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SB0185c -1- HCS CSSB 185(L&C)
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HOUSE CS FOR CS FOR SENATE BILL NO. 185(L&C)
IN THE LEGISLATURE OF THE STATE OF ALASKA
THIRTY-FOURTH LEGISLATURE - SECOND SESSION
BY THE HOUSE LABOR AND COMMERCE COMMITTEE
Offered: 4/27/26
Referred: Rules
Sponsor(s): SENATE LABOR AND COMMERCE COMMITTEE
A BILL
FOR AN ACT ENTITLED
"An Act relating to the business of insurance; relating to exceptions to prohibited 1
rebates; relating to the powers of the director of the division of insurance; relating to 2
prohibited practices in the advertisement of insurance; relating to insurance coverage 3
for prosthetic and orthotic devices; relating to medical assistance for prosthetic and 4
orthotic devices; and providing for an effective date." 5
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 6
* Section 1. AS 21.36.010 is amended to read: 7
Sec. 21.36.010. Purpose. The purpose of this chapter is to regulate an act or a 8
trade practice in the business of insurance in accordance with the intent of Congress as 9
expressed in 15 U.S.C. 1011 - 1015 (McCarran-Ferguson Act) and P.L. 106-102 10
(Gramm-Leach-Bliley Act) by defining or providing for determination of all the 11
practices in this state that constitute an unfair method of competition or an unfair or 12
deceptive act or practice and by prohibiting them. 13
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* Sec. 2. AS 21.36.110 is amended to read: 1
Sec. 21.36.110. Exceptions to discrimination and rebates. Nothing in 2
AS 21.36.090, 21.36.100, and AS 21.54.100 may be construed as including within the 3
definition of discrimination or rebates any of the following practices: 4
(1) in the case of a contract of life insurance or life annuity, paying 5
bonuses to policyholders or otherwise abating their premiums in whole or in part out 6
of surplus accumulated from nonparticipating insurance, if the bonuses or abatement 7
of premiums is fair and equitable to policyholders and for the best interests of the 8
insurer; 9
(2) in the case of a life insurance policy issued on industrial debit, 10
preauthorized check, bank draft, or similar plans, making allowance to policyholders 11
who have made premium payments directly to an office of the insurer or by 12
preauthorized debit, check, bank draft, or similar plan, in an amount that fairly 13
represents the saving in collection expense; 14
(3) readjustment of the rate of premium for a group insurance policy 15
based on the loss or expense experience thereunder, at the end of the first or a 16
subsequent policy year of insurance thereunder, which may be made retroactive only 17
for that policy year; 18
(4) issuance of life or health insurance policies or annuity contracts at 19
rates less than the usual rates of premiums for the policies or contracts, or modification 20
of premium or rate based on amount of insurance; but the issuance or modification 21
may not result in reduction in premium or rate in excess of savings in administration 22
and issuance expenses reasonably attributable to the policies or contracts; 23
(5) a reward under a wellness program established under a health care 24
plan that favors an individual if the wellness program meets the following 25
requirements: 26
(A) the wellness program is reasonably designed to promote 27
health or prevent disease; 28
(B) an individual has an opportunity to qualify for the reward at 29
least once a year; 30
(C) the reward is available for all similarly situated individuals; 31
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(D) the wellness program has alternative standards for 1
individuals who are unable to obtain the reward because of a health factor; 2
(E) alternative standards are available for an individual who is 3
unable to participate in a reward program because of a health condition; 4
(F) the insurer provides information explaining the standard for 5
achieving the reward and discloses the alternative standards; and 6
(G) the total rewards for all wellness programs under the health 7
insurance policy do not exceed 20 percent of the cost of coverage; 8
(6) the offer or provision by an insurer or insurance producer, 9
including by or through an employee, affiliate, or third-party representative, of a 10
value-added product or service at no cost or reduced cost when that product or 11
service is not specified in the policy of insurance and the product or service 12
(A) is offered in accordance with (b) of this section; 13
(B) relates to the insurance coverage; and 14
(C) is primarily designed to 15
(i) provide loss mitigation or loss control; 16
(ii) reduce claim costs or claim settlement costs; 17
(iii) provide education about liability risks or risk of 18
loss to persons or property; 19
(iv) monitor or assess risk, identify sources of risk, 20
or develop strategies for eliminating or reducing risk; 21
(v) enhance health; 22
(vi) enhance financial wellness by providing 23
education or financial planning services; 24
(vii) provide post-loss services; 25
(viii) incentivize behavioral changes to improve the 26
health or reduce the risk of death or disability of a policyholder, 27
potential policyholder, certificate holder, potential certificate 28
holder, insured, potential insured, or applicant; or 29
