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ARIZONA STATE SENATE
Fifty-Fourth Legislature, First Regular Session
ENACTED
AMENDED
FACT SHEET FOR S.B. 1109/H.B. 2375
short-term limited duration insurance; notice.
Purpose
Extends, for short-term limited duration insurance (STLDI), the maximum initial contract term to 12 months and allows STLDI policies to be renewed or extended for up to 36 months.
Background
On August 3, 2018, the U.S. Departments of Health and Human Services, Labor and the Treasury issued a final rule that extends the maximum period for STLDI. Under federal law, STLDI is health coverage provided through a contract with an issuer that has an expiration date specified in the contract that: 1) is less than 12 months after the original effective date of the contract; and 2) has a duration of no longer than 36 months in total, including renewals and extensions. The maximum initial contract term is intended to provide a uniform federal standard for the initial contract term for STLDI. The final rule requires the prominent display of a notice in the insurance contract as well as any application materials that are provided in connection with enrollment in a STLDI policy.
Currently, statute defines STLDI as health insurance coverage that: 1) is offered by a health care insurer; 2) remains in effect for no more than 185 days; 3) cannot be renewed or otherwise continued for more than 180 days; and 4) is not intended or marketed as health insurance coverage subject to guaranteed issuance or guaranteed renewal provisions under Arizona law. STLDI is also excluded from the statutory definition of individual health insurance coverage (A.R.S. § 20-1379).
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
1. Increases, from 185 days to 12 months, the maximum length of an initial STLDI contract term.
2. Allows STLDI policies to be renewed or extended for an additional 24 months rather than 180 days.
3. Requires all STLDI policies or certificates issued, delivered or renewed to display the notice on the policy's fact page and in any application materials provided in connection with STLDI enrollment.
4. Requires an insurer to provide the disclosure notice to the insured before the expiration or renewal date of the STLDI policy.
5. Redefines STLDI.
6. Defines health care insurer.
7. Makes technical and conforming changes.
8. Becomes effective on the general effective date.
Amendments Adopted by Committee
· Exempts STLDI from any health coverage mandates.
Senate Action House Action
FIN 1/30/19 DPA 6-4-0 HHS 3/4/19 W/D
3rd Read 2/13/19 18-12-0 3rd Read 3/4/19 28-30-2
3rd Read* 3/4/19 31-28-1
*on reconsideration
(S.B. 1109 was substituted for H.B. 2375 on
3rd Read)
Signed by the Governor 3/11/19
Chapter 8
Prepared by Senate Research
April 3, 2019
CRS/AB/gs