BILL REQ. #: H-1752.2
| State of Washington | 60th Legislature | 2007 Regular Session |
READ FIRST TIME 02/12/07.
AN ACT Relating to reforming the health care system in Washington state; amending RCW 41.05.021, 48.43.005, 48.43.015, 48.43.025, 48.43.035, 48.41.100, and 70.47.020; adding new sections to chapter 48.43 RCW; adding a new section to chapter 70.47 RCW; adding a new chapter to Title 41 RCW; adding a new chapter to Title 49 RCW; creating new sections; repealing RCW 48.21.045, 48.21.047, 48.44.023, 48.44.024, 48.46.066, 48.46.068, 70.47A.010, 70.47A.020, 70.47A.030, 70.47A.040, 70.47A.050, 70.47A.060, 70.47A.070, 70.47A.080, 70.47A.090, and 70.47A.900; and providing effective dates.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
NEW SECTION. Sec. 101
(1) The people of Washington have expressed strong concerns about
health care costs and access to needed health services. Even if
currently insured, they are not confident that they will continue to
have health insurance coverage in the future and feel that they are
getting less, but spending more.
(2) Many employers, especially small employers, struggle with the
cost of providing employer-sponsored health insurance coverage to their
employees, while others are unable to offer employer-sponsored health
insurance due to its high cost.
(3) Six hundred thousand Washingtonians are uninsured.
Three-quarters work or have a working family member; two-thirds are low
income; and one-half are young adults. Many are low-wage workers who
are not offered, or eligible for, employer-sponsored coverage. Others
struggle with the burden of paying their share of the costs of
employer-sponsored health insurance, while still others turn down their
employer's offer of coverage due to its costs.
(4) Access to health insurance and other health care spending has
resulted in improved health for many Washingtonians. Yet, we are not
receiving as much value as we should for each health care dollar spent
in Washington state. By failing to sufficiently focus our efforts on
prevention and management of chronic diseases, such as diabetes,
asthma, and heart disease, too many Washingtonians suffer from
complications of their illnesses. By failing to make health insurance
coverage affordable for low-wage workers and self-employed people,
health problems that could be treated in a doctor's office are treated
in the emergency room or hospital. By failing to focus on the most
effective ways to maintain our health and treat disease, Washingtonians
have not made lifestyle changes proven to improve health, nor do they
receive the most effective care.
NEW SECTION. Sec. 102
(1) Health insurance coverage is more affordable for employers,
employees, self-employed people, and other individuals;
(2) The process of choosing and purchasing health insurance
coverage is well-informed, clearer, and simpler;
(3) Prevention, chronic care management, wellness, and improved
quality of care are a fundamental part of our health care system; and
(4) As a result of these changes, more people in Washington state
have access to affordable health insurance coverage and health outcomes
in Washington state are improved.
NEW SECTION. Sec. 201 The definitions in this section apply
throughout this chapter unless the context clearly requires otherwise.
(1) "Administrator" means the administrator of the health care
authority as defined in RCW 41.05.011.
(2) "Authority" means the health care authority established in
chapter 41.05 RCW.
(3) "Basic health plan" means the program administered under
chapter 70.47 RCW.
(4) "Carrier" means a carrier as defined in RCW 48.43.005.
(5) "Commissioner" means the insurance commissioner established
under RCW 48.02.010.
(6) "Connector" means the Washington state health insurance
connector established in section 203 of this act.
(7) "Connector board" and "board" means the board of the Washington
state health insurance connector established in section 204 of this
act.
(8) "Connector participant" means a person who has been determined
by the connector to be, and continues to be, an employee of a
participating small employer plan for purposes of obtaining coverage
through the connector or a former employee of a participating small
employer plan who chooses to continue receiving coverage through the
connector following separation from employment.
(9) "Eligible small group" or "eligible small employer" means a
small group or small employer as defined in RCW 48.43.005.
(10) "Health plan" or "health benefit plan" means a health plan or
health benefit plan as defined in RCW 48.43.005.
(11) "Participating small employer plan" means a group health plan,
as defined in federal law, Sec. 706 of ERISA (29 U.S.C. Sec. 1186),
that is sponsored by a small employer and for which the plan sponsor
has entered into an agreement with the connector, in accordance with
the provisions of section 207 of this act, for the connector to offer
and administer health insurance benefits for enrollees in the plan.
(12) "Preexisting condition" means a preexisting condition as
defined in RCW 48.43.005.
(13) "Premium assistance payment" means a payment made to carriers
by the connector as provided in section 209 of this act.
Sec. 202 RCW 41.05.021 and 2006 c 103 s 2 are each amended to
read as follows:
(1) The Washington state health care authority is created within
the executive branch. The authority shall have an administrator
appointed by the governor, with the consent of the senate. The
administrator shall serve at the pleasure of the governor. The
administrator may employ up to seven staff members, who shall be exempt
from chapter 41.06 RCW, and any additional staff members as are
necessary to administer this chapter. The administrator may delegate
any power or duty vested in him or her by this chapter, including
authority to make final decisions and enter final orders in hearings
conducted under chapter 34.05 RCW. The primary duties of the authority
shall be to: Administer state employees' insurance benefits and
retired or disabled school employees' insurance benefits; administer
the basic health plan pursuant to chapter 70.47 RCW; study state-purchased health care programs in order to maximize cost containment in
these programs while ensuring access to quality health care; and
implement state initiatives, joint purchasing strategies, and
techniques for efficient administration that have potential application
to all state-purchased health services. The authority's duties
include, but are not limited to, the following:
(a) To administer health care benefit programs for employees and
retired or disabled school employees as specifically authorized in RCW
41.05.065 and in accordance with the methods described in RCW
41.05.075, 41.05.140, and other provisions of this chapter;
(b) To analyze state-purchased health care programs and to explore
options for cost containment and delivery alternatives for those
programs that are consistent with the purposes of those programs,
including, but not limited to:
(i) Creation of economic incentives for the persons for whom the
state purchases health care to appropriately utilize and purchase
health care services, including the development of flexible benefit
plans to offset increases in individual financial responsibility;
(ii) Utilization of provider arrangements that encourage cost
containment, including but not limited to prepaid delivery systems,
utilization review, and prospective payment methods, and that ensure
access to quality care, including assuring reasonable access to local
providers, especially for employees residing in rural areas;
(iii) Coordination of state agency efforts to purchase drugs
effectively as provided in RCW 70.14.050;
(iv) Development of recommendations and methods for purchasing
medical equipment and supporting services on a volume discount basis;
(v) Development of data systems to obtain utilization data from
state-purchased health care programs in order to identify cost centers,
utilization patterns, provider and hospital practice patterns, and
procedure costs, utilizing the information obtained pursuant to RCW
41.05.031; and
(vi) In collaboration with other state agencies that administer
state purchased health care programs, private health care purchasers,
health care facilities, providers, and carriers:
(A) Use evidence-based medicine principles to develop common
performance measures and implement financial incentives in contracts
with insuring entities, health care facilities, and providers that:
(I) Reward improvements in health outcomes for individuals with
chronic diseases, increased utilization of appropriate preventive
health services, and reductions in medical errors; and
(II) Increase, through appropriate incentives to insuring entities,
health care facilities, and providers, the adoption and use of
information technology that contributes to improved health outcomes,
better coordination of care, and decreased medical errors;
(B) Through state health purchasing, reimbursement, or pilot
strategies, promote and increase the adoption of health information
technology systems, including electronic medical records, by hospitals
as defined in RCW 70.41.020(4), integrated delivery systems, and
providers that:
(I) Facilitate diagnosis or treatment;
(II) Reduce unnecessary duplication of medical tests;
(III) Promote efficient electronic physician order entry;
(IV) Increase access to health information for consumers and their
providers; and
(V) Improve health outcomes;
(C) Coordinate a strategy for the adoption of health information
technology systems using the final health information technology report
and recommendations developed under chapter 261, Laws of 2005((.));
(c) To analyze areas of public and private health care interaction;
(d) To provide information and technical and administrative
assistance to the board;
(e) To review and approve or deny applications from counties,
municipalities, and other political subdivisions of the state to
provide state-sponsored insurance or self-insurance programs to their
employees in accordance with the provisions of RCW 41.04.205, setting
the premium contribution for approved groups as outlined in RCW
41.05.050;
(f) To establish billing procedures and collect funds from school
districts in a way that minimizes the administrative burden on
districts;
(g) To publish and distribute to nonparticipating school districts
and educational service districts by October 1st of each year a
description of health care benefit plans available through the
authority and the estimated cost if school districts and educational
service district employees were enrolled;
(h) To administer the Washington state health insurance connector
established in sections 203 through 205 of this act;
(i) To apply for, receive, and accept grants, gifts, and other
payments, including property and service, from any governmental or
other public or private entity or person, and make arrangements as to
the use of these receipts to implement initiatives and strategies
developed under this section; and
(((i))) (j) To promulgate and adopt rules consistent with this
chapter as described in RCW 41.05.160.
