Pennsylvania Act 2024-58 — INSURANCE (40 PA.C.S.) - PAYMENT CHOICE, ELECTRONIC NOTICE OF INSURANCE PRACTICES AND IMPOSING PENALTIES

Act text

Session of 2024

No. 2024-58

HB 1664

AN ACT

Amending Title 40 (Insurance) of the Pennsylvania Consolidated Statutes, in regulation of insurers and related persons generally, providing for payment choice and for electronic notice of insurance practices; and imposing penalties.

The General Assembly of the Commonwealth of Pennsylvania hereby enacts as follows:

Section 1. Title 40 of the Pennsylvania Consolidated Statutes is amended by adding chapters to read:

CHAPTER 49

PAYMENT CHOICE

Sec.

4901. Definitions.

4902. Payment.

4903. Regulations.

4904. Enforcement.

§ 4901. Definitions.

The following words and phrases when used in this chapter shall have the meanings given to them in this section unless the context clearly indicates otherwise:

"Commissioner." The Insurance Commissioner of the Commonwealth.

"Covered person." A policyholder, subscriber or other individual who is entitled to receive health care services under a health insurance policy.

"Credit card payment." A type of electronic funds transfer in which a health insurer or its contracted vendor issues a single-use series of numbers associated with the payment of covered health care services performed by a health care provider and chargeable at a predetermined rate for which the health care provider is responsible for processing the payment by a credit card terminal or Internet portal. The term includes virtual or online credit card payments for which no physical card is presented to the health care provider and the single-use credit card expires upon payment processing.

"Dental insurance policy." An insurance policy that pays or provides dental expense benefits for covered dental services and is delivered or issued for delivery by or through a dental insurer. The term includes coverage for dental benefits issued either on a stand-alone basis or integrated, or otherwise incorporated into the terms and coverage of a health insurance policy.

"Dental insurer." An entity that offers, issues or renews a dental insurance policy that covers dental services provided by a dentist and that is governed under any of the following:

(1) The act of May 17, 1921 (P.L.682, No.284), known as The Insurance Company Law of 1921, including section 630 and Article XXIV.

(2) The act of December 29, 1972 (P.L.1701, No.364), known as the Health Maintenance Organization Act.

(3) Chapter 61 (relating to hospital plan corporations).

(4) Chapter 63 (relating to professional health services plan corporations).

"Dentist." A person licensed by the State Board of Dentistry to provide dental services. The term does not include a dental hygienist as defined in section 2 of the act of May 1, 1933 (P.L.216, No.76), known as The Dental Law.

"Electronic funds transfer." A payment of any method of electronic funds transfer as codified in 45 CFR 162.1601 (relating to health care electronic funds transfers (EFT) and remittance advice transaction) and 162.1602 (relating to standards for health care electronic funds transfers (EFT) and remittance advice transaction).

"Health care provider." A licensed hospital or health care facility, medical equipment supplier or person who is licensed, certified or otherwise regulated to provide health care services under the laws of this Commonwealth, including a physician, podiatrist, optometrist, psychologist, physical therapist, certified nurse practitioner, registered nurse, nurse midwife, physician's assistant, chiropractor, pharmacist, dentist or an individual accredited or certified to provide behavioral health services. The term includes an individual providing emergency services under a licensed emergency medical services agency as defined in 35 Pa.C.S. § 8103 (relating to definitions).

"Health care service." A covered treatment, admission, procedure, medical supplies and equipment or other service, including behavioral health, prescribed or otherwise provided or proposed to be provided by a health care provider to a covered person for the diagnosis, prevention, treatment, cure or relief of a health condition, illness, injury or disease under the terms of a health insurance policy.

"Health insurance policy." A policy, subscriber contract, certificate or plan issued by a health insurer that provides medical or health care coverage, including a dental insurance policy. The term does not include any of the following:

(1) An accident only policy.

(2) A credit only policy.

(3) A long-term care or disability income policy.

(4) A specified disease policy.

(5) A Medicare supplement policy.

(6) A TRICARE policy, including a Civilian Health and Medical Program of the Uniformed Services (CHAMPUS) supplement policy.

(7) A fixed indemnity policy.

(8) A hospital indemnity policy.

(9) A workers' compensation policy.

