SB292 HB&I, Amendment #1

Sears 3258

Delegate Westfall moves to amend the bill on page 1, after the enacting clause, by striking out the remainder of the bill and inserting in lieu thereof the following:

Article 1A. Health Care Sharing Organizations Freedom to Share Act.

§35-1A-1. Definitions.

As used in this chapter:

"Administrative fee" means an amount collected from members and used for a purpose other than reimbursing members for medical expenses, including amounts used to pay for health care sharing organization administrative expenses and the compensation of third-party vendors for services.
"Administrator" means any person who adjusts or settles claims on, residents of this state in connection with life, dental, health, prescription drugs, or disability insurance or self-insurance programs. “Administrator” includes a pharmacy benefit manager. “Administrator” does not include any of the following:
1. An insurance agent or solicitor licensed in this state whose activities are limited exclusively to the sale of insurance and who does not provide any administrative services;
2. Any person who administers or operates the workers’ compensation program of a self-insuring employer;
3. Any person who administers pension plans for the benefit of the person’s own members or employees or administers pension plans for the benefit of the members or employees of any other person;
4. Any person that administers an insured plan or a self-insured plan that provides life, dental, health, or disability benefits exclusively for the person’s own members or employees;
5. Any health insuring corporation holding a certificate of authority or an insurance company that is authorized to write life or sickness and accident insurance in this state.
"Health care sharing organization" means an organization that:
1. Is an exempt organization as defined in 26 U.S.C. 501(c)(3);
2. Is exempt from taxation under 26 U.S.C. 501(a);
3. Facilitates the sharing of medical expenses and has five hundred or more members residing in this state;
4. Enables the members of the organization to retain membership even after the member develops a medical condition;
5. Does not assume risk or promise to pay any medical expenses for or on behalf of a member or the health care sharing organization.
"Member" means an individual enrolled in a health care sharing organization for the purpose of sharing medical expenses with other enrolled individuals.
"Sharing request" means a request for reimbursement of medical expenses submitted by a member to the health care sharing organization.

§35-1A-2. Exemption of Health Care Sharing Organizations from the Insurance Code.

Notwithstanding any other provision of the Code, a health care sharing organization that acts in accordance with this chapter is not considered to be engaging in the business of insurance or acting as an administrator.

§35-1A-3. Certificates of Registration.

Except as provided in subdivision (b) of this section, a person shall not operate a health care sharing organization in this state unless the person has a current certificate of registration from the Commissioner of Insurance.
A health care sharing organization with an expired certificate of registration may continue to operate without a certificate until the later of either of the following:
1. Ninety days after the certificate's expiration;
2. The date on which a late application for certificate renewal made under §35-1A-3 of this Code is approved or denied, if the application for renewal is made prior to ninety days after the certificate's expiration.
An applicant for a health care sharing organization certificate shall apply in the form and manner prescribed by the commissioner of insurance in rule.
A health care sharing organization registration application shall include all of the following:
1. The name of the responsible director or manager of the applicant;
2. The applicant's physical, mailing, and electronic mail addresses;
3. The contact phone number for the responsible director or manager of the applicant;
4. Information demonstrating that the applicant meets the definition of a health care sharing organization;
5. 1. A copy of the applicant's most recent annual audit;
  2. Such an audit shall be made of all monies sent by the applicant’s members that are received by the applicant, received by the applicant’s members or received by any third-party vendors of applicant identified under (6) of this subsection and shall have been conducted by an independent certified public accounting firm in accordance with generally accepted accounting principles.
  3. Such an audit shall be made available to the public on request.
6. A list of any third-party vendors acting on behalf of the applicant in this state for any of the following purposes:
  1. Enrolling members;
  2. Negotiating with health care providers before or after services are rendered;
  3. The financial sharing of member medical needs.
7. A copy of any application forms and organization guidelines used by the applicant;
8. A report of the applicant's members in this state, as of the date of application. Such a report shall include all of the following:
  1. The total number of enrolled members;
  2. The distribution of members by age;
  3. The distribution of members by sex.
9. 1. A certification that the applicant does not compensate anyone, for the solicitation and enrollment of members in this state, based on the number of members solicited and enrolled or the amount of contributions received from enrolled members. As used in this section, "compensate" includes by commission.
  2. An applicant shall not be required to make such a certification with regard to either of the following:
    1. A salaried individual employed by the health care sharing organization who does not receive any form of commission, compensation, or other valuable consideration based on enrolling new members;
    2. A new member referral program providing credit for membership for existing members of a health care sharing organization who have referred new members, if the program is limited to credit for not more than twelve months of membership for an existing member annually.
The Commissioner shall issue a certificate of registration to each applicant that meets the requirements of this chapter and any associated rules.
The commissioner may deny any application that does not meet the requirements of this chapter and associated rules.
1. If the commissioner denies an application, the commissioner shall, at the applicant's request, hold a hearing on the denial.
2. The commissioner shall set a hearing for a denial requested under division (g)(1) of this section within thirty days of receiving the request.
1. The commissioner, by rule, shall set a fee for the issuance of a certificate of registration in an amount not to exceed one hundred dollars.
2. A registration fee collected under this section shall be deposited to the credit of the department of insurance operating fund.

