Federal & State Regulations | Health plans - Tennessee

State Info

Summary of differences between federal and state regulations

Employee health plans are generally covered under the federal jurisdiction of the Employee Retirement Income Security Act (ERISA).

Federal ERISA plans generally do not have to comply with state laws. ERISA rules preempt or block state laws that relate to ERISA plans. State insurance laws, however, do apply. State laws include the following provisions:

If the plan covers prescriptions, it cannot require the use of a mail order pharmacy, nor may it require higher payments for not using a mail order pharmacy. (§56-7-117)
The plan cannot prohibit the provider from disclosing to a patient the existence of financial arrangements with the health plan which reward the provider for reducing or limiting the range and amount of medically necessary and appropriate services rendered to the patients enrolled in the health plan. (§56-7-122)
If a prepaid dental plan limits access to provider dentists, participants must offer the option of selecting alternative coverage which permits participants to obtain dental services from any licensed dentist of their choice. (§56-7-1701)
If dependents are covered, children must be covered from the moment of birth. (§56-7-2301)
The plan must indicate that coverage for dependent child terminates upon attainment of the limiting age for dependent children, and must also provide that such limiting age be not earlier than 24 years for those dependent children who are unmarried and dependent on the insured for support and maintenance. Coverage is to continue regardless of age for dependents who are incapable of self-sustaining employment by reason of mental retardation or physical handicap, and chiefly dependent upon the policyholder for support and maintenance
(§56-7-2302)
If coverage for the treatment of cancer by dose-intensive chemotherapy/autologous bone marrow transplants or stem cell transplants is provided for patients or enrollees included in the TennCare program, the plan must offer and make available such coverage. (§56-7-2504)
The plan must cover the treatment of phenylketonuria. (§56-7-2505)
The plan may provide coverage for a qualified individual for scientifically proven bone mass measurement (bone density testing) for the diagnosis and treatment of osteoporosis. (§56-7-2506)
If the plan covers hospital and surgical expenses, it must cover expenses arising from psychiatric disorders, mental or nervous conditions, drug dependence, or the medical complication of mental illness or mental retardation, unless the policy or plan of insurance specifically excludes or reduces the above benefits. (§56-7-2601)
Group plans must offer coverage for the necessary care and treatment of alcohol and other drug dependency. The coverage must not be less favorable than for physical illness generally, and must be subject to the same durational limits, dollar limits, deductibles and coinsurance factors. (§56-7-2602)
The plan must offer optional coverage for disorders of hearing or conditions or disorders of speech, voice, or language, so long as such conditions or disorders receive treatment from duly licensed audiologists or speech pathologists. (§56-7-2603)
If the plan provides maternity coverage, it must make available benefits for pediatric nursery care of newly born children. (§56-7-2604)
If the plan provides hospital, surgical, or medical expense coverage, it must cover equipment, supplies, and outpatient self-management training and education, including medical nutrition counseling, when prescribed by a physician as medically necessary for the treatment of diabetes. (§56-7-2605)
Coverage cannot be denied or canceled, or the premiums, terms, or conditions varied for participants on the basis that the participant has requested or received genetic services. (§56-7-2703)
Plans may not discriminate against a subject of abuse on the basis of that abuse status. (§56-8-303, §56-8-304)
Health Maintenance Organization plans must offer additional benefits — point of service or preferred provider. (§56-32-228)
A managed health insurance issuer shall not discriminate with respect to participation, referral, reimbursement of covered services, or indemnification as to any provider who is acting within the scope of the provider's license or certification under state law, solely on the basis of such license or certification. (§56-32-237)
Rate review under the federal Affordable Care Act

The Tennessee Department of Commerce and Insurance feels it should retain rate review authority in part because the process needs to strike a balance between ensuring company solvency and the protection of consumers from premium rates that are not reasonable for the benefits provided in the policy. If the state did not retain such authority, it would fall to the federal Department of Health and Human Services (HHS) Center for Consumer Information and Insurance Oversight (CCIIO).

The HHS has never performed the rate review function and lacks specific knowledge of the health insurance market in Tennessee since insurance regulation has historically been in the purview of the states. Tennessee law empowers the insurance commissioner to deny premium rates to be found to be unreasonable. HHS has no such authority to prevent unreasonable rates from being applied and collected from policyholders.

Tennessee Rules of the Department of Commerce and Insurance, §0780-01-20 (repealed); 0780-01-92 - 0780-01-93