H-1406.7  _______________________________________________

 

                          HOUSE BILL 2157

          _______________________________________________

 

State of Washington      57th Legislature     2001 Regular Session

 

By Representatives Pennington, Kessler, Schoesler, Mulliken, Schindler and Pflug

 

Read first time 02/20/2001.  Referred to Committee on Health Care.

Concerning small business health insurance requirements.


    AN ACT Relating to health plans for small businesses; and amending RCW 48.21.045, 48.44.023, and 48.46.066.

 

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

 

    Sec. 1.  RCW 48.21.045 and 1995 c 265 s 14 are each amended to read as follows:

    (1)(a) An insurer offering any health benefit plan to a small employer shall offer and actively market to the small employer a health benefit plan ((providing benefits identical to the schedule of covered health services that are required to be delivered to an individual enrolled in the basic health plan)) featuring a limited schedule of covered health services and lower premium costs than would otherwise be available.  Nothing in this subsection shall preclude an insurer from offering, or a small employer from purchasing, other health benefit plans that may have more ((or less)) comprehensive benefits than ((the basic health plan,)) provided ((such plans are in accordance with this chapter)) by this subsection.  An insurer offering a health benefit plan ((that does not include benefits in the basic health plan)) under this section shall clearly disclose ((these differences)) all covered benefits to the small employer in a brochure approved by the commissioner.

    (b) A health benefit plan offered under this subsection shall provide coverage for hospital expenses and services rendered by a physician licensed under chapter 18.57 or 18.71 RCW but is not subject to the requirements of RCW 48.21.130, 48.21.140, 48.21.141, 48.21.142, 48.21.144, 48.21.146, 48.21.160 through 48.21.197, 48.21.200, 48.21.220, 48.21.225, 48.21.230, 48.21.235, 48.21.240, 48.21.244, 48.21.250, 48.21.300, 48.21.310, or 48.21.320 if ((:  (i) The health benefit plan is the mandatory offering under (a) of this subsection that provides benefits identical to the basic health plan, to the extent these requirements differ from the basic health plan; or (ii))) the health benefit plan is offered to employers with not more than ((twenty-five)) fifty employees or to associations or member-governed groups formed specifically for the purpose of purchasing health care.

    (2) Nothing in this section shall prohibit an insurer from offering, or a purchaser from seeking, benefits in excess of the ((basic health plan services)) benefits offered under subsection (1) of this section.  All forms, policies, and contracts shall be submitted for approval to the commissioner, and the rates of any plan offered under this section shall be reasonable in relation to the benefits thereto.

    (3) Premium rates for health benefit plans for small employers as defined in this section shall be subject to the following provisions:

    (a) The insurer shall develop its rates based on an adjusted community rate and may only vary the adjusted community rate for:

    (i) Geographic area;

    (ii) Family size;

    (iii) Age; and

    (iv) Wellness activities.

    (b) The adjustment for age in (a)(iii) of this subsection may not use age brackets smaller than five-year increments, which shall begin with age twenty and end with age sixty-five.  Employees under the age of twenty shall be treated as those age twenty.

    (c) The insurer 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 shall be subject to the requirements of this subsection (3).

    (d) The permitted rates for any age group shall be no more than four hundred twenty-five percent of the lowest rate for all age groups on January 1, 1996, four hundred percent on January 1, 1997, and three hundred seventy-five percent on January 1, 2000, and thereafter.

    (e) A discount for wellness activities shall be permitted to reflect actuarially justified differences in utilization or cost attributed to such programs not to exceed twenty percent.

    (f) The rate charged for a health benefit plan offered under this section may not be adjusted more frequently than annually except that the premium may be changed to reflect:

    (i) Changes to the enrollment of the small employer;

    (ii) Changes to the family composition of the employee;

    (iii) Changes to the health benefit plan requested by the small employer; or

    (iv) Changes in government requirements affecting the health benefit plan.

    (g) Rating factors shall produce premiums for identical groups that differ only by the amounts attributable to plan design, with the exception of discounts for health improvement programs.

