Senate Bill No. 650
(By Senator Redd, Minard, Caldwell, Hunter, Rowe, Mitchell,
Kessler, Edgell and Ross)
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[Introduced February 18, 2002; referred to the Committee
on Small Business; and then to the Committee on Finance.]
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A BILL to amend and reenact sections one-a and two, article
sixteen, chapter thirty-three of the code of West Virginia,
one thousand nine hundred thirty-one, as amended, all relating
to removing the impediments to small business corporations
combining to form a "bona fide association" and thereby
qualifying to provide group insurance for their employees.
Be it enacted by the Legislature of West Virginia:
That sections one-a and two, article sixteen, chapter
thirty-three of the code of West Virginia, one thousand nine
hundred thirty-one, as amended, be amended and reenacted, all to
read as follows:
ARTICLE 16. GROUP ACCIDENT AND SICKNESS INSURANCE.
§33-16-1a. Definitions.
As used in this article:
(a) "Bona fide association" means an association which has
been actively in existence for at least five years or an
affiliation of corporate entities all of which have been actively
in existence for at least five years; has been formed and
maintained in good faith for purposes other than obtaining
insurance or, if a qualified affiliation of corporate entities, has
been formed and maintained solely for the purpose of securing group
insurance for its members; does not condition membership in the
association on any health status-related factor relating to an
individual; makes accident and sickness insurance offered through
the association available to all members regardless of any health
status-related factor relating to members or individuals eligible
for coverage through a member; does not make accident and sickness
insurance coverage offered through the association available other
than in connection with a member of the association; and meets any
additional requirements as may be set forth in this chapter or by
rule.
(b) "Commissioner" means the commissioner of insurance.
(c) "Creditable coverage" means, with respect to an
individual, coverage of the individual after the thirtieth day of
June, one thousand nine hundred ninety-six, under any of the
following, other than coverage consisting solely of excepted
benefits:
(1) A group health plan;
(2) A health benefit plan;
(3) Medicare Part A or Part B, 42 U.S.C. §1395 et seq.;
Medicaid, 42 U.S.C. §1396a et seq. (other than coverage consisting
solely of benefits under Section 1928 of the Social Security Act);
Civilian Health and Medical Program of the Uniformed Services
(CHAMPUS), 10 U.S.C., Chapter 55; and a medical care program of
the Indian Health Service or of a tribal organization;
(4) A health benefits risk pool sponsored by any state of the
United States or by the District of Columbia; a health plan offered
under 5 U.S.C., chapter 89; a public health plan as defined in
regulations promulgated by the federal secretary of health and
human services; or a health benefit plan as defined in the Peace
Corps Act, 22 U.S.C. §2504(e).
(d) "Dependent" means an eligible employee's spouse or any
unmarried child or stepchild under the age of eighteen or
unmarried, dependent child or stepchild under age twenty-three if
a full-time student at an accredited school.
(e) "Eligible employee" means an employee, including an
individual who either works or resides in this state, who meets all
requirements for enrollment in a health benefit plan.
(f) "Excepted benefits" means:
(1) Any policy of liability insurance or contract supplemental
thereto; coverage only for accident or disability income insurance
or any combination thereof; automobile medical payment insurance;
credit-only insurance; coverage for on-site medical clinics;
workers' compensation insurance; or other similar insurance under which benefits for medical care are secondary or incidental to
other insurance benefits; or
(2) If offered separately, a policy providing benefits
for long-term care, nursing home care, home health care,
community-based care or any combination thereof, dental or vision
benefits, or other similar, limited benefits; or
(3) If offered as independent, noncoordinated benefits under
separate policies or certificates, specified disease or illness
coverage, hospital indemnity or other fixed indemnity insurance, or
coverage, such as medicare supplement insurance, supplemental to a
group health plan; or
(4) A policy of accident and sickness insurance covering a
period of less than one year.
(g) "Group health plan" means an employee welfare benefit
plan, including a church plan or a governmental plan, all as
defined in section three of the Employee Retirement Income Security
Act of 1974, 29 U.S.C. §1003, to the extent that the plan provides
medical care.
