibility. Alternative three allows reduction so that benefits payable by the second plan are reduced by amounts already paid by the primary plan for the same expenses to preserve deductibles and the coinsurance responsibility (Kentucky Administrative Regulations, Title 806, Ch. 18, Sec. 806 KAR 18:030).
Medicare coordination.- A group contract may not reduce benefits if a person is or could be covered under another plan, except for Part B of Medicare (Kentucky Administrative Regulations, Title 806, Ch. 18, Sec. 806 KAR 18:030).
Required language.- If a plan uses alternatives two or three for maintenance of benefits, the plan must provide prior notice to employees or members than when it is secondary, its benefits plus those paid by the primary plan will be less than 100 percent of allowable expenses (Kentucky Administrative Regulations, Title 806, Ch. 18, Sec. 806 KAR 18:030).
Providers.- Every policy of group or blanket health insurance issued, delivered, or renewed in Kentucky that provides coverage on an expense-incurred basis for any services by a licensed psychologist or a licensed clinical social worker is deemed to entitle the policyholder, or other person entitled to these benefits under the policy, to payment of or reimbursement for the cost of the service, not in excess of the coverage limits, regardless of provider profession (Sec. 304.18-0363).
Optometrists.- When any policy or group insurance or blanket health insurance issued in Kentucky provides for reimbursement for any service that is within the lawful scope of practice of an optometrist duly licensed under Kentucky law, the insured or other person entitled to benefits under such policy is entitled to reimbursement for such services, whether such services are performed by a duly licensed physician, osteopath, or optometrist, notwithstanding any provision contained in such policy, or if the policy so provides, payment may be made directly to the provider of the services (Sec. 304.18-095).
Chiropractors.- When any policy or group insurance or blanket health insurance issued in Kentucky provides for reimbursement for any service that is within the lawful scope of practice of a chiropractor duly licensed under Kentucky law, the insured or other person entitled to benefits under such policy is entitled to reimbursement for such services, whether such services are performed by a duly licensed physician, osteopath, or chiropractor, notwithstanding any provision contained in such policy, or if the policy so provides, payment may be made directly to the provider of the services (Sec. 304.18-095).
Podiatrists.- When any policy of group insurance or blanket health insurance issued in Kentucky provides for reimbursement for any service that is within the lawful scope of practice of a podiatrist duly licensed under Kentucky law, the insured or other person entitled to benefits under that policy is entitled to reimbursement for those services, whether those services are performed by a duly licensed physician, osteopath, chiropractor, or podiatrist, notwithstanding any provision contained in the policy, or if the policy so provides, payment may be made directly to the provider of the services (Sec. 304.18-095).
Dentists.- Any group insurance or blanket health insurance policy or contract issued in Kentucky providing coverage for services that can be lawfully performed within the scope of the license of a duly licensed dentist is deemed to provide benefits for such services whether performed by a duly licensed physician or a duly licensed dentist (Sec. 304.18-097).
Registered nurse first assistants.- A health plan issued or renewed on or after July 15, 2000, that provides coverage for surgical first assisting benefits or services will be construed as providing coverage for a registered nurse first assistant who performs services that are within the scope of practice of the registered nurse first assistant (Sec. 304.17A-146, as added by Ch. 96 (H. 281), L. 2000).
Surgical assistants/physician assistants.- A health benefit plan issued or renewed on or after July 15, 2001, that provides coverage for surgical first assisting or intraoperative surgical care benefits or services will be construed as providing coverage for a certified surgical assistant or physician assistant who performs intraoperative surgical care as specified in Sec. 216B.015(15) (Sec. 3, H. 138, L. 2001).
Preexisting conditions.- Group health insurance plans that replace prior group insurance coverage must have coverage for preexisting conditions that is the lesser of the benefits of the two policies (Sec. 304.18-127).
Metabolic disorders.- Coverage for a newly born child must consist of the necessary care and treatment of medically diagnosed inherited metabolic diseases (Sec. 304.17A-139, as amended by H. 395, L. 2002).
