H. B. 2410

(By Delegates Doyle and Manuel)
[Introduced January 27, 1999; referred to the
Committee on Government Organization then Finance.]

A BILL to amend chapter twenty-nine of the code of West Virginia, one thousand nine hundred thirty-one, as amended, by adding thereto a new article, designated article twelve-b, relating to voluntary small employer purchasing pools; short title; definitions; authority; alliance contracts; prohibitions; and tax exemptions and deductions.

Be it enacted by the Legislature of West Virginia:
That chapter twenty-nine of the code of West Virginia, one thousand nine hundred thirty-one, as amended, be amended by adding thereto a new article, designated article twelve-b, to read as follows:
§29-12B-1. Short title.
This article shall be known and may be cited as the "Voluntary Small Employer Purchasing Pool Act."
§29-12B-2. Definitions.
The following words and phrases when used in this article have the meaning given to them unless the context clearly indicates otherwise:
(a) "Alliance program" or "alliance health care program" means a program sponsored by a small employer health care alliance that assists small employer members in obtaining health insurance for their employees under one or more health benefit plans.
(b) "Eligible employees" means employees, dependents and retirees who are eligible for coverage under the terms of the applicable alliance program.
(c) "Enrolled small employer" means a small employer that has obtained coverage for its eligible employees from an insurer under an alliance program.
(d) "Health benefit plan" means:
(1) Any hospital or medical expense policy of insurance or health care plan, including a health maintenance organization plan and a preferred provider organization plan, provided by an insurer;
(2) The term does not include accident-only, fixed indemnity, limited benefit, credit, dental, vision, medicare supplement, long-term care or disability income insurance, individual major medical insurance, workers' compensation or similar insurance, automobile medical-payment insurance or a multistate association health benefit plan.
(e) "Insurer" means an insurance company, hospital plan corporation, professional health services plan corporation, fraternal benefit society or health maintenance organization authorized to issue health benefit plans in this state.
(f) "Participants" means eligible employees who are covered by health benefit plans provided by an insurer to enrolled small employers under an alliance program.
(g) "Small employer" means a person, firm, corporation, partnership or association that is actively engaged in business and on at least fifty percent of its working days during the preceding calendar year employed a minimum of three employees.
(h) "Small employer health care alliance" means an existing or newly created organization that is either a chamber of commerce, trade association, professional organization or any other organization that has all of the following characteristics:
(1) Is a nonprofit corporation or association;
(2) Has members that include or are exclusively small employers;
(3) Includes a collective minimum of one hundred eligible employees;
(4) Sponsors or is part of a program to assist small employer members to obtain coverage for their employees under one or more health benefit plans; and
(5) Is not directly or indirectly controlled through voting membership, representation on its governing board, or otherwise, by an insurance company, person, firm or corporation that sells insurance, any provider, or by persons who are officers, trustees or directors of such enterprises, or by any combination of such enterprises or persons.
§29-12B-3. Authority.
(a) A small employer health care alliance may do any of the following:
(1) Negotiate and enter into agreements with one or more insurers to offer one or more health benefit plans to small employers for their eligible employees;
(2) Contract with another alliance to include the small employer members of one in the alliance program of the other;
(3) Provide to small employers information concerning the availability, coverage, benefits, premiums and other information regarding an alliance program;
(4) Provide or contract with others to provide enrollment, record keeping, information, premium billing, collection and other services under an alliance program;
(5) Receive reports and information from the insurer and inspect and audit the books and records of the insurer; and
(6) Provide services to an alliance program sponsored by another alliance.
(b) A small employer health care alliance may not be considered for any purpose of law an insurer, an adjuster of claims or a third-party administrator and is not liable for any health benefit plan provided through the alliance program.
(c) The promotion of an alliance program by an alliance or by an insurer is not an offer, solicitation or sale of insurance.
§29-12B-4. Alliance contracts.
(a) An agreement between a small employer health care alliance and an insurer shall contain at least the following:
(1) A provision requiring the insurer to offer to small employers served by an alliance one or more health benefit plans for their eligible employees;
(2) A brief description of each type of health benefit plan that is offered and the conditions for the modification, continuation and termination of the coverage and benefits;
(3) A statement of the eligibility requirements that a participant must meet in order to be eligible to obtain coverage under any health benefit plan;
(4) A description of any preexisting condition and waiting period rules;
(5) A statement of the premium rates or other charges that apply to each health benefit plan and an explanation of how rates or charges are determined;
(6) A provision prescribing the minimum employer contribution toward premiums or other charges required in order to permit a small employer to obtain coverage under a health benefit plan; and
(7) A provision requiring that each health benefit plan under the alliance program comply with state conversion and portability laws.
(b) An agreement between a small employer health care alliance and an insurer may contain provisions relating to, but not limited to, any of the following:
(1) The application and enrollment process for a small employer and provisions relating to historical experience, health statements and underwriting standards;
(2) The minimum number of employees required to participate in order to permit a small employer to obtain a health benefit plan, which may vary with the number of employees;
(3) A procedure for allowing an enrolled small employer to change from one plan to another, subject to qualifying by size or otherwise;
(4) Relevant experience periods, enrollment periods and contract periods;
(5) Effective dates for coverage of eligible participants;
(6) Conditions under which denial or withdrawal of coverage may occur for falsification or misrepresentation of material facts or criminal conduct toward the insurer, small employer or alliance;
(7) Premium rate structures, which may be uniform or make provision for age-specific rates, differentials based on number of participants of an enrolled small employer, products and plan options selected, and other factors, rate adjustments based on consumer price indices, utilization, or other relevant factors, notification of rate adjustments and arbitration;
(8) Any responsibilities of the alliance for billing, collection and transmittal or premiums;
(9) The agreement of the insurer to offer one or more health benefit plans to a small employer member of another small employer health care alliance that contracts with the alliance for that purpose;
(10) Indemnification from claims and liability because of the acts or omissions of others;
(11) Ownership, use, availability, maintenance and confidentiality of data and records relating to the alliance program; and
(12) Use reports to be provided to the alliance by the insurer.
(c) Neither an alliance program nor an agreement between an alliance and an insurer is itself a policy or contract of insurance, or a certificate, endorsement, rider or application forming any part of a policy, contract or certificate of insurance.
§29-12B-5. Prohibitions.
(a) No health benefit plan provided by an insurer to a small employer under an alliance program is subject to any law that does any of the following:
(1) Inhibits the insurer from selectively contracting with providers or groups of providers with respect to health care service or benefits;
(2) Imposes any restrictions on the ability of the insurer to negotiate with providers regarding the level or method of reimbursing for care or services;
(3) Requires the insurer either to include a specific provider or class of providers, or to exclude any class of providers that are generally authorized by law to provide such care;
(4) Limits the financial incentives that a health benefit plan may require a beneficiary to pay when a nonplan provider is used on a nonemergency basis;
(5) Prohibits utilization review of any or all treatments and conditions;
(6) Mandates benefits; or
(7) Requires regulatory oversight of health benefit plans by the insurance commissioner.
(b) Nothing in this article may be construed to prevent an alliance program from using the services of an insurance producer.
§29-12B-6. Taxes.
(a) The premiums received by an insurer from an enrolled small employer and eligible employees under a health benefit plan are exempt from any premium tax or excise tax in this state.
(b) The premiums or other charges paid by an enrolled small employer to an insurer for health benefit plan coverage under a qualified alliance program are fully deductible in determining taxes payable by the small employer in this state.

NOTE: The purpose of this bill is to create the Voluntary Small Employer Purchasing Pool Act.

This article is new; therefore, strike-throughs and underscoring have been omitted.