BILL REQ. #:  H-1109.2 

Read first time 01/27/09.   Referred to Committee on Health Care & Wellness.

     AN ACT Relating to association health plans; amending RCW 48.21.047, 48.44.024, and 48.46.068; adding a new section to chapter 48.21 RCW; adding a new section to chapter 48.44 RCW; and adding a new section to chapter 48.46 RCW.

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

Sec. 1   RCW 48.21.047 and 2005 c 223 s 11 are each amended to read as follows:
     (1) An insurer may not offer any health benefit plan to any small employer without complying with RCW 48.21.045(((3))).
     (2) Employers purchasing health plans provided through associations or through member-governed groups ((formed specifically for the purpose of purchasing health care)) are not small employers and the plans are not subject to RCW 48.21.045(((3))), but are subject to section 4 of this act.
     (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. 2   RCW 48.44.024 and 2003 c 248 s 15 are each amended to read as follows:
     (1) A health care service contractor may not offer any health benefit plan to any small employer without complying with RCW 48.44.023(((3))).
     (2) Employers purchasing health plans provided through associations or through member-governed groups ((formed specifically for the purpose of purchasing health care)) are not small employers and the plans are not subject to RCW 48.44.023(((3))), but are subject to section 5 of this act.
     (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 48.46.068 and 2003 c 248 s 16 are each amended to read as follows:
     (1) A health maintenance organization may not offer any health benefit plan to any small employer without complying with RCW 48.46.066(((3))).
     (2) Employers purchasing health plans provided through associations or through member-governed groups ((formed specifically for the purpose of purchasing health care)) are not small employers and are not subject to RCW 48.46.066(((3))), but are subject to section 6 of this act.
     (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. 4   A new section is added to chapter 48.21 RCW to read as follows:
     (1) Premium rates for health benefit plans for employers and individuals purchasing health plans provided through associations or through member-governed groups shall be subject to the following provisions:
     (a) The insurer shall develop the rates for a particular association or member-governed group based on an adjusted community rate applied to the entire association or member-governed group 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. Individuals 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.
     (d) 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.
     (e) A discount for wellness activities shall be permitted to reflect actuarially justified differences in utilization or cost attributed to such programs.
     (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 employer;
     (ii) Changes to the family composition of the employee or individual;
     (iii) Changes to the health benefit plan requested by the employer, the association or member-governed group, or the individual; or
     (iv) Changes in government requirements affecting the health benefit plan.
     (g) 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. A carrier may develop its rates based on claims costs due to network provider reimbursement schedules or type of network. This subsection does not restrict or enhance the portability of benefits as provided in RCW 48.43.015.
     (h) Adjusted community rates established under this section shall pool the medical experience of the entire association or member-governed group.
     (2) Nothing in this section shall restrict the right of employees to collectively bargain for insurance providing benefits in excess of those provided herein.
     (3)(a) Except as provided in this subsection, requirements used by an insurer in determining whether to provide coverage to an employer or an individual purchasing health plans provided through associations or member-governed groups shall be applied uniformly among all employers and individuals applying for coverage or receiving coverage through an association or member-governed group 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 an employer, an 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 an employer at any time after the employer has been accepted for coverage.
     (e) Minimum participation requirements and employer premium contribution requirements adopted by the health insurance partnership board under RCW 70.47A.110 shall apply only to the employers and employees who purchase health benefit plans through the health insurance partnership.
     (4) An insurer must offer coverage to all eligible employees of an employer purchasing health plans through associations or member-governed groups and their dependents. An insurer may not offer coverage to only certain individuals or dependents of an employer or to only part of the employer group. An insurer which offers health plans to an association or member-governed group must offer all such health plans to all members of the association or member-governed group. An insurer may not modify a health plan with respect to an employer or individual member of an association or any eligible employee or dependent of an association member through riders, endorsements, or otherwise, to restrict or exclude coverage or benefits for specific diseases, medical conditions, or services otherwise covered by the plan.
     (5) As used in this section, "health benefit plan," "adjusted community rate," and "wellness activities" mean the same as defined in RCW 48.43.005.