(10) An automobile medical payment policy under 75 Pa.C.S. (relating to vehicles).

(11) A homeowner's insurance policy.

(12) Any other similar policies providing for limited benefits.

"Health insurer." An entity, including a dental insurer, that offers, issues or renews a health insurance policy that is offered or governed under any of the following:

(1) The Insurance Company Law of 1921, including section 630 and Article XXIV.

(2) The Health Maintenance Organization Act.

(3) Chapter 61.

(4) Chapter 63.

"Merchant servicer." Any of the following, as defined in 26 U.S.C. § 6050W(b) (relating to returns relating to payments made in settlement of payment card and third party network transactions):

(1) A payment settlement entity.

(2) A merchant acquiring entity.

(3) A third-party settlement organization.

"Participating health care provider." A health care provider that has entered into a contractual or operating relationship with a health insurer to participate in one or more designated networks of the health insurer and to provide health care services to covered persons under the terms of the health insurer's administrative policy.

§ 4902. Payment.

(a) Payment.--A health insurer or its contracted vendor may not restrict the method of payment to a participating health care provider so that the exclusive payment method is a credit card payment.

(b) Changing payment.--If initiating or changing payments to a participating health care provider using electronic funds transfer payments, including credit card payments, a health insurer or its contracted vendor shall:

(1) Advise the health care provider of all available payment methods.

(2) Notify the health care provider that fees imposed by the health insurer or its contracted vendor may apply to electronic funds transfer payments, including credit card payments, and provide instructions and contact information so that the health care provider may obtain the exact amount of the fees. Fees charged by a financial institution or merchant servicer chosen by the health care provider shall not be included for the purposes of this paragraph.

(3) Provide clear instructions to the health care provider for the process of selecting a payment method.

(4) Not charge a fee solely to transmit the payment to the health care provider, unless the health care provider has consented to the fee.

(c) Waiver prohibited.--The provisions of this section may not be waived by contract, and any contractual clause in conflict with the provisions of this section or that purport to waive any requirements of this section are void.

§ 4903. Regulations.

The department may promulgate regulations necessary to implement this chapter.

§ 4904. Enforcement.

(a) Penalties.--Upon satisfactory evidence of the violation of this chapter by a health insurer or any other person, one or more of the following penalties may be imposed at the commissioner's discretion:

(1) A fine of not more than $5,000 for each violation of this chapter.

(2) A fine of not more than $10,000 for each willful violation of this chapter.

(b) Limitations.--

(1) Fines imposed against an individual insurer under this chapter may not exceed $500,000 in the aggregate during a single calendar year.

(2) Fines imposed against any other person under this chapter may not exceed $100,000 in the aggregate during a single calendar year.

(c) Additional remedies.--The enforcement remedies imposed under this section are in addition to any other remedies or penalties that may be imposed under any other applicable law of this Commonwealth, including:

(1) The act of July 22, 1974 (P.L.589, No.205), known as the Unfair Insurance Practices Act. Violations of this chapter shall be deemed to be an unfair method of competition and an unfair or deceptive act or practice under that act.

(2) The act of December 18, 1996 (P.L.1066, No.159), known as the Accident and Health Filing Reform Act.

(3) The act of June 25, 1997 (P.L.295, No.29), known as the Pennsylvania Health Care Insurance Portability Act.

(d) Administrative procedure.--The administrative provisions of this section shall be subject to 2 Pa.C.S. Ch. 5 Subch. A (relating to practice and procedure of Commonwealth agencies). A party against whom penalties are assessed in an administrative action may appeal to Commonwealth Court as provided in 2 Pa.C.S. Ch. 7 Subch. A (relating to judicial review of Commonwealth agency action).

CHAPTER 50

ELECTRONIC NOTICE OF INSURANCE PRACTICES

Sec.

5001. Scope of chapter.

5002. Definitions.

5003. Electronic delivery of insurance notices or documents.

5004. Changes in hardware or software requirements.

5005. Affect, validity and enforceability of insurance notices or documents.

5006. Rescission of delivery by electronic means.

5007. Prior consent for electronic delivery of insurance notices or documents.

5008. Alternative methods of delivery.

5009. Limitation on civil liability.

5010. Delivery of insurance policies and endorsements.

5011. Construction.

5012. Regulations.

5013. Violations.

§ 5001. Scope of chapter.