§35-1A-4. Renewal of Certificates of Registration.

A health care sharing organization may renew a certificate of registration for an additional one-year in a form and manner prescribed by the commissioner of insurance in rule.
A renewal application shall include all of the following:
1. An update of any changes made to documents previously filed with the commissioner as part of the applicant's initial registration application or subsequent renewals;
2. A copy of the most recent annual audit required under 26 U.S.C. 5000A(d)(2)(B);
3. An organization financial report detailing all of the following for the prior registration period:
  1. The total amount of money collected from members in this state, including contributions, administrative fees, and other funds;
  2. The total number of sharing requests made by members in this state;
  3. The total amount of money paid for health care services for members in this state;
  4. The total number of sharing requests that were denied;
  5. The total amount of administrative fees collected from members in this state, including amounts paid to each third-party vendor for services provided to members in this state;
4. A report of the health care sharing organization's members in this state as of the date the report that includes all of the following:
  1. The total number of enrolled members;
  2. The distribution of members by age;
  3. The distribution of members by sex.
5. A report detailing all of the following:
  1. The total number of sharing requests made by members in this state;
  2. The number of sharing requests made by members in this state that were approved for sharing;
  3. The number of sharing requests made by members in this state that were denied for sharing;
  4. The number of complaints made by members in this state.
6. 1. A certification that the health care sharing organization does not compensate anyone to solicit or enroll members in this state based on the number of members solicited or enrolled or the amount of contributions received from enrolled members, including by commission;
  2. A health care sharing organization is not required to make such a certification with regard to either of the following:
    1. A salaried individual employed by the health care sharing organization who does not receive any form of commission, compensation, or other valuable consideration based on enrolling new members;
    2. A new member referral program providing credit for membership for existing members of a health care sharing organization who have referred new members, if the program is limited to credit for not more than twelve months of membership for the existing members annually.
  3. The commissioner shall automatically renew a certificate of registration for each health care sharing organization that meets the requirements of this chapter and associated rules.
  4. A health care sharing organization that fails to file the required information prior to the date specified by the commissioner shall pay a fee in accordance with the following:
    1. Two hundred fifty dollars for filing the required information one to thirty days after the date specified by the commissioner;
    2. Five hundred dollars for filing the required information thirty-one to sixty days after the date specified by the commissioner;
    3. One thousand dollars for filing the required information sixty-one to ninety days after the date specified by the commissioner;
  5. If a health care sharing organization fails to file the required information within ninety days after the date specified by the commissioner, the organization shall not be registered as a health care sharing organization for two years, beginning on the ninety-first day after the expiration of the date specified by the commissioner.
  6. The commissioner may revoke the registration certificate of a health care sharing organization that does not meet the requirements of this chapter and associated rules.
  7. 1. If the commissioner revokes the registration certificate of a health care sharing organization, the commissioner, at the request of the health care sharing organization, shall hold a hearing on the denial.
    2. The commissioner shall set a hearing for a denial requested under division (I)(1) of this section within thirty days of receiving the request.

