H. B. 306
(By Mr. Speaker, Mr. Kiss, and Delegate Trump)
[By Request of the Executive]
[Introduced November 15, 2004.]
A BILL to amend and reenact §33-48-2, §33-48-4, §33-48-6 and
§33-48-7 of the code of West Virginia, 1931, as amended; and
to amend said code by adding thereto a new section,
designated §33-48-7a, all relating to the West Virginia health
insurance plan; placing the plan within the office of the
insurance commissioner; exempting the plan from the certain
state purchasing requirements; authorizing the hiring of an
executive director and exempting such director from the
classified service; changing eligibility criteria for the
plan; limiting the eligibility of recipients of the West
Virginia children's health insurance program; prohibiting
balance billing of plan members by health care providers for
covered services provided under the plan; authorizing the
insurance commissioner to utilize department staff and
resources in administering the plan; and creating a special
revenue account known as the "West Virginia health insurance plan fund" for the purpose of receiving and expending moneys
to be used in connection with the West Virginia health
insurance plan.
Be it enacted by the Legislature of West Virginia:
That §33-48-2, §33-48-4, §33-48-6 and §33-48-7 of the code of
West Virginia, 1931, as amended, be amended and reenacted; and that
said code be amended by adding thereto a new section, designated
§33-48-7a, all to read as follows:
ARTICLE 48. MODEL HEALTH PLAN FOR UNINSURABLE INDIVIDUALS ACT.
§33-48-2. Operation of the plan.
(a) There is hereby created within the West Virginia
department of tax and revenue department a body corporate and
politic to be known as the West Virginia health insurance plan
which shall be deemed to be an instrumentality of the state and a
public corporation. The West Virginia health insurance plan shall
have perpetual existence and any change in the name or composition
of the plan shall in no way impair the obligations of any contracts
existing under this chapter article.
(b) The plan shall operate subject to the supervision and
control of the board. The board shall consist of the commissioner
or his or her designated representative, who shall serve as an ex
officio member of the board and shall be its chairperson, and six
members appointed by the governor. At least two board members
shall be individuals, or the parent, spouse or child of individuals, reasonably expected to qualify for coverage by the
plan. At least two board members shall be representatives of
insurers. At least one board member shall be a hospital
administrator. A majority of the board shall be composed of
individuals who are not representatives of insurers or health care
providers.
(c) The initial board members shall be appointed as follows:
One third of the members to serve a term of two years; one third of
the members to serve a term of four years; and one third of the
members to serve a term of six years. Subsequent board members
shall serve for a term of three years. A board member's term shall
continue until his or her successor is appointed.
(d) Vacancies in the board shall be filled by the governor.
Board members may be removed by the governor for cause.
(e) Board members shall not be compensated in their capacity
as board members but shall be reimbursed for reasonable expenses
incurred in the necessary performance of their duties.
(f) The board shall submit to the commissioner a plan of
operation for the plan and any amendments thereto necessary or
suitable to assure the fair, reasonable and equitable
administration of the plan. The plan of operation shall become
effective upon approval in writing by the commissioner consistent
with the date on which the coverage under this article must be made
available. If the board fails to submit a suitable plan of operation within one hundred eighty days after the appointment of
the board of directors, or at any time thereafter fails to submit
suitable amendments to the plan of operation, the commissioner
shall adopt and promulgate such rules as are necessary or advisable
to effectuate the provisions of this section. Such rules shall
continue in force until modified by the commissioner or superseded
by a plan of operation submitted by the board and approved by the
commissioner.
(g) The plan of operation shall:
(1) Establish procedures for operation of the plan: Provided,
That the plan shall be operated so as to qualify as an acceptable
alternative mechanism under the federal Health Insurance
Portability and Accountability Act and as an option to provide
health insurance coverage for individuals eligible for the federal
health care tax credit established by the federal Trade Adjustment
Assistance Reform Act of 2002 (Section 35 of the Internal Revenue
Code of 1986);
(2) Establish procedures for selecting an administrator in
accordance with section six of this article;
(3) Establish procedures to create a fund, under management
of the board, for administrative expenses;
(4) (3) Establish procedures for the handling, accounting and
auditing of assets, moneys and claims of the plan and the plan
administrator;
(5)(4) Develop and implement a program to publicize the
existence of the plan, the eligibility requirements and procedures
for enrollment; and to maintain public awareness of the plan;
(6)(5) Establish procedures under which applicants and
participants may have grievances reviewed by a grievance committee
appointed by the board. The grievances shall be reported to the
board after completion of the review. The board shall retain all
written complaints regarding the plan for at least three years; and
(7)(6) Provide for other matters as may be necessary and
proper for the execution of the board's powers, duties and
obligations under this article.
