[atlas:bill]

AN ACT Relating to subsidizing premiums for employer-sponsored insurance; amending RCW 70.47.020; adding a new section to chapter 70.47 RCW; and adding a new section to chapter 74.09 RCW.

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

NEW SECTION. Sec. 1. A new section is added to chapter 70.47 RCW to read as follows:

(1) The legislature finds that many low-wage workers and their families are eligible for, or receive health insurance coverage through, the basic health plan and medical assistance programs. Some of these low-wage workers may work for employers who do not offer health insurance or may have access to employer-sponsored health insurance for themselves and their dependents, but that insurance may be unaffordable for the worker. The legislature finds that pilot projects should be established to determine whether it is appropriate to use basic health plan and medical assistance funds to subsidize premium shares for employer-sponsored health insurance when such a subsidy would be cost-effective for the state.

(2) Upon receipt of a reasonable request from an entity that has received funding through the federal health resources and services administration community access program to develop a regional system for increased access to health services and health insurance coverage, the administrator shall develop mechanisms to apply subsidy payments toward premium shares for employer-sponsored health insurance for the employees and their dependents, rather than as direct payments to managed health care systems participating in the basic health plan. The payment mechanisms must be developed in consultation with the requesting entity, the department of social and health services, and other interested entities, and must meet the following criteria:

(a) Subsidy payments may be made only on behalf of individuals who meet the basic health plan eligibility criteria in effect at the time the pilot project is underway; and

(b) Subsidy payments toward premium shares for employer-sponsored health insurance must be cost-effective. The payment amount must not exceed the subsidy payment amount that would be made to the benchmark managed health care system participating in the basic health plan in the counties covered by the pilot project if that employee had enrolled directly in the basic health plan.

(3) By November 1, 2002, the administrator and the secretary of the department of social and health services must jointly report to the health care committees of the senate and the house of representatives on their progress in developing the payment mechanisms authorized in this act.

Sec. 2. RCW 70.47.020 and 2000 c 79 s 43 are each amended to read as follows:

As used in this chapter:

(1) "Washington basic health plan" or "plan" means the system of enrollment and payment for basic health care services, administered by the plan administrator through participating managed health care systems, created by this chapter.

(2) "Administrator" means the Washington basic health plan administrator, who also holds the position of administrator of the Washington state health care authority.

(3) "Managed health care system" means: (a) Any health care organization, including health care providers, insurers, health care service contractors, health maintenance organizations, or any combination thereof, that provides directly or by contract basic health care services, as defined by the administrator and rendered by duly licensed providers, to a defined patient population enrolled in the plan and in the managed health care system; or (b) a self-funded or self-insured method of providing insurance coverage to subsidized enrollees provided under RCW 41.05.140 and subject to the limitations under RCW 70.47.100(7).

(4) "Subsidized enrollee" means an individual, or an individual plus the individual's spouse or dependent children: (a) Who is not eligible for medicare; (b) who is not confined or residing in a government-operated institution, unless he or she meets eligibility criteria adopted by the administrator; (c) who resides in an area of the state served by a managed health care system participating in the plan; (d) whose gross family income at the time of enrollment does not exceed two hundred percent of the federal poverty level as adjusted for family size and determined annually by the federal department of health and human services; and (e) who chooses to obtain basic health care coverage from a particular managed health care system in return for periodic payments to the plan. To the extent that state funds are specifically appropriated for this purpose, with a corresponding federal match, "subsidized enrollee" also means an individual, or an individual's spouse or dependent children, who meets the requirements in (a) through (c) and (e) of this subsection and whose gross family income at the time of enrollment is more than two hundred percent, but less than two hundred fifty-one percent, of the federal poverty level as adjusted for family size and determined annually by the federal department of health and human services.

(5) "Nonsubsidized enrollee" means an individual, or an individual plus the individual's spouse or dependent children: (a) Who is not eligible for medicare; (b) who is not confined or residing in a government-operated institution, unless he or she meets eligibility criteria adopted by the administrator; (c) who resides in an area of the state served by a managed health care system participating in the plan; (d) who chooses to obtain basic health care coverage from a particular managed health care system; and (e) who pays or on whose behalf is paid the full costs for participation in the plan, without any subsidy from the plan.

(6) "Subsidy" means the difference between the amount of periodic payment the administrator makes to a managed health care system or an entity authorized in section 1 of this act on behalf of a subsidized enrollee plus the administrative cost to the plan of providing the plan to that subsidized enrollee, and the amount determined to be the subsidized enrollee's responsibility under RCW 70.47.060(2).

(7) "Premium" means a periodic payment, based upon gross family income which an individual, their employer or another financial sponsor makes to the plan as consideration for enrollment in the plan as a subsidized enrollee or a nonsubsidized enrollee.

(8) "Rate" means the amount, negotiated by the administrator with and paid to a participating managed health care system, that is based upon the enrollment of subsidized and nonsubsidized enrollees in the plan and in that system.

NEW SECTION. Sec. 3. A new section is added to chapter 74.09 RCW to read as follows:

(2) Upon receipt of a request from an entity that has received funding from the federal health resources and services administration community access program to develop a regional system for increased access to health services and health insurance coverage, the secretary shall use his or her existing authority under Title XIX of the federal social security act to pay premium shares for employer-sponsored health insurance for the employees and their dependents. Payment mechanisms must be developed in consultation with the requesting entity, the health care authority, and other interested entities, and must meet the following criteria:

(a) Subsidy payments may be made only on behalf of individuals who meet medical assistance eligibility criteria in effect at the time the pilot project is underway; and

(b) Payments toward premium shares for employer-sponsored health insurance must be cost-effective, as defined in federal law.