(2) On and after January 1, 1996, the public employees' benefits
board may implement strategies to promote managed competition among
employee health benefit plans. Strategies may include but are not
limited to:
(a) Standardizing the benefit package;
(b) Soliciting competitive bids for the benefit package;
(c) Limiting the state's contribution to a percent of the lowest
priced qualified plan within a geographical area;
(d) Monitoring the impact of the approach under this subsection
with regards to: Efficiencies in health service delivery, cost shifts
to subscribers, access to and choice of managed care plans statewide,
and quality of health services. The health care authority shall also
advise on the value of administering a benchmark employer-managed plan
to promote competition among managed care plans.
NEW SECTION. Sec. 203 (1) The Washington state health insurance
connector is hereby established. The connector shall be administered
by the administrator and governed by the Washington state health
insurance connector board established in section 204 of this act. The
purpose of the connector is to facilitate the availability, choice, and
adoption of private health insurance plans, as provided in this
chapter.
(2) With the approval of the board, the administrator, or his or
her designee, has the following powers and duties:
(a) Plan, direct, coordinate, and execute administrative functions
in conformity with the policies and directives of the board;
(b) Employ professional and clerical staff as necessary;
(c) Report to the board on all operations under his or her control
and supervision;
(d) Prepare an annual budget and manage the administrative expenses
of the connector; and
(e) Undertake any other activities necessary to implement the
powers and duties set forth in this chapter.
NEW SECTION. Sec. 204 (1) The Washington state health insurance
connector board is hereby established. The function of the board is to
develop and approve policies necessary for operation of the Washington
state health insurance connector.
(2) The connector board shall be composed of twelve members
appointed by the governor as follows:
(a) A member in good standing of the American academy of actuaries;
(b) Two representatives of small businesses;
(c) Two employee health plan benefits specialists;
(d) Two representatives of health care consumers;
(e) A physician licensed in good standing under chapter 18.57 RCW;
(f) A health insurance broker licensed in good standing under
chapter 48.17 RCW;
(g) The assistant secretary of the department of social and health
services, health recovery services administration;
(h) The commissioner; and
(i) The administrator.
(3) The governor shall appoint the initial members of the board to
staggered terms not to exceed four years. Members appointed thereafter
shall serve two-year terms. Members of the board shall be compensated
in accordance with RCW 43.03.250 and shall be reimbursed for their
travel expenses while on official business in accordance with RCW
43.03.050 and 43.03.060. The board shall prescribe rules for the
conduct of its business. The administrator shall serve as chair of the
board. Meetings of the board shall be at the call of the chair.
(4) The board may establish technical advisory committees or seek
the advice of technical experts when necessary to execute the powers
and duties included in section 205 of this act.
NEW SECTION. Sec. 205 The connector board has the following
duties and powers:
(1) Develop and approve a benefit design for health benefit plans
that will be sold by carriers as individual health plans through the
connector. The connector shall offer at least four, but no more than
six, benefit packages. For each benefit package, the board shall
develop at least three deductible and point-of-service cost-sharing
options.
(a) One benefit package shall include services comparable to those
offered through the basic health plan under chapter 70.47 RCW, as of
January 1, 2007. One of the deductible and cost-sharing options
offered with this benefit package shall be the deductible and
cost-sharing provisions of the basic health plan as of January 1, 2007.
In developing the remaining benefit packages and deductible and
cost-sharing options, the board shall provide a range of options, from
catastrophic to comprehensive coverage, so that a broad choice of
health plans is available to small employers and their employees.
(b) In designing the benefit packages, the board shall make every
effort to include innovative components that will maximize the quality
of care provided and result in improved health outcomes. These
components include, but are not limited to:
(i) Preventive care;
(ii) Wellness incentives, such as personal health assessments with
health coaching, and smoking cessation benefits;
(iii) Limited cost-sharing for preventive services, medications to
manage chronic illness, and chronic care management visits;
(iv) Payment for chronic care services, such as increased
reimbursement for primary care visits, reimbursement for care
coordination services, and coverage of group visits, telephone
consultation, and nutrition education that enable patients to learn the
skills needed to manage their chronic illness;
(v) Provider network development and payment policies related to
quality of care, such as tiered networks, payment for performance in
areas such as use of evidence-based protocols, delivery of preventive
and chronic care management services, and quality and outcomes
reporting.
(c) The board shall establish an advisory committee that includes
small employers, employees, low-wage workers, carriers, brokers, and
other stakeholders to provide advice and input related to the
development of benefit packages and deductible and cost-sharing
options.
(d) The board may design and approve a limited health care service
plan for dental care services to be offered by limited health care
service contractors under RCW 48.44.035;
(2) Establish enrollment procedures, including:
(a) Publicizing the existence of the connector and disseminating
information on eligibility requirements and enrollment procedures for
the connector;
(b) Establishing procedures to determine each applicant's
eligibility for purchasing insurance offered by the connector,
including a standard application form for persons seeking to purchase
health plans through the connector, as well as persons seeking a
premium assistance payment. The application shall include information
necessary to determine an applicant's eligibility, previous health
insurance coverage history, and payment method;
(c) Establishing rules related to minimum participation of
employees in small groups seeking to purchase health insurance through
the connector;
(d) Preparing and distributing certificate of eligibility forms and
application forms to insurance brokers and the general public; and
(e) Establishing and administering procedures for the election of
coverage by connector participants during open enrollment periods and
outside of open enrollment periods upon the occurrence of any
qualifying event specified in the federal health insurance portability
and accountability act of 1996 or applicable state law. The procedures
shall include preparing and distributing to connector participants:
(i) Descriptions of the coverage, benefits, limitations,
copayments, and premiums for all participating plans; and
(ii) Forms and instructions for electing coverage and arranging
payment for coverage;
(3) Establish and manage a system of collecting and transmitting to
the applicable carriers all premium payments or contributions made by
or on behalf of connector participants, including developing mechanisms
to receive and process automatic payroll deductions for connector
participants enrolled in small employer plans;
(4) Establish a risk adjustment mechanism for premiums paid to
carriers;
(5) Establish and manage a system for determining eligibility for
premium assistance payments and remitting premium assistance payments
to the carriers, as provided in section 209 of this act;
(6) Establish a plan for operating a health insurance service
center to provide information on the connector and manage connector
enrollment, and for publicizing the existence of the connector and the
connector's eligibility requirements and enrollment procedures;
(7) Establish, beginning January 1, 2012, and annually thereafter,
a schedule to determine whether creditable coverage is affordable for
residents of Washington state at varying income levels. The schedule
shall be developed for purposes of implementing section 404 of this
act. In developing the schedule, the board shall examine the
percentage of household income that it is reasonable to ask Washington
state residents to dedicate to the purchase of creditable coverage,
based upon a family's income relative to varying percentages of the
federal poverty level, as determined annually by the federal department
of health and human services;
(8) Establish procedures necessary to integrate the individual
health insurance market, Washington state health insurance pool
established under chapter 48.41 RCW, the basic health plan established
under chapter 70.47 RCW, the public employees' benefits board program
established under chapter 41.05 RCW, and public school employees into
the connector beginning January 1, 2012;
(9) Establish other procedures for operations of the connector,
including but not limited to procedures to:
(a) Seek and receive any grant funding from the federal government,
departments or agencies of the state, and private foundations;
(b) Contract with professional service firms as may be necessary in
the board's judgment, and to fix their compensation;
(c) Contract with companies which provide third-party
administrative and billing services for insurance products;
(d) Adopt bylaws for the regulation of its affairs and the conduct
of its business;
(e) Sue and be sued in its own name, plead, and be impleaded;
(f) Establish lines of credit, and establish one or more cash and
investment accounts to receive payments for services rendered and
appropriations from the state, and for all other business activity
granted by this chapter except to the extent otherwise limited by any
applicable provision of the employee retirement income security act of
1974; and
(g) Enter into interdepartmental agreements with the office of the
insurance commissioner, department of social and health services, and
any other state agencies the board deems necessary to implement this
chapter; and
(10) Begin offering health benefit plans under this act on January
1, 2009, following an open enrollment period that begins on September
1, 2008.