§35-1A-5. Representations.

A health care sharing organization shall not operate under any name other than the name for which the organization’s certificate of registration has been issued.
Except for a health care sharing organization making its annual audit available to the public, or disclosing its accreditation, a health care sharing organization shall not, either directly or indirectly, represent itself as being either of the following:
1. Operating in a financially sound manner;
2. Having a successful history of meeting members’ medical costs unless the asserted made are verified by independently audited financial results.
In all communications with members or the public, a health care sharing organization shall not do either of the following:
1. Use known or well-established terms that may mislead or confuse a member or prospective member, including terms such as premium, copay, deductible, coverage, network, and benefit plan;
2. Make a direct or indirect representation that a health care service is free or included at no cost to the membership.
1. A health care sharing organization shall not compensate anyone for services provided to members in this state based on the number of members solicited an enrolled or the amount of contributions received from enrolled members, including by commission.
2. Division (d)(1) of this section does not apply with regard to either of the following:
  1. A salaried individual employed by the health care sharing organization who does not receive any form of commission, compensation, or other valuable consideration based on enrolling new members;
  2. A new member referral program providing credit for membership for existing members of a health care sharing organization who have referred new members only if the program is limited to credit for not more than twelve months of membership for the existing members annually.

§35-1A-6. Disclosures.

A health care sharing organization shall disclose all of the following information in writing for each calendar year from the previous five calendar years in a prominent and conspicuous manner before and at the time an individual is enrolled as a member:
1. Total member contributions;
2. Total amounts paid for sharing requests;
3. Total administrative fees paid by members;
4. The percentage of money paid by members that was paid toward the following:
  1. Sharing requests;
  2. administrative fees
5. If the organization is accredited by a third party, the latest report of the accrediting entity.
A health care sharing organization shall provide a prominent and conspicuous written quarterly and annual statement within thirty business days of the end of each reporting period to all members in this state that includes all of the following for this state:
1. the number of members participating that quarter and for that calendar year;
2. the amount of money contributed by members that quarter and for that calendar year;
3. The number of and monetary amount of all sharing requests submitted that quarter and for that calendar year;
4. The number of and monetary amount of sharing requests paid that quarter and for that calendar year;
5. The amount of member contributions remaining for future sharing requests for that quarter and for that calendar year;
6. The amount of administrative fees for services to members for that quarter and for that calendar year, including all of the following:
  1. The purpose of the administrative fee;
  2. The amount paid for each type of administrative fee;
  3. Any amount remaining that is designated for the payment of future sharing requests.
1. A health care sharing organization shall conduct an annual audit of the funds set forth in §35-1A-3(d)(5)(B).
2. The audit shall be performed by an independent certified public accounting firm in accordance with generally accepted accounting principles.
3. The audit shall be made available to the public on request.

§35-1A-7. Written Notice.