See also “Prescription drugs” below.
Prescription drugs.- No health benefit plan issued or renewed on or after July 15, 1998, may exclude coverage of any cancer drug for a particular indication on the grounds that the drug has not been approved by the Federal Food and Drug Administration for that indication, if the drug has been prescribed for a member or a member's dependent covered by the plan who has been diagnosed with cancer, and the drug is recognized as safe and effective for the treatment of the indication in the official compendium or in the medical literature. Any required coverage of a cancer drug must also include medically necessary services associated with the administration of the drug (H. 618, L. 1998, effective July 15, 1998).
Metabolic disorders.- A health benefit plan that provides prescription drug coverage must provide that coverage for amino acid modified preparations and low-protein modified food products for the treatment of inherited metabolic diseases if the amino acid modified preparations and low-protein modified food products are prescribed for the therapeutic treatment of inherited metabolic diseases and are administered under the direction of a physician. This coverage may be subject, for each plan year, to a cap of $25,000 for medical formulas and a separate cap for each plan year of $4,000 on low protein modified foods, subject to annual inflation adjustments (Sec. 304.17A-139, as amended by H. 395, L. 2002).
Refills.- Any health benefit plan that provides benefits for prescription drugs shall include an exceptions policy or an override policy that provides coverage for the refill of a covered drug dispensed prior to the expiration of the insured's supply of the drug. The insurer shall provide notice in existing written or electronic communications to pharmacies doing business with the insurer, the pharmacy benefit manager if applicable, and to the insured regarding the exceptions policy or override policy. This subsection shall not apply to specified controlled substances. Nothing in this section shall prohibit an insurer from limiting payment to no more than three refills of a covered drug in a 90-day period (Sec. 1, Ch. 213 (H. 181), L. 2006).
Mammograms.- All insurers issuing group or blanket health insurance policies and certificates in Kentucky that provide coverage on an expense-incurred basis for medical and surgical benefits with respect to a mastectomy and that are delivered, issued for delivery, amended, or renewed on or after October 15, 1990, must also provide coverage for mammograms under Sec. 304.17-316 (see below) (Sec. 304.18-098, as amended by H. 9, L. 2000).
HMOs must also provide this coverage (Sec. 304.38-1935, as amended by H. 9, L. 2000).
Insurers, health benefit plans and HMOs may not offer medical and surgical benefits with respect to a mastectomy that require the procedure to be performed on an outpatient basis (Secs. 304.17A-134, 304.18-0983 and 304.38-1934, as amended by Act 181 (S. 38), L. 2002).
A health benefit plan, insurer or HMO shall provide written notice to a covered person of the availability of medical and surgical benefits with respect to a mastectomy upon enrollment and annually thereafter (Secs. 304.17A-134, 304.18-0983, and 304.38-1934, as amended by Act 181 (S. 38), L. 2002).
Bone marrow transplants: breast cancer.- All insurers issuing group or blanket health insurance policies and certificates in Kentucky providing coverage on an expense-incurred basis for treatment of breast cancer by chemotherapy must also provide coverage for treatment of breast cancer by high-dose chemotherapy with autologous bone marrow transplantation or stem cell transplantation (Sec. 2, Ch. 114, L. 1996).
This coverage requirement also applies to the following: nonprofit hospital, medical-surgical, dental, and health service corporations, and health maintenance organizations issuing contracts in Kentucky that provide hospital, medical, or surgical expense benefits for treatment of breast cancer by chemotherapy; and health benefit plans that provide benefits for treatment of breast cancer by chemotherapy (Secs. 3 -5, Ch. 114, L. 1996).
Maternity benefits: Minimum maternity hospital stays.- A health benefit plan issued or renewed on or after July 15, 1996, that provides maternity coverage must provide coverage for inpatient care for a mother and her newly-born child for a minimum of 48 hours after vaginal delivery and a minimum of 96 hours after delivery by Cesarean section (Sec. 1, Ch. 88, L. 1996, effective July 15, 1996).
