Insurers asked to waive prior authorization requirements, cease cancellations and nonrenewals due to missed or delayed payments

Insurance Commissioner Trinidad Navarro and the Delaware Department of Insurance today issued a bulletin with recommended actions for the insurance industry. Requests included asking health insurers waive all prior authorization constraints for lab testing and future treatment of COVID-19, and that insurers consider ceasing cancellations or nonrenewals of insurance policies due to nonpayment throughout the duration of the declared Delaware State of Emergency.

“The insurance industry has the opportunity to help tens of thousands of Delaware residents, businesses, and healthcare providers during this state of emergency,” said Insurance Commissioner Trinidad Navarro. “Waiving prior authorization requirements would help the entire healthcare system to run more efficiently and allow providers to focus on patient outcomes rather than paperwork.”

Prior authorization is a process that requires certain tests, medications, or other health services to be pre-approved by an insurance company before a medical provider serves an insured consumer, which can at times result in delays. Should prior-authorization be voluntarily waived by insurers, that would not mean that residents should not be in contact with their primary care provider prior to visiting a COVID-19 testing site.

The bulletin also asked insurance carriers to voluntarily freeze cancellations and nonrenewals of policies that might have otherwise occurred due to delays in payments through the duration of the state of emergency.

“Throughout Delaware’s State of Emergency, many companies have had to close or reduce their business, and employees have been laid off or fired as a result,” Commissioner Navarro explained. “After hearing from businesses and residents who were concerned about the choices they will have to make with limited finances, we ask insurers to help alleviate some of that stress and ensure that residents and business owners in this difficult situation can have the peace of mind that insurance provides throughout the duration of the emergency.”

Business interruption coverage will vary policy to policy, and some business interruption coverage may explicitly exclude viral infections. Companies are urged to review their related insurance policies and contact their insurance company with questions about coverage. Hospitality small businesses and nonprofits may be able to apply for no-interest loans from the Division of Small Business Hospitality Emergency Loan Program (HELP). Organizations can receive a $10,000 maximum loan per month for rent, utilities, and other unavoidable, non-personnel bills.

On March 18, Governor Carney’s updated State of Emergency Declaration waived certain telemedicine regulations to expand access to these services. The Governor clarified that residents do not need to see a provider in-person before receiving telemedicine services, and that if a Delaware resident is out-of-state, they can still receive telemedicine services. To increase availability of these services, out-of-state providers who are licensed to provide telemedicine in other jurisdictions will also be able to serve Delaware residents through the duration of the emergency declaration. Telehealth and telemedicine can be provided via phone, webcam, facetime, and a myriad of other easily accessible options, as the department recently reminded insurers via bulletin.

Department of Insurance March 20 Bulletin

National Association of Insurance Commissioner’s COVID-19 and Insurance Brief

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Action, legislation, and investigations into “patriot penalties”

Delaware Insurance Commissioner Trinidad Navarro responded strongly to a Consumer Federation of America report that Delaware service members may return home from deployment to increased auto insurance premiums, calling the practice completely unacceptable and issuing a formal bulletin to insurance companies about the illegality of this practice in Delaware. Commissioner Navarro plans to work with the General Assembly to expand protections from the “patriot penalty.”

“Service members and their families deserve to be treated like the heroes they are, returning home to gratitude and respect, not financial penalties,” said Commissioner Trinidad Navarro. “If a member of the military terminates their auto insurance because they are serving away from home and no longer using a personal vehicle – whether in another state, another country, or in international waters – they are making a personal financial decision that should not increase their auto insurance rates in the future.”

Last week, the Consumer Federation of America distributed a letter to Insurance Commissioners, detailing an investigative report that shows that service members who incur a lapse in coverage due to deployment are later charged higher premiums, even when the company is aware that the lapse is due to deployment. While the department is not aware of specific residents experiencing this issue, report indicated that Delawareans returning from deployment may be facing these increased costs, prompting a passionate response from Commissioner Navarro.

“It is absolutely outrageous and unacceptable to allow any insurer to charge a higher premium to a member of the military solely because they didn’t maintain insurance coverage when they were sent abroad to serve,” said consumer advocate Doug Heller, an insurance expert for Consumer Federation of America. “We thank Commissioner Navarro for being so quick to stand up for servicemembers and do whatever it takes to ensure that no company charges a Patriot Penalty in Delaware. We hope other Commissioners will follow his lead.”