(ix) assist in the administration of the employee or 30
retiree benefit insurance coverage; 31
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(7) the provision of an offer, gift, item, or service provided in 1
accordance with (d) of this section. 2
* Sec. 3. AS 21.36.110 is amended by adding new subsections to read: 3
(b) Except as provided in (c) of this section, an insurer or insurance producer 4
offering a value-added product or service in accordance with (a)(6) of this section 5
shall ensure that 6
(1) the cost to the insurer or producer of offering the product or service 7
to a customer is reasonable relative to that customer's premium or insurance coverage 8
for the policy class, the aggregate cost of a value-added product or service offered 9
under this subsection does not exceed the greater of $250 for each policy term or five 10
percent of the premium for the applicable policy, and that a value-added product or 11
service is not offered solely to an individual negotiating or procuring a group or 12
association policy on behalf of others; 13
(2) if the insurer or producer is providing the product or service 14
offered, the customer is provided with information for whom to contact to assist the 15
customer with questions regarding the product or service; and 16
(3) the product or service is made available based on documented, 17
objective criteria and offered in a manner that is not unfairly discriminatory; 18
documented criteria described in this paragraph must be maintained by the insurer or 19
producer and provided to the director upon request. 20
(c) If an insurer or insurance producer does not have sufficient evidence but 21
has a good faith belief that a value-added product or service meets the criteria in 22
(a)(6)(C) of this section, the insurer or producer may provide the product or service in 23
a manner that is not unfairly discriminatory as part of a pilot or testing program for a 24
period of not more than three years. An insurer or producer offering a product or 25
service to consumers in the state as part of a pilot or testing program under this 26
subsection shall notify the director before launching the program and may proceed 27
with the program if the director does not object within 21 days after receiving the 28
notice. 29
(d) An insurer or insurance producer may 30
(1) offer or give noncash gifts, items, or services to, including 31
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provision of meals to or charitable donations made on behalf of, a customer in 1
connection with the marketing, sale, purchase, or retention of a contract of insurance if 2
(A) the offer is made in a manner that is not unfairly 3
discriminatory; 4
(B) the customer is not required to purchase, continue to 5
purchase, or renew a policy in exchange for the noncash gift, item, or service; 6
and 7
(C) the cost of the noncash gift, item, or service does not 8
exceed an amount determined by the director to be reasonable for each term of 9
a policy year; 10
(2) offer or give noncash gifts, items, or services to, including 11
provision of meals to or charitable donations made on behalf of, a commercial or 12
institutional customer in connection with the marketing, sale, purchase, or retention of 13
a contract of insurance if 14
(A) the offer is made in a manner that is not unfairly 15
discriminatory; 16
(B) the customer is not required to purchase, continue to 17
purchase, or renew a policy in exchange for the noncash gift, item, or service; 18
(C) the cost of the noncash gift, item, or service is reasonable 19
relative to the premium or proposed premium; and 20
(D) the cost of the noncash gift, item, or service is not included 21
in any amounts charged to another person or entity; 22
(3) conduct a raffle or drawing to the extent permitted by state law if 23
(A) there is no financial cost to entrants to participate; 24
(B) the raffle or drawing does not obligate participants to 25
purchase insurance; 26
(C) the prizes are not valued in excess of a reasonable amount 27
determined by the director; 28
(D) the raffle or drawing is open to the public; 29
(E) the raffle or drawing is offered in a manner that is not 30
unfairly discriminatory; and 31
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(F) a participant is not required to purchase, continue to 1
purchase, or renew a policy in exchange for participation in the raffle or 2
drawing. 3
(e) The director may adopt regulations to implement this section. 4
* Sec. 4. AS 21.36 is amended by adding a new section to read: 5
Sec. 21.36.115. Prohibited advertising practices. An insurer, insurance 6
producer, or representative of an insurer or producer may not 7
(1) offer or provide insurance as an incentive for purchasing another 8
policy; or 9
(2) use in an advertisement the words "free," "no cost," or similar 10
language that suggests that the insurance coverage is free or provided at no cost to the 11
consumer. 12
* Sec. 5. AS 21.36.120(a) is amended to read: 13
(a) A property, casualty, or surety insurer or its employee or representative [,] 14
or an insurance producer [AN AGENT, OR SOLICITOR] may not pay, allow, give, 15
or offer to pay, allow, or give, directly or indirectly, as an inducement to insurance or 16
after insurance has been effected, a rebate, discount, abatement, credit, or reduction of 17