    (h) For the purposes of this section, a health benefit plan that contains a restricted network provision shall not be considered similar coverage to a health benefit plan that does not contain such a provision, provided that the restrictions of benefits to network providers result in substantial differences in claims costs.  This subsection does not restrict or enhance the portability of benefits as provided in RCW 48.43.015.

    (i) Adjusted community rates established under this section shall pool the medical experience of all small groups purchasing coverage.

    (4) ((The health benefit plans authorized by this section that are lower than the required offering shall not supplant or supersede any existing policy for the benefit of employees in this state.))

    Nothing in this section shall restrict the right of employees to collectively bargain for insurance providing benefits in excess of those provided herein.

    (5)(a) Except as provided in this subsection, requirements used by an insurer in determining whether to provide coverage to a small employer shall be applied uniformly among all small employers applying for coverage or receiving coverage from the carrier.

    (b) An insurer shall not require a minimum participation level greater than:

    (i) One hundred percent of eligible employees working for groups with three or less employees; and

    (ii) Seventy-five percent of eligible employees working for groups with more than three employees.

    (c) In applying minimum participation requirements with respect to a small employer, a small employer shall not consider employees or dependents who have similar existing coverage in determining whether the applicable percentage of participation is met.

    (d) An insurer may not increase any requirement for minimum employee participation or modify any requirement for minimum employer contribution applicable to a small employer at any time after the small employer has been accepted for coverage.

    (6) An insurer must offer coverage to all eligible employees of a small employer and their dependents.  An insurer may not offer coverage to only certain individuals or dependents in a small employer group or to only part of the group.  An insurer may not modify a health plan with respect to a small employer or any eligible employee or dependent, through riders, endorsements or otherwise, to restrict or exclude coverage or benefits for specific diseases, medical conditions, or services otherwise covered by the plan.

    (7) As used in this section, "health benefit plan," "small employer," "basic health plan," "adjusted community rate," and "wellness activities" mean the same as defined in RCW 48.43.005.

 

    Sec. 2.  RCW 48.44.023 and 1995 c 265 s 16 are each amended to read as follows:

    (1)(a) A health care service((s)) contractor offering any health benefit plan to a small employer shall offer and actively market to the small employer a health benefit plan ((providing benefits identical to the schedule of covered health services that are required to be delivered to an individual enrolled in the basic health plan)) featuring a limited schedule of covered health services and lower premium costs than would otherwise be available.  Nothing in this subsection shall preclude a contractor from offering, or a small employer from purchasing, other health benefit plans that may have more ((or less)) comprehensive benefits than ((the basic health plan,)) provided ((such plans are in accordance with this chapter)) by this subsection.  A contractor offering a health benefit plan ((that does not include benefits in the basic health plan)) under this section shall clearly disclose ((these differences)) all covered benefits to the small employer in a brochure approved by the commissioner.

    (b) A health benefit plan offered under this subsection shall provide coverage for hospital expenses and services rendered by a physician licensed under chapter 18.57 or 18.71 RCW but is not subject to the requirements of RCW 48.44.225, 48.44.240, 48.44.245, 48.44.290, 48.44.300, 48.44.310, 48.44.320, 48.44.325, 48.44.330, 48.44.335, 48.44.340, 48.44.344, 48.44.360, 48.44.400, 48.44.440, 48.44.450, and 48.44.460 if((:  (i) The health benefit plan is the mandatory offering under (a) of this subsection that provides benefits identical to the basic health plan, to the extent these requirements differ from the basic health plan; or (ii))) the health benefit plan is offered to employers with not more than ((twenty-five)) fifty employees or to associations or member-governed groups formed specifically for the purpose of purchasing health care.

    (2) Nothing in this section shall prohibit a health care service contractor from offering, or a purchaser from seeking, benefits in excess of the ((basic health plan services)) benefits offered under subsection (1) of this section.  All forms, policies, and contracts shall be submitted for approval to the commissioner, and the rates of any plan offered under this section shall be reasonable in relation to the benefits thereto.

    (3) Premium rates for health benefit plans for small employers as defined in this section shall be subject to the following provisions:

    (a) The contractor shall develop its rates based on an adjusted community rate and may only vary the adjusted community rate for:

    (i) Geographic area;

    (ii) Family size;

    (iii) Age; and

    (iv) Wellness activities.