This chapter relates to electronic notice of insurance practices.

§ 5002. Definitions.

The following words and phrases when used in this chapter shall have the meanings given to them in this section unless the context clearly indicates otherwise:

"Covered person." An individual who is entitled to receive health care services under a health benefit plan.

"Deliver by electronic means." Any of the following:

(1) The delivery to an email address at which a covered person has consented to receive a notice or document from an insurer.

(2) A post on an electronic network or website accessible via the Internet, mobile device or application, tablet or any other electronic device, administered by an insurer, including a separate notice of the post by delivery to an email address at which a covered person has consented to receive a notice or document or by any other delivery method that has been consented by the covered person, which contains the Internet address at which the notice or document is posted. For purposes of this definition, delivery shall be effective upon the post or actual delivery of the separate notice of the post as specified under this paragraph.

"ERISA." Employee Retirement Income Security Act of 1974 (Public Law 93-406, 88 Stat. 829).

"Health benefit plan." A policy, contract, certificate or agreement entered into, offered by or issued by an insurer to provide, deliver or arrange for, pay for or reimburse any of the costs of health care services, including a vision or dental benefit plan.

"Insurer." An entity licensed by the department with authority to issue a health benefit plan that is governed under any of the following:

(1) The act of May 17, 1921 (P.L.682, No.284), known as The Insurance Company Law of 1921, including section 630 and Article XXIV.

(2) The act of December 29, 1972 (P.L.1701, No.364), known as the Health Maintenance Organization Act.

(3) Chapter 61 (relating to hospital plan corporations).

(4) Chapter 63 (relating to professional health services plan corporations).

"Plan sponsor." A person or entity that establishes, adopts or maintains a health benefit plan on behalf of a covered person.

§ 5003. Electronic delivery of insurance notices or documents.

(a) Transactions.--Subject to the requirements of this section, an insurer may deliver by electronic means a notice to a covered person or any document required by Federal or State law in a transaction with the insurer or deliver in a manner that serves as evidence of insurance coverage in accordance with the act of December 16, 1999 (P.L.971, No.69), known as the Electronic Transactions Act.

(b) Effect of delivery.--The delivery of a notice or document in accordance with this section shall be considered the equivalent to and having the same effect as a delivery method required by Federal or State law, including delivery by first class mail, first class mail with postage prepaid, certified mail, certificate of mail or certificate mailing.

(c) Consent from covered persons.--Notwithstanding subsection (d), an insurer may deliver by electronic means a notice or document to a covered person in accordance with this section if all of the following apply:

(1) The covered person has affirmatively consented electronically or confirmed consent electronically in a manner that reasonably demonstrates that the covered person can access information in the electronic form that will be used for a notice or document delivered by electronic means, and the covered person has not withdrawn the consent.

(2) Before the covered person gives the consent required under paragraph (1), the insurer provides the covered person with a clear and conspicuous statement informing the covered person of all of the following:

(i) The hardware and software requirements for access to and retention of a notice or document delivered by electronic means.

(ii) The types of notices and documents for which the covered person may consent to receive by delivery by electronic means.

(iii) The right of the covered person to withdraw consent to having a notice or document delivered by electronic means at any time and the conditions or consequences imposed in the event consent is withdrawn.

(iv) The procedures necessary for the covered person to withdraw consent to having a notice or document delivered by electronic means, which shall be no more burdensome than the procedures required to provide consent under paragraph (1), and the manner in which the covered person can update the covered person's email address for the purposes of this subsection.

(v) The right of a covered person to have a notice or document delivered by the insurer upon request in paper form.

(vi) The right of a covered person to request that personal health information be treated and communicated confidentially and the process by which a covered person may receive confidential communication of personal health information delivered by electronic means.

(d) Consent from plan sponsors.--A plan sponsor may, on behalf of each covered person, provide consent to the delivery by electronic means of communications related to the plan from an insurer.

(e) Duties of plan sponsors.--Before consenting on behalf of a covered person under subsection (d), a plan sponsor shall have the following duties:

(1) To the extent applicable, confirm that the covered person routinely uses electronic communications and is able to access and retain electronic communications that may be delivered by an insurer to an email address used by the covered person.