the premium named in the policy of insurance, or a special favor or advantage in the 18
dividends or other benefits to accrue thereon, or any valuable consideration or 19
inducement, not specified in the policy, except to the extent provided for in an 20
applicable filing with the director as provided by law. 21
* Sec. 6. AS 21.42 is amended by adding a new section to read: 22
Sec. 21.42.445. Coverage for prosthetic and orthotic devices. (a) A health 23
care insurer that offers, issues for delivery, delivers, or renews in the state a health 24
care insurance plan in the group or individual market shall provide coverage for 25
prosthetic and orthotic devices at a level that is at least equal to the coverage required 26
under 42 U.S.C. 1395k - 1395m. 27
(b) The coverage for prosthetic and orthotic devices required under this 28
section must include an initial prosthetic or orthotic device that the covered person's 29
health care provider determines are the most appropriate models to meet the medical 30
needs of the covered person to complete activities of daily living or essential job-31
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related activities, shower or bathe, perform applicable physical activities, including 1
running, biking, swimming, and strength training, and maximize whole-body health 2
and limb function. The coverage must also include one additional device necessary for 3
any of the activities listed above and all device materials and components and 4
instruction to the covered person on use of the devices. 5
(c) Coverage under this section must include coverage for repair or 6
replacement of a prosthetic or orthotic device as needed. The health care insurer shall 7
provide for the replacement of the device, or the repair or replacement of a part of the 8
device, without regard to continuous use or useful lifetime restrictions, if a health care 9
provider determines that the repair or replacement of the device or a part the device is 10
necessary because a change has occurred in the physiological condition of the covered 11
person or a change has occurred in the condition of the device or in a part of the 12
device that affects its functionality. 13
(d) A health care insurer shall classify the benefits provided under this section 14
as habilitative or rehabilitative benefits to meet state or federal requirements for 15
coverage of essential health benefits. 16
(e) A health care insurer may not deny coverage for a benefit to a covered 17
person with limb loss or absence that would otherwise be covered for a nondisabled 18
covered person seeking medical or surgical intervention to restore or maintain the 19
ability to perform the same physical activity. A health care insurer shall provide 20
replacement coverage when the condition of the prosthetic or orthotic device or a part 21
of the device requires repair and the cost of repair would be more than 60 percent of 22
the cost of replacement of the device or the part of the device needing repair. A health 23
care insurer may require confirmation from a health care provider before providing 24
repair or replacement coverage under this section if the device, or the part of the 25
device needing repair or replacement, is less than three years old. 26
(f) A health care insurer shall ensure at least two distinct providers of 27
prosthetics and orthotics are included within the health care insurer's network. If 28
medically necessary covered prosthetics or orthotics are not available from an in-29
network provider, the health care insurer shall provide the covered person with a 30
referral to an out-of-network provider and shall fully reimburse the out-of-network 31
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provider at a mutually agreed on rate, less the portion that is the responsibility of the 1
covered person. The copayment of the covered person is determined on an in-network 2
basis. 3
(g) A health care insurer may not require that a person covered under the 4
health care insurer's plan be subject to financial requirements that are applicable only 5
to prosthetic and orthotic coverage. A health care provider may not impose more 6
restrictive cost-sharing requirements for prosthetic or orthotic services than the plan's 7
cost-sharing requirements for inpatient physician and surgical services. 8
(h) A health care insurer shall provide a covered person with a description of 9
the covered person's rights under this section in evidence of coverage and any benefit 10
denial letter. A denial letter must be in writing and explain in detail the reason for the 11
denial, including an explanation as to how the request or claim does not meet the 12
medical necessity standards of the insurer, if applicable. 13
* Sec. 7. AS 47.07.030(b) is amended to read: 14
(b) In addition to the mandatory services specified in (a) of this section and the 15
services provided under (d) of this section, the department may offer only the 16
following optional services: case management services for traumatic or acquired brain 17
injury; case management and nutrition services for pregnant women; personal care 18
services in a recipient's home; emergency hospital services; long-term care 19
noninstitutional services; medical supplies and equipment; advanced practice 20