(h) "Health benefit plan" means benefits consisting of
medical care provided directly, through insurance or reimbursement,
or indirectly, including items and services paid for as medical
care, under any hospital or medical expense incurred policy or
certificate; hospital, medical or health service corporation
contract; health maintenance organization contract; or plan
provided by a multiple-employer trust or a multiple-employer welfare arrangement. "Health benefit plan" does not include
excepted benefits.
(i) "Health insurer" means an entity licensed by the
commissioner to transact accident and sickness in this state and
subject to this chapter. "Health insurer" does not include a group
health plan.
(j) "Health status-related factor" means an individual's
health status, medical condition (including both physical and
mental illnesses), claims experience, receipt of health care,
medical history, genetic information, evidence of insurability
(including conditions arising out of acts of domestic violence) or
disability.
(k) "Medical care" means amounts paid for, or paid for
insurance covering, the diagnosis, cure, mitigation, treatment or
prevention of disease, or amounts paid for the purpose of affecting
any structure or function of the body, including amounts paid for
transportation primarily for and essential to such care.
(l) "Mental health benefits" means benefits with respect to
mental health services, as defined under the terms of a group
health plan or a health benefit plan offered in connection with the
group health plan.
(m) "Network plan" means a health benefit plan under which the
financing and delivery of medical care are provided, in whole or in
part, through a defined set of providers under contract with the
health insurer.
(n) "Preexisting condition exclusion" means, with respect to
a health benefit plan, a limitation or exclusion of benefits
relating to a condition based on the fact that the condition was
present before the enrollment date for such coverage, whether or
not any medical advice, diagnosis, care or treatment was
recommended or received before the enrollment date.
§33-16-2. Eligible groups.
Any insurer licensed to transact accident and sickness
insurance in this state may issue group accident and sickness
policies coming within any of the following classifications:
(a) A policy issued to an employer, who shall be deemed
considered the policyholder, insuring at least ten employees of
such employer, for the benefit of persons other than the employer,
and conforming to the following requirements:
(1) If the premium is paid by the employer the group shall
comprise all employees or all of any class or classes thereof
determined by conditions pertaining to the employment; or
(2) If the premium is paid by the employer and employees
jointly, or by the employees, the group shall comprise not less
than seventy percent of all employees of the employer or not less
than seventy-five percent of all employees of any class or classes
thereof determined by conditions pertaining to the employment; or
(3) The term "employee" as used herein shall be deemed
considered
to include the officers, managers, and employees of the
employer, the partners, if the employer is a partnership, the officers, managers, and employees of subsidiary or affiliated
corporations of a corporation employer, and the individual
proprietors, partners and employees of individuals and firms, the
business of which is controlled by the insured employer through
stock ownership, contract, or otherwise. The term "employer" as
used herein may be deemed considered
to include any municipal or
governmental corporation, unit, agency or department thereof and
the proper officers, as such, of any unincorporated municipality or
department thereof, as well as private individuals, partnerships
and corporations.
(b) A policy issued to an a bona fide association which has a
constitution and bylaws, and which has been organized and is
maintained in good faith for purposes other than that of obtaining
insurance insuring at least ten members of the association for the
benefit of persons other than the association or its officers or
trustees, as such.
(c) A policy issued to a college, school or other institution
of learning or to the head or principal thereof, insuring at least
ten students, or students and employees, of such institution.
(d) A policy issued to or in the name of any volunteer fire
department, insuring all of the members of such department or all
of any class or classes thereof against any one or more of the
hazards to which they are exposed by reason of such membership but
in each case not less than ten such members.
(e) A policy issued to any person or organization to which a policy of group life insurance may be issued or delivered in this
state, to insure any class or classes of individuals that could be
insured under such group life policy.
NOTE: The purpose of this bill is to allow small businesses
to combine for the purpose of securing a group insurance plan for
its members.
Strike-throughs indicate language that would be stricken from
the present law, and underscoring indicates new language that would
be added.
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