    (b) The adjustment for age in (a)(iii) of this subsection may not use age brackets smaller than five-year increments, which shall begin with age twenty and end with age sixty-five.  Employees under the age of twenty shall be treated as those age twenty.

    (c) 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 shall be subject to the requirements of this subsection (3).

    (d) The permitted rates for any age group shall be no more than four hundred twenty-five percent of the lowest rate for all age groups on January 1, 1996, four hundred percent on January 1, 1997, and three hundred seventy-five percent on January 1, 2000, and thereafter.

    (e) A discount for wellness activities shall be permitted to reflect actuarially justified differences in utilization or cost attributed to such programs not to exceed twenty percent.

    (f) The rate charged for a health benefit plan offered under this section may not be adjusted more frequently than annually except that the premium may be changed to reflect:

    (i) Changes to the enrollment of the small employer;

    (ii) Changes to the family composition of the employee;

    (iii) Changes to the health benefit plan requested by the small employer; or

    (iv) Changes in government requirements affecting the health benefit plan.

    (g) Rating factors shall produce premiums for identical groups that differ only by the amounts attributable to plan design, with the exception of discounts for health improvement programs.

    (h) For the purposes of this section, a health benefit plan that contains a restricted network provision shall not be considered similar coverage to a health benefit plan that does not contain such a provision, provided that the restrictions of benefits to network providers result in substantial differences in claims costs.  This subsection does not restrict or enhance the portability of benefits as provided in RCW 48.43.015.

    (i) Adjusted community rates established under this section shall pool the medical experience of all groups purchasing coverage.

    (4) ((The health benefit plans authorized by this section that are lower than the required offering shall not supplant or supersede any existing policy for the benefit of employees in this state.))

    Nothing in this section shall restrict the right of employees to collectively bargain for insurance providing benefits in excess of those provided herein.

    (5)(a) Except as provided in this subsection, requirements used by a contractor in determining whether to provide coverage to a small employer shall be applied uniformly among all small employers applying for coverage or receiving coverage from the carrier.

    (b) A contractor shall not require a minimum participation level greater than:

    (i) One hundred percent of eligible employees working for groups with three or less employees; and

    (ii) Seventy-five percent of eligible employees working for groups with more than three employees.

    (c) In applying minimum participation requirements with respect to a small employer, a small employer shall not consider employees or dependents who have similar existing coverage in determining whether the applicable percentage of participation is met.

    (d) A contractor may not increase any requirement for minimum employee participation or modify any requirement for minimum employer contribution applicable to a small employer at any time after the small employer has been accepted for coverage.

    (6) A contractor must offer coverage to all eligible employees of a small employer and their dependents.  A contractor may not offer coverage to only certain individuals or dependents in a small employer group or to only part of the group.  A contractor may not modify a health plan with respect to a small employer or any eligible employee or dependent, through riders, endorsements or otherwise, to restrict or exclude coverage or benefits for specific diseases, medical conditions, or services otherwise covered by the plan.

 

    Sec. 3.  RCW 48.46.066 and 1995 c 265 s 18 are each amended to read as follows:

    (1)(a) A health maintenance organization offering any health benefit plan to a small employer shall offer and actively market to the small employer a health benefit plan ((providing benefits identical to the schedule of covered health services that are required to be delivered to an individual enrolled in the basic health plan)) featuring a limited schedule of covered health services and lower premium costs than would otherwise be available.  Nothing in this subsection shall preclude a health maintenance organization from offering, or a small employer from purchasing, other health benefit plans that may have more ((or less)) comprehensive benefits than ((the basic health plan,)) provided ((such plans are in accordance with this chapter)) by this subsection.  A health maintenance organization offering a health benefit plan ((that does not include benefits in the basic health plan)) under this section shall clearly disclose ((these differences)) all covered benefits to the small employer in a brochure approved by the commissioner.