NEW SECTION. Sec. 206
(2)(a) Except as provided in (b) of this subsection, no carrier may
offer a health plan through the connector unless the carrier has agreed
to offer all of the health plan options approved by the connector board
under section 205(1) of this act.
(b) A carrier that has contracted exclusively with the department
of social and health services to serve medicaid program clients, or
with the authority to serve basic health plan enrollees, may offer only
the health plan comparable to the basic health plan under section
205(1)(a) of this act and may offer coverage only to persons receiving
premium assistance under section 209 of this act.
NEW SECTION. Sec. 207
(2) Any small employer seeking to be the sponsor of a participating
small employer plan shall, as a condition of participation in the
connector, enter into a binding agreement with the connector that
includes the following conditions:
(a) The sponsoring small employer designates the connector to be
the plan's administrator for the employer's group health plan, and the
connector agrees to undertake the obligations required of a plan
administrator under federal law;
(b) Any individual eligible to participate in the connector by
reason of his or her eligibility for coverage under the employer's
participating small employer plan may elect coverage under any health
plan offered through the connector, and neither the employer nor the
connector shall limit such individual's choice of coverage from among
all the health plans offered;
(c) The small employer agrees that, for the term of the agreement,
the small employer will not offer to individuals eligible to
participate in the connector by reason of their eligibility for
coverage under the employer's participating small employer plan any
separate or competing health plan;
(d) The small employer reserves the right to determine the criteria
for eligibility and enrollment in the participating small employer plan
and the terms and amounts of the small employer's contributions to that
plan, so long as for the term of the agreement with the connector the
small employer agrees not to alter or amend any criteria or
contribution amounts at any time other than during an annual period
designated by the connector for participating small employer plans to
make such changes in conjunction with the connector's annual open
enrollment period;
(e) The small employer agrees to make available to the connector
any of the employer's documents, records, or information, including
copies of the employer's federal and state tax and wage reports, that
the administrator reasonably determines are necessary for the connector
to verify:
(i) That the small employer is in compliance with the terms of its
agreement with the connector governing the employer's sponsorship of a
participating small employer plan;
(ii) That the participating small employer plan is in compliance
with applicable laws relating to employee welfare benefit plans,
particularly those relating to nondiscrimination in coverage; and
(iii) The eligibility, under the terms of the small employer's
plan, of those individuals enrolled in the participating small employer
plan;
(f) The small employer agrees to also sponsor a "cafeteria plan" as
permitted under federal law, 26 U.S.C. Sec. 125, for all employees
eligible for coverage under the employer's participating employer plan.
NEW SECTION. Sec. 208
NEW SECTION. Sec. 209
(2) Beginning January 1, 2009, the administrator shall accept
applications for premium assistance from connector participants who
have family income up to two hundred percent of the federal poverty
level, as determined annually by the federal department of health and
human services, on behalf of themselves, their spouses, and their
dependent children.
(3) The connector board shall design and implement a schedule of
premium assistance payments that is based upon gross family income,
giving appropriate consideration to family size and the ages of all
family members. The benchmark plan for purposes of designing the
premium assistance payment schedule shall be the benefit design
comparable to the basic health plan established under section 205(1)(a)
of this act with the deductible and cost-sharing of the basic health
plan benefit package in effect on January 1, 2007.
For employees of participating small employer plans, the premium
assistance schedule shall be applied to the employee premium obligation
remaining after employer premium contributions, so that employees
benefit financially from their employer's contribution to the cost of
their coverage through the connector. Any surcharge included in the
premium under section 212 of this act shall be included when
determining the appropriate level of premium assistance payments.
(4) A financial sponsor may, with the prior approval of the
administrator, pay the premium or any other amount on behalf of a
connector participant, by arrangement with the participant and through
a mechanism acceptable to the administrator.
(5) The connector shall remit the premium assistance in an amount
determined under subsection (3) of this section to the carrier offering
the health plan in which the connector participant has chosen to
enroll. If, however, such connector participant has chosen to enroll
in a high deductible health plan, any difference between the amount of
premium assistance that the participant would receive and the
applicable premium rate for the high deductible health plan shall be
deposited into a health savings account for the benefit of that
participant.
NEW SECTION. Sec. 210
NEW SECTION. Sec. 211
NEW SECTION. Sec. 212
(2) Each carrier participating in the connector shall be required
to furnish such reasonable reports as the board determines necessary to
enable the executive director to carry out his or her duties under this
chapter.
NEW SECTION. Sec. 213
NEW SECTION. Sec. 214
(1) The operation and administration of the connector, including
surveys and reports of health benefit plans available to connector
participants and on the experience of the plans. The experience on the
plans shall include data on enrollees in the connector, the operation
and administration of the connector premium assistance program,
expenses, claims statistics, complaints data, how the connector met its
goals, and other information deemed pertinent by the connector; and
(2) Any significant observations regarding utilization and adoption
of the connector.
NEW SECTION. Sec. 215
(1) The impact of active and retired state employees and public
school employees participating in the connector, with respect to the
utilization of services and cost of health plans offered through the
connector;
(2) Whether any distinction should be made in connector
participation between active and retired employees, giving
consideration to the implicit subsidy that nonmedicare eligible
retirees currently benefit from by being pooled with active employees,
and to how medicare-eligible retirees would be affected;
(3) The impact of applying the insurance regulations in section 303
of this act, RCW 48.43.015, 48.43.025, 48.43.035, and section 307 of
this act on access to health services and the cost of coverage for
active and retired state employees and public school employees; and
(4) How the composition of the board should be modified to reflect
the participation of active and retired state employees and public
school employees.
NEW SECTION. Sec. 216
Sec. 301 RCW 48.43.005 and 2006 c 25 s 16 are each amended to
read as follows:
Unless otherwise specifically provided, the definitions in this
section apply throughout this chapter.
(1) "Adjusted community rate" means the rating method used to
establish the premium for health plans adjusted to reflect actuarially
demonstrated differences in utilization or cost attributable to
geographic region, age, family size, and use of wellness activities.
(2) "Basic health plan" means the plan described under chapter
70.47 RCW, as revised from time to time.
(3) "Basic health plan model plan" means a health plan as required
in RCW 70.47.060(2)(e).
(4) "Basic health plan services" means that schedule of covered
health services, including the description of how those benefits are to
be administered, that are required to be delivered to an enrollee under
the basic health plan, as revised from time to time.
(5) "Catastrophic health plan" means:
(a) In the case of a contract, agreement, or policy covering a
single enrollee, a health benefit plan requiring a calendar year
deductible of, at a minimum, one thousand five hundred dollars and an
annual out-of-pocket expense required to be paid under the plan (other
than for premiums) for covered benefits of at least three thousand
dollars; and
(b) In the case of a contract, agreement, or policy covering more
than one enrollee, a health benefit plan requiring a calendar year
deductible of, at a minimum, three thousand dollars and an annual out-of-pocket expense required to be paid under the plan (other than for
premiums) for covered benefits of at least five thousand five hundred
dollars; or
(c) Any health benefit plan that provides benefits for hospital
inpatient and outpatient services, professional and prescription drugs
provided in conjunction with such hospital inpatient and outpatient
services, and excludes or substantially limits outpatient physician
services and those services usually provided in an office setting.
