"NEW SECTION.  Sec. 1   The legislature finds that the affordable care act requires the states to establish health benefit exchanges. The legislature intends to establish an exchange, including a governance structure that will be in place no later than July 1, 2012. There are many policy decisions associated with establishing an exchange that need to be made that will take a great deal of effort and expertise. It is therefore the intent of the legislature to establish a process through which these policy decisions can be made by the legislature and the governor by the deadline established in the affordable care act.

NEW SECTION.  Sec. 2   The definitions in this section apply throughout this chapter unless the context clearly requires otherwise. Terms and phrases used in this chapter that are not defined in this section must be defined as consistent with implementation of a state health benefit exchange pursuant to the affordable care act.
     (1) "Affordable care act" means the federal patient protection and affordable care act, P.L. 111-148, as amended by the federal health care and education reconciliation act of 2010, P.L. 111-152, or federal regulations or guidance issued under the affordable care act.
     (2) "Authority" means the Washington state health care authority, established under chapter 41.05 RCW.
     (3) "Board" means the health benefit exchange board established in section 4 of this act.
     (4) "Commissioner" means the insurance commissioner, established in Title 48 RCW.
     (5) "Exchange" means a state health benefit exchange pursuant to the affordable care act.

NEW SECTION.  Sec. 3   The state shall establish, by statute, a health benefit exchange consistent with the federal affordable care act, P.L. 111-148, to begin operations no later than January 1, 2014. Initially, the powers and duties of the exchange, and its board, shall be limited as provided in section 4(10) of this act. Once operational, the exchange is intended to:
     (1) Increase access to quality affordable health care coverage, reduce the number of uninsured persons in Washington state, and increase the availability of health care coverage through the private health insurance market to qualified individuals and small employers;
     (2) Provide consumer choice and portability of health insurance, regardless of employment status;
     (3) Create an organized, transparent, and accountable health insurance marketplace for Washingtonians to purchase affordable, quality health care coverage, to claim available federal refundable premium tax credits and cost-sharing subsidies, and to meet the personal responsibility requirements for minimum essential coverage as provided under the federal affordable care act;
     (4) Promote consumer literacy and empower consumers to compare plans and make informed decisions about their health care and coverage;
     (5) Effectively and efficiently administer health care subsidies and determination of eligibility for participation in publicly subsidized health care programs, including the exchange;
     (6) Create a health insurance market that competes on the basis of price, quality, service, and other innovative efforts;
     (7) Operate in a manner compatible with efforts to improve quality, contain costs, and promote innovation;
     (8) Recognize the need for a private health insurance market to exist outside of the exchange and the need for a regulatory framework that applies both inside and outside of the exchange; and
     (9) Recognize that the regulation of the health insurance market, both inside and outside the exchange, should continue to be performed by the insurance commissioner.

