BILL REQ. #: H-0564.3
| State of Washington | 60th Legislature | 2007 Regular Session |
Read first time 01/23/2007. Referred to Committee on Health Care & Wellness.
AN ACT Relating to reforming the health care system in Washington state; amending RCW 41.05.021, 48.43.005, 48.43.015, 48.43.025, and 48.43.035; adding new sections to chapter 48.43 RCW; adding a new chapter to Title 41 RCW; adding a new chapter to Title 49 RCW; creating new sections; repealing RCW 48.01.260, 48.20.025, 48.20.028, 48.20.029, 48.21.045, 48.21.047, 48.43.012, 48.43.018, 48.43.038, 48.43.041, 48.44.017, 48.44.021, 48.44.022, 48.44.023, 48.44.024, 48.46.062, 48.46.063, 48.46.064, 48.46.066, 48.46.068, 70.47A.010, 70.47A.020, 70.47A.030, 70.47A.040, 70.47A.050, 70.47A.060, 70.47A.070, 70.47A.080, 70.47A.090, 70.47A.900, 48.41.010, 48.41.020, 48.41.030, 48.41.037, 48.41.040, 48.41.050, 48.41.060, 48.41.070, 48.41.080, 48.41.090, 48.41.100, 48.41.110, 48.41.120, 48.41.130, 48.41.140, 48.41.150, 48.41.160, 48.41.170, 48.41.190, 48.41.200, 48.41.210, 48.41.900, and 48.41.910; and providing effective dates.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
NEW SECTION. Sec. 101
(1) The people of Washington have expressed strong concerns about
health care costs and access to needed health services. Even if
currently insured, they are not confident that they will continue to
have health insurance coverage in the future and feel that they are
getting less, but spending more.
(2) Many employers, especially small employers, struggle with the
cost of providing employer-sponsored health insurance coverage to their
employees, while others are unable to offer employer-sponsored health
insurance due to its high cost.
(3) Six hundred thousand Washingtonians are uninsured.
Three-quarters work or have a working family member; two-thirds are low
income; and one-half are young adults. Many are low-wage workers who
are not offered, or eligible for, employer-sponsored coverage. Others
struggle with the burden of paying their share of the costs of
employer-sponsored health insurance, while still others turn down their
employer's offer of coverage due to its costs.
(4) Access to health insurance and other health care spending has
resulted in improved health for many Washingtonians. Yet, we are not
receiving as much value as we should for each health care dollar spent
in Washington state. By failing to sufficiently focus our efforts on
prevention and management of chronic diseases, such as diabetes,
asthma, and heart disease, too many Washingtonians suffer from
complications of their illnesses. By failing to make health insurance
coverage affordable for low-wage workers and self-employed people,
health problems that could be treated in a doctor's office are treated
in the emergency room or hospital. By failing to focus on the most
effective ways to maintain our health and treat disease, Washingtonians
have not made lifestyle changes proven to improve health, nor do they
receive the most effective care.
NEW SECTION. Sec. 102
(1) Health insurance coverage is more affordable for employers,
employees, self-employed people, and other individuals;
(2) The process of choosing and purchasing health insurance
coverage is well-informed, clearer, and simpler;
(3) Prevention, chronic care management, wellness, and improved
quality of care are a fundamental part of our health care system; and
(4) As a result of these changes, more people in Washington state
have access to affordable health insurance coverage and health outcomes
in Washington state are improved.
NEW SECTION. Sec. 201 The definitions in this section apply
throughout this chapter unless the context clearly requires otherwise.
(1) "Administrator" means the administrator of the health care
authority as defined in RCW 41.05.011.
(2) "Authority" means the health care authority established in
chapter 41.05 RCW.
(3) "Basic health plan" means the program administered under
chapter 70.47 RCW.
(4) "Carrier" means a carrier as defined in RCW 48.43.005.
(5) "Commissioner" means the insurance commissioner established
under RCW 48.02.010.
(6) "Connector" means the Washington state health insurance
connector established in section 203 of this act.
(7) "Connector board" and "board" means the board of the Washington
state health insurance connector established in section 204 of this
act.
(8) "Eligible individual" means an individual, including a sole
proprietor, who is a resident of Washington state and is not offered
subsidized health insurance by an employer with more than fifty
employees. "Eligible individual" includes any individual who is
eligible for benefits under section 210 of the federal trade act of
2002, at 26 U.S.C. Sec. 35(c).