registered nurse services; clinic services; rehabilitative services for children eligible 21
for services under AS 47.07.063, substance abusers, and emotionally disturbed or 22
chronically mentally ill adults; targeted case management services; inpatient 23
psychiatric facility services for individuals 65 years of age or older and individuals 24
under 21 years of age; psychologists' services; clinical social workers' services; marital 25
and family therapy services; professional counseling services; midwife services; 26
prescribed drugs; physical therapy; occupational therapy; chiropractic services; low-27
dose mammography screening, as defined in AS 21.42.375(e); hospice care; treatment 28
of speech, hearing, and language disorders; adult dental and dental hygiene services; 29
prosthetic and orthotic devices or replacements as covered in AS 21.42.445(b) and 30
(c); [AND] eyeglasses; optometrists' services; intermediate care facility services, 31
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including intermediate care facility services for persons with intellectual and 1
developmental disabilities; skilled nursing facility services for individuals under 21 2
years of age; and reasonable transportation to and from the point of medical care. 3
* Sec. 8. The uncodified law of the State of Alaska is amended by adding a new section to 4
read: 5
REPORTING. (a) Not later than October 1, 2028, a health care insurer subject to 6
AS 21.42.445, added by sec. 6 of this Act, shall submit a report to the director of the division 7
of insurance, Department of Commerce, Community, and Economic Development, on a form 8
determined by the director, that contains the total number of claims and the total amount of 9
claims paid for services required under AS 21.42.445 for the preceding two fiscal years. 10
(b) Before the first day of the First Regular Session of the Thirty-Sixth Alaska State 11
Legislature, the director of the division of insurance, Department of Commerce, Community, 12
and Economic Development, shall prepare a report that contains the information reported 13
under (a) of this section aggregated by fiscal year, and shall deliver the report to the senate 14
secretary and the chief clerk of the house of representatives and notify the legislature that the 15
report is available. 16
(c) Before the first day of the First Regular Session of the Thirty-Sixth Alaska State 17
Legislature, the commissioner of health shall prepare a report aggregated by fiscal year of the 18
total number of claims and the total amount of claims paid for prosthetic and orthotic services 19
provided through medical assistance under AS 47.07.030(b), as amended by sec. 7 of this Act, 20
and shall deliver the report to the senate secretary and the chief clerk of the house of 21
representatives and notify the legislature that the report is available. 22
* Sec. 9. The uncodified law of the State of Alaska is amended by adding a new section to 23
read: 24
APPLICABILITY. AS 21.42.445, added by sec. 6 of this Act, applies to a health care 25
insurance plan or contract issued, delivered, or renewed on or after the effective date of sec. 6 26
of this Act. 27
* Sec. 10. The uncodified law of the State of Alaska is amended by adding a new section to 28
read: 29
TRANSITION: REGULATIONS. The director of the division of insurance may adopt 30
regulations necessary to implement secs. 1 - 5 of this Act. The regulations take effect under 31
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AS 44.62 (Administrative Procedure Act), but not before the effective date of the law 1
implemented by the regulation. 2
* Sec. 11. The uncodified law of the State of Alaska is amended by adding a new section to 3
read: 4
MEDICAID STATE PLAN FEDERAL APPROVAL. To the extent necessary to 5
implement this Act, the Department of Health shall amend and submit to the United States 6
Department of Health and Human Services for approval the state plan for medical assistance 7
coverage consistent with AS 47.07.030(b), as amended by sec. 7 of this Act. 8
* Sec. 12. The uncodified law of the State of Alaska is amended by adding a new section to 9
read: 10
CONDITIONAL EFFECT; NOTIFICATION. (a) Section 7 of this Act takes effect 11
only if, on or before January 1, 2029, the United States Department of Health and Human 12
Services 13
(1) approves the amendment to the state plan for medical assistance coverage 14
under AS 47.07.030(b); or 15
(2) determines that approval of the amendment to the state plan for medical 16
assistance coverage under AS 47.07.030(b) is not necessary. 17
(b) The commissioner of health shall notify the revisor of statutes in writing within 30 18
days after the United States Department of Health and Human Services approves the 19
amendment to the state plan or determines that approval is not necessary under this section. 20
* Sec. 13. Section 10 of this Act takes effect immediately under AS 01.10.070(c). 21
* Sec. 14. If sec. 7 of this Act takes effect, it takes effect on the day after the United States 22
Department of Health and Human Services approves the amendment submitted under sec. 12 23
of this Act or determines that approval of the amendment is not necessary. 24
* Sec. 15. Except as provided in secs. 13 and 14 of this Act, this Act takes effect January 1, 25
2027. 26