COMMITTEE SUBSTITUTE
FOR
Senate Bill No. 143
(By Senators Tomblin, Mr. President, and Sprouse,
By Request of the Executive)
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[Originating in the Committee on Banking and Insurance;
reported January 23, 2004.]
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A BILL to repeal §5-16A-1, §5-16A-2, §5-16A-3, §5-16A-4, §5-16A-5,
§5-16A-6, §5-16A-7, §5-16A-8, §5-16A-9, §5-16A-10 and
§5-16A-11 of the code of West Virginia, 1931, as amended; and
to amend said code by adding thereto a new section, designated
§33-16D-16, relating to small employer accident and sickness
policies and small employer group health benefit plans for
uninsured groups.
Be it enacted by the Legislature of West Virginia:
That §5-16A-1, §5-16A-2, §5-16A-3,§5-16A-4,§5-16A-5, §5-16A-6,
§5-16A-7, §5-16A-8, §5-16A-9, §5-16A-10 and §5-16A-11 of the code
of West Virginia, 1931, as amended, be repealed; and that said code
be amended by adding thereto a new section, designated §33-16D-16,
to read as follows:
ARTICLE 16D. MARKETING AND RATE PRACTICES FOR SMALL EMPLOYER
ACCIDENT AND SICKNESS INSURANCE POLICIES.
§33-16D-16. Authorization of uninsured small group health benefit
plans.
(a) Upon filing with and approval by the commissioner, any
carrier licensed pursuant to this chapter which accesses a
healthcare provider network to deliver services may offer a health
benefit plan and rates associated therewith to a small employer
subject to the conditions of this section and subject to the
provisions of this article. Such health benefit plan shall be
subject to the following conditions:
(1) The health benefit plan may be offered by the carrier only
to small employers which have not had a health benefit plan
covering their employees for at least six consecutive months before
the effective date of this section. After the passage of six
months from the effective date of this section, the health benefit
plan hereunder may be offered by carriers only to small employers
which have not had a health benefit plan covering their employees
for twelve consecutive months.
(2) If a small employer covered by a health benefit plan
offered pursuant to this section no longer meets the definition of
a small employer as a result of an increase in eligible employees,
that employer shall remain covered by the health benefit plan until
the next annual renewal date.
(3) The small employer must pay at least fifty percent of its
employees' premium amount for individual employee coverage.
(4) The commissioner shall promulgate emergency rules on or
before the first day of September, two thousand four, to place additional restrictions upon the eligibility requirements for
health benefit plans authorized by this section in order to prevent
manipulation of eligibility criteria by small employers and
otherwise implement the provisions of this section.
(5) Carriers must offer the health benefit plans issued
pursuant to this section through one of their existing networks of
health care providers.
(A)The director of the public employees insurance agency
shall, on or before the first day of May, two thousand four, and
each year thereafter, by regular mail, provide a written notice to
all known in-state health care providers that:
(i)Informs the healthcare provider regarding the provisions
of this section; and
(ii)Notifies the healthcare provider that if the healthcare
provider does not give written refusal to the director of the
public employees insurance agency within thirty days from receipt
of the notice or the healthcare provider has not previously filed
a written notice of refusal to participate, the healthcare provider
must participate with and accept the products and provider
reimbursements authorized pursuant to this section.
(B) The carrier's network of health care providers, as well as
any health care provider which provides health care goods or
services to beneficiaries of any departments or divisions of the
state, as identified in article twenty-nine-d, chapter sixteen of
this code, must accept the health care provider reimbursement rates set pursuant to this section unless the health care provider gives
written refusal to the director of the public employees insurance
agency between the first day of May and the first day of June, that
the provider will not participate in this program for the next
calendar year. Notwithstanding any provision of this code to the
contrary, health care providers may not be mandated to participate
in this program except under the opt-out provisions of subdivision
five, subsection (a) of this section, and therefore such health
care provider shall annually have the ability to file with the
director of the public employees insurance agency written notice
that the healthcare provider will not participate with products
issued pursuant to this section. Once a health care provider has
filed a notice of refusal with the director, the notice shall
remain effective until rescinded by the provider and the provider
shall not be required to renew the notice each year.
(C)The public employees insurance agency is responsible for
receiving the responses, if any, from the healthcare providers that
have elected not to participate, and for providing a list to the
commissioner of those healthcare providers that have elected not to
participate.
(D)Those healthcare providers that do not file a notice of
refusal shall be deemed to have accepted participation in this
program and to accept public employees insurance agency health care
provider reimbursement rates for their services as set by this
section.
(E) Health care provider reimbursement rates used by the
carrier for a health benefit plan offered pursuant to this section
shall have no effect on provider rates for other products offered
by the carrier and most-favored-nation clauses do not apply to such
rates.
