West Virginia Insurance Commissioner Issues Orders and Bulletins related to COVID-19 Crisis
West Virginia Insurance Commissioner Jim Dodrill has been active in dealing with the COVID-19 crisis, issuing six Emergency Orders and a series of Insurance Bulletins. The Commissioner started issuing Bulletins on March 9, 2020. On March 13, 2020, the Commissioner declared an “insurance emergency” which by statute provides him with authority to change deadlines and rules and issue orders to protect insureds and protect the solvency of carriers.
We’ve summarized the Bulletins and orders below. All can be found on the Offices of the Insurance Commissioner’s website, here. According to the Commissioner, “Insurance Bulletins are issued when the Commissioner renders formal opinions, guidance or expectations on matters or issues, explains how new statutes or rules will be implemented or applied, or advises of interpretation or application of existing statutes or rules.”
The most recent Bulletin, No. 20-10, was issued on April 1 and provides guidance and resources to furloughed workers under the Consolidated Omnibus Budget Reconciliation Act (COBRA), The Affordable Care Act (ACA), Medicaid, and the West Virginia Navigator.
On March 9, 2020, Commissioner Dodrill issued the first COVID-19 related Bulletin, No. 20-01, which urged insurers to take immediate measures to anticipate an expected surge in health insurance claims, including reviewing procedures, streamlining the claims process and waiving cost sharing and network limitations for COVID-19 testing and treatment.
As of March 9, the Bulletin notes, “the West Virginia Department of Health and Human Resource’s Bureau for Public Health has reported that there are no confirmed cases of COVID-19 in West Virginia. However, as the number of national cases grow, the risk of a confirmed case and community spread in West Virginia appears more likely.” Because “this matter is of urgent importance to public health” and “to protect public health”, the Commissioner asked insurers providing coverage through health benefit plans to take immediate measures to review and continually assess internal processes and operations to ensure they are prepared to address COVID-19 issues “including by providing insureds with information and timely access to all medically necessary covered health care services.” The Bulletin further asks insurers to inform insureds of available benefits and quickly respond to inquiries and consider processes to streamline responses and benefits; to waive cost-sharing for testing and in-network provider, urgent care and emergency room visits related to COVID-19; to “review and ensure their telehealth programs with participating providers are robust and will be able to meet any increased demand…”; to verify their provider networks are adequate to handle a potential increase in the need for services and if not to provide access to out of network providers; to expedite utilization review and appeal processes for services related to COVID-19; to waive cost-sharing in the event a vaccine becomes available; to make “expedited” formulary exceptions “if the insured is suffering from a health condition that may seriously jeopardize the insured’s health, life, or ability to regain maximum function or if the insured is undergoing a current course of treatment using a non-formulary prescription drug…”; and to provide information about steps taken in response to the Bulletin.
Bulletin 20-02 issued on March 12 addresses a concern that products given to insureds to assist in reducing risk are not considered illegal rebates. The Bulletin clarifies that “value added” products like “connected technology devices or wearables, telematics, mobile apps, smart technology devices such as smart fire detectors, discounted wellness programs or gym memberships” are not considered “rebating” which is generally prohibited under West Virginia law. See, W. Va. Code § 33-11-4(8). The Bulletin explains:
[V]alue-added products, services or programs provided at no or reduced costs to policyholders are not rebates or other forms of valuable consideration or inducements not specified in the policy that are prohibited by W. Va. Code § 33-11-4(8), and they may be offered to policyholders so long as they have a nexus to or enhance the value of the insurance coverage, and are intended to do at least one of the following:
- Prevent or mitigate loss to persons or property;
- Provide loss control;
- Reduce claims costs or claim settlement costs;
- Educate about risk of loss to persons or property;
- Monitor or assess risk, identify sources of risk, or develop strategies for eliminating or reducing risks;
- Enhance the health or financial wellness of the policyholder; or
- Provide post-loss services.
On March 13, the commissioner issued the first formal Order, No. 20-EO-01, declaring an “insurance emergency” stating “the COVID-19 pandemic constitutes an insurance emergency in the State of West Virginia pursuant to W.Va. Code § 33-2-10a.” The declaration of an “insurance emergency” was significant as it allowed the Commissioner to temporarily suspend timeframes and take other administrative measures to address the emergency. For example, the Commissioner suspended the normal time frames for claims handling and settlement and ordered:
[I]nsurers and other regulated entities shall continue to adjust claims as expeditiously as possible during this insurance emergency and shall utilize all possible methods of adjusting claims remotely, such as telephone, email, facsimile, mobile applications, satellite imagery or 3D mapping, all the while striving to meet normal time frames for the adjustment and resolution of claims whenever possible. The Commissioner recognizes that some claims must be adjusted in person and that strict adherence to normal time frames may be impractical in those certain circumstances and others related to staffing and social distancing because of the COVID-19 crisis. Insurers should prioritize claims adjustment and resolution strategies during this insurance emergency to ensure that high priority claims are addressed before lower priority claims.