1. A health care sharing organization shall provide a written notice on or accompanying all applications, and guideline materials.
2. The notice shall be in at least a font size of ten points, in a prominent and conspicuous place, and read substantially as follows: "Notice: Payment of your medical expenses is not guaranteed. This health care sharing organization facilitates the sharing of medical expenses and is not an insurance company, and neither its guidelines nor its plan of operation is an insurance policy. Whether anyone chooses to assist you with your medical bills will be totally voluntary, because no other participant will be compelled by law to contribute toward your medical bills. As such, participation in the organization or a subscription to any of its documents should never be considered to be insurance. Regardless of whether you receive any payment for medical expenses or whether this organization continues to operate, you are always personally responsible for the payment of your own medical bills. Complaints concerning this health care sharing organization may be reported to the West Virginia Offices of the Insurance Commissioner."
A health care sharing organization that has not received from the Centers for Medicare and Medicaid Services a certification letter recognizing the Organization as qualifying for the exemption under 26 U.S.C. 5000A(d)(2)(B) shall provide written disclosure to a member upon enrollment that state both of the following:
1. The member may not be exempt from 26 U.S.C. 5000A(d) (2)(B).
2. The member may be subject to a tax if the congress of the United States reinstates the tax previously imposed for violating 26 U.S.C. 5000A.

§35-1A-8. Third-Party Accreditation.

A health care sharing organization may elect to receive third-party accreditation as an alternative to verification examination by the department of insurance under this chapter.
A health care sharing organization that elects to receive third-party accreditation is required to do all of the following:
1. Apply for a certificate of registration with the department in accordance with §35-1A-3 of this Code, if applicable;
2. Apply for a certificate of registration renewal with the department in accordance with §35-1A-4 of this Code, if applicable;
3. Pay fees to the department in accordance with §35-1A-3 and §35-1A-4 of this Code, as applicable;
4. Receive accreditation from a third-party accreditor approved by the commissioner of insurance.
A health care sharing organization that elects not to receive third-party accreditation under this section may be examined not more than once a year by the commissioner of insurance for the sole purpose of verifying the accuracy of the information submitted under §35-1A-4 and §35-1A-6 of this Code and compliance with §35-1A-5 and §35-1A-7 of this Code. This verification examination shall be performed not less than 30 days after notice is given by the commissioner. The costs of this examination shall be borne by the organization.

§35-1A-9. Third-Party Accreditor Application.

An entity may apply to the commissioner of insurance in a form and manner prescribed in rule for approval as a third-party accreditor for the purpose of accrediting health sharing organizations as described in §35-1A-8 of this Code.
An applicant for approval as a third-party accreditor shall include both of the following:
1. The applicant's standards and procedures for evaluating health care sharing organizations;
2. A list of all health care sharing organizations that the applicant has accredited under its standards and the dates of accreditation for each organization.
An applicant for a third-party accreditor must meet all of the following criteria:
1. Have a minimum of two consecutive years' experience in accrediting health care sharing organizations under its accrediting standards;
2. Be operated as a wholly independent third party from a health care sharing organization;
3. Use standards of review and accreditation that meet or exceed the standards provided by §35-1A-6 of this Code.
All of the following are not eligible to be third-party accreditors:
1. Any entity owned by or affiliated with, wholly or partly, directly or indirectly, either of the following:
  1. A person who is or has been employed by or under contract with a health care sharing organization;
  2. A person who is related by blood, marriage, or adoption to a person described in division (d)(1)(A) of this section.
2. Any entity that is operated, wholly or partly, directly or indirectly, by a person involved in the representation or advocacy of health care sharing organizations or a relative of the person.
The commissioner shall approve in writing an application to be a third-party accreditor that satisfies the requirements of this chapter and any associated rules.
A third-party accreditor's approval is valid for two years.

§35-1A-10. Renewal of Third-Party Accreditation.

A third-party accreditor may apply to the commissioner of insurance for renewal of the approval in a form and manner prescribed by the commissioner in rule.
The commissioner shall renew a third-party accreditor approval if the commissioner determines that the accreditor is in compliance with this chapter and any associated rules.
The commissioner shall review a third-party accreditor’s compliance with this chapter and any associated rules at least once every two years, but shall not review an accreditor more than once a year.

§35-1A-11. Third-Party Accreditor Duties.