NEW SECTION.  Sec. 4   (1) The health benefit exchange shall be established by July 1, 2012, as a quasi-governmental, public-private partnership with a health benefit exchange board composed of nine persons with expertise in the Washington state health care system and private and public health care coverage. The governor shall appoint members of the board as follows:
     (a) Two employee benefits specialists;
     (b) A health economist or actuary;
     (c) A representative of small businesses;
     (d) A representative of health care consumer advocates;
     (e) The administrator of the health care authority under chapter 41.05 RCW;
     (f) The insurance commissioner or designee as a nonvoting ex officio member; and
     (g) Two appointments from a list of recommendations submitted by the legislature. Each chamber of the legislature shall forward two recommendations representing mutually agreed on names from each caucus. Each person appointed to the board under this subsection (1)(g) must have demonstrated and acknowledged expertise in at least one of the following areas:
     (i) Individual health care coverage;
     (ii) Small employer health care coverage;
     (iii) Health benefits plan administration;
     (iv) Health care finance and economics;
     (v) Actuarial science;
     (vi) Administering a public or private health care delivery system; or
     (vii) Purchasing health plan coverage.
     (2) The board shall elect a chair from among its members.
     (3) No board member may be employed by, a consultant to, a member of the board of directors of, or otherwise a representative of or a lobbyist for an entity in the business of, or potentially in the business of, selling items or services of significant value to the health benefit exchange.
     (4) Initial members of the board shall serve staggered terms not to exceed four years. Initial appointments must be made on or before July 1, 2012. Members appointed thereafter shall serve two-year terms.
     (5) Members of the board must be reimbursed for their travel expenses while on official business in accordance with RCW 43.03.050 and 43.03.060. The board shall prescribe rules for the conduct of its business. Meetings of the board are at the call of the chair.
     (6) The board shall conduct its business consistent with the provisions of chapter 42.30 RCW, the open public meetings act. Consistent with the open public meetings act, the board may hold executive sessions to consider proprietary or confidential nonpublished information.
     (7)(a) The board shall establish an advisory committee to allow for the views of the health care industry and other stakeholders to be heard in the operation of the health benefit exchange. The advisory committee shall provide expertise and recommendations to the board, but shall have no authority to promulgate rules or enter into contracts on behalf of the health benefit exchange.
     (b) The board may establish technical advisory committees or seek the advice of technical experts when necessary to execute the powers and duties included in this act.
     (8) Members of the board are not civilly or criminally liable and may not have any penalty or cause of action of any nature arise against them for any action taken or not taken, including any discretionary decision or failure to make a discretionary decision, when the action or inaction is done in good faith and in the performance of the powers and duties under this act. Nothing in this section prohibits legal actions against the board to enforce the board's statutory or contractual duties or obligations.
     (9) In recognition of the government to government relationship between the state of Washington and the federally recognized tribes in the state of Washington, the board shall consult with the American Indian health commission on an ongoing basis.
     (10)(a) The powers and duties of the exchange and the board are limited to those necessary to apply for and administer grants, establish information technology infrastructure, and other administrative functions necessary to begin operating the exchange by January 1, 2014. Neither the exchange nor the board may begin operating the exchange or make substantive decisions regarding the options developed under section 5 of this act unless specifically authorized to do so by statute.
     (b) Neither the exchange nor the board shall be deemed to be established until all of the members of the board are appointed as provided in subsection (1) of this section.
     (c) Prior to the establishment of the exchange and the board, the authority shall:
     (i) Be responsible for the duties imposed on the exchange and the board under (a) of this subsection; and
     (ii) Have the powers granted to the exchange and the board under (a) of this subsection.