(9) "Eligible small group" or "eligible small employer" means a
small group or small employer as defined in RCW 48.43.005.
(10) "Health plan" or "health benefit plan" means a health plan or
health benefit plan as defined in RCW 48.43.005.
(11) "Participating individual" means a person who has been
determined by the connector to be, and continues to be, an eligible
individual or an employee of a participating small employer plan for
purposes of obtaining coverage through the connector.
(12) "Participating small employer plan" means a group health plan,
as defined in federal law, Sec. 706 of ERISA (29 U.S.C. Sec. 1186),
that is sponsored by a small employer and for which the plan sponsor
has entered into an agreement with the connector, in accordance with
the provisions of section 208 of this act, for the connector to offer
and administer health insurance benefits for enrollees in the plan.
(13) "Preexisting condition" means a preexisting condition as
defined in RCW 48.43.005.
(14) "Premium assistance payment" means a payment made to carriers
by the connector as provided in section 209 of this act.
Sec. 202 RCW 41.05.021 and 2006 c 103 s 2 are each amended to
read as follows:
(1) The Washington state health care authority is created within
the executive branch. The authority shall have an administrator
appointed by the governor, with the consent of the senate. The
administrator shall serve at the pleasure of the governor. The
administrator may employ up to seven staff members, who shall be exempt
from chapter 41.06 RCW, and any additional staff members as are
necessary to administer this chapter. The administrator may delegate
any power or duty vested in him or her by this chapter, including
authority to make final decisions and enter final orders in hearings
conducted under chapter 34.05 RCW. The primary duties of the authority
shall be to: Administer state employees' insurance benefits and
retired or disabled school employees' insurance benefits; administer
the basic health plan pursuant to chapter 70.47 RCW; study state-purchased health care programs in order to maximize cost containment in
these programs while ensuring access to quality health care; and
implement state initiatives, joint purchasing strategies, and
techniques for efficient administration that have potential application
to all state-purchased health services. The authority's duties
include, but are not limited to, the following:
(a) To administer health care benefit programs for employees and
retired or disabled school employees as specifically authorized in RCW
41.05.065 and in accordance with the methods described in RCW
41.05.075, 41.05.140, and other provisions of this chapter;
(b) To analyze state-purchased health care programs and to explore
options for cost containment and delivery alternatives for those
programs that are consistent with the purposes of those programs,
including, but not limited to:
(i) Creation of economic incentives for the persons for whom the
state purchases health care to appropriately utilize and purchase
health care services, including the development of flexible benefit
plans to offset increases in individual financial responsibility;
(ii) Utilization of provider arrangements that encourage cost
containment, including but not limited to prepaid delivery systems,
utilization review, and prospective payment methods, and that ensure
access to quality care, including assuring reasonable access to local
providers, especially for employees residing in rural areas;
(iii) Coordination of state agency efforts to purchase drugs
effectively as provided in RCW 70.14.050;
(iv) Development of recommendations and methods for purchasing
medical equipment and supporting services on a volume discount basis;
(v) Development of data systems to obtain utilization data from
state-purchased health care programs in order to identify cost centers,
utilization patterns, provider and hospital practice patterns, and
procedure costs, utilizing the information obtained pursuant to RCW
41.05.031; and
(vi) In collaboration with other state agencies that administer
state purchased health care programs, private health care purchasers,
health care facilities, providers, and carriers:
(A) Use evidence-based medicine principles to develop common
performance measures and implement financial incentives in contracts
with insuring entities, health care facilities, and providers that:
(I) Reward improvements in health outcomes for individuals with
chronic diseases, increased utilization of appropriate preventive
health services, and reductions in medical errors; and
(II) Increase, through appropriate incentives to insuring entities,
health care facilities, and providers, the adoption and use of
information technology that contributes to improved health outcomes,
better coordination of care, and decreased medical errors;
(B) Through state health purchasing, reimbursement, or pilot
strategies, promote and increase the adoption of health information
technology systems, including electronic medical records, by hospitals
as defined in RCW 70.41.020(4), integrated delivery systems, and
providers that:
(I) Facilitate diagnosis or treatment;
(II) Reduce unnecessary duplication of medical tests;
(III) Promote efficient electronic physician order entry;
(IV) Increase access to health information for consumers and their
providers; and
(V) Improve health outcomes;
(C) Coordinate a strategy for the adoption of health information
technology systems using the final health information technology report
and recommendations developed under chapter 261, Laws of 2005((.));
(c) To analyze areas of public and private health care interaction;
(d) To provide information and technical and administrative
assistance to the board;
(e) To review and approve or deny applications from counties,
municipalities, and other political subdivisions of the state to
provide state-sponsored insurance or self-insurance programs to their
employees in accordance with the provisions of RCW 41.04.205, setting
the premium contribution for approved groups as outlined in RCW
41.05.050;
(f) To establish billing procedures and collect funds from school
districts in a way that minimizes the administrative burden on
districts;
(g) To publish and distribute to nonparticipating school districts
and educational service districts by October 1st of each year a
description of health care benefit plans available through the
authority and the estimated cost if school districts and educational
service district employees were enrolled;
(h) To administer the Washington state health insurance connector
established in sections 203 through 205 of this act;
(i) To apply for, receive, and accept grants, gifts, and other
payments, including property and service, from any governmental or
other public or private entity or person, and make arrangements as to
the use of these receipts to implement initiatives and strategies
developed under this section; and
(((i))) (j) To promulgate and adopt rules consistent with this
chapter as described in RCW 41.05.160.
