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Compliance Corner

State Updates

Certain Nonprofit Agricultural Organizations Exempt from State Insurance Laws

March 30, 2021

Recently, the South Dakota legislature passed Senate Bill 87, which exempts certain health benefit plans sponsored by nonprofit agricultural organizations from state insurance regulation, including health benefit mandates.

Effective July 1, 2021, the exemption applies to self-funded plans sponsored by nonprofit agricultural organizations meeting particular criteria that contract with a TPA licensed in South Dakota. Among other criteria, the nonprofit agricultural organization must be domiciled in South Dakota, in existence for at minimum 25 continuous years prior to issuing health benefits to its members and must be created primarily to promote the development of rural communities and the economic stability and sustainability of farmers in this state.

Nonprofit agricultural organizations that sponsor self-funded group health plans should be aware of these developments.

Senate Bill 87 »

Extension of Transition Policies for Non-ACA Compliant Plans

March 30, 2021

On March 15, 2021, Division of Insurance Director Deiter issued Bulletin 21-01, permitting health insurance carriers in the individual and small group market to continue transitional health insurance plans that renew for a policy year starting on or before October 1, 2022, if the coverage comes into compliance by January 1, 2023.

As background, on January 19, 2021, CMS provided guidance for a transition policy extension that allows insurers the option to renew non-grandfathered non-ACA-compliant plans, if the state allows. Such transition policies are not required to comply with certain ACA mandates including community rating, coverage of essential health benefits, prohibition on pre-existing condition exclusions and the annual out-of-pocket maximum limit.

Transitional relief for these “grandmothered” plans has been extended several times before, and this bulletin applies the most recent federal extension to South Dakota and allows insurers to renew policies in the individual market and the small group market according to the extended transitional policy for a policy year starting on or before October 1, 2022. This bulletin reflects the Center for Consumer Information and Insurance Oversight’s guidance allowing states the option to extend transitional policies for individual and small group health insurance plans that have continually been renewed since 2014.

Carriers must submit an information filing to the division of their intention to either operate under this transition guidance or discontinue their transition policies by April 21, 2021.

Small employers that are interested in renewing their non-ACA-compliant plan should work with their advisors and insurers.

Bulletin 21-01 »

Health Benefit Mandates: Step Therapy

April 28, 2020

Effective beginning July 1, 2020, carriers (under certain circumstances) must approve step therapy override exception where coverage of a prescription drug for a medical condition is restricted through step therapy protocols, authorizing coverage if the drug is covered under the participant's plan.

As background, step therapy is a process used to help control costs and requires a participant to try a lower-priced medication before taking a “step up” to a more costly medication. With this new benefit mandate, a carrier must approve a step therapy override exception in certain circumstances, such as if the drug required under step therapy protocol is 1) not recommended; 2) likely to cause harm or be ineffective; 3) the participant has had a trial of a therapeutically equivalent dose of the drug that was discontinued as ineffective; and 4) the participant is currently receiving positive therapeutic outcome on a drug selected by the participant’s health care provider.

Employers who sponsor fully insured group health plans issued in South Dakota should be aware of this new mandate and confirm that their insurers are in compliance effective July 1, 2020.

Senate Bill 155 »

Extension of Transition Policies for Non-ACA Compliant Plans

March 31, 2020

On March 23, 2020, Division of Insurance Director Deiter issued Bulletin 20-01, permitting health insurance carriers in the individual and small group market to continue transitional health insurance plans that renew for a policy year starting on or before October 1, 2021, as long as the coverage comes into compliance by January 1, 2022

As background, on January 31, 2020, CMS provided guidance for a transition policy extension that allows insurers the option to renew non-grandfathered non-ACA-compliant plans, as long as the state allows. Such transition policies are not required to be in compliance with certain ACA mandates including community rating, coverage of essential health benefits, prohibition on pre-existing condition exclusions and the annual out-of-pocket maximum limit.

Transitional relief for these “grandmothered” plans has been extended several times before, and this bulletin applies the most recent federal extension to South Dakota and allows insurers to renew policies in the individual market and the small group market according to the extended transitional policy for a policy year starting on or before October 1, 2021. This bulletin reflects the Center for Consumer Information and Insurance Oversight’s guidance allowing states the option to extend transitional policies for individual and small group health insurance plans that have continually been renewed since 2014.

Carriers must submit an information filing of their intention to either operate under this transition guidance or discontinue their transition policies to the division by April 20, 2020.

Small employers that are interested in renewing their non-ACA-compliant plan should work with their advisors and insurers.