Delaware banned this practice in 2008 after a resident who served in Iraq for more than a year experienced a premium increase upon return, extending the protection to spouses that accompany a service member in overseas service as well. Currently, the law is only applicable to deployments outside of the continental United States, but Commissioner Navarro wants to change that.

“Members of our armed services should be protected from the ‘patriot penalty’ regardless of the specific location of their deployment,” stated Commissioner Navarro, who also intends to remind insurers of their existing legal obligations and responsibilities to residents who serve overseas and their accompanying spouses via a formal bulletin to the insurance industry, stating that the practice is “illegal in Delaware and is punishable to the full extent allowed under the Delaware Insurance Code.”

The department encourages residents to share this information with military members and their families to increase awareness and caution when reviewing auto insurance rates and quotes. Anyone who thinks that they may have experienced a “patriot penalty” is urged to contact the department right away. Should individuals come forward with this concern, the auto insurance company where this occurred will be investigated thoroughly and appropriate action will be taken if the company is acting contrary to Delaware law.

Contact the Delaware Department of Insurance by visiting insurance.delaware.gov, emailing consumer@delaware.gov, or calling (302) 674-7300.

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Measure helps ensure Delawareans are judged on driving record, not personal factors such as credit score or age

DOVER – Delawareans shopping for automobile insurance policies would no longer have their price quotes impacted by their age, marital status, credit, income or other personal life decisions under proposed legislation filed Thursday by Rep. Trey Paradee and backed by Delaware Insurance Commissioner Trinidad Navarro.

Recent research and news articles reveal that there has been a huge surge in auto insurance premiums across the country and issues with rating standards that take into account more than just a person’s driving record. According to a report from the Consumer Federation of America, insurance expenditures in the United States have risen more than 40 percent during the past 25 years.

Without established guidelines, insurance companies can base rate quotes for auto policies on factors that are not related to driving habits, such as age or socioeconomic status.

An exposé from Consumer Reports, which analyzed more than 2 billion auto policy price quotes, found that companies can use credit history to determine quotes. Transparency is also an issue when consumers seek information about the price of their car insurance policy.

House Bill 80 establishes a set list of rating factors for determining rates and premiums related to automobile insurance policies. Those factors include: a person’s at-fault accident history and safety record, the number of miles the motorist drives annually, and years of driving experience. It also requires insurance companies to offer a good driver discount plan to all qualified drivers. Similar legislation has passed in California, Hawaii, Maryland and Maine.

“Delawareans deserve to be judged on their driving history when they are shopping for car insurance policies, and not have personal details about their lives such as age, marital status or credit score adversely affect the price of their insurance quotes,” said Rep. Paradee, D-Dover West. “Living expenses continue to rise in Delaware – from the cost of health care to even the prices at the grocery store – and we need to make sure that Delawareans are getting the most affordable, fair insurance they can.”

According to the National Conference of State Legislatures, insurance companies use credit history to assess a consumer’s level of risk before selling various policies. However, experts say that places the consumer at a disadvantage.

“I believe that the practice of using a social and economic status to set car insurance rates is unfairly discriminatory. Drivers should be rated on how they drive—not who they are,” said Insurance Commissioner Navarro. “This bill will lead to a fair and more affordable marketplace for consumers by establishing relevant factors for companies to use that directly relate to an individual’s risk and history as a driver.”

AARP Delaware, which represents Delawareans over age 50, supports the measure as well since it will establish fair, equitable rate standards in setting automobile insurance rates in Delaware. Though consideration will be given to the number of years of driving experience, the organization is glad to see that other key factors will also be taken into consideration.

“Older individuals depend heavily on their automobiles for transportation. They are keeping licenses longer and driving more often. The incidence of older driver crash deaths and fatal crash involvements have declined steadily during the decade from 1997 to 2008,” said Lucretia Young, AARP Delaware State Director. “For these reasons, AARP encourages policymakers to prohibit companies from refusing to insure people, raising premiums, or limiting coverage based on age alone or in an arbitrary or unfair manner.”

If passed, Delaware’s law would take effect Jan. 1, 2018. Sen. Margaret Rose Henry is the prime sponsor in the Senate, with Rep. Helene Keeley and Sen. Brian Pettyjohn as co-prime sponsors.

“I made a promise that, as Insurance Commissioner, I would level the playing field between the insurance companies and the consumers. The introduction of this bill is a major step forward in delivering on that commitment,” Commissioner Navarro said. “I know, however, that this is not an easy task before us. I am honored to be joined on the frontlines of this cause by great consumer champions with Senators Henry and Pettyjohn, and Representatives Paradee and Keeley as the sponsors of this bill.”

