SENATE BILL REPORT

SB 6084

As Reported by Senate Committee On:

Health & Long Term Care, January 23, 2018

Title: An act relating to requiring maintenance of minimum essential health care coverage.

Brief Description: Requiring maintenance of minimum essential health care coverage.

Sponsors: Senators Cleveland, Kuderer, Keiser, Liias, Chase and Conway.

Brief History:

Committee Activity: Health & Long Term Care: 1/09/18, 1/23/18 [DPS, DNP, w/oRec].

Majority Report: That Substitute Senate Bill No. 6084 be substituted therefor, and the substitute bill do pass.

Signed by Senators Cleveland, Chair; Kuderer, Vice Chair; Conway, Keiser, Mullet and Van De Wege.

Minority Report: Do not pass.

Signed by Senators Rivers, Ranking Member; Bailey and Becker.

Minority Report: That it be referred without recommendation.

Signed by Senator Fain.

Staff: Evan Klein (786-7483)

Background: Affordable Care Act. The Patient Protection and Affordable Care Act (ACA) requires that individuals, unless they meet a specific exemption, ensure that they and any of their dependents maintain minimum essential health care coverage for each month. Anyone not exempted from the minimum essential coverage requirement or exempted from having to pay the penalty, must pay a taxpayer penalty for failing to meet the coverage requirements for one or more months in a year.

Persons with certain religious affiliations, those not lawfully present in the United States, and incarcerated individuals are exempt from the requirement to maintain coverage. Certain individuals who are otherwise not exempt from the coverage requirement, are exempt from having to pay the taxpayer penalty, including individuals whose required contribution for coverage would exceed 8 percent of the individual's household income, taxpayers with income below the filing threshold, members of Indian Tribes, individuals with short coverage gaps, and individuals with certain hardships.

Minimum essential coverage includes coverage through government sponsored coverage programs, employer-sponsored health plans, individual market health plans, grandfathered health plans, and other coverage such as state health benefits risk pools.

Tax Cuts and Jobs Act. On December 22, 2017, the President signed the Tax Cuts and Jobs Act (TCJA) into law. Beginning January 1, 2019, the TCJA reduces all penalties for failing to maintain minimum essential health care coverage to zero.

Summary of Bill (First Substitute): Residents of Washington State are required to ensure that they and any of their dependents maintain minimum essential health care coverage for each month, unless the individual is exempted from the requirement.

The following types of individuals are exempted from the maintenance of minimum essential health coverage requirement:

• members of recognized religious sects or divisions, or adherents of those sects' or divisions' established tenets or teachings, as defined by section 1402(g)(1) of the internal revenue code;

• members of health care sharing ministries;

• persons who are not citizens or lawfully present aliens in the United States;

• persons who are incarcerated, other than incarceration pending disposition of charges;

• members of an Indian tribe;

• persons not covered by minimum essential coverage for a continuous period of less than three months in a year; and

• persons determined to have a hardship by the Insurance Commissioner.

Minimum essential coverage includes coverage through:

• Medicare;

• Medicaid;

• the Children's Health Insurance Program;

• the military, department of Veterans Affairs, Peace Corps, or Department of Defense;

• an employer-sponsored self-funded health plan, individual, group or association health plan, or a grandfathered health plan; and

• other health benefits programs, including the Washington State health insurance pool, that the insurance commissioner recognizes as constituting minimum essential coverage.

The Office of the Insurance Commissioner is directed to convene a task force to explore individual mandate enforcement mechanisms. The task force is comprised of six members, including representatives of:

• the Health Benefit Exchange;

• the Health Care Authority;

• the Department of Revenue;

• Issuers;

• Consumers; and

• Business groups.

The task force is directed to review and analyze the feasibility of different minimum essential coverage enforcement options, as well as feasibility of other options to incentivize maintained coverage other than a mandate. The task force must submit a report by December 1, 2018, to include an overview of the reviewed and recommended options for enforcement.

EFFECT OF CHANGES MADE BY HEALTH & LONG TERM CARE COMMITTEE (First Substitute):

• Adds a task force to explore individual mandate enforcement mechanisms and the feasibility of other options to incentivize the maintenance of minimum essential coverage.

• Requires the task force to report on its findings to the legislature by December 1, 2018.

Appropriation: None.

Fiscal Note: Available.

Creates Committee/Commission/Task Force that includes Legislative members: No.

Effective Date: Ninety days after adjournment of session in which bill is passed.

Staff Summary of Public Testimony on Original Bill: The committee recommended a different version of the bill than what was heard. OTHER: This is an important tool for market stability, but the intent needs to be better understood.  The Association of Washington Health Care Plans supports the underlying bill, but is concerned there is no enforcement mechanism.

Persons Testifying: OTHER: Erin Dziedzic, American Cancer Society, Bleeding Disorder Foundation of Washington, Susan G. Komen Puget Sound; Sean Graham, Washington State Medical Association; Chris Bandoli, Washington State Hospital Association.

Persons Signed In To Testify But Not Testifying: No one.