(2) On and after January 1, 1996, the public employees' benefits
board may implement strategies to promote managed competition among
employee health benefit plans. Strategies may include but are not
limited to:
(a) Standardizing the benefit package;
(b) Soliciting competitive bids for the benefit package;
(c) Limiting the state's contribution to a percent of the lowest
priced qualified plan within a geographical area;
(d) Monitoring the impact of the approach under this subsection
with regards to: Efficiencies in health service delivery, cost shifts
to subscribers, access to and choice of managed care plans statewide,
and quality of health services. The health care authority shall also
advise on the value of administering a benchmark employer-managed plan
to promote competition among managed care plans.
NEW SECTION. Sec. 203 (1) The Washington state health insurance
connector is hereby established. The connector shall be administered
by the administrator and governed by the Washington state health
insurance connector board established in section 204 of this act. The
purpose of the connector is to facilitate the availability, choice, and
adoption of private health insurance plans to eligible individuals and
small groups, as provided in this chapter.
(2) With the approval of the board, the administrator, or his or
her designee, has the following powers and duties:
(a) Plan, direct, coordinate, and execute administrative functions
in conformity with the policies and directives of the board;
(b) Employ professional and clerical staff as necessary;
(c) Report to the board on all operations under his or her control
and supervision;
(d) Prepare an annual budget and manage the administrative expenses
of the connector; and
(e) Undertake any other activities necessary to implement the
powers and duties set forth in this chapter.
NEW SECTION. Sec. 204 (1) The Washington state health insurance
connector board is hereby established. The function of the board is to
develop and approve policies necessary for operation of the Washington
state health insurance connector.
(2) The connector board shall be composed of fourteen members
appointed by the governor as follows:
(a) A member in good standing of the American academy of actuaries;
(b) A health economist;
(c) Two representatives of small businesses;
(d) Two employee health plan benefits specialists;
(e) Two representatives of health care consumers;
(f) A physician licensed in good standing under chapter 18.57 RCW;
(g) A health insurance broker licensed in good standing under
chapter 48.17 RCW;
(h) A representative of organized labor;
(i) The assistant secretary of the department of social and health
services, health recovery services administration;
(j) The commissioner; and
(k) The administrator.
No member may be an employee of any licensed carrier authorized to
do business in the state of Washington.
(3) The governor shall appoint the initial members of the board to
staggered terms not to exceed four years. Members appointed thereafter
shall serve two-year terms. Members of the board shall be compensated
in accordance with RCW 43.03.250 and shall 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. The administrator shall serve as chair of the
board. Meetings of the board shall be at the call of the chair.
(4) The board may establish technical advisory committees or seek
the advice of technical experts when necessary to execute the powers
and duties included in section 205 of this act.
NEW SECTION. Sec. 205 The connector board has the following
duties and powers:
(1) Develop and approve a benefit design for health benefit plans
that will be sold by carriers as individual health plans through the
connector. The connector shall offer at least four, but no more than
five, benefit packages. For each benefit package, the board shall
develop at least three deductible and point-of-service cost-sharing
options.