(h) The plan shall have the general powers and authority
granted under the laws of this state to health insurers and, in
addition thereto, the specific authority to:
(1) Enter into contracts as are necessary or proper to carry
out the provisions and purposes of this article, including the
authority, with the approval of the commissioner, to enter into
contracts with similar plans of other states for the joint
performance of common administrative functions or with persons or
other organizations for the performance of administrative
functions: Provided, That the provisions of article three, chapter
five-a of this code relating to the division of purchasing of the
department of administration do not apply to any contracts executed
by or on behalf of the plan under this article;
(2) Sue or be sued, including taking any legal actions
necessary or proper to recover or collect assessments due the plan;
(3) Take such legal action as necessary:
(A) To avoid the payment of improper claims against the plan
or the coverage provided by or through the plan;
(B) To recover any amounts erroneously or improperly paid by
the plan;
(C) To recover any amounts paid by the plan as a result of
mistake of fact or law; or
(D) To recover other amounts due the plan;
(4) Establish and modify, from time to time, as appropriate,
rates, rate schedules, rate adjustments, expense allowances,
agents' referral fees, claim reserve formulas and any other
actuarial function appropriate to the operation of the plan. Rates
and rate schedules may be adjusted for appropriate factors such as
age, sex and geographic variation in claim cost and shall take into
consideration appropriate factors in accordance with established
actuarial and underwriting practices;
(5) Issue policies of insurance in accordance with the
requirements of this article;
(6) Appoint appropriate legal, actuarial and other committees
as necessary to provide technical assistance in the operation of
the plan, policy and other contract design and any other function
within the authority of the pool;
(7) Borrow money to effect the purposes of the plan. Any
notes or other evidence of indebtedness of the plan not in default
shall be legal investments for insurers and may be carried as
admitted assets;
(8) Establish rules, conditions and procedures for reinsuring
risks of participating insurers desiring to issue plan coverages in
their own name. Provision of reinsurance shall not subject the
plan to any of the capital or surplus requirements, if any,
otherwise applicable to reinsurers;
(9) Employ and fix the compensation of employees, including
an executive director of the plan. The executive director shall
have overall management responsibility for the plan and is exempt
from the classified service and not subject to the procedures and
protections provided by articles six and six-a, chapter twenty-nine
of this code;
(10) Prepare and distribute certificate of eligibility forms
and enrollment instruction forms to insurance procedures producers
and to the general public;
(11) Provide for reinsurance of risks incurred by the plan;
(12) Issue additional types of health insurance policies to
provide optional coverages, including medicare supplemental insurance;
(13) Provide for and employ cost containment measures and
requirements, including, but not limited to, preadmission
screening, second surgical opinion, concurrent utilization review and individual case management for the purpose of making the
benefit plan more cost effective;
(14) Design, utilize, contract or otherwise arrange for the
delivery of cost-effective health care services, including
establishing or contracting with preferred provider organizations,
health maintenance organizations and other limited network provider
arrangements: Provided, That all contracts with preferred provider
organizations, health maintenance organizations, other network
providers or other health care providers shall provide that plan
participants are not personally liable for the cost of services
covered by the plan other than applicable deductibles or
copayments, including any balance claimed by the provider to be
owed as being the difference between that provider's charge or
charges and the amount payable by the plan; and
(15) Adopt bylaws, policies and procedures as may be
necessary or convenient for the implementation of this article and
the operation of the plan.
(i) The board shall make an annual report to the governor
which shall also be filed with the Legislature. The report shall
summarize the activities of the plan in the preceding calendar
year, including the net written and earned premiums, plan
enrollment, the expense of administration, and the paid and
incurred losses.
(j) Study and recommend to the Legislature in January, two thousand six, alternative funding mechanisms for the continuation
of the health plan for uninsurable individuals.
(k) Neither the board nor its employees shall be liable for
any obligations of the plan. No member or employee of the board
shall be liable, and no cause of action of any nature may arise
against them, for any act or omission related to the performance of
their powers and duties under this article, unless such act or
omission constitutes willful or wanton misconduct. The board may
provide in its bylaws or rules for indemnification of, and legal
representation for, its members and employees.
§33-48-4. Eligibility.