(6) "Certification" means a determination by a review organization
that an admission, extension of stay, or other health care service or
procedure has been reviewed and, based on the information provided,
meets the clinical requirements for medical necessity, appropriateness,
level of care, or effectiveness under the auspices of the applicable
health benefit plan.
(7) "Concurrent review" means utilization review conducted during
a patient's hospital stay or course of treatment.
(8) "Connector" means the Washington state health insurance
connector established in sections 203 through 205 of this act.
(9) "Connector participant" means a person who has been determined
by the connector to be, and continues to be, an employee of a
participating small employer plan for purposes of obtaining coverage
through the connector or a former employee of a participating small
employer plan who chooses to continue receiving coverage through the
connector following separation from employment.
(10) "Covered person" or "enrollee" means a person covered by a
health plan including an enrollee, subscriber, policyholder,
beneficiary of a group plan, or individual covered by any other health
plan.
(((9))) (11) "Dependent" means, at a minimum, the enrollee's legal
spouse and unmarried dependent children who qualify for coverage under
the enrollee's health benefit plan.
(((10))) (12) "Eligible employee" means an employee who works on a
full-time basis with a normal work week of thirty or more hours. The
term includes a self-employed individual, including a sole proprietor,
a partner of a partnership, and may include an independent contractor,
if the self-employed individual, sole proprietor, partner, or
independent contractor is included as an employee under a health
benefit plan of a small employer, but does not work less than thirty
hours per week and derives at least seventy-five percent of his or her
income from a trade or business through which he or she has attempted
to earn taxable income and for which he or she has filed the
appropriate internal revenue service form. Persons covered under a
health benefit plan pursuant to the consolidated omnibus budget
reconciliation act of 1986 shall not be considered eligible employees
for purposes of minimum participation requirements of chapter 265, Laws
of 1995.
(((11))) (13) "Emergency medical condition" means the emergent and
acute onset of a symptom or symptoms, including severe pain, that would
lead a prudent layperson acting reasonably to believe that a health
condition exists that requires immediate medical attention, if failure
to provide medical attention would result in serious impairment to
bodily functions or serious dysfunction of a bodily organ or part, or
would place the person's health in serious jeopardy.
(((12))) (14) "Emergency services" means otherwise covered health
care services medically necessary to evaluate and treat an emergency
medical condition, provided in a hospital emergency department.
(((13))) (15) "Enrollee point-of-service cost-sharing" means
amounts paid to health carriers directly providing services, health
care providers, or health care facilities by enrollees and may include
copayments, coinsurance, or deductibles.
(((14))) (16) "Grievance" means a written complaint submitted by or
on behalf of a covered person regarding: (a) Denial of payment for
medical services or nonprovision of medical services included in the
covered person's health benefit plan, or (b) service delivery issues
other than denial of payment for medical services or nonprovision of
medical services, including dissatisfaction with medical care, waiting
time for medical services, provider or staff attitude or demeanor, or
dissatisfaction with service provided by the health carrier.
(((15))) (17) "Health care facility" or "facility" means hospices
licensed under chapter 70.127 RCW, hospitals licensed under chapter
70.41 RCW, rural health care facilities as defined in RCW 70.175.020,
psychiatric hospitals licensed under chapter 71.12 RCW, nursing homes
licensed under chapter 18.51 RCW, community mental health centers
licensed under chapter 71.05 or 71.24 RCW, kidney disease treatment
centers licensed under chapter 70.41 RCW, ambulatory diagnostic,
treatment, or surgical facilities licensed under chapter 70.41 RCW,
drug and alcohol treatment facilities licensed under chapter 70.96A
RCW, and home health agencies licensed under chapter 70.127 RCW, and
includes such facilities if owned and operated by a political
subdivision or instrumentality of the state and such other facilities
as required by federal law and implementing regulations.
(((16))) (18) "Health care provider" or "provider" means:
(a) A person regulated under Title 18 or chapter 70.127 RCW, to
practice health or health-related services or otherwise practicing
health care services in this state consistent with state law; or
(b) An employee or agent of a person described in (a) of this
subsection, acting in the course and scope of his or her employment.
(((17))) (19) "Health care service" means that service offered or
provided by health care facilities and health care providers relating
to the prevention, cure, or treatment of illness, injury, or disease.
(((18))) (20) "Health carrier" or "carrier" means a disability
insurer regulated under chapter 48.20 or 48.21 RCW, a health care
service contractor as defined in RCW 48.44.010, or a health maintenance
organization as defined in RCW 48.46.020.
(((19))) (21) "Health plan" or "health benefit plan" means any
policy, contract, or agreement offered by a health carrier to provide,
arrange, reimburse, or pay for health care services except the
following:
(a) Long-term care insurance governed by chapter 48.84 RCW;
(b) Medicare supplemental health insurance governed by chapter
48.66 RCW;
(c) Coverage supplemental to the coverage provided under chapter
55, Title 10, United States Code;
(d) Limited health care services offered by limited health care
service contractors in accordance with RCW 48.44.035;
(e) Disability income;
(f) Coverage incidental to a property/casualty liability insurance
policy such as automobile personal injury protection coverage and
homeowner guest medical;
(g) Workers' compensation coverage;
(h) Accident only coverage;
(i) Specified disease and hospital confinement indemnity when
marketed solely as a supplement to a health plan;
(j) Employer-sponsored self-funded health plans;
(k) Dental only and vision only coverage; and
(l) Plans deemed by the insurance commissioner to have a short-term
limited purpose or duration, or to be a student-only plan that is
guaranteed renewable while the covered person is enrolled as a regular
full-time undergraduate or graduate student at an accredited higher
education institution, after a written request for such classification
by the carrier and subsequent written approval by the insurance
commissioner.
(((20))) (22) "Material modification" means a change in the
actuarial value of the health plan as modified of more than five
percent but less than fifteen percent.
(((21))) (23) "Participating small employer plan" means a group
health plan, as defined in federal law, Sec. 706 of ERISA (29 U.S.C.
Sec. 1186), that is sponsored by a small employer and for which the
plan sponsor has entered into an agreement with the connector, in
accordance with the provisions of section 207 of this act, for the
connector to offer and administer health insurance benefits for
enrollees in the plan.
(24) "Preexisting condition" means any medical condition, illness,
or injury that existed any time prior to the effective date of
coverage.
(((22))) (25) "Premium" means all sums charged, received, or
deposited by a health carrier as consideration for a health plan or the
continuance of a health plan. Any assessment or any "membership,"
"policy," "contract," "service," or similar fee or charge made by a
health carrier in consideration for a health plan is deemed part of the
premium. "Premium" shall not include amounts paid as enrollee point-of-service cost-sharing.
(((23))) (26) "Review organization" means a disability insurer
regulated under chapter 48.20 or 48.21 RCW, health care service
contractor as defined in RCW 48.44.010, or health maintenance
organization as defined in RCW 48.46.020, and entities affiliated with,
under contract with, or acting on behalf of a health carrier to perform
a utilization review.
