BP BHEAD INT S

AN ACT Relating to economic incentives for health care coverage; adding new sections to chapter 48.43 RCW; adding new sections to chapter 51.16 RCW; adding a new section to chapter 82.04 RCW; creating a new section; and recodifying RCW 51.14.010.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION. Sec. 1. A new section is added to chapter 48.43 RCW to read as follows:

(1) Every subscriber-purchasing group shall:

(a) Admit all individuals, employers, or other groups wishing to participate that meet individual purchasing group requirements;

(b) Be operated as a member-governed and owned, nonprofit organization in which no health carrier, independent practice association, independent physician organization, or any individual with a pecuniary interest in any such organization, shall have any pecuniary interest in or management control of the organization;

(d) Serve as an ombudsman for its members to resolve inquiries, complaints, or other concerns with health carriers.

(2) No health insurance purchasing cooperative may bear any financial risk for the delivery of standard benefits package services, or for any other insurance or health services program.

(3) Every subscriber-purchasing group shall offer members the standard benefits package as the minimum available health plan. The purchasing group may negotiate with health carriers the standard benefits package premium to be paid by members, but the rate must be filed and approved by the commissioner. Premium negotiation may not result in an experience-rated standard benefits package for the subscriber-purchasing group.

(4) When more than one carrier's standard benefits package is offered by the purchasing group, every subscriber-purchasing group shall assist members in selecting health plans and for this purpose may devise a rating system or similar system to judge the quality and cost-effectiveness of health carriers. Each purchasing group and directors, officers, and other employees of the group are immune from liability in any civil action or suit arising from the publication of any report, brochure, or guide, or dissemination of information related to the services, quality, price, or cost-effectiveness of health carriers unless actual malice, fraud, or bad faith is shown. Such immunity is in addition to any common law or statutory privilege or immunity enjoyed by such person, and nothing in this section is intended to abrogate or modify in any way such common law or statutory privilege or immunity.

(5) Every subscriber-purchasing group shall employ or contract for the services of an insurance agent or broker licensed under chapter 48.17 RCW appropriate to the insurance products and programs made available through the group.

(6) The commissioner may adopt rules necessary for the implementation of this section.

(7) The commissioner may recommend to interested parties ways in which purchasing groups can develop, encourage, and provide incentives for employee wellness programs.

NEW SECTION. Sec. 2. A new section is added to chapter 48.43 RCW to read as follows:

(1) The department of labor and industries, in consultation with the workers' compensation advisory committee, may conduct pilot projects to purchase medical services for injured workers through health care coverage arrangements. The projects shall assess the effects of health care coverage on the cost and quality of, and employer and employee satisfaction with, medical services provided to injured workers.

(2) The pilot projects may be limited to specific employers. The implementation of a pilot project shall be conditioned upon a participating employer and a majority of its employees, or, if the employees are represented for collective bargaining purposes, the exclusive bargaining representative, voluntarily agreeing to the terms of the pilot. Unless the project is terminated by the department, both the employer and employees are bound by the project agreements for the duration of the project.

(3) Solely for the purpose and duration of a pilot project, the specific requirements of Title 51 RCW that are identified by the department as otherwise prohibiting implementation of the pilot project shall not apply to the participating employers and employees to the extent necessary for conducting the project. Health care coverage arrangements for the pilot projects may include the designation of doctors responsible for the care delivered to injured workers participating in the projects.

(4) The projects shall conclude no later than July 1, 1996. The department shall present an interim report on or before October 1, 1996, the results of the pilot projects, and any recommendations related to the projects to the governor and appropriate committees of the legislature on or before April 1, 1997.

NEW SECTION. Sec. 3. A new section is added to chapter 48.43 RCW to read as follows:

(1) No person may establish or operate a subscriber-purchasing group as defined in this chapter without having first obtained a certificate of authority from the insurance commissioner.

(2) Every proposed group shall furnish notice to the insurance commissioner that shall:

(a) Identify the principal name and address of the group;

(b) Furnish the names and addresses of the initial officers of the group;

(d) Furnish copies of its proposed articles and bylaws; and

(e) Provide other information as prescribed by the insurance commissioner to verify that the group is qualified and is managed by competent and trustworthy individuals.

(3) The commissioner shall establish by rule a fee to be paid by groups in an amount necessary to review and approve applications for a certificate of authority. Such fee shall accompany the application and no certificate may be issued until such fee is paid. Fees collected for such purpose shall be deposited in the insurance commissioner's regulatory account in the state treasury.

(4) All funds representing premiums or return premiums received by a group in its fiduciary capacity shall be accounted for and maintained in a separate account from all other funds. Each willful violation of this section constitutes a misdemeanor.

(5) Every group shall keep at its principal address, a record of all transactions it has consummated on behalf of its members with health carriers. All such records shall be kept available and open to the inspection of the insurance commissioner at any business time during a five-year period immediately after the date of completion of the transaction.

NEW SECTION. Sec. 4. A new section is added to chapter 51.16 RCW to read as follows:

(1) Except as otherwise provided in this section, every employer under this title shall secure the payment of compensation under this title by:

(a) Insuring and keeping insured the payment of such benefits with the state fund; or

(b) Qualifying as a self-insurer under this title.