(a) The following persons are eligible for plan coverage:
(1) Any individual person who is and continues to be a
resident shall be eligible for plan coverage of this state if
evidence is provided; (A) Of of a notice of rejection or refusal
to issue substantially similar insurance for health reasons by one
insurer or (B) Of of a refusal by an insurer to issue insurance
except at a rate exceeding the plan rate, except that a rejection
or refusal by an insurer offering only stop loss, excess of loss or
reinsurance coverage shall not be sufficient evidence under this
subdivision;
(C) (2) That the Any individual who is legally domiciled in
this state and is eligible for the credit for health insurance
costs under Section 35 of the Internal Revenue Code of 1986; and
(2) (3) Any federally defined eligible individual who has not
experienced a significant break in coverage and who is and
continues to be a resident shall be eligible for plan coverage of
this state.
(3) A rejection or refusal by an insurer offering only stop
loss, excess of loss or reinsurance coverage with respect to an
applicant under subdivision (1) of this subsection shall not be
sufficient evidence under this subsection.
(b) The board shall promulgate a list of medical or health
conditions for which a person shall be is eligible for plan
coverage without applying for health insurance coverage pursuant to
subdivision (1), subsection (a) of this section. Persons who can
demonstrate the existence or history of any medical or health
conditions on the list promulgated by the board shall not be are
not required to prove the evidence specified in said subdivision
(1). The list shall be effective on the first day of the operation
of the plan and may be amended, from time to time, as may be
appropriate.
(c) Each resident dependent of a person who is eligible for
plan coverage shall is also be eligible for plan coverage.
(d) A person shall is not be eligible for coverage under the
plan if:
(1) The person has or obtains health insurance coverage
substantially similar to or more comprehensive than a plan policy or would be eligible to have coverage if the person elected to
obtain it, except that:
(A) A person may maintain other coverage for the period of
time the person is satisfying any preexisting condition waiting
period under a plan policy; and
(B) A person may maintain plan coverage for the period of
time the person is satisfying a preexisting condition waiting
period under another health insurance policy intended to replace
the plan policy;
(2) The person is determined to be eligible for health care
benefits under the state medicaid law or the West Virginia
children's health insurance program;
(3) The person has previously terminated plan coverage unless
twelve months have lapsed since such terminations, except that this
subdivision shall does not apply with respect to an applicant who
is a federally defined eligible individual or with respect to an
applicant who has exhausted annual benefits under the West Virginia
children's health insurance program;
(4) The plan has paid out one million dollars in benefits on
behalf of the person;
(5) The person is an inmate or resident of a public
institution, except that this subdivision shall does not apply with
respect to an applicant who is a federally defined eligible
individual; or
(6) The person's premiums are paid for or reimbursed under
any government sponsored program or by any government agency or
health care provider, except as an otherwise qualifying full-time
employee, or dependent thereof, of a government agency or health
care provider.
(e) Coverage shall cease:
(1) On the date a person is no longer a resident of this
state;
(2) On the date a person requests coverage to end;
(3) Upon the death of the covered person;
(4) On the date state law requires cancellation of the
policy; or
(5) At the option of the plan, thirty days after the plan
makes any inquiry concerning the person's eligibility or place of
residence to which the person does not reply.
(f) Except under the circumstance described in subsection (d)
of this section, a person who ceases to meet the eligibility
requirements of this section may be terminated at the end of the
policy period for which the necessary premiums have been paid.
§33-48-6. Plan administrator.
(a) The board shall select a plan administrator through a
competitive bidding process to administer the plan. The board
shall evaluate bids submitted based on criteria established by the
board which shall include:
(1) The plan administrator's proven ability to handle health
insurance coverage to individuals;
(2) The efficiency and timeliness of the plan administrator's
claim processing procedures;
(3) An estimate of total charges for administering the plan;
(4) The plan administrator's ability to apply effective cost
containment programs and procedures and to administer the plan in
a cost efficient manner; and
(5) The financial condition and stability of the plan
administrator.
(b) (1) The plan administrator shall serve for a period
specified in the contract between the plan and the plan
administrator subject to removal for cause and subject to any
terms, conditions and limitations of the contract between the plan
and the plan administrator.
(2) At least one year prior to the expiration of each period
of service by a plan administrator, the board shall invite eligible
entities, including the current plan administrator to submit bids
to serve as the plan administrator. Selection of the plan
administrator for the succeeding period shall be made at least six
months prior to the end of the current period.
(c) The plan administrator shall perform such functions
relating to the plan as may be assigned to it, including:
(1) Determination of eligibility;
(2) Payment of claims;
(3) Establishment of a premium billing procedure for
collection of premium from persons covered under the plan; and
(4) Other necessary functions to assure timely payment of
benefits to covered persons under the plan.
(d) The plan administrator shall submit regular reports to
the board regarding the operation of the plan. The frequency,
content and form of the report shall be specified in the contract
between the board and the plan administrator.
