S-3801.3 _______________________________________________
SENATE BILL 6761
_______________________________________________
State of Washington 57th Legislature 2002 Regular Session
By Senators West and Parlette
Read first time 02/01/2002. Referred to Committee on Health & Long‑Term Care.
AN ACT Relating to offering covered health services to employers with no more than fifty employees; amending RCW 48.21.045, 48.21.047, 48.43.035, 48.44.023, 48.44.024, 48.46.066, and 48.46.068; and providing an effective date.
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)) may offer a 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)), as defined in RCW 48.43.005, featuring a
limited schedule of covered health services ((that are required to be
delivered to an individual enrolled in the basic health plan)). 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)) those included in the product offered
under this section. An insurer offering a health benefit plan ((that
does not include benefits in the basic health plan)) under this
subsection 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)) will not
include the services identified in RCW 48.21.130, 48.21.140, 48.21.141,
48.21.142, 48.21.144, 48.21.146, 48.21.148, 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))), 48.43.045(1),
48.43.125, or 48.43.180 if the health benefit plan is offered to employers
with not more than ((twenty-five)) fifty employees.
(2)(a) Nothing
in this section shall prohibit an insurer from offering, or a purchaser from
seeking, benefits in excess of the ((basic health plan services)) health
benefit plan offered under subsection (1) of this section.
(b) All forms, policies, and contracts shall be submitted for approval to the commissioner, and the rates of any plan offered under subsection (1) of this section shall be reasonable in relation to the (i) benefits thereto, and (ii) risks involved as determined by the insurer.
(((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 48.21.047 and 1995 c 265 s 22 are each amended to read as follows:
(1) No insurer shall
offer any health benefit plan to any small employer without complying with the
provisions of RCW 48.21.045(((5))).
(2) Employers
purchasing health plans provided through associations or through
member-governed groups formed specifically for the purpose of purchasing health
care shall not be considered small employers and such plans shall not be
subject to the provisions of RCW 48.21.045(((5))).
(3) For purposes of this section, "health benefit plan," "health plan," and "small employer" mean the same as defined in RCW 48.43.005.
Sec. 3. RCW 48.43.035 and 2000 c 79 s 24 are each amended to read as follows:
For group health benefit plans, 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)) does not apply in the
following cases:
(a) A carrier has zero enrollment on a product; or
(b) For group health plans sold to groups other than small employer groups, 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; or
(c) For group health plans offered to small employer groups, no sooner than October 1, 2002, a carrier discontinues offering a particular type of health benefit plan if: (i) The carrier provides notice to each group provided coverage of this type 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 in any other small employer group health benefit plan currently being offered by the carrier; 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 individuals enrolled through the small employer group, individuals who may become eligible for such coverage, or the collective health status of groups enrolled in coverage of this type; or
(d) A carrier discontinues offering all small employer group health coverage in the state and discontinues coverage under all existing small employer group health benefit plans if: (i) The carrier provides notice to the commissioner of its intent to discontinue offering all small employer group health coverage in the state and its intent to discontinue coverage under all existing health benefit plans at least one hundred eighty days prior to the date of the discontinuation of coverage under all existing health benefit plans; and (ii) the carrier provides notice to each covered small employer group of the intent to discontinue his or her existing health benefit plan at least one hundred eighty days prior to the date of the discontinuation and includes information in the notice that can help the small employer group identify alternative sources of coverage. In the case of discontinuation under this subsection, the carrier may not issue any small employer group health coverage in this state for a five-year period beginning on the date of the discontinuation of the last health plan not so renewed. Nothing in this subsection (4) may be construed to require a carrier to provide notice to the commissioner of its intent to discontinue offering a health benefit plan to new applicants where 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.
Sec. 4. RCW 48.44.023 and 1995 c 265 s 16 are each amended to read as follows:
(1)(a) A health care
services contractor ((offering any)) may offer a 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)), as
defined in RCW 48.43.005, featuring a limited schedule of covered health
services ((that are required to be delivered to an individual enrolled in
the basic health plan)). 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)) those included in the product offered under this section.
A contractor offering a health benefit plan ((that does not include benefits
in the basic health plan)) under this subsection 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)) will not
include the services identified in RCW 48.44.225, 48.44.240, 48.44.245,
48.44.290, 48.44.300, 48.44.310, 48.44.315, 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))), 48.44.500, 48.43.045(1),
48.43.125, or 48.43.180 if the health benefit plan is offered to employers
with not more than ((twenty-five)) fifty employees.
(2)(a) 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)) health benefit plan offered under subsection (1) of this
section.
(b) All forms, policies, and contracts shall be submitted for approval to the commissioner, and the rates of any plan offered under subsection (1) of this section shall be reasonable in relation to the (i) benefits thereto, and (ii) risks involved as determined by the insurer.
(((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. 5. RCW 48.44.024 and 1995 c 265 s 23 are each amended to read as follows:
(1) No health care
service contractor shall offer any health benefit plan to any small employer
without complying with the provisions of RCW 48.44.023(((5))).
(2) Employers purchasing
health plans provided through associations or through member-governed groups
formed specifically for the purpose of purchasing health care shall not be
considered small employers and such plans shall not be subject to the
provisions of RCW 48.44.023(((5))).
(3) For purposes of this section, "health benefit plan," "health plan," and "small employer" mean the same as defined in RCW 48.43.005.
Sec. 6. 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)) may offer a 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)),
as defined in RCW 48.43.005, featuring a limited schedule of covered health
services ((that are required to be delivered to an individual enrolled in
the basic health plan)). 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)) those included in the product offered
under this section. A health maintenance organization offering a health
benefit plan ((that does not include benefits in the basic health plan))
under this subsection 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)) will not
include the services identified in RCW 48.46.272, 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))), 48.46.565,
48.46.570, 48.43.045(1), 48.43.125, or 48.43.180 if the health benefit plan
is offered to employers with not more than ((twenty-five)) fifty
employees.
(2)(a) 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)) health benefit plan offered under subsection (1) of this
section.
(b) All forms, policies, and contracts shall be submitted for approval to the commissioner, and the rates of any plan offered under subsection (1) of this section shall be reasonable in relation to the (i) benefits thereto, and (ii) risks involved as determined by the insurer.
(((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.))
Sec. 7. RCW 48.46.068 and 1995 c 265 s 24 are each amended to read as follows:
(1) No health
maintenance organization shall offer any health benefit plan to any small
employer without complying with the provisions of RCW 48.46.066(((5))).
(2) Employers
purchasing health plans provided through associations or through
member-governed groups formed specifically for the purpose of purchasing health
care shall not be considered small employers and such plans shall not be
subject to the provisions of RCW 48.46.066(((5))).
(3) For purposes of this section, "health benefit plan," "health plan," and "small employer" mean the same as defined in RCW 48.43.005.
NEW SECTION. Sec. 8. Section 3 of this act takes effect January 1, 2004.
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