(((24))) (27) "Small employer" or "small group" means any person,
firm, corporation, partnership, association, political subdivision,
sole proprietor, or self-employed individual that is actively engaged
in business that, on at least fifty percent of its working days during
the preceding calendar quarter, employed at least two but no more than
fifty eligible employees, with a normal work week of thirty or more
hours, the majority of whom were employed within this state, and is not
formed primarily for purposes of buying health insurance and in which
a bona fide employer-employee relationship exists. In determining the
number of eligible employees, companies that are affiliated companies,
or that are eligible to file a combined tax return for purposes of
taxation by this state, shall be considered an employer. Subsequent to
the issuance of a health plan to a small employer and for the purpose
of determining eligibility, the size of a small employer shall be
determined annually. Except as otherwise specifically provided, a
small employer shall continue to be considered a small employer until
the plan anniversary following the date the small employer no longer
meets the requirements of this definition. A self-employed individual
or sole proprietor must derive at least seventy-five percent of his or
her income from a trade or business through which the individual or
sole proprietor has attempted to earn taxable income and for which he
or she has filed the appropriate internal revenue service form 1040,
schedule C or F, for the previous taxable year except for a self-employed individual or sole proprietor in an agricultural trade or
business, who must derive at least fifty-one percent of his or her
income from the trade or business through which the individual or sole
proprietor has attempted to earn taxable income and for which he or she
has filed the appropriate internal revenue service form 1040, for the
previous taxable year. A self-employed individual or sole proprietor
who is covered as a group of one on the day prior to June 10, 2004,
shall also be considered a "small employer" to the extent that
individual or group of one is entitled to have his or her coverage
renewed as provided in RCW 48.43.035(6).
(((25))) (28) "Utilization review" means the prospective,
concurrent, or retrospective assessment of the necessity and
appropriateness of the allocation of health care resources and services
of a provider or facility, given or proposed to be given to an enrollee
or group of enrollees.
(((26))) (29) "Wellness activity" means an explicit program of an
activity consistent with department of health guidelines, such as,
smoking cessation, injury and accident prevention, reduction of alcohol
misuse, appropriate weight reduction, exercise, automobile and
motorcycle safety, blood cholesterol reduction, and nutrition education
for the purpose of improving enrollee health status and reducing health
service costs.
NEW SECTION. Sec. 302
(2) No health benefit plan may be offered through the connector
unless the commissioner has first certified to the connector that:
(a) The carrier seeking to offer the plan is an admitted carrier in
Washington state and is in good standing with the office of the
insurance commissioner;
(b) The plan meets the benefit design specifications established by
the connector board under section 205(1) of this act, the rating
specifications under section 303 of this act, the preexisting condition
provisions under RCW 48.43.015 and 48.43.025, the issue and renewal
provisions of RCW 48.43.035, and the requirements of this section; and
(c) The plan and the carrier are in compliance with all other
applicable Washington state laws.
(3) No plan shall be certified that excludes from coverage any
individual otherwise determined by the connector as meeting the
eligibility requirements for participation.
(4) Each certification shall be valid for a uniform term of at
least one year, but may be made automatically renewable from term to
term in the absence of notice of either:
(a) Withdrawal by the commissioner; or
(b) Discontinuation of participation in the connector by the
carrier.
(5) Certification of a plan may be withdrawn only after notice to
the carrier and opportunity for hearing. The commissioner may,
however, decline to renew the certification of any carrier at the end
of a certification term.
(6) Each plan certified by the commissioner as eligible to be
offered through the connector shall contain a detailed description of
benefits offered including maximums, limitations, exclusions, and other
benefit limits.
(7) Any limited health care services plan for dental care services
offered through the connector established in section 203 of this act
shall be filed with the office of the insurance commissioner. No
limited health care services plan for dental care services may be
offered through the connector unless the commissioner has first
certified to the connector that the plan meets the benefit design
specifications established by the connector board under section 205(1)
of this act, and complies with subsections (2)(a) and (c), (3), and (6)
of this section. Certification and withdrawal thereof shall be
governed by subsections (4) and (5) of this section.
NEW SECTION. Sec. 303
(1) The carrier shall develop its rates based on an adjusted
community rate and may only vary the adjusted community rate for:
(a) Geographic area;
(b) Family size;
(c) Age; and
(d) Wellness activities.
(2) The adjustment for age in subsection (1)(c) of this section may
not use age brackets smaller than five-year increments, which shall
begin with age twenty and end with age sixty-five. Participating
individuals under the age of twenty shall be treated as those age
twenty.
(3) The contractor shall be permitted to develop separate rates for
individuals age sixty-five or older for coverage for which medicare is
the primary payer and coverage for which medicare is not the primary
payer. Both rates are subject to the requirements of this section.
(4) The permitted rates for any age group shall be no more than
three hundred seventy-five percent of the lowest rate for all age
groups.
(5) A discount for wellness activities is permitted to reflect
actuarially justified differences in utilization or cost attributed to
such programs.
(6) Rating factors shall produce premiums for identical connector
participants that differ only by the amounts attributable to plan
design, with the exception of discounts for health improvement
programs.
(7)(a) Except to the extent provided otherwise in (b) of this
subsection, adjusted community rates established under this section
shall pool the medical experience of all connector participants
purchasing coverage through the connector.
(b) Carriers may treat persons under age thirty as a separate
experience pool for purposes of establishing rates for health plans
approved by the connector board under section 205(1)(a). The rates
charged for this age group are not subject to subsection (4) of this
section.
Sec. 304 RCW 48.43.015 and 2004 c 192 s 5 are each amended to
read as follows:
(1) For a health benefit plan offered to a group or through the
connector established in sections 203 through 205 of this act, every
health carrier shall reduce any preexisting condition exclusion,
limitation, or waiting period in the group health plan in accordance
with the provisions of section 2701 of the federal health insurance
portability and accountability act of 1996 (42 U.S.C. Sec. 300gg).
(2) For a health benefit plan offered to a group other than a small
group:
(a) If the individual applicant's immediately preceding health plan
coverage terminated during the period beginning ninety days and ending
sixty-four days before the date of application for the new plan and
such coverage was similar and continuous for at least three months,
then the carrier shall not impose a waiting period for coverage of
preexisting conditions under the new health plan.
(b) If the individual applicant's immediately preceding health plan
coverage terminated during the period beginning ninety days and ending
sixty-four days before the date of application for the new plan and
such coverage was similar and continuous for less than three months,
then the carrier shall credit the time covered under the immediately
preceding health plan toward any preexisting condition waiting period
under the new health plan.
(c) For the purposes of this subsection, a preceding health plan
includes an employer-provided self-funded health plan, the basic health
plan's offering to health coverage tax credit eligible enrollees as
established by chapter 192, Laws of 2004, and plans of the Washington
state health insurance pool.
(3) For a health benefit plan offered ((to a small group)) through
the connector established in sections 203 through 205 of this act:
(a) If the individual applicant's immediately preceding health plan
coverage terminated during the period beginning ninety days and ending
sixty-four days before the date of application for the new plan and
such coverage was similar and continuous for at least nine months, then
the carrier shall not impose a waiting period for coverage of
preexisting conditions under the new health plan.
(b) If the individual applicant's immediately preceding health plan
coverage terminated during the period beginning ninety days and ending
sixty-four days before the date of application for the new plan and
such coverage was similar and continuous for less than nine months,
then the carrier shall credit the time covered under the immediately
preceding health plan toward any preexisting condition waiting period
under the new health plan.
(c) For the purpose of this subsection, a preceding health plan
includes an employer-provided self-funded health plan, the basic health
plan's offering to health coverage tax credit eligible enrollees as
established by chapter 192, Laws of 2004, and plans of the Washington
state health insurance pool.
(4) For a health benefit plan offered to an individual, other than
an individual to whom subsection (5) of this section applies, every
health carrier shall credit any preexisting condition waiting period in
that plan for a person who was enrolled at any time during the sixty-three day period immediately preceding the date of application for the
new health plan in a group health benefit plan or an individual health
benefit plan, other than a catastrophic health plan, and (a) the
benefits under the previous plan provide equivalent or greater overall
benefit coverage than that provided in the health benefit plan the
individual seeks to purchase; or (b) the person is seeking an
individual health benefit plan due to his or her change of residence
from one geographic area in Washington state to another geographic area
in Washington state where his or her current health plan is not
offered, if application for coverage is made within ninety days of
relocation; or (c) the person is seeking an individual health benefit
plan: (i) Because a health care provider with whom he or she has an
established care relationship and from whom he or she has received
treatment within the past twelve months is no longer part of the
carrier's provider network under his or her existing Washington
individual health benefit plan; and (ii) his or her health care
provider is part of another carrier's provider network; and (iii)
application for a health benefit plan under that carrier's provider
network individual coverage is made within ninety days of his or her
provider leaving the previous carrier's provider network. The carrier
must credit the period of coverage the person was continuously covered
under the immediately preceding health plan toward the waiting period
of the new health plan. For the purposes of this subsection (4), a
preceding health plan includes an employer-provided self-funded health
plan, the basic health plan's offering to health coverage tax credit
eligible enrollees as established by chapter 192, Laws of 2004, and
plans of the Washington state health insurance pool.