(e) Following the close of each calendar year, the plan
administrator shall determine net written and earned premiums, the
expense of administration and the paid and incurred losses for the
year and report this information to the board and the commission on
a form prescribed by the commissioner.
(f) Notwithstanding any other provision in this section to
the contrary, the board may elect to designate the public employees
insurance agency as the plan administrator. If so designated, the
public employees insurance agency shall provide the services set
forth in subsection (c) of this section and shall be subject to the
reporting requirements of subsections (d) and (e) of this section.
The plan shall, if the public employees insurance agency is
designated by the board as the plan administrator, reimburse health
care providers at the same health care reimbursement rates then in
effect for the West Virginia public employees insurance agency and health care providers are be subject to the same prohibition
against balance billing of plan participants as set forth in
section four, article twenty-nine-d, chapter sixteen of this code.
§33-48-7. Funding of the plan.
(a) Premiums.
(1) The plan shall establish premium rates for plan coverage
as provided in subdivision (2) of this subsection. Separate
schedules of premium rates based on age, sex and geographical
location may apply for individual risks. Premium rates and
schedules shall be submitted to the commissioner for approval prior
to use.
(2) The plan, with the assistance of the commissioner, shall
determine a standard risk rate by considering the premium rates
charged by other insurers offering health insurance coverage to
individuals. The standard risk rate shall be established using
reasonable actuarial techniques, and shall reflect anticipated
experience and expenses for such coverage. Initial rates for plan
coverage shall not be less than one hundred twenty-five percent of
rates established as applicable for individual standard risks.
Subject to the limits provided in this subdivision, subsequent
rates shall be established to provide fully for the expected costs
of claims including recovery of prior losses, expenses of
operation, investment income of claim reserves, and any other cost
factors subject to the limitations described herein. In no event shall plan rates exceed one hundred fifty percent of rates
applicable to individual standard risks.
(b) Sources of additional revenue.
(1) The plan may be additionally funded by an assessment on
hospitals. Notwithstanding the provisions of subsection (c),
section eight, article twenty-nine-b, chapter sixteen of this code
and not to be construed as in conflict therewith, the health care
authority is authorized to increase the assessment obligation of
hospitals The increase shall in an amount not to exceed a maximum
of twenty-five percent above the one tenth of one percent specified
in this code section The said subsection and the entire assessment,
including the increase additional assessment, shall be collected as
specified in said subsection (c), section eight, article twenty-
nine-b, chapter sixteen of this code. Upon receipt of the
additional assessment fees, the health care authority shall
transfer all proceeds generated from the new fee additional
assessment collected to a special revenue account established in
the state treasury by the commissioner and designated the "West
Virginia Health Insurance Plan Account" for the sole purpose of
providing additional funding for the plan. the special revenue
account established in section seven-a of this article.
(c) The plan is authorized to receive and expend any federal
grant.
(d) With the consent of the board, the commissioner is authorized to utilize his or her administrative staff and resources
in administering this article. The board shall reimburse the
commissioner for all costs of administrative and actuarial
services, supplies and other costs incurred by the commissioner in
implementing the provisions of this article.
§33-48-7a. Special revenue account created.
(a) There is hereby created a special revenue account in the
state treasury, designated the "West Virginia Health Insurance Plan
Fund," which shall be an interest-bearing account and may be
invested in the manner permitted by article six, chapter twelve of
this code, with the interest income a proper credit to the fund,
unless otherwise designated in law. The fund shall be administered
by the commissioner, under the supervision and control of the
board, and used to pay all proper costs incurred in implementing
the provisions of this article, all administrative costs of the
plan, all claims and all proper ongoing costs of the plan. Moneys
deposited into this account are available for expenditure as the
commissioner may direct in accordance with the provisions of this
article.
(b) The following funds shall be paid into this account:
(1) All premium payments received from individuals insured by
the plan;
(2) All other payments, gifts, or income from any source; and
(3) Transfers from the health care authority of all proceeds generated from the additional assessment collected pursuant to
subsection (b), section seven of this article at any time after the
first day of July, two thousand four.
NOTE: The purpose of this bill is to clarify the authority of
the West Virginia Health Insurance Plan Board, to clarify
eligibility and provider billing, to create the West Virginia
Health Insurance Plan Fund for moneys to be used by the plan for
its costs and to authorize the Insurance Commissioner to provide
administrative services and resources to the plan and to be
reimbursed by the plan for costs associated with those services.
Strike-throughs indicate language that would be stricken from
the present law, and underscoring indicates new language that would
be added.
§33-48-7a is new; therefore, underscoring and strike-throughs
have been omitted.