Kansas Insurance Department,Kathleen Sebelius, Commissioner of Insurance

TO: All Companies Authorized To Transact Accident and Health Insurance In The State Of Kansas

SUBJECT: Health Insurance, Agent Sales Practices

DATE: February 12, 1998

It has come to the attention of the Kansas Insurance Department that some health insurance companies are indirectly attempting to deny coverage and services to applicants for group health insurance which must now be covered under the provisions of the Health Insurance Portability and Accountability Act of 1996 (HIPAA) and amendments to the Kansas Insurance Code made by 1997 Senate Bill 204. These practices are designed to avoid the requirements of the guarantee issue of policies in the group market. Such activities will be considered an unfair trade practice as defined in K.S.A. 40-2209m(c)(1) and (2). The practices which have been reported to the Department include:

This list illustrates some of the ways in which health insurers may try to discourage groups with perceived high risk of claims from obtaining coverage from the carrier. The practices are contrary to the guarantee issue provisions of HIPAA and state law. When such practices are brought to the attention of the Kansas Insurance Department, the carrier will be subject to the provisions of K.S.A. 40-2407, which provides for fines, penalties and orders from the Commissioner of Insurance to cease and desist such unfair practices.

If you have any questions or comments regarding this Bulletin, please contact the Accident and Health Division of the Kansas Insurance Department, 420 SW 9th Street, Topeka, Kansas 66612, (785) 296-7850.

Any questions regarding this Bulletin may be directed to the Kansas Insurance Department, Accident and Health Division, 420 SW 9th Street, Topeka, Kansas 66612, (785)296-7850 or You may send e-mail to rhuncker@ink.org.