BILL REQ. #: H-3779.1
State of Washington | 62nd Legislature | 2012 Regular Session |
Read first time 01/25/12. Referred to Committee on Health Care & Wellness.
AN ACT Relating to expanding opportunities for the purchase of health care coverage outside of state-governed health care coverage programs; adding new sections to chapter 48.05 RCW; and creating a new section.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
NEW SECTION. Sec. 1 (1) The legislature recognizes the need for
individuals and small employers to have multiple options for health
insurance coverage to meet their personal and financial needs.
Washington currently has a limited market within which consumers are
unable to find true choice among health plans and health insurers. The
ability to choose among competitive health plans and insurers will be
essential to ensuring individuals and small employers have access to
affordable, quality coverage.
(2) The federal patient protection and affordable care act provides
certain consistencies that make it easier and more desirable to develop
new options for consumers.
(3) As the state moves forward to develop the federally required
state-based health exchange, small employers and individuals unable to
take advantage of tax credits and subsidies are still in need of
affordable coverage and should not be ignored during this time of
implementation. Providing additional options for these purchasers is
essential to ensuring they are able to maintain coverage and are
receiving true value from the coverage they choose.
(4) The legislature therefore intends to expand affordable coverage
to individuals and small employers that will improve the variety of
health plan designs and price points, as well as increase the number of
insurers competing for consumer dollars within our state.
NEW SECTION. Sec. 2 (1) By January 2014, the insurance
commissioner shall identify at least five states within which eighty-five percent of those state's insurance laws governing reserves,
network adequacy, complaint resolution, consumer protection, and
marketing standards either meet or exceed standards established by the
national association of insurance commissioners, and that have no more
than two of the same health insurers or their affiliate lines of
business providing coverage in that state's small group and individual
markets that are also providing coverage in Washington's small group
and individual markets, and are interested in joining in a licensing
reciprocal agreement that allows for the sale of private market health
plans among the consortium states. The commissioner shall approve for
sale in Washington the private market individual and small group
policies that have been approved for issuance in the participating
reciprocity states, so long as the policies comply with the federal
employee health benefit plan design. Such policies are prohibited from
being sold in the state-based exchange in accordance with section 6 of
this act.
(2) A policy approved and issued pursuant to this section must be
treated as if it were issued by an insurer domiciled in Washington,
regardless of the insurer's domiciliary state.
NEW SECTION. Sec. 3 (1) Any insurer selling an insurance policy
pursuant to this section, and any plan approved under this section,
must satisfy actuarial standards and insurer solvency requirements in
accordance with the national association of insurance commissioners and
adopted in the reciprocal state or as otherwise prescribed by similar
rule adopted in the reciprocal state so long as any such rule is not
inconsistent with the national association of insurance commissioners
standards.
(2) The commissioner has the authority to determine whether an
insurer satisfies the standards required by this section and may not
approve a policy or plan that he or she finds not in compliance with
this section. The commissioner has the authority to determine whether
the policies sold pursuant to this section continue to satisfy the
requirements of this section in the same manner as he or she does with
a policy issued by an insurer domiciled in the state. The commissioner
has the authority to suspend or revoke new sales of out-of-state
policies if the laws and rules of those states are determined to
egregiously harm Washington residents. Upon such suspension or
revocation, the issuers of the out-of-state policies are required to
notify in writing all affected Washington policyholders.
NEW SECTION. Sec. 4 (1) Each written application for
participation in an out-of-state health benefit plan under this section
or plan issued pursuant to this chapter must contain the following
language in boldface type at the beginning of the document:
"This policy is primarily governed by the laws of (insert state
where the master policy is filed); therefore, all of the rating laws
applicable to policies filed in this state may not apply to this
policy, which may result in increases in your premium at renewal that
would be different than increases experienced by residents purchasing
coverage from insurers domiciled in the state of Washington. For
information concerning individual or small group health coverage under
a Washington approved policy, please consult your insurance agent or
the office of the insurance commissioner."
(2) Each out-of-state health benefit policy issued pursuant to this
chapter must contain the following language in boldface type at the
beginning of the document:
"The benefits of this policy providing your coverage are governed
by the laws of a state OTHER than Washington. While this health
benefit plan includes the federally required essential health benefits,
it may provide fewer health benefits than those normally included as a
state-mandated health benefit in Washington state. Please consult your
insurance agent to determine which state mandated health benefits are
excluded under this policy."
NEW SECTION. Sec. 5 The commissioner shall cooperate with other
insurance commissioners in creating a consortium of like-states. The
consortium shall establish rules of reciprocity for the approval of
comprehensive private market individual and small group health plans in
the participating states. At a minimum, the rules of approval for
reciprocity must include the terms and conditions to protect Washington
residents similar to the following:
(1) An issuer, with respect to a particular insurer, may only
designate one state as its primary state with respect to all such
coverage it offers. Such an issuer may not change the designated
primary state with respect to individual or small group health coverage
within three years of selecting its state of designation;
(2) In the case of an insurer that is selling a policy in, or to a
resident of, a secondary state, the issuer must be considered as being
licensed and approved to do business in the secondary state;
(3) The covered laws of the primary state apply to individual and
small group coverage offered by a health insurer domiciled in the
primary state and all policies sold by that insurer in any secondary
state; and
(4) Insurers participating in the sale of health plans in secondary
states are subject to payment on a nondiscriminatory basis of
applicable premium and other taxes, including high risk pool
assessments and other assessments which are levied on insurers in the
participant states. The assessments must be based on the number of
lives covered in the secondary state in which the assessment applies.
NEW SECTION. Sec. 6 By January 2017, the commissioner shall
present to the legislature a plan to either establish a separate
compact that will allow for more enhanced opportunities for Washington
to collaborate with states on the sale of health care coverage; or to
convert the existing reciprocal agreement into a more expansive
compact. After such a compact is in place, the state may consider
options for allowing carriers not fully admitted in the state of
Washington to participate in Washington's state-based health exchange.
Before the existence of a governing compact, insurers participating in
reciprocal agreements with participating states are prohibited from
selling policies through Washington's state-based exchange until such
time as that insurer becomes a fully admitted carrier in Washington.
NEW SECTION. Sec. 7 Sections 2 through 6 of this act are each
added to chapter