(a) The benefit packages shall include:
(i) A high deductible health plan that meets the federal
requirements necessary to be offered in conjunction with a health
savings account. The high deductible health plan must offer all
preventive services allowable under section 223 of the federal internal
revenue code;
(ii) A benefit package that includes services comparable to those
offered through the basic health plan under chapter 70.47 RCW, as of
January 1, 2007. One of the deductible and cost-sharing options
offered with this benefit package shall be the deductible and
cost-sharing provisions of the basic health plan as of January 1, 2007;
(iii) A benefit package that provides first dollar coverage for a
fixed number of provider visits, and a fixed dollar amount of
laboratory or diagnostic services prior to an enrollee being required
to satisfy their deductible;
(iv) A benefit package that includes services comparable to those
offered through the public employees' benefits board under chapter
41.05 RCW;
(b) In designing the benefit packages, the board shall make every
effort to include innovative components that will maximize the quality
of care provided and result in improved health outcomes. These
components include, but are not limited to:
(i) Preventive care;
(ii) Wellness incentives, such as personal health assessments with
health coaching, and smoking cessation benefits;
(iii) Limited cost-sharing for preventive services, medications to
manage chronic illness, and chronic care management visits;
(iv) Payment for chronic care services, such as increased
reimbursement for primary care visits, reimbursement for care
coordination services, and coverage of group visits, telephone
consultation, and nutrition education that enable patients to learn the
skills needed to manage their chronic illness;
(v) Provider network development and payment policies related to
quality of care, such as tiered networks, payment for performance in
areas such as use of evidence-based protocols, delivery of preventive
and chronic care management services, and quality and outcomes
reporting;
(2) Establish procedures for the enrollment of eligible individuals
and small groups, including:
(a) Publicizing the existence of the connector and disseminating
information on eligibility requirements and enrollment procedures for
the connector;
(b) Establishing procedures to determine each applicant's
eligibility for purchasing insurance offered by the connector,
including a standard application form for eligible individuals and
small groups seeking to purchase health insurance through the
connector, as well as persons seeking a premium assistance payment.
The application shall include information necessary to determine an
applicant's eligibility, previous health insurance coverage history,
and payment method;
(c) Establishing rules related to minimum participation of
employees in small groups seeking to purchase health insurance through
the connector;
(d) Preparing and distributing certificate of eligibility forms and
application forms to insurance brokers and the general public; and
(e) Establishing and administering procedures for the election of
coverage by participating individuals during open enrollment periods
and outside of open enrollment periods upon the occurrence of any
qualifying event specified in the federal health insurance portability
and accountability act of 1996 or applicable state law. The procedures
shall include preparing and distributing to participating individuals:
(i) Descriptions of the coverage, benefits, limitations,
copayments, and premiums for all participating plans; and
(ii) Forms and instructions for electing coverage and arranging
payment for coverage;
(3) Establish and manage a system of collecting and transmitting to
the applicable carriers all premium payments or contributions made by
or on behalf of participating individuals, including developing
mechanisms to receive and process automatic payroll deductions for
participating individuals enrolled in small employer plans;
(4) Establish, if the board finds it necessary, a risk adjustment
mechanism for premiums paid to carriers;
(5) Establish and manage a system for determining eligibility for
premium assistance payments and remitting premium assistance payments
to the carriers, as provided in section 209 of this act;
(6) Establish a plan for operating a health insurance service
center to provide eligible individuals and small groups with
information on the connector and manage connector enrollment, and for
publicizing the existence of the connector and the connector's
eligibility requirements and enrollment procedures;
(7) Establish procedures for coordinating with the office of the
insurance commissioner regarding administration of the reinsurance
program established in section 501 of this act;
(8) Establish, beginning January 1, 2012, and annually thereafter,
a schedule to determine whether creditable coverage is affordable for
residents of Washington state at varying income levels. The schedule
shall be developed for purposes of implementing section 404 of this
act. In developing the schedule, the board shall examine the
percentage of household income that it is reasonable to ask Washington
state residents to dedicate to the purchase of creditable coverage,
based upon a family's income relative to varying percentages of the
federal poverty level, as determined annually by the federal department
of health and human services;
(9) Establish other procedures for operations of the connector,
including but not limited to procedures to:
(a) Seek and receive any grant funding from the federal government,
departments or agencies of the state, and private foundations;
(b) Contract with professional service firms as may be necessary in
the board's judgment, and to fix their compensation;
(c) Contract with companies which provide third-party
administrative and billing services for insurance products;
(d) Charge and equitably apportion among participating institutions
its administrative costs and expenses incurred in the exercise of the
powers and duties granted by this chapter;
(e) Adopt bylaws for the regulation of its affairs and the conduct
of its business;
(f) Sue and be sued in its own name, plead, and be impleaded;
(g) Establish lines of credit, and establish one or more cash and
investment accounts to receive payments for services rendered and
appropriations from the state, and for all other business activity
granted by this chapter except to the extent otherwise limited by any
applicable provision of the employee retirement income security act of
1974; and
(h) Enter into interdepartmental agreements with the office of the
insurance commissioner, department of social and health services, and
any other state agencies the board deems necessary to implement this
chapter; and
(10) Begin offering health benefit plans under this act on
September 1, 2008.