HB 80 has been assigned to House Economic Development/Banking/Insurance/Commerce Committee.

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Contact: Jen Rini

Work: (302) 744-4399

Businesses Also Saved $12.1 Million in Workers Comp Premiums 

DOVER, DE – Insurance Commissioner Karen Weldin Stewart and the Delaware Department of Insurance announced today that its Consumer Services Division recovered $2,959,783.45 for consumers during the first nine months of 2016. Delaware employers also saved $12,126,418.00 in workers compensation premiums during the same period through the Department’s Workplace Safety Program.

The Consumer Services Division received 3,482 formal insurance coverage complaints and inquiries regarding automobile, homeowners, life and health policies between January 1 and September 30, and directly recovered $2,361,693.88 from insurers for Delaware policyholders. The Division also conducted arbitration hearings on behalf of policyholders, which netted consumers $598,089.57 in awards during the same period.

“I want to thank the staff for their vigorous advocacy on behalf of consumers,” said Commissioner Stewart. “Every day they help consumers clear up problems with health insurance companies, agents and providers. And I’m glad the Workplace Safety Program continues to benefit employers and employees.”

The Workplace Safety Program incentivizes employers to establish and maintain safe workplaces. The program provides businesses with the opportunity to earn discounts of up to 19 percent on their workers’ compensation insurance premiums by meeting certain safety requirements and agreeing to undergo periodic inspections. The $12,126,418.00 savings figure, from the Delaware Compensation Ratings Bureau, is approximate because businesses may pay their workers compensation insurance premium annually, quarterly, or by some other schedule.

For help with general insurance matters, call the Department at (302) 674-7300. Call (800) 282-8611 for Consumer Services. For more information on the Workplace Safety Program call (302) 674-7377.Go to our website at www.delawareinsurance.gov, and visit our Facebook page,  www.facebook.com/DelawareInsurance. Follow us on Twitter @Delaware_DOI.

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Commissioner Stewart helps Baby Boomers and Gen Xers navigate empty nest reversal

 DOVER, DE — Nearly half of adults in their 40s and 50s have a parent age 65 or older and are either raising a young child or financially supporting an adult child.¹ These baby boomers and members of Generation X are feeling the pressure of empty nest reversal from boomerangs – adult children returning home to live – and live-in elders – seniors trading their current home for a loved one’s spare bedroom. In addition to negotiating cooking and cleaning responsibilities, Delaware Insurance Commissioner Karen Weldin Stewart encourages families to make sure everyone understands how a change in address might affect insurance needs.

“American households are experiencing a dramatic shift. Whether it’s aging parents moving in with their grown children or young adults moving back in with mom and dad — today’s households come in all shapes and sizes,” said Stewart. “As family dynamics evolve, the National Association of Insurance Commissioners and I urge consumers to understand the insurance implications of their unique living arrangements.”

Aging Relatives 

For seniors, moving in with an adult child can be uncomfortable. Before the first box is packed, parent and child need to talk about finances, including insurance.

Consider the following questions:

• Are you current on health, auto and life insurance premium payments?
• Are you covered by Medicare?
• Is long-term care insurance something we should look into?
• What are your end-of-life wishes?

This level of detail will help both parties decide what changes, if any, need to be made to existing coverage. Most importantly, seek to make your loved one feel cared about, not cared for. 

Boomerang Kids 

For the first time in more than 130 years, adults 18-34 years old are more likely to be living with their parents than in any other scenario — including living with a spouse or partner, other family or friends, or alone.² Experts say hosting an adult child can cost between $8,000 and $18,000 per year.³

Before welcoming an adult child back home, set clear expectations:

• How will health insurance be covered? Who will pay for what?
• Will we combine auto policies? How will driving records affect premiums?
• What belongings are you bringing? Will expensive items such as electronics or sporting equipment increase homeowner’s insurance premiums?

To avoid misunderstandings, the NAIC developed the Welcome Home contract. In addition to outlining basic rules of adult co-habitation, the document places under signature key insurance-related agreements between adult child and parent.

For insurance tips to help modern households of all shapes and sizes including baby boomers, same-sex couples, single parents, millennials and more, visit InsureUonline.org. Delawareans interested in state-specific insurance information can contact the Department of Insurance at 1-800-282-8611 or visit http://www.delawareinsurance.gov/.

Sources

¹ Pew Research Center

² Pew Research Center

³ The Wall Street Journal

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