(2) Inform the covered person no less than 30 days prior that consent will be provided as authorized under subsection (d) and a notice or document related to the health benefit plan may be delivered by electronic means unless the covered person affirmatively opts out of delivery by electronic means prior to the expiration of the 30-day period.

(f) Duties of insurers for health benefit plans.--At least 30 days before providing delivery by electronic means of a notice or document related to a health benefit plan, an insurer for the plan shall have the following duties:

(1) Verify that the plan sponsor has met its duties under subsection (e).

(2) Provide a clear and conspicuous statement informing a covered person enrolled in the plan of all of the following:

(i) The types of notices and documents that may be delivered by electronic means to the covered person.

(ii) The right of the covered person to opt out of having a notice or document delivered by electronic means at any time without charge.

(iii) The procedures necessary for the covered person to opt out of having a notice or document delivered by electronic means and the manner in which the covered person can update the covered person's email address for the purposes of this subsection.

(iv) The right of the covered person to have a notice or document delivered by the insurer upon request in paper form without charge.

(v) The right of a covered person to request that personal health information be treated and communicated confidentially and the process by which a covered person may receive the confidential communication of personal health information delivered by electronic means.

(3) Provide an opportunity for a covered person enrolled in the plan to opt out of delivery by electronic means.

(4) Comply with the applicable provisions of this chapter, the Electronic Transactions Act, 45 CFR 164.530(c) (relating to administrative requirements) and other applicable provisions of Federal law regarding technical safeguards such as encryption.

§ 5004. Changes in hardware or software requirements.

After a covered person or plan sponsor provides consent in accordance with section 50 03 (relating to electronic delivery of insurance notices or documents ), if a change in the hardware or software requirements necessary to access or retain a notice or document to be delivered by electronic means creates a material risk such that the covered person will not be able to access or retain the notice or document for which the consent applies, an insurer may not deliver by electronic means a notice or document to the covered person unless the insurer complies with the requirements of section 50 03 and provides the covered person with a statement that describes all of the following:

(1) The revised hardware and software requirements for access to and retention of a document delivered by electronic means.

(2) The right of the covered person to opt out of delivery by electronic means without the imposition of a condition or consequence that was not disclosed at the time of initial consent.

§ 5005. Affect, validity and enforceability of insurance notices or documents.

(a) Content of notices or documents.--Nothing in this chapter shall be construed to affect requirements related to content of an insurance notice or document or the timing related to the notice or document required under any other provision of Federal or State law.

(b) Confirmation receipts.--If any other applicable Federal or State law requires confirmation of the receipt of a notice or document from a covered person or plan sponsor of a health benefit plan, an insurer shall only deliver by electronic means a notice or document if the method for delivery provides for an active confirmation receipt by the covered person or plan sponsor.

(c) Prior consent.--This chapter shall not apply to a notice or document delivered by electronic means by an insurer before the effective date of this subsection to a covered person who, prior to the effective date of this subsection, provided consent to the insurer to receive a notice or document delivered by electronic means from the insurer.

(d) Validity or enforceability.--The validity or enforceability of a contract or policy of an insurer executed by a covered person shall not be denied solely because of the failure of the insurer to obtain electronic consent or confirmation of consent of the covered person in accordance with this chapter if the notice or document is delivered in paper form.

§ 5006. Rescission of delivery by electronic means.

(a) Procedures.--No later than 30 days after the effective date of this subsection, an insurer shall develop procedures by which a covered person may opt out of delivery by electronic means.

(b) Legality.--The decision by a covered person to opt out of delivery by electronic means shall not affect the legality or enforceability of a notice or document delivered by electronic means to the covered person before the decision takes effect.

(c) Effect.--The decision by a covered person to opt out of delivery by electronic means shall take effect no later than 30 days after the insurer receives notice of the covered person's decision.

§ 5007. Prior consent for electronic delivery of insurance notices or documents.

If an insurer has a documented record from a covered person indicating approval by the covered person for a notice or document to be delivered by electronic means from the insurer before the effective date of this section and the insurer intends to deliver by electronic means an additional notice or document under this chapter, prior to providing the additional notice or document for delivery by electronic means, the insurer shall comply with sections 5003 (relating to electronic delivery of insurance notices or documents) and 5004 (relating to changes in hardware or software requirements) and provide the covered person with a statement that describes the following:

(1) A list of each notice or document that will be delivered by electronic means that was not previously delivered by electronic means.