(5) Every health carrier shall waive any preexisting condition
waiting period in its individual plans for a person who is an eligible
individual as defined in section 2741(b) of the federal health
insurance portability and accountability act of 1996 (42 U.S.C. Sec.
300gg-41(b)).
(6) Subject to the provisions of subsections (1) through (5) of
this section, nothing contained in this section requires a health
carrier to amend a health plan to provide new benefits in its existing
health plans. In addition, nothing in this section requires a carrier
to waive benefit limitations not related to an individual or group's
preexisting conditions or health history.
Sec. 305 RCW 48.43.025 and 2001 c 196 s 9 are each amended to
read as follows:
(1) For group health benefit plans for groups other than small
groups, no carrier may reject an individual for health plan coverage
based upon preexisting conditions of the individual and no carrier may
deny, exclude, or otherwise limit coverage for an individual's
preexisting health conditions; except that a carrier may impose a
three-month benefit waiting period for preexisting conditions for which
medical advice was given, or for which a health care provider
recommended or provided treatment within three months before the
effective date of coverage. Any preexisting condition waiting period
or limitation relating to pregnancy as a preexisting condition shall be
imposed only to the extent allowed in the federal health insurance
portability and accountability act of 1996.
(2) For group health benefit plans ((for small groups)) offered
through the connector established in sections 203 through 205 of this
act, no carrier may reject an individual for health plan coverage based
upon preexisting conditions of the individual and no carrier may deny,
exclude, or otherwise limit coverage for an individual's preexisting
health conditions. Except that a carrier may impose a nine-month
benefit waiting period for preexisting conditions for which medical
advice was given, or for which a health care provider recommended or
provided treatment within six months before the effective date of
coverage. Any preexisting condition waiting period or limitation
relating to pregnancy as a preexisting condition shall be imposed only
to the extent allowed in the federal health insurance portability and
accountability act of 1996.
(3) No carrier may avoid the requirements of this section through
the creation of a new rate classification or the modification of an
existing rate classification. A new or changed rate classification
will be deemed an attempt to avoid the provisions of this section if
the new or changed classification would substantially discourage
applications for coverage from individuals or groups who are higher
than average health risks. These provisions apply only to individuals
who are Washington residents.
Sec. 306 RCW 48.43.035 and 2004 c 244 s 4 are each amended to
read as follows:
For group health benefit plans and for health benefit plans offered
through the connector established in sections 203 through 205 of this
act, the following shall apply:
(1) All health carriers shall accept for enrollment any state
resident within the group to whom the plan is offered and within the
carrier's service area and provide or assure the provision of all
covered services regardless of age, sex, family structure, ethnicity,
race, health condition, geographic location, employment status,
socioeconomic status, other condition or situation, or the provisions
of RCW 49.60.174(2). The insurance commissioner may grant a temporary
exemption from this subsection, if, upon application by a health
carrier the commissioner finds that the clinical, financial, or
administrative capacity to serve existing enrollees will be impaired if
a health carrier is required to continue enrollment of additional
eligible individuals.
(2) Except as provided in subsection (5) of this section, all
health plans shall contain or incorporate by endorsement a guarantee of
the continuity of coverage of the plan. For the purposes of this
section, a plan is "renewed" when it is continued beyond the earliest
date upon which, at the carrier's sole option, the plan could have been
terminated for other than nonpayment of premium. The carrier may
consider the group's anniversary date as the renewal date for purposes
of complying with the provisions of this section.
(3) The guarantee of continuity of coverage required in health
plans shall not prevent a carrier from canceling or nonrenewing a
health plan for:
(a) Nonpayment of premium;
(b) Violation of published policies of the carrier approved by the
insurance commissioner;
(c) Covered persons entitled to become eligible for medicare
benefits by reason of age who fail to apply for a medicare supplement
plan or medicare cost, risk, or other plan offered by the carrier
pursuant to federal laws and regulations;
(d) Covered persons who fail to pay any deductible or copayment
amount owed to the carrier and not the provider of health care
services;
(e) Covered persons committing fraudulent acts as to the carrier;
(f) Covered persons who materially breach the health plan; or
(g) Change or implementation of federal or state laws that no
longer permit the continued offering of such coverage.
(4) The provisions of this section do not apply in the following
cases:
(a) A carrier has zero enrollment on a product;
(b) A carrier replaces a product and the replacement product is
provided to all covered persons within that class or line of business,
includes all of the services covered under the replaced product, and
does not significantly limit access to the kind of services covered
under the replaced product. The health plan may also allow
unrestricted conversion to a fully comparable product;
(c) No sooner than January 1, 2005, a carrier discontinues offering
a particular type of health benefit plan offered for groups of up to
two hundred if: (i) The carrier provides notice to each group of the
discontinuation at least ninety days prior to the date of the
discontinuation; (ii) the carrier offers to each group provided
coverage of this type the option to enroll, with regard to small
employer groups, in any other small employer group plan, or with regard
to groups of up to two hundred, in any other applicable group plan,
currently being offered by the carrier in the applicable group market;
and (iii) in exercising the option to discontinue coverage of this type
and in offering the option of coverage under (c)(ii) of this
subsection, the carrier acts uniformly without regard to any health
status-related factor of enrolled individuals or individuals who may
become eligible for this coverage;
(d) A carrier discontinues offering all health coverage in the
small group market or for groups of up to two hundred, or both markets,
in the state and discontinues coverage under all existing group health
benefit plans in the applicable market involved if: (i) The carrier
provides notice to the commissioner of its intent to discontinue
offering all such coverage in the state and its intent to discontinue
coverage under all such existing health benefit plans at least one
hundred eighty days prior to the date of the discontinuation of
coverage under all such existing health benefit plans; and (ii) the
carrier provides notice to each covered group of the intent to
discontinue the existing health benefit plan at least one hundred
eighty days prior to the date of discontinuation. In the case of
discontinuation under this subsection, the carrier may not issue any
group health coverage in this state in the applicable group market
involved for a five-year period beginning on the date of the
discontinuation of the last health benefit plan not so renewed. This
subsection (4) does not require a carrier to provide notice to the
commissioner of its intent to discontinue offering a health benefit
plan to new applicants when the carrier does not discontinue coverage
of existing enrollees under that health benefit plan; or
(e) A carrier is withdrawing from a service area or from a segment
of its service area because the carrier has demonstrated to the
insurance commissioner that the carrier's clinical, financial, or
administrative capacity to serve enrollees would be exceeded.
(5) The provisions of this section do not apply to health plans
deemed by the insurance commissioner to be unique or limited or have a
short-term purpose, after a written request for such classification by
the carrier and subsequent written approval by the insurance
commissioner.
(6) Notwithstanding any other provision of this section, the
guarantee of continuity of coverage applies to a group of one only if:
(a) The carrier continues to offer any other small employer group plan
in which the group of one was eligible to enroll on the day prior to
June 10, 2004; and (b) the person continues to qualify as a group of
one under the criteria in place on the day prior to June 10, 2004.
NEW SECTION. Sec. 307
NEW SECTION. Sec. 308
NEW SECTION. Sec. 401 The definitions in this section apply
throughout this chapter unless the context clearly requires otherwise.
(1) "Employee" means any individual employed by any employer.
(2) "Employer" means an employer as defined in RCW 49.46.010.
(3) "Connector" means the entity established in sections 203
through 205 of this act.
NEW SECTION. Sec. 402 Beginning January 1, 2009, each employer
with more than five employees in the state of Washington shall:
(1) Adopt and maintain a cafeteria plan that satisfies 26 U.S.C.
