HOUSE BILL REPORT

HB 2061

As Reported by House Committee On:

Health Care & Wellness

Title: An act relating to carriers operating outside of the exchange but only relating to requiring that carriers offering health benefit plans that meet the definition of bronze level in the individual or small group market must also offer silver and gold level plans as specified in section 1302 of P.L. 111-148 of 2010 and that nongrandfathered individual and small group health plans must conform with the actuarial value tiers specified in section 1302 of P.L. 111-148 of 2010

Brief Description: Clarifying the requirements for health plans offered outside of the exchange.

Sponsors: Representatives Harris, Cody and Hope.

Brief History:

Committee Activity:

Health Care & Wellness: 1/13/14, 1/23/14 [DP].

Majority Report: Do pass. Signed by 17 members: Representatives Cody, Chair; Riccelli, Vice Chair; Schmick, Ranking Minority Member; Harris, Assistant Ranking Minority Member; Clibborn, DeBolt, Green, G. Hunt, Jinkins, Manweller, Moeller, Morrell, Rodne, Ross, Short, Tharinger and Van De Wege.

Staff: Alexa Silver (786-7190).

Background:

The federal Patient Protection and Affordable Care Act as amended by the Health Care and Education Reconciliation Act of 2010 (ACA) specifies four categories of health plans to be offered through the Health Benefit Exchange (Exchange) and in the individual and small group markets outside the Exchange. The categories are based on the actuarial value of the plans (i.e., the percentage of the costs the plan is expected to pay):

• platinum: 90 percent of the actuarial value of the benefits under the plan;

• gold: 80 percent of the actuarial value of the benefits under the plan;

• silver: 70 percent of the actuarial value of the benefits under the plan; and

• bronze: 60 percent of the actuarial value of the benefits under the plan.

For plan or policy years beginning January 1, 2014, a carrier must offer individual or small group health benefit plans at the silver and gold level in any market outside the Exchange in which it offers a bronze level plan. All health plans outside the Exchange, other than catastrophic plans, must conform to the platinum, gold, silver, and bronze value tiers specified in the ACA.

Certain group health plans and individual health plans that were created before the ACA became effective are "grandfathered" and do not have to meet all the requirements of the ACA.

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Summary of Bill:

For plan or policy years beginning January 1, 2014, a carrier that offers a bronze level health benefit plan in the individual market must also offer silver and gold level plans in the individual market, and a carrier that offers a bronze level health benefit plan in the small group market must also offer silver and gold level plans in the small group market.

Only non-grandfathered individual and small group plans offered outside the Health Benefit Exchange, other than catastrophic plans, must conform to the platinum, gold, silver, and bronze value tiers specified in the Affordable Care Act.

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Appropriation: None.

Fiscal Note: Not requested.

Effective Date: The bill takes effect 90 days after adjournment of the session in which the bill is passed.

Staff Summary of Public Testimony:

(In support) The bill clarifies that the market rules were intended to be applied to small group and individual plans outside the Health Benefit Exchange, not large group plans. This was a drafting error from two years ago. The Office of the Insurance Commissioner sought to fix this mistake last year in its technical corrections bill.

(Opposed) None.

Persons Testifying: Tom Kwieciak, Building Industry Association of Washington; Clif Finch, Washington Alliance for Healthcare Insurance Trust; Sydney Smith Zvara, Association of Washington Healthcare Plans; Sheela Tallman, Premera Blue Cross; and Sheri Nelson, Association of Washington Business.

Persons Signed In To Testify But Not Testifying: None.