The order states that it remains in full force and effect until further notice.
Bulletin No. 20-03, issued March 13, anticipated the Governor signing House Bill 4003 which mandates that insurers provide coverage for Telehealth Services. The Commissioner requested “health insurers immediately review their telehealth or telemedicine services in light of the law’s anticipated, impending implementation and the COVID-19 crisis.”
Bulletin No 20-04 was issued on March 13 and later replaced with No. 20-04a on April 2, to provide express guidance from the Commissioner to Insurers about what is expected as to continuity of their operations and preparedness in relation to the COVID-19 crisis.
Bulletin 20-04a provides “guidance on what the OIC expects from insurers in regard to continuity of operations and preparedness plans to address any operational risks, and to ensure that insurers are identifying, monitoring, and managing the financial risk posed by the COVID-19 crisis. It is critical that insurers establish plans to address how they will assess and manage disruptions and other risks to their services and operations.” The Bulletin reviews the minimum requirements for the plans including preparedness as well as assessment and monitoring of financial risk that may arise from COVID-19.
Bulletin No. 20-05, also issued March 13, addresses coverage for larger patient supplies prescription drugs. Noting CDC and American Red Cross guidance that households maintain at least a 30-day supply of medications, insurers are directed:
To the extent consistent with clinical guidelines, the Commissioner (WVOIC) requires applicable insurers to cover an additional one-time early refill of any necessary prescriptions to ensure individuals have access to their necessary medications should they need to limit close contact with others. For maintenance medications, insurers shall permit insureds to obtain a 90-day supply upon refill. Insurers shall not apply a different cost-sharing amount to an early filling/refilling of a prescription due to concerns about COVID-19.
Insurers are also directed to make formulary exceptions and to encourage but not require use of mail-order prescription benefits. The Bulletin strongly suggests insurers allow temporary use of out of network pharmacies.
To aid insurers in handling the expected influx of COVID-19 related claims, Bulletin No. 20-06, also issued March 13, provides for temporary licensure of providers without the need for producer testing and fingerprinting as third parties providing those services suspend or close operations due to the COVID-19 crisis. This is expressly allowed under state law upon determination of an insurance emergency.
Two orders particularly apply to workers’ compensation carriers.
Emergency Order, 20-EO-02 was issued on March 18 on the heels of National and State Emergency declarations and most significantly prohibits certain policy cancellations. The order provides, in part, that workers’ compensation insurers shall consider the impact on rates of any idling of workers by employer insureds, and insurers shall, if requested by the employer insured, conduct an audit in order to determine whether the insured is entitled to any adjustment in premium due to the idling, furloughing, laying off or other dismissal of workers.
Emergency Order 20-EO-03 was issued on March 23, 2020. The order suspended normal time standards for claims handling applicable to workers’ compensation insurers but directed that claims be handled as expeditiously as possible. Under the order, workers’ compensation insurers should not terminate or suspend a claimant’s temporary total disability benefits for failure to undergo examinations or needed treatment. Finally, the order directed that all workers’ compensation insurers “further evaluate their telehealth or telemedicine programs in light thereof in order to ensure that they are being utilized to the fullest extent possible.”
The importance of this Order to workers’ compensation insurance carriers and third party administrators for self-insured employers is that it suspends the normally short time periods within which claim handling decisions must be made. Many of those decisions depend on being able to gather factual information, medical records, medical exams or medical opinions quickly or run the risk of being found guilty of a “failure to timely act” with a resulting fine or other penalty imposed on a carrier or employer. This Order is the Insurance Commissioner’s recognition that in the current environment, quick access to medical information or medical exams is not likely to happen. But the order directs that claims be handled as expeditiously as possible.”
The Order also recognizes that temporary total disability benefits which are being received by a claimant, should not be terminated because of the claimant’s failure to attend a carrier/employer scheduled medical examination or treatment. Given the current “shelter-in-place” directive, this is understandable.
Emergency Order 20-EO-04 issued March 24 provides expedited use of emergency adjusters. Relying upon the March 13 declaration of an insurance emergency, this order provides for licensing valid only for the COVID-19 insurance emergency “and for so long as the Commissioner specifies, but not to exceed a period of one hundred twenty (120) days unless extended for a period of an additional ninety (90) days.” Licensed emergency insurance adjusters have the same power, authority and responsibility as other licensed insurance adjusters.
Issued on March 26, 2020, Insurance Bulletin No. 20-07 addresses a wide range of things, clarifying prior Orders and Bulletins. Following up on Emergency Order 20-02 the Bulletin clarifies that the order “is not meant to prohibit the cancellation or non-renewal of all insurance policies and does not apply to insureds or policyholders who were already delinquent or who were or are canceled/non-renewed for other valid underwriting reasons.” Nor does it excuse policy holders from paying premiums although insurers are encouraged to be flexible. The Commissioner will not view accommodations made to insureds in light of the COVID-19 crisis as violating insurance laws. But accommodations cannot be made in a discriminatory manner and the insurer can require “validation” that the insured’s adverse circumstance is in fact related to the COVID-19 epidemic.