Sec. 125 and the rules adopted by the connector that provides a premium
only plan option so that employees can use salary deductions to pay
health plan premiums. A copy of such cafeteria plan shall be filed
with the connector; and
(2) Collect and transmit amounts designated as payroll deductions
by employees to the connector for those employees purchasing coverage
through the connector.
NEW SECTION. Sec. 403 The attorney general shall enforce
sections 401 and 402 of this act and has the authority to seek and
obtain injunctive relief in a court of appropriate jurisdiction.
NEW SECTION. Sec. 404 Beginning January 1, 2012, any resident of
the state of Washington age eighteen and over shall obtain and maintain
creditable coverage, as defined in the federal health insurance
portability and accountability act of 1996 (42 U.S.C. 300gg(c)), so
long as it is deemed affordable under the schedule set by the board of
the connector under section 205 of this act. Residents who within the
past sixty-three days have terminated any prior creditable coverage,
shall obtain and maintain creditable coverage within sixty-three days
of such termination.
Sec. 501 RCW 48.41.100 and 2001 c 196 s 3 are each amended to
read as follows:
(1) The following persons who are residents of this state are
eligible for pool coverage:
(a) Any person who provides evidence of a carrier's decision not to
accept him or her for enrollment in an individual health benefit plan
as defined in RCW 48.43.005, or of the health care authority
administrator's decision not to accept him or her for enrollment in the
basic health plan as a nonsubsidized enrollee, based upon, and within
ninety days of the receipt of, the results of the standard health
questionnaire designated by the board and administered by health
carriers under RCW 48.43.018 or the administrator of the health care
authority under section 503 of this act;
(b) Any person who continues to be eligible for pool coverage based
upon the results of the standard health questionnaire designated by the
board and administered by the pool administrator pursuant to subsection
(3) of this section;
(c) Any person who resides in a county of the state where no
carrier or insurer eligible under chapter 48.15 RCW offers to the
public an individual health benefit plan other than a catastrophic
health plan as defined in RCW 48.43.005 at the time of application to
the pool, and who makes direct application to the pool; and
(d) Any medicare eligible person upon providing evidence of
rejection for medical reasons, a requirement of restrictive riders, an
up-rated premium, or a preexisting conditions limitation on a medicare
supplemental insurance policy under chapter 48.66 RCW, the effect of
which is to substantially reduce coverage from that received by a
person considered a standard risk by at least one member within six
months of the date of application.
(2) The following persons are not eligible for coverage by the
pool:
(a) Any person having terminated coverage in the pool unless (i)
twelve months have lapsed since termination, or (ii) that person can
show continuous other coverage which has been involuntarily terminated
for any reason other than nonpayment of premiums. However, these
exclusions do not apply to eligible individuals as defined in section
2741(b) of the federal health insurance portability and accountability
act of 1996 (42 U.S.C. Sec. 300gg-41(b));
(b) Any person on whose behalf the pool has paid out one million
dollars in benefits;
(c) Inmates of public institutions and persons whose benefits are
duplicated under public programs. However, these exclusions do not
apply to eligible individuals as defined in section 2741(b) of the
federal health insurance portability and accountability act of 1996 (42
U.S.C. Sec. 300gg-41(b));
(d) Any person who resides in a county of the state where any
carrier or insurer regulated under chapter 48.15 RCW offers to the
public an individual health benefit plan other than a catastrophic
health plan as defined in RCW 48.43.005 at the time of application to
the pool and who does not qualify for pool coverage based upon the
results of the standard health questionnaire, or pursuant to subsection
(1)(d) of this section.
(3) When a carrier or insurer regulated under chapter 48.15 RCW
begins to offer an individual health benefit plan in a county where no
carrier had been offering an individual health benefit plan:
(a) If the health benefit plan offered is other than a catastrophic
health plan as defined in RCW 48.43.005, any person enrolled in a pool
plan pursuant to subsection (1)(c) of this section in that county shall
no longer be eligible for coverage under that plan pursuant to
subsection (1)(c) of this section, but may continue to be eligible for
pool coverage based upon the results of the standard health
questionnaire designated by the board and administered by the pool
administrator. The pool administrator shall offer to administer the
questionnaire to each person no longer eligible for coverage under
subsection (1)(c) of this section within thirty days of determining
that he or she is no longer eligible;
(b) Losing eligibility for pool coverage under this subsection (3)
does not affect a person's eligibility for pool coverage under
subsection (1)(a), (b), or (d) of this section; and
(c) The pool administrator shall provide written notice to any
person who is no longer eligible for coverage under a pool plan under
this subsection (3) within thirty days of the administrator's
determination that the person is no longer eligible. The notice shall:
(i) Indicate that coverage under the plan will cease ninety days from
the date that the notice is dated; (ii) describe any other coverage
options, either in or outside of the pool, available to the person;
(iii) describe the procedures for the administration of the standard
health questionnaire to determine the person's continued eligibility
for coverage under subsection (1)(b) of this section; and (iv) describe
the enrollment process for the available options outside of the pool.
Sec. 502 RCW 70.47.020 and 2005 c 188 s 2 are each amended to
read as follows:
As used in this chapter:
(1) "Washington basic health plan" or "plan" means the system of
enrollment and payment for basic health care services, administered by
the plan administrator through participating managed health care
systems, created by this chapter.
(2) "Administrator" means the Washington basic health plan
administrator, who also holds the position of administrator of the
Washington state health care authority.
(3) "Health coverage tax credit program" means the program created
by the Trade Act of 2002 (P.L. 107-210) that provides a federal tax
credit that subsidizes private health insurance coverage for displaced
workers certified to receive certain trade adjustment assistance
benefits and for individuals receiving benefits from the pension
benefit guaranty corporation.
(4) "Health coverage tax credit eligible enrollee" means individual
workers and their qualified family members who lose their jobs due to
the effects of international trade and are eligible for certain trade
adjustment assistance benefits; or are eligible for benefits under the
alternative trade adjustment assistance program; or are people who
receive benefits from the pension benefit guaranty corporation and are
at least fifty-five years old.
(5) "Managed health care system" means: (a) Any health care
organization, including health care providers, insurers, health care
service contractors, health maintenance organizations, or any
combination thereof, that provides directly or by contract basic health
care services, as defined by the administrator and rendered by duly
licensed providers, to a defined patient population enrolled in the
plan and in the managed health care system; or (b) a self-funded or
self-insured method of providing insurance coverage to subsidized
enrollees provided under RCW 41.05.140 and subject to the limitations
under RCW 70.47.100(7).
(6) "Subsidized enrollee" means an individual, or an individual
plus the individual's spouse or dependent children: (a) Who is not
eligible for medicare; (b) who is not confined or residing in a
government-operated institution, unless he or she meets eligibility
criteria adopted by the administrator; (c) who is not a full-time
student who has received a temporary visa to study in the United
States; (d) who resides in an area of the state served by a managed
health care system participating in the plan; (e) whose gross family
income at the time of enrollment does not exceed two hundred percent of
the federal poverty level as adjusted for family size and determined
annually by the federal department of health and human services; and
(f) who chooses to obtain basic health care coverage from a particular
managed health care system in return for periodic payments to the plan.
To the extent that state funds are specifically appropriated for this
purpose, with a corresponding federal match, "subsidized enrollee" also
means an individual, or an individual's spouse or dependent children,
who meets the requirements in (a) through (d) and (f) of this
subsection and whose gross family income at the time of enrollment is
more than two hundred percent, but less than two hundred fifty-one
percent, of the federal poverty level as adjusted for family size and
determined annually by the federal department of health and human
services.
(7) "Nonsubsidized enrollee" means an individual, or an individual
plus the individual's spouse or dependent children: (a) Who is not
eligible for medicare; (b) who is not confined or residing in a
government-operated institution, unless he or she meets eligibility
criteria adopted by the administrator; (c) who, under section 503 of
this act, is not required to complete the standard health questionnaire
or does not qualify for coverage under the Washington state health
insurance pool based upon the results of the standard health
questionnaire; (d) who resides in an area of the state served by a
managed health care system participating in the plan; (((d))) (e) who
chooses to obtain basic health care coverage from a particular managed
health care system; and (((e))) (f) who pays or on whose behalf is paid
the full costs for participation in the plan, without any subsidy from
the plan.