The provisions relating to length of inpatient care described above do not apply to a health benefit plan if the plan authorizes an initial postpartum home visit that would include the collection of an adequate sample for the hereditary and metabolic newborn screening, and if the attending physician, with the mother's consent, authorizes a shorter length of stay upon the physician's determination that the mother and newborn are medically stable (Sec. 1, Ch. 88, L. 1996, effective July 15, 1996).
Domestic abuse victims.- No health benefit plan may deny coverage, refuse to issue or renew, cancel or otherwise terminate, restrict or exclude any person from any health benefit plan issued or renewed on or after July 15, 1998, on the basis of the applicant's or insured's status as a victim of domestic violence and abuse (Sec. 6, H. 864, L. 1998, effective July 15, 1998).
Reconstructive surgery: mastectomies.- All insurers issuing group or blanket health insurance policies and certificates in Kentucky providing coverage on an expense-incurred basis must make available and offer to the purchaser coverage for the following, if an insurer provides medical and surgical benefits with respect to a mastectomy, in a manner determined in consultation with the attending physician and the covered person, and subject to annual deductibles and coinsurance provisions as may be deemed appropriate and as are consistent with those established for other benefits under the coverage: (1) all stages of breast reconstruction surgery of the breast on which the mastectomy has been performed; (2) surgery and reconstruction of the other breast to produce a symmetrical appearance; and (3) prostheses and physical complications of all stages of mastectomy, including lymphedemas (Sec. 304.18-0983, as amended by Act 181 (S. 38), L. 2002).
HMOs must also provide this coverage (Sec. 304.38-1934, as amended by Act 181 (S. 38), L. 2002).
A health benefit plan must make available and offer to the purchaser coverage for the following, if the plan provides medical and surgical benefits with respect to mastectomy, in a manner determined in consultation with the attending physician and the covered person, and subject to annual deductibles and coinsurance provisions as may be deemed appropriate and as are consistent with those established for other benefits under the coverage: (1) all stages of breast reconstruction surgery of the breast on which the mastectomy has been performed; (2) surgery and reconstruction of the other breast to produce a symmetrical appearance; and (3) prostheses and physical complications of all stages of mastectomy, including lymphedemas (Sec. 304A.17A-134, as amended by Act 181 (S. 38), L. 2002).
Endometriosis.- All insurers issuing group or blanket health insurance policies and certificates in Kentucky providing coverage on an expense-incurred basis must make available and offer to the purchaser coverage for diagnosis and treatment of endometriosis and endometritis if the insurer also covers hysterectomies (Sec. 304.18-0983, as amended by Act 181 (S. 38), L. 2002). HMOs must also provide this coverage (Sec. 304.38-1934, as amended by Act 181 (S. 38), L. 2002).
A health benefit plan must make available and offer to the purchaser coverage for diagnosis and treatment of endometriosis and endometritis if the health benefit plan also covers hysterectomies (Sec. 304.17A-134, as amended by Act 181 (S. 38), L. 2002).
Diabetes.- All health benefit plans issued or renewed on or after July 15, 1998, must provide coverage for equipment, supplies, outpatient self-management training and education, including medical nutrition therapy, and all medications necessary for the treatment of insulin-dependent diabetes, insulin-using diabetes, gestational diabetes, and noninsulin-using diabetes if prescribed by a health care provider legally authorized to prescribe the items (H. 380, L. 1998, effective July 15, 1998).
Temporomandibular joint disorder.- All groups or blanket policies of health insurance issued, delivered, or renewed in Kentucky on or after January 1, 1991, and certificates issued under such policies that provide coverage on an expense-incurred basis for surgical or nonsurgical treatment of skeletal disorders must provide coverage for medically necessary procedures relating to temporomandibular joint disorders and craniomandibular jaw disorders (Sec. 304.18-0365).