A third-party accreditor shall do all of the following:
1. Maintain a list of health care sharing organizations for which the accreditor provided an accreditation.
2. Provide the commissioner of insurance, in a form and manner prescribed in rule, an update reflecting a change to the list described in division (a)(1) of this section not later than ten days after the date of the change;
3. Accept all applications for accreditation.
For purposes of exempting a health care sharing organization from §35-1A-8 of this Code, a third-party accreditor shall not require that the organization meet a definition of a health care sharing organization that is more stringent than the definition provide in §35-1A-1 of this Code.

§35-1A-12. Suspension or Revocation of Third-Party Accreditor’s Approval or Denial of Renewal.

The commissioner of insurance may, subject to division (b) of this section, suspend or revoke a third-party accreditor's approval or deny renewal of an accreditor's approval on written notice to the accreditor that the accreditor has violated this chapter or associated rules.
1. If the commissioner suspends or revokes a thirdparty accreditor's approval, the commissioner shall, at the accreditor's request, hold a hearing on the suspension or revocation.
2. The commissioner shall set a date for a requested hearing not later than thirty days after the request is received.
1. If the commissioner suspends a third-party accreditor's approval, the suspension shall include a determination on whether or not the accreditor may continue to oversee health care sharing organizations during the period of suspension.
2. If the third-party accreditor is prohibited from overseeing health care sharing organizations during the period of suspension, the commissioner shall instruct each health care sharing organization accredited by the organization on how to maintain the organization's certificate of registration during the suspension period.
A health care sharing organization operating in this state under the accreditation of a third-party accreditor whose approval has been revoked under this section shall, within ninety days of the approval being revoked, do any of the following:
1. Submit proof satisfactory to the commissioner that it is in compliance with the requirements of §35-1A-4, §35-1A-5, §35-1A-6, and §35-1A-7 of this Code;
2. Receive accreditation from a new third-party accreditor;
3. Cease operations in this state.

§35-1A-13. Violations of Third-Party Accreditor.

If a health care sharing organization or a third-party accreditor is found to be violating or have violated this chapter, other law, or associated rules, the commissioner of insurance may do any of the following:
1. 1. Suspend or revoke a certificate of registration issued to a health care sharing organization;
  2. Suspend or revoke the approval of a third-party accreditor in accordance with §35-1A-12 of this Code.
2. Issue a cease and desist order;
3. Impose an administrative penalty in accordance with §35-1A-16 of this Code;
4. Order the payment of restitution to the affected parties;
5. Any combination of divisions (a)(1) through (4) of this section.
If the commissioner believes that a health care sharing organization, third-party accreditor, or another person is violating or has violated this chapter, the attorney general, at the request of the commissioner, may bring an action in a court of competent jurisdiction to enjoin the violation, order restitution, and obtain other relief the court considers appropriate.
A remedy or action authorized by this section is in addition to any other civil, administrative, or criminal action provided by law.

§35-1A-14. Exemption for Institutions of Higher Education.

A student at an institution of higher education who is a member of a health care sharing organization is exempt from a requirement by the institution that the student maintain health benefit coverage.
As used in this section, "institution of higher education" means a state university or college, or a community college district, technical college district, university branch district, or state community college, and includes the applicable board of trustees or, in the case of a university branch district, any other managing authority.

§35-1A-15. Rule-Making Authority.

The commissioner of insurance may adopt rules as necessary to carry out the requirements of this chapter.
Notwithstanding §35-1A-03 of this Code, as enacted in this act, a health care sharing organization operating in this state immediately prior to the effective date of this section may continue operating in this state for up to ninety days without a certificate of registration.
1. If such a health care sharing organization applies for a certificate of registration during this ninety-day window, the organization may continue operating without a certificate of registration until the application is approved or denied.
2. Such an application shall be made and reviewed in accordance with §35-1A-3 of this Code.
A health care sharing organization operating in this state immediately prior to the effective date of this section that fails to apply for a certificate of registration prior to the end of the ninety-day window may not operate in this state or apply for a certificate of registration for two years after the effective date of this section.

Adopted

Rejected