(8) "Subsidy" means the difference between the amount of periodic
payment the administrator makes to a managed health care system on
behalf of a subsidized enrollee plus the administrative cost to the
plan of providing the plan to that subsidized enrollee, and the amount
determined to be the subsidized enrollee's responsibility under RCW
70.47.060(2).
(9) "Premium" means a periodic payment, based upon gross family
income which an individual, their employer or another financial sponsor
makes to the plan as consideration for enrollment in the plan as a
subsidized enrollee, a nonsubsidized enrollee, or a health coverage tax
credit eligible enrollee.
(10) "Rate" means the amount, negotiated by the administrator with
and paid to a participating managed health care system, that is based
upon the enrollment of subsidized, nonsubsidized, and health coverage
tax credit eligible enrollees in the plan and in that system.
NEW SECTION. Sec. 503 A new section is added to chapter 70.47
RCW to read as follows:
(1) Except as provided in (a) through (e) of this subsection, the
administrator shall require any person seeking enrollment in the basic
health plan as a nonsubsidized enrollee to complete the standard health
questionnaire designated under chapter 48.41 RCW.
(a) If a person is seeking enrollment in the basic health plan as
a nonsubsidized enrollee due to his or her change of residence from one
geographic area in Washington state to another geographic area in
Washington state where his or her current health plan is not offered,
completion of the standard health questionnaire shall not be a
condition of coverage if application for coverage is made within ninety
days of relocation.
(b) Completion of the standard health questionnaire shall not be a
condition of coverage if a person is seeking enrollment in the basic
health plan as a nonsubsidized enrollee:
(i) Because a health care provider with whom he or she has an
established care relationship and from whom he or she has received
treatment within the past twelve months is no longer part of the
provider network under his or her existing Washington individual health
benefit plan; and
(ii) His or her health care provider is part of a managed health
care system's provider network; and
(iii) Application for enrollment in the basic health plan as a
nonsubsidized enrollee under that managed health care system's provider
network is made within ninety days of his or her provider leaving the
previous carrier's provider network.
(c) If a person is seeking enrollment in the basic health plan as
a nonsubsidized enrollee due to his or her having exhausted
continuation coverage provided under 29 U.S.C. Sec. 1161 et seq.,
completion of the standard health questionnaire shall not be a
condition of coverage if application for coverage is made within ninety
days of exhaustion of continuation coverage. The administrator shall
accept an application without a standard health questionnaire from a
person currently covered by such continuation coverage if application
is made within ninety days prior to the date the continuation coverage
would be exhausted and the effective date of the basic health plan
coverage applied for is the date the continuation coverage would be
exhausted, or within ninety days thereafter.
(d) If a person is seeking enrollment in the basic health plan as
a nonsubsidized enrollee due to his or her receiving notice that his or
her coverage under a conversion contract is discontinued, completion of
the standard health questionnaire shall not be a condition of coverage
if application for coverage is made within ninety days of
discontinuation of eligibility under the conversion contract. The
administrator shall accept an application without a standard health
questionnaire from a person currently covered by such conversion
contract if application is made within ninety days prior to the date
eligibility under the conversion contract would be discontinued and the
effective date of the basic health plan coverage applied for is the
date eligibility under the conversion contract would be discontinued,
or within ninety days thereafter.
(e) If a person is seeking enrollment in the basic health plan as
a nonsubsidized enrollee and, but for the number of persons employed by
his or her employer, would have qualified for continuation coverage
provided under 29 U.S.C. Sec. 1161 et seq., completion of the standard
health questionnaire shall not be a condition of coverage if: (i)
Application for coverage is made within ninety days of a qualifying
event as defined in 29 U.S.C. Sec. 1163; and (ii) the person had at
least twenty-four months of continuous group coverage immediately prior
to the qualifying event. The administrator shall accept an application
without a standard health questionnaire from a person with at least
twenty-four months of continuous group coverage if application is made
no more than ninety days prior to the date of a qualifying event and
the effective date of the basic health plan coverage applied for is the
date of the qualifying event, or within ninety days thereafter.
(2) If, based upon the results of the standard health
questionnaire, the person qualifies for coverage under the Washington
state health insurance pool, the following apply:
(a) The administrator shall not accept the person's application for
enrollment in the basic health plan as a nonsubsidized enrollee; and
(b) Within fifteen business days of receipt of a completed
application, the administrator shall provide written notice of the
decision not to accept the person's application for enrollment in the
basic health plan as a nonsubsidized enrollee to both the person and
the administrator of the Washington state health insurance pool. The
notice to the person shall state that the person is eligible for health
insurance provided by the Washington state health insurance pool and
shall include information about the Washington state health insurance
pool and an application for such coverage. If the administrator does
not provide or postmark such notice within fifteen business days, the
application for enrollment in the basic health plan as a nonsubsidized
enrollee is deemed approved.
NEW SECTION. Sec. 601 (1) Sections 102, 201, and 203 through 216
of this act constitute a new chapter in Title
(2) Sections 302, 303, 307, and 308 of this act are each added to
chapter 48.43 RCW.
(3) Sections 401 through 404 of this act constitute a new chapter
in Title 49 RCW.
NEW SECTION. Sec. 602 Part headings and captions used in this
act are not any part of the law.
NEW SECTION. Sec. 603 The following acts or parts of acts are
each repealed, effective January 1, 2009:
(1) RCW 48.21.045 (Health plan benefits for small employers--Coverage -- Exemption from statutory requirements -- Premium rates--Requirements for providing coverage for small employers -- Definitions)
and 2004 c 244 s 1, 1995 c 265 s 14, & 1990 c 187 s 2;
(2) RCW 48.21.047 (Requirements for plans offered to small
employers -- Definitions) and 2005 c 223 s 11 & 1995 c 265 s 22;
(3) RCW 48.44.023 (Health plan benefits for small employers--Coverage -- Exemption from statutory requirements -- Premium rates--Requirements for providing coverage for small employers) and 2004 c 244
s 7, 1995 c 265 s 16, & 1990 c 187 s 3;
(4) RCW 48.44.024 (Requirements for plans offered to small
employers -- Definitions) and 2003 c 248 s 15 & 1995 c 265 s 23;
(5) RCW 48.46.066 (Health plan benefits for small employers--Coverage -- Exemption from statutory requirements -- Premium rates--Requirements for providing coverage for small employers) and 2004 c 244
s 9, 1995 c 265 s 18, & 1990 c 187 s 4;
(6) RCW 48.46.068 (Requirements for plans offered to small
employers -- Definitions) and 2003 c 248 s 16 & 1995 c 265 s 24;
(7) RCW 70.47A.010 (Finding -- Intent) and 2006 c 255 s 1;
(8) RCW 70.47A.020 (Definitions) and 2006 c 255 s 2;
(9) RCW 70.47A.030 (Program established -- Administrator duties) and
2006 c 255 s 3;
(10) RCW 70.47A.040 (Premium subsidies -- Enrollment verification,
status changes -- Administrator duties -- Rules) and 2006 c 255 s 4;
(11) RCW 70.47A.050 (Enrollment to remain within appropriation) and
2006 c 255 s 5;
(12) RCW 70.47A.060 (Rules) and 2006 c 255 s 6;
(13) RCW 70.47A.070 (Reports) and 2006 c 255 s 7;
(14) RCW 70.47A.080 (Small employer health insurance partnership
program account) and 2006 c 255 s 8;
(15) RCW 70.47A.090 (State children's health insurance program--Federal waiver request) and 2006 c 255 s 9; and
(16) RCW 70.47A.900 (Captions not law -- 2006 c 255) and 2006 c 255
s 11.
NEW SECTION. Sec. 604 Sections 304 through 306 of this act take
effect January 1, 2009.