NEW SECTION.  Sec. 5   (1)(a) In collaboration with the joint select committee on health reform implementation, the authority shall apply for planning and establishment grants pursuant to the affordable care act. Whenever possible, planning and establishment grant applications shall allow for the possibility of partially funding the activities of the joint select committee on health reform implementation.
     (b) The authority, in collaboration with the joint select committee on health reform implementation, shall implement provisions of the planning and establishment grants as approved by the United States secretary of health and human services.
     (2) Consistent with the work plan developed in subsection (3) of this section, but in no case later than January 1, 2012, the authority, in collaboration with the joint select committee on health reform implementation, shall develop a broad range of options for establishing and implementing a state-administered health benefit exchange. The options must include analysis and recommendations on the following:
     (a) The operations and administration of the exchange, including:
     (i) The goals and principles of the exchange;
     (ii) The creation and implementation of a single state-administered exchange for all geographic areas in the state that operates as the exchange for both the individual and small employer markets by January 1, 2014;
     (iii) Whether and under what circumstances the state should consider establishment of, or participation in, a regionally administered multistate exchange;
     (iv) Whether the role of an exchange includes serving as an aggregator of funds that comprise the premium for a health plan offered through the exchange;
     (v) The administrative, fiduciary, accounting, contracting, and other services to be provided by the exchange;
     (vi) Coordination of the exchange with other state programs;
     (vii) Development of sustainable funding for administration of the exchange as of January 1, 2015; and
     (viii) Recognizing the need for expedience in determining the structure of needed information technology, the necessary information technology to support implementation of exchange activities.
     (b) Whether to adopt and implement a federal basic health plan option as authorized in the affordable care act, whether the federal basic health plan option should be administered by the entity that administers the exchange or by a state agency, and whether the federal basic health plan option should merge risk pools for rating with any portion of the state's medicaid program;
     (c) Individual and small group market impacts, including whether to:
     (i) Merge the risk pools for rating the individual and small group markets in the exchange and the private health insurance markets; and
     (ii) Increase the small group market to firms with up to one hundred employees;
     (d) Creation of a competitive purchasing environment for qualified health plans offered through the exchange, including promoting participation in the exchange to a level sufficient to provide sustainable funding for the exchange;
     (e) Certifying, selecting, and facilitating the offer of individual and small group plans through an exchange, to include designation of qualified health plans and the levels of coverage for the plans;
     (f) The role and services provided by producers and navigators, including the option to use private insurance market brokers as navigators;
     (g) Effective implementation of risk management methods, including: Reinsurance, risk corridors, risk adjustment, to include the entity designated to operate reinsurance and risk adjustment, and the continuing role of the Washington state health insurance pool;
     (h) Participation in innovative efforts to contain costs in Washington's markets for public and private health care coverage;
     (i) Providing federal refundable premium tax credits and reduced cost-sharing subsidies through the exchange, including the processes and entity responsible for determining eligibility to participate in the exchange and the cost-sharing subsidies provided through the exchange;
     (j) The staff, resources, and revenues necessary to operate and administer an exchange for the first two years of operation;
     (k) The extent and circumstances under which benefits for spiritual care services that are deductible under section 213(d) of the internal revenue code as of January 1, 2010, will be made available under the exchange; and
     (l) Any other areas identified by the joint select committee on health reform implementation.
     (3)(a) In collaboration with the joint select committee on health reform implementation, the authority shall develop a work plan for the development of options under subsection (2) of this section in discrete, prioritized stages.
     (b) The joint select committee on health reform implementation may submit to the authority specific questions pertaining to the establishment of a health benefit exchange under section 3 of this act.
     (4) The authority shall consult with the commissioner, the joint select committee on health reform implementation, and stakeholders relevant to carrying out the activities required under this section, including: (a) Educated health care consumers who are enrolled in commercial health insurance coverage and publicly subsidized health care programs; (b) individuals and entities with experience in facilitating enrollment in health insurance coverage, including health carriers, producers, and navigators; (c) representatives of small businesses, employees of small businesses, and self-employed individuals; (d) advocates for enrolling hard to reach populations and populations enrolled in publicly subsidized health care programs; (e) facilities and providers of health care; (f) representatives of publicly subsidized health care programs; and (g) members in good standing of the American academy of actuaries.
     (5) Once established under section 4 of this act, the exchange and the board shall be responsible for the duties imposed on the authority under this section.

NEW SECTION.  Sec. 6   (1) The authority may enter into:
     (a) Information sharing agreements with federal and state agencies and other state exchanges to carry out the provisions of this act: PROVIDED, That such agreements include adequate protections with respect to the confidentiality of the information to be shared and comply with all state and federal laws and regulations; and
     (b) Interdepartmental agreements with the office of the insurance commissioner, the department of social and health services, the department of health, and any other state agencies necessary to implement this act.
     (2) To the extent funding is available, the authority shall:
     (a) Provide staff and resources to implement this act;
     (b) Manage and administer the grant and other funds; and
     (c) Expend funds specifically appropriated by the legislature to implement the provisions of this act.
     (3) Once established under section 4 of this act, the exchange and the board shall:
     (a) Be responsible for the duties imposed on the authority under this section; and
     (b) Have the powers granted to the authority under this section.

NEW SECTION.  Sec. 7   Sections 1 through 6 of this act constitute a new chapter in Title 43 RCW."