HOUSE BILL REPORT

ESB 6834

BYSenators Sellar, Conner, West, McDonald and Bauer

Establishing a basic health care plan for small business employees.

House Committe on Health Care

Majority Report:  Do pass.  (8)

      Signed by Representatives Braddock, Chair; Day, Vice Chair; Brooks, Ranking Republican Member; Cantwell, Morris, Prentice, D. Sommers and Wolfe.

Minority Report:  Do not pass.  (1)

      Signed by Representative Vekich.

House Staff:Bill Hagens (786-7131)

AS PASSED HOUSE MARCH 1, 1990

BACKGROUND:

Group health insurance policies issued in the state of Washington are required to provide services by specified health care providers and certain types of treatment.  These requirements appear in the statute that regulates group disability insurance policies, health care maintenance agreements and health care service contracts.  These mandated benefits are included in the majority of policies issued by any of the companies, health maintenance organizations or health care service contractors.

It has been suggested that because of the numerous mandates that are contained in state law, it is difficult for small businesses to purchase insurance for their employees.  As a result, it is argued, many people working for small business are left without health insurance coverage.  It has also been suggested that if a basic health insurance product were available, more small businesses would be able to afford insurance for their employees.

SUMMARY:

A basic group disability policy, health care service contract or health maintenance agreement may be offered to employers of fewer than 25 employees.  The basic contract, policy or agreement must provide coverage for hospital expenses and services rendered by a licensed physician or doctor of osteopathic medicine.  The basic policy, contract or agreement is not subject to any of the statutes mandating coverage for specified practitioners or procedures except for the requirements of coverage for a child from birth, and continuation of coverage for a child after the age of eligibility when the child is incapacitated.  The requirement that adopted children be covered applies to any basic health program.

An insurer is not prohibited from offering nor is a purchaser prohibited from seeking benefits in excess of the basic program that is authorized.  The Insurance Commissioner must approve all forms, policies and contracts, and rates for any basic plan must be reasonable in relationship to the benefits.

The Insurance Commissioner is required to collect data from insurers, health care service contractors and health maintenance organizations relating to the basic programs sold.  The data collected must include the number of groups purchasing coverage, the number of insured persons, subscribers, members and their dependents, and the rate and rate increases of the coverage.  The Insurance Commissioner is required to provide by November 1, 1992 a written summary of the data to the governor, appropriate legislative committees and other interested parties.

The basic group health plan authorized may not supplant an existing policy.  The right of employees to collectively bargain for insurance providing benefits in excess of the basic programs authorized is not restricted.

Fiscal Note:      Not Requested.

House Committee ‑ Testified For:    Mel Sorensen, Washington Physician's Service and Blue Cross; Robb Menaul, Washington State Hospital Association; Beverly Woods, Association of Washington Business; Rick Ruben, Health Care Purchasing Association; Dick Ducharme, Beer and Wine Wholesalers Association and Utility Contractor's Association; Susie Tracy, Washington State Medical Association; and Gary Smith, Independent Business Association.

House Committee - Testified Against:      No one.

House Committee - Testimony For:    This is an excellent piecemeal effort to assist small business in providing health care to their employees.

House Committee - Testimony Against:      None.