NEW SECTION. Sec. 206
NEW SECTION. Sec. 207
(2)(a) Except as provided in (b) of this subsection, no carrier may
offer a health plan through the connector unless the carrier has agreed
to offer all of the health plan options approved by the connector board
under section 205(1) of this act.
(b) A carrier that has contracted exclusively with the department
of social and health services to serve medicaid program clients, or
with the authority to serve basic health plan enrollees, may offer only
the health plan approved by the connector board under section
205(1)(a)(ii) of this act and may offer coverage only to persons
receiving premium assistance under section 209 of this act.
NEW SECTION. Sec. 208
(2) Any small employer seeking to be the sponsor of a participating
small employer plan shall, as a condition of participation in the
connector, enter into a binding agreement with the connector that
includes the following conditions:
(a) The sponsoring small employer designates the connector to be
the plan's administrator for the employer's group health plan, and the
connector agrees to undertake the obligations required of a plan
administrator under federal law;
(b) Any individual eligible to participate in the connector by
reason of his or her eligibility for coverage under the employer's
participating small employer plan, regardless of whether any such
individual would otherwise qualify as an eligible individual if not
enrolled in the participating small employer plan, may elect coverage
under any health plan offered through the connector, and neither the
employer nor the connector shall limit such individual's choice of
coverage from among all the health plans offered;
(c) The small employer agrees that, for the term of the agreement,
the small employer will not offer to individuals eligible to
participate in the connector by reason of their eligibility for
coverage under the employer's participating small employer plan any
separate or competing health plan, regardless of whether any such
individuals would otherwise qualify as eligible individuals if not
enrolled in the participating small employer plan;
(d) The small employer reserves the right to determine the criteria
for eligibility and enrollment in the participating small employer plan
and the terms and amounts of the small employer's contributions to that
plan, so long as for the term of the agreement with the connector the
small employer agrees not to alter or amend any criteria or
contribution amounts at any time other than during an annual period
designated by the connector for participating small employer plans to
make such changes in conjunction with the connector's annual open
enrollment period;
(e) The small employer agrees to make available to the connector
any of the employer's documents, records, or information, including
copies of the employer's federal and state tax and wage reports, that
the administrator reasonably determines are necessary for the connector
to verify:
(i) That the small employer is in compliance with the terms of its
agreement with the connector governing the employer's sponsorship of a
participating small employer plan;
(ii) That the participating small employer plan is in compliance
with applicable laws relating to employee welfare benefit plans,
particularly those relating to nondiscrimination in coverage; and
(iii) The eligibility, under the terms of the small employer's
plan, of those individuals enrolled in the participating small employer
plan;
(f) The small employer agrees to also sponsor a "cafeteria plan" as
permitted under federal law, 26 U.S.C. Sec. 125, for all employees
eligible for coverage under the employer's participating employer plan.
NEW SECTION. Sec. 209
(2) Beginning January 1, 2009, the administrator shall accept
applications for premium assistance from eligible individuals and
employees of participating small employer plans who have family income
up to two hundred percent of the federal poverty level, as determined
annually by the federal department of health and human services, on
behalf of themselves, their spouses, and their dependent children.
(3) The connector board shall design and implement a schedule of
premium assistance payments that is based upon gross family income,
giving appropriate consideration to family size and the ages of all
family members. The benchmark plan for purposes of designing the
premium assistance payment schedule shall be the benefit design
established under section 205(1)(a)(ii) of this act with the deductible
and cost-sharing of the basic health plan benefit package in effect on
January 1, 2007.
The premium assistance schedule shall be applied to eligible
individuals, and to the employee premium obligation remaining after
employer premium contributions for employees of participating small
employer plans, so that employees benefit financially from their
employer's contribution to the cost of their coverage through the
connector. Any surcharge included in the premium under section 212 of
this act shall be included when determining the appropriate level of
premium assistance payments.
(4) A financial sponsor may, with the prior approval of the
administrator, pay the premium or any other amount on behalf of an
eligible individual or employee of a participating small employer plan,
by arrangement with