Bulletin 20-01 »

COVID-19 and Health Benefit Plans

March 31, 2020

On March 25, 2020, the Department of Labor and Regulation issued Bulletin 20-02, requesting health carriers take certain measures (through June 30, 2020) in light of the unique circumstances impacting individuals due to COVID-19. Highlights include:

  • COVID-19 testing and related visit – whether office, urgent care or emergency room – must be provided at no cost to insured individuals (in conjunction with the Families First Coronavirus Response Act).
  • Any preauthorization requirements should be waived or expedited.
  • Carriers are urged to expand availability of telemedicine and are encouraged to waive cost sharing for telemedicine services.
  • When appropriate, carriers are strongly encouraged to permit early refills on maintenance prescription medication (with no additional authorization requirements).
  • If there is not adequate number of in-network providers, carriers are recommended to allow access to out-of-network provides at in-network cost sharing.
  • Carriers are urged to provide grace periods for premium payments.
  • Health care providers are urged to refrain from balance billing.

Employers should be aware of these developments.

Bulletin 20-02 »

Conditional Renewal for Non-ACA Compliant Plans Extended

May 14, 2019

On April 18, 2019, Division of Insurance Director Deiter issued Bulletin 19-01, permitting health insurance carriers in the individual and small group market to continue transitional health insurance plans that renew for a policy year starting on or before October 1, 2020, as long as the coverage comes into compliance by January 1, 2021. As background, on March 25, 2019, CMS provided guidance for a transition policy extension that allows insurers the option to renew non-grandfathered non-PPACA-compliant plans, as long as the state allows. Such transition policies are not required to be in compliance with certain ACA mandates including community rating, coverage of essential health benefits, prohibition on pre-existing condition exclusions and the annual out-of-pocket maximum limit.

Transitional relief for these “grandmothered” plans has been extended several times before, and this bulletin applies the most recent federal extension to South Dakota and allows insurers to renew policies in the individual market and the small group market according to the extended transitional policy for a policy year starting on or before October 1, 2020. This bulletin reflects the Center for Consumer Information and Insurance Oversight’s guidance allowing states the option to extend transitional policies for individual and small group health insurance plans that have continually been renewed since 2014.

Carriers must submit an information filing of their intention to either operate under this transition guidance or discontinue their transition policies to the division by May 15, 2019.

Small employers that are interested in renewing their non-ACA-compliant plan should work with their advisors and insurers.

Bulletin 19-01 »

Dental Anesthesia and Hospitalization Requirements Revised

March 20, 2018

On March 1, 2018, Governor Daugaard signed HB 1205 into law. This law requires plans to cover dental procedure anesthesia and access to a hospital or ambulatory care center for plan participants that are children younger than age five or individuals who are severely disabled, suffering from developmental disabilities, or have other medical conditions that place plan participants at serious medical risk. Issuers can require that plan participants obtain prior authorization for such services in the same way that prior authorization is required for other covered conditions.

HB 1205 »

Law on Group Health Coverage for Autism Spectrum Disorder Amended

April 04, 2017

On March 9, 2017, Governor Daugaard signed House Bill 1195 into law, amending the law as it relates to group health coverage for autism spectrum disorders. Specifically, the Bill now requires that applied behavior analysis treatments be performed or supervised by persons who are licensed by the South Dakota Board of Medical and Osteopathic Examiners or the Board of Examiners of Psychologists, or who have a master's or doctoral degree and are certified by the National Behavior Analyst Certification Board as a board certified behavior analyst. The Bill is effective Jan. 1, 2018.HB 1195

Extension of Transition Policies

March 07, 2017

On March 1, 2017, the Division of Insurance issued Bulletin 17-01, permitting health insurance issuers to continue transitional health insurance plans through December 2018. As background, these plans are not subject to certain provisions of the PPACA. This bulletin reflects the Center for Consumer Information and Insurance Oversight’s (CCIIO) guidance allowing states the option to extend transitional policies for individual and small group health insurance plans to policy years beginning on or before October 1, 2018 provided that all policies end by December 31, 2018.

Bulletin 17-01 »

April 5, 2016

April 05, 2016

On March 28, 2016, the Division of Insurance issued Bulletin 16-03, which provides guidance related to transitional small group policies. As background, on Feb. 29, 2016, CMS announced that states would have the option of renewing transitional small group and individual policies for policy years beginning on or before Oct. 1, 2017. The non-grandfathered policies had to be in place prior to 2014 and must end by Dec. 31, 2017. If the policy meets requirements, it is exempt from certain coverage mandates including community rating, coverage of clinical trials and essential health benefits. See the March 6, 2016 edition of Compliance Corner.

The bulletin confirms that insurers in South Dakota will have the option to continue such policies until Dec. 31, 2017.

Bulletin 16-03 »


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