    (b) A health benefit plan offered under this subsection shall provide coverage for hospital expenses and services rendered by a physician licensed under chapter 18.57 or 18.71 RCW but is not subject to the requirements of RCW 48.46.275, 48.46.280, 48.46.285, 48.46.290, 48.46.350, 48.46.355, 48.46.375, 48.46.440, 48.46.480, 48.46.510, 48.46.520, and 48.46.530 if((:  (i) The health benefit plan is the mandatory offering under (a) of this subsection that provides benefits identical to the basic health plan, to the extent these requirements differ from the basic health plan; or (ii))) the health benefit plan is offered to employers with not more than ((twenty-five)) fifty employees or to associations or member-governed groups formed specifically for the purpose of purchasing health care.

    (2) Nothing in this section shall prohibit a health maintenance organization from offering, or a purchaser from seeking, benefits in excess of the ((basic health plan services)) benefits offered under subsection (1) of this section.  All forms, policies, and contracts shall be submitted for approval to the commissioner, and the rates of any plan offered under this section shall be reasonable in relation to the benefits thereto.

    (3) Premium rates for health benefit plans for small employers as defined in this section shall be subject to the following provisions:

    (a) The health maintenance organization shall develop its rates based on an adjusted community rate and may only vary the adjusted community rate for:

    (i) Geographic area;

    (ii) Family size;

    (iii) Age; and

    (iv) Wellness activities.

    (b) The adjustment for age in (a)(iii) of this subsection may not use age brackets smaller than five-year increments, which shall begin with age twenty and end with age sixty-five.  Employees under the age of twenty shall be treated as those age twenty.

    (c) The health maintenance organization 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 shall be subject to the requirements of this subsection (3).

    (d) The permitted rates for any age group shall be no more than four hundred twenty-five percent of the lowest rate for all age groups on January 1, 1996, four hundred percent on January 1, 1997, and three hundred seventy-five percent on January 1, 2000, and thereafter.

    (e) A discount for wellness activities shall be permitted to reflect actuarially justified differences in utilization or cost attributed to such programs not to exceed twenty percent.

    (f) The rate charged for a health benefit plan offered under this section may not be adjusted more frequently than annually except that the premium may be changed to reflect:

    (i) Changes to the enrollment of the small employer;

    (ii) Changes to the family composition of the employee;

    (iii) Changes to the health benefit plan requested by the small employer; or

    (iv) Changes in government requirements affecting the health benefit plan.

    (g) Rating factors shall produce premiums for identical groups that differ only by the amounts attributable to plan design, with the exception of discounts for health improvement programs.

    (h) For the purposes of this section, a health benefit plan that contains a restricted network provision shall not be considered similar coverage to a health benefit plan that does not contain such a provision, provided that the restrictions of benefits to network providers result in substantial differences in claims costs.  This subsection does not restrict or enhance the portability of benefits as provided in RCW 48.43.015.

    (i) Adjusted community rates established under this section shall pool the medical experience of all groups purchasing coverage.

    (4) ((The health benefit plans authorized by this section that are lower than the required offering shall not supplant or supersede any existing policy for the benefit of employees in this state.))

    Nothing in this section shall restrict the right of employees to collectively bargain for insurance providing benefits in excess of those provided herein.

    (5)(a) Except as provided in this subsection, requirements used by a health maintenance organization in determining whether to provide coverage to a small employer shall be applied uniformly among all small employers applying for coverage or receiving coverage from the carrier.

    (b) A health maintenance organization shall not require a minimum participation level greater than:

    (i) One hundred percent of eligible employees working for groups with three or less employees; and

    (ii) Seventy-five percent of eligible employees working for groups with more than three employees.

    (c) In applying minimum participation requirements with respect to a small employer, a small employer shall not consider employees or dependents who have similar existing coverage in determining whether the applicable percentage of participation is met.

    (d) A health maintenance organization may not increase any requirement for minimum employee participation or modify any requirement for minimum employer contribution applicable to a small employer at any time after the small employer has been accepted for coverage.

    (6) A health maintenance organization must offer coverage to all eligible employees of a small employer and their dependents.  A health maintenance organization may not offer coverage to only certain individuals or dependents in a small employer group or to only part of the group.  A health maintenance organization may not modify a health plan with respect to a small employer or any eligible employee or dependent, through riders, endorsements or otherwise, to restrict or exclude coverage or benefits for specific diseases, medical conditions, or services otherwise covered by the plan.

 


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