The Bulletin also notes COVID-19 related insurance scams and reminds insurers of their statutory duty to report insurance fraud. “There are no exceptions nor reasons for those engaged in the business of insurance to refrain from reporting if fraud or criminal activity is known or suspected.” Insurers are again encouraged to use electronic filing and signature for forms. Insurers are encouraged to communicate with the Office of Insurance Commissioner by email whenever possible. The OIC announced it would not conduct on site work that is non-essential in light of Executive Orders closing businesses. The OIC is scheduling inspections after June 2020 unless circumstances don’t allow. OIC is also not holding any hearings at present: “OIC will not hold any administrative hearings that are nonessential or contrary to directives to limit gatherings or practice social distancing or isolation. At this time, it is not possible for the OIC to conduct telephonic hearings due to the need to have a court reporter present to record the hearings. However, the OIC will continue to review and explore options to determine if a feasible remote hearing solution is achievable.” For the present, insurance premium tax payment deadlines, regulatory filing, response and request for extension deadlines are not change except on a individual basis.
Emergency Order No. 20-EO-05 entered March 27 gives pharmacies broad discretion to deliver prescription, pharmacy supplies or products to patients using mail delivery or “other home delivery methods or services.” Insurers are not allowed to prohibit these deliveries: Insurers, benefit managers, health benefit plans, etc. are prohibited “from enforcing contractual terms with pharmacies that prohibit pharmacies from delivering prescription medications or other pharmacy supplies or products via the mail, common carrier or other home delivery methods or services to patients, insureds or customers.”
Similarly, the April 3 Emergency Order No. 20-EO-06 provided that “individuals engaged in the business of insurance in West Virginia may leave their residences to provide any services or perform any work necessary to operate and/or maintain the essential business or operations of insurance entities.” The order, however, expressly prohibits “door to door” or “in home” transactions unless:
(1) they are servicing or conducting another essential transaction regarding a current policy or policies, (2) they are engaging in the door-to-door/in-home activity at the request of the policyholder or other insured, (3) such policy servicing or other essential transaction cannot be accomplished electronically or otherwise remotely, and (4) the door-to-door/in-home transaction is to be done only with the use of personal protective equipment and/or appropriate social distancing.
Bulletin No. 20-08, directed to “[a]ll Insurers, Insurance Trade Associations, and Other Interested Persons,” addresses Business Interruption Coverage and COVID-19. Noting that commercial policies “have unique terms, conditions and exclusions that are not uniformly applicable to every business,” the Bulletin states “Business interruption coverage is typically triggered under a commercial insurance policy when a covered risk causes direct physical loss or damage to the insured’s or policyholder’s premises resulting in the need to shut down business operations.” Discussing these policies in the context of the COVID-19 crisis, the Commissioner states:
A business interruption insurance policy should clearly list or describe the types of events, commonly known as perils, that it covers. Perils that are not listed or described in the policy, or that are specifically excluded in the policy, are generally not covered. These excluded perils are typically risks that are too great to be underwritten at an affordable price. For example, insurance policies generally contain exclusions for loss or damage caused by war, nuclear accident and radiation. The potential loss costs from such perils are so great that providing coverage would jeopardize the financial solvency of insurers and many businesses could not afford the premium costs to cover such catastrophic events even if they were covered perils. Global pandemics like COVID-19 usually fall into this category of risks or perils that are not covered. Business interruption policies were generally not designed or priced to provide coverage against communicable diseases, such as COVID-19, and therefore usually include exclusions for that risk.
Further, even though some commercial policies provide coverage where a business is shut down by government order, “for coverage to apply, most insurance policies still require a direct physical loss from a covered peril as the underlying cause of the business shut down or closure.”
Because insurance policies can be different, the Commissioner encourages insureds to review their policies and contact their broker or agent. And, “It is imperative for an insured or policyholder to discuss insurance policy coverages directly with their insurance professionals, including agents, brokers or employees of the insurance company.”
Addressing a technical issue of claims reporting, the Commissioner directs that inquiries about coverage not be reported as negative claims activity. In other words, if you contact your agent and are told you do not have coverage for COVID-19 related losses, it is not reportable (presumably unless you presented a formal claim and it was denied).
Since the COVID-19 pandemic has been declared to be both a State and Federal Emergency, as well as an insurance emergency by the Commissioner, and further since this Bulletin specifically directs insureds and policyholders to contact their broker, agent or insurance company regarding the availability, if any, of business interruption coverage for COVID-19, the Commissioner directs that no insurance company should report negative claims activity or a claim denial when an insured or policyholder contacts the company or its agent or broker to inquire about business interruption coverage for COVID-19 under its policy.
The Bulletin closes with the assurance that the Commissioner is “is closely monitoring insurance issues related to COVID-19. Our core mission includes making sure insurance companies remain solvent and treat consumers fairly by following the provisions in their policies, as well as applicable state laws and rules.”