(2) The covered person's right to opt out of delivery by electronic means without imposition of a condition or consequence that was not previously disclosed to the covered person.

§ 5008. Alternative methods of delivery.

(a) Alternative methods.--An insurer shall deliver a notice or document to a covered person by any other method that was authorized by Federal or State law before the effective date of this subsection other than delivery by electronic means if either of the following occurs:

(1) The insurer attempts to deliver the notice or document by electronic means and has a reasonable basis for believing that the notice or document has not been received by the covered person.

(2) The insurer becomes aware that the email address provided by the covered person to the insurer is no longer valid.

(b) Confidentiality.--Nothing in this chapter shall be construed to preclude the ability of a covered person to request confidential communication of the covered person's protected health information as permitted by the Health Insurance Portability and Accountability Act of 1996 (Public Law 104-191, 110 Stat. 1936).

(c) Construction.--Nothing in this chapter shall be construed to preclude the ability of an insurer to deliver a notice or document to a covered person by any method authorized by Federal or State law.

§ 5009. Limitation on civil liability.

An insurer or plan sponsor shall not be civilly liable under this chapter.

§ 5010. Delivery of insurance policies and endorsements.

(a) Authorization.--An insurer may mail, deliver or, if the plan sponsor obtains a separate specific consent, post on the insurer's publicly accessible Internet website an insurance policy and endorsement that does not contain any personally identifiable information.

(b) Internet website posting requirements.--If an insurer elects to post an insurance policy and endorsement on the insurer's publicly accessible Internet website, in lieu of mailing or delivering the policy and endorsement to the insured, the insurer shall have the following duties:

(1) The insurer shall ensure that the policy and endorsement are accessible to the plan sponsor and producer of record and remains accessible while the policy is in effect.

(2) After the expiration of the policy, the insurer shall do one of the following:

(i) Make the expired policy and endorsement available upon request for a period of no less than five years.

(ii) If the insurer continues to make the expired policy or endorsement available on the insurer's publicly accessible Internet website, keep the plan sponsor's user identification active for a period of not less than five years.

(c) Printable format.--If an insurer elects to post an insurance policy and endorsement on the insurer's publicly accessible Internet website in lieu of mailing or delivering the policy and endorsement to the covered person, the insurer shall post the policy and endorsement in a manner that enables the plan sponsor and producer of record to print and save the policy and endorsement using a program or application that is widely available on the Internet and free to use.

(d) Description.--The insurer shall provide the following information to the plan sponsor in or simultaneous with each declaration page provided at the time of issuance of an initial insurance policy and each renewal of the policy:

(1) A description of the exact policy and endorsement form purchased by the plan sponsor.

(2) A description of the plan sponsor's right to receive upon request and without charge an electronic or paper copy of the policy and endorsement.

(3) The publicly accessible Internet website at which the policy and endorsement are posted by the insurer.

(e) Paper copies.--Upon request by the plan sponsor, the insurer shall mail a paper copy of the plan sponsor's insurance policy and endorsement. The insurer shall mail the first paper copy of the insurance policy and endorsement to the plan sponsor without charge, but may impose a fee on each subsequent request for a paper copy.

§ 5011. Construction.

(a) Applicability.--Nothing in this chapter shall apply to self-insured health benefit plans subject to ERISA or exempted from ERISA under section 4(b) of ERISA.

(b) Content and timing of notices.--Nothing in this chapter shall be construed to affect or change the time or content of a disclosure or document required to be provided to a plan sponsor under Federal or State law.

§ 5012. Regulations.

The department may promulgate any necessary or appropriate regulations to effectuate this chapter.

§ 5013. Violations.

Failure to comply with the requirements of this chapter shall be deemed an unfair insurance practice under the act of July 22, 1974 (P.L.589, No.205), known as the Unfair Insurance Practices Act.

Section 2. This act shall apply to contracts offered, entered, issued or renewed after the effective date of this section.

Section 3. This act shall take effect in 60 days.

APPROVED--The 15th day of July, A.D. 2024.

JOSH SHAPIRO