(6) With respect to the health benefit plans authorized by
this section, the carrier shall reimburse network health care
providers at the same health care provider reimbursement rates in
effect for the managed care and health maintenance organization
plans offered by the West Virginia public employees insurance
agency. Beginning in the year two thousand four, and in each year
thereafter, the health care provider reimbursement rates set under
this section shall not be lowered from the level of the rates in
effect on the first day of July of that year for the managed care
and health maintenance plans offered by the public employees
insurance agency. While it is the intent of this paragraph to
govern rates for plans offered pursuant to this section for annual
periods, this paragraph in no way prevents the public employees
insurance agency from making provider reimbursement rate
adjustments to public employees insurance agency plans during the
course of each year. If there is a dispute regarding the
determination of appropriate rates pursuant to this section, the
director of the public employees insurance agency shall, in their
sole discretion, specify the appropriate rate to be applied.
(A) The health care provider reimbursement rates as authorized by this section shall be accepted by the health care provider as
payment in full for services or products provided to a person
covered by a product authorized by this section.
(B) Except for the health care provider rates as authorized
herein, a carrier's payment methodology, including copayments and
deductibles and other conditions of coverage, remains unaffected by
this section.
(C) The provisions of this section do not require the public
employees insurance agency to give carriers access to the
purchasing networks of the public employees insurance agency. The
public employees insurance agency is authorized to enter into
agreements with carriers offering health benefit plans under this
section to permit the carrier, at its election, to participate in
drug purchasing arrangements pursuant to article sixteen-c, chapter
five of this code, including the multi-state drug purchasing
program. This paragraph provides authorization of such agreements
pursuant to section four, article sixteen-c, chapter five of this
code.
(7) Carriers may not underwrite products authorized by this
section more strictly than other small group policies governed by
this article.
(8) With respect to health benefit plans authorized by this
section, a carrier shall have a minimum anticipated loss ratio of
eighty percent to be eligible to make a rate increase request after
the first year of providing a health benefit plan under this section.
(9) Products authorized under this section shall be exempt
from the premium taxes assessed under sections fourteen and
fourteen-a, article three of this chapter.
(10)A carrier may elect to nonrenew any health benefit plan
to an eligible employer if at any time the carrier determines, by
applying the same network criteria which it applies to other small
employer health benefit plans, that it no longer has an adequate
network of health care providers accessible for that eligible small
employer. If the carrier makes a determination that an adequate
network does not exist, the carrier shall have no obligation to
obtain additional healthcare providers to establish an adequate
network.
(11)Upon thirty days advance notice to the commissioner, a
carrier may at any time elect to nonrenew all health benefit plans
issued pursuant to this section. If a carrier nonrenews all its
business issued pursuant to this section for any reason other than
the adequacy of the provider network, the carrier may not offer
this health benefit plan to any eligible small employer for a
period of at least two years after the last eligible small employer
is nonrenewed.
(12)The insurance commissioner may not approve any health
benefit plan issued pursuant to this section until it has obtained
any necessary federal governmental authorizations or waivers. The
insurance commissioner shall apply for and obtain all such necessary federal authorizations or waivers.
(b) Health benefit plans authorized by this section are not
intended to violate the prohibition set out in subsection (a),
section four of this article.
(c) If no carrier has offered a health benefit plan under this
section by the first day of July, two thousand five, except for
failure to obtain a federal authorization or waiver pursuant to
subdivision twelve, subsection (a) of this section, the director of
the public employees insurance agency and the insurance
commissioner may, if they so agree, jointly develop a proposed
program for consideration by the Legislature for the public
employees insurance agency to offer small group health plans to
uninsured small employer groups. Such proposed program shall not
be acted upon by the public employees insurance agency until such
time as the Legislature approves the program.
(d)If no carrier or the public employees insurance agency
has offered a health benefit plan pursuant to this section within
three years from the effective date of this section, the provisions
of this section shall expire and become null and void.
(e)The commissioner shall appoint a policy advisory
committee to provide advice to the commissioner regarding providing
health insurance to uninsureds and to monitor the effectiveness of
this legislation. The committee shall contain such members as the
commissioner deems appropriate, but shall have members representing
at least the following interest groups; labor, hospital providers,
physician providers, private business, local government, insurance
carriers and the uninsured.
(f) Carriers offering health benefit plans pursuant to this
section shall annually or before the first day of December of each
year report in a form acceptable to the commissioner the number of
health benefit plans written by the carrier and the number of
individuals covered under such health benefit plans.
(g) To the extent that provisions of this section differ from
those contained elsewhere in this chapter, the provisions of this
section shall control.
NOTE: The purpose of this bill is to provide health benefit
plans to small employers that do not have such plans covering their
employees.
This section is new; therefore, strike-throughs and
underscoring have been omitted.
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