NEW SECTION.  Sec. 5   A new section is added to chapter 48.44 RCW to read as follows:
     (1) Premium rates for health benefit plans for employers and individuals purchasing health plans provided through associations or through member-governed groups shall be subject to the following provisions:
     (a) The contractor shall develop the rates for a particular association or member-governed group based on an adjusted community rate applied to the entire association or member-governed group 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. Individuals 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.
     (d) 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.
     (e) A discount for wellness activities shall be permitted to reflect actuarially justified differences in utilization or cost attributed to such programs.
     (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 employer;
     (ii) Changes to the family composition of the employee or individual;
     (iii) Changes to the health benefit plan requested by the employer, the association or member-governed group, or the individual; or
     (iv) Changes in government requirements affecting the health benefit plan.
     (g) 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. A carrier may develop its rates based on claims costs due to network provider reimbursement schedules or type of network. This subsection does not restrict or enhance the portability of benefits as provided in RCW 48.43.015.
     (h) Adjusted community rates established under this section shall pool the medical experience of the entire association or member-governed group.      
     (2) Nothing in this section shall restrict the right of employees to collectively bargain for insurance providing benefits in excess of those provided herein.
     (3)(a) Except as provided in this subsection, requirements used by a contractor in determining whether to provide coverage to an employer or an individual purchasing health plans provided through associations or member-governed groups shall be applied uniformly among all employers and individuals applying for coverage or receiving coverage through an association or member-governed group 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 an employer, an 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 employer has been accepted for coverage.
     (e) Minimum participation requirements and employer premium contribution requirements adopted by the health insurance partnership board under RCW 70.47A.110 shall apply only to the employers and employees who purchase health benefit plans through the health insurance partnership.
     (4) A contractor must offer coverage to all eligible employees of an employer purchasing health plans through associations or member-governed groups and their dependents. A contractor may not offer coverage to only certain individuals or dependents of an employer or to only part of the employer group. A contractor that offers health plans to an association or member-governed group must offer all such health plans to all members of the association or member-governed group. A contractor may not modify a health plan with respect to an employer or individual member of an association or any eligible employee or dependent of an association member, through riders, endorsements, or otherwise, to restrict or exclude coverage or benefits for specific diseases, medical conditions, or services otherwise covered by the plan.
     (5) As used in this section, "health benefit plan," "adjusted community rate," and "wellness activities" mean the same as defined in RCW 48.43.005.

NEW SECTION.  Sec. 6   A new section is added to chapter 48.46 RCW to read as follows:
     (1) Premium rates for health benefit plans for employers and individuals purchasing health plans provided through associations or through member-governed groups shall be subject to the following provisions:
     (a) The health maintenance organization shall develop the rates for a particular association or member-governed group based on an adjusted community rate applied to the entire association or member-governed group 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. Individuals 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.
     (d) 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.
     (e) A discount for wellness activities shall be permitted to reflect actuarially justified differences in utilization or cost attributed to such programs.
     (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 employer;
     (ii) Changes to the family composition of the employee or individual;
     (iii) Changes to the health benefit plan requested by the employer, the association or member-governed group, or the individual; or
     (iv) Changes in government requirements affecting the health benefit plan.
     (g) 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. A carrier may develop its rates based on claims costs due to network provider reimbursement schedules or type of network. This subsection does not restrict or enhance the portability of benefits as provided in RCW 48.43.015.
     (h) Adjusted community rates established under this section shall pool the medical experience of the entire association or member-governed group.     
     (2) Nothing in this section shall restrict the right of employees to collectively bargain for insurance providing benefits in excess of those provided herein.
     (3)(a) Except as provided in this subsection, requirements used by a health maintenance organization in determining whether to provide coverage to an employer or an individual purchasing health plans provided through associations or member-governed groups shall be applied uniformly among all employers and individuals applying for coverage or receiving coverage through an association or member-governed group 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 an employer, an 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 an employer at any time after the employer has been accepted for coverage.
     (e) Minimum participation requirements and employer premium contribution requirements adopted by the health insurance partnership board under RCW 70.47A.110 shall apply only to the employers and employees who purchase health benefit plans through the health insurance partnership.
     (4) A health maintenance organization must offer coverage to all eligible employees of an employer purchasing health plans through associations or member-governed groups and their dependents. A health maintenance organization may not offer coverage to only certain individuals or dependents of an employer or to only part of the employer group. A health maintenance organization that offers health plans to an association or member-governed group must offer all such health plans to all members of the association or member-governed group. A health maintenance organization may not modify a health plan with respect to an employer or individual member of an association or any eligible employee or dependent of an association member, through riders, endorsements, or otherwise, to restrict or exclude coverage or benefits for specific diseases, medical conditions, or services otherwise covered by the plan.
     (5) As used in this section, "health benefit plan," "adjusted community rate," and "wellness activities" mean the same as defined in RCW 48.43.005.