(2) Beginning July 1, 1996, with respect to medical aid benefits required under this title, an employer may elect to provide the medical aid benefits through the employee health care benefit plan sponsored by the employer to provide general health care benefits to employees if the employer pays one hundred percent of the premium cost of the employee health care benefit plan. An employer electing this option:

(a) Must provide notice of the election to the department in a manner prescribed by department rules;

(b) May not require deductibles, coinsurance, copayment, or other point-of-service cost-sharing for services related to industrial injuries or diseases; and

NEW SECTION. Sec. 5. A new section is added to chapter 51.16 RCW to read as follows:

(1) Every employer not qualifying as a self-insurer, shall insure with the state, except that employers electing the option authorized under section 4(2) of this act, shall not be required to insure medical aid benefits with the state.

(2) Employers insuring with the state shall, on or before the last day of January, April, July, and October of each year thereafter, furnish the department with a true and accurate payroll for the period in which workers were employed by it during the preceding calendar quarter, the total amount paid to such workers during such preceding calendar quarter, and a segregation of employment in the different classes established pursuant to this title, and shall pay its premium thereon to the appropriate fund. Premiums for a calendar quarter, whether reported or not, shall become due and delinquent on the day immediately following the last day of the month following the calendar quarter. The sufficiency of such statement shall be subject to the approval of the director. The director may in his or her discretion and for the effective administration of this title require an employer in individual instances to furnish a supplementary report containing the name of each individual worker, his or her hours worked, his or her rate of pay, and the class or classes in which such work was performed.

(3) If an employer furnishes the department with four consecutive quarterly reports wherein each such quarterly report indicates that no premium is due the department may close the account.

(4) The department may adopt rules in accordance with chapter 34.05 RCW to establish other reporting periods and payment due dates in lieu of reports and payments following each calendar quarter, and may also establish terms and conditions for payment of premiums and assessments based on estimated payrolls, with such payments being subject to approval as to sufficiency of the estimated payroll by the department, and also subject to appropriate periodic adjustments made by the department based on actual payroll.

(5) A temporary help company which provides workers on a temporary basis to its customers shall be considered the employer for purposes of reporting and paying premiums and assessments under this title according to the appropriate rate classifications as determined by the department. However, the employer shall be liable for paying premiums and assessments, should the temporary help company fail to pay the premiums and assessments under this title.

NEW SECTION. Sec. 6. A new section is added to chapter 51.16 RCW to read as follows:

(1) Every employer who is not a self-insurer, or who has not elected the option authorized in section 4(2) of this act, shall deduct from the pay of each of his or her workers one-half of the amount he or she is required to pay, for medical benefits within each risk classification. Such amount shall be periodically determined by the director and reported by him or her to all employers under this title: PROVIDED, That the state governmental unit shall pay the entire amount into the medical aid fund for volunteers, as defined in RCW 51.12.035, and the state apprenticeship council shall pay the entire amount into the medical aid fund for registered apprentices or trainees, for the purposes of RCW 51.12.130. The deduction under this section is not authorized for premiums assessed under RCW 51.16.210.

(2) It is unlawful for the employer, unless specifically authorized by this title, to deduct or obtain any part of the premium or other costs required to be paid by him or her from the wages or earnings of any of his or her workers, and the making of or attempt to make any such deduction shall be a gross misdemeanor.

NEW SECTION. Sec. 7. The department of labor and industries shall prepare recommendations for legislation necessary to implement section 4(2) of this act, including requirements for maintaining financial responsibility sufficient to cover the entire liability of the employer for injuries and occupational diseases of his or her employees that occurred during the period of the election made under section 4(2) of this act, and requirements for claims reporting. The department shall report its recommendations to the appropriate committees of the legislature by December 1, 1995.

NEW SECTION. Sec. 8. A new section is added to chapter 82.04 RCW to read as follows:

Persons with fewer than twenty-five full-time equivalent employees are entitled to a credit against their tax liability under this chapter if:

(1) The person was not engaging in business activities in this state before July 1, 1994; and

(2) The person is providing health benefits to employees and paying at least fifty percent of the premium for each employee who has worked full time for at least sixty days. For the purposes of this section, "full time" means working one hundred twenty or more hours in a calendar month.

The amount of the credit shall equal a percentage of the amounts paid during the reporting period for health care benefits for employees according to the following table:

Amount of Credit Time Period

100% 1st 12 months

75% 2nd 12 months

50% 3rd 12 months

25% 4th 12 months

Credits under this section may only be taken for the first forty-eight months the person provides health care benefits to employees. No credit may be taken in excess of the person's tax liability for the reporting period, and no credit may carry over to a subsequent reporting period.

The department of revenue shall adopt rules to administer this tax credit by May 1996, and shall utilize data collected by other agencies from employers to the greatest extent reasonably possible in the administration of this tax credit.

NEW SECTION. Sec. 9. RCW 51.14.010 is recodified in chapter 51.16 RCW.