Dental care.- Health benefit plans that provide coverage for general anesthesia and hospitalization services to a covered person must provide coverage for payment of anesthesia and hospital or facility charges for services performed in a hospital or ambulatory surgical facility in connection with dental procedures for children below the age of nine years, persons with serious mental or physical conditions, and persons with significant behavioral problems, where the dentist treating the patient or admitting physician involved certifies that, because of the patient's age or condition or problem, hospitalization or general anesthesia is required in order to safely and effectively perform the procedures (H. 39, L. 2002).
Outpatient services.- All group or blanket health insurance policies and certificates issued under such policies providing coverage on an expense-incurred basis must provide coverage for health care treatment or services rendered by ambulatory surgical centers approved by the Kentucky Health Facilities and Health Services Certificate of Need and Licensure board. The coverage for health care treatment or services rendered by an ambulatory surgical center must be on the same basis as coverage provided for the same health care treatment or services rendered by a hospital (Sec. 304.18-035).
Home health care benefits.- All insurers issuing group or blanket health insurance policies in Kentucky and certificates issued under such policies providing coverage on an expense-incurred basis must make available and offer to the master policyholder coverage for home health care. The coverage may contain a limitation on the number of home health care visits for which benefits are payable, but the number of such visits must not be less than 60 in any calendar year or in any continuous period of 12 months for each person covered under the policy. Home health care will not be reimbursed unless an attending physician certifies that hospitalization or confinement in a skilled nursing facility would otherwise be required if home health care was not provided (Sec. 304.18-037).
Autism.- All health benefit plans must provide coverage, including therapeutic, respite and rehabilitative care, for the treatment of autism of a child covered under the policy (Sec. 2, S. 227, L. 1998, amending S. 63, effective April 14, 1998).
Osteoporosis.- All insurers issuing group or blanket health insurance policies and certificates in Kentucky providing coverage on an expense-incurred basis must make available and offer to the purchaser coverage for bone density testing for women age 35 years and older, as indicated by the health care provider, in accordance with standard medical practice, to obtain baseline data for the purpose of early detection of osteoporosis (Sec. 304.18-0983, as amended by Act 181 (S. 38), L. 2002). HMOs must also provide this coverage (Sec. 304.38-1934, as amended by Act 181 (S. 38), L. 2002).
A health benefit plan must make available and offer to the purchaser coverage for bone density testing for women age 35 years and older, as indicated by the health care provider, in accordance with standard medical practice, to obtain baseline data for the purpose of early detection of osteoporosis (Sec. 304.17A-134, as amended by Act 181 (S. 38), L. 2002).
Domestic partners.- Public universities in Kentucky may not offer health insurance coverage to the domestic partners of their employees so long as eligibility for such benefits is conditioned “upon a legal status defined in a manner substantially similar to that of marriage.” To do so would constitute “recognition” of the legal status of domestic partners, a violation of the state Constitution. However, state universities may extend benefits in a more inclusive manner-to all household members, for example-without offending the constitution, the state attorney general's office advised (OAG 07-004, Office of the Attorney General of the Commonwealth of Kentucky , June 1, 2007).
Utilization review.- Insurers must maintain written procedures for (Sec. 2, H. 390, L. 2000, effective July 14, 2000):
determining whether a requested service, treatment, drug or device is covered under the terms of a covered person's health benefit plan;
making utilization review determinations; and
notifying covered persons, authorized persons, and providers acting on behalf of covered persons of its determinations.
NOTICE
Any employer doing business in Kentucky who implements for its employees on a self-insured basis a plan for providing hospital or surgical benefits must notify the Department of Insurance not less than 30 days prior to implementing such plan, and must include in the notice the name of any outside third party administrator. Any change in third party administrators must be reported to the department within 30 days of the change (Sec. 304.32-320, as amended by Act 181 (S. 38), L. 2002).
WHO TO CONTACT
Contact the Public Protection and Regulation Cabinet, Insurance Department, 229 W. Main, Frankfort, KY 40602. Telephone: (502) 564-3630. Fax: (502) 564-6090.
<p>Contact the Public Protection and Regulation Cabinet, Insurance Department, 229 W. Main, Frankfort, KY 40602. Telephone: (502) 564-3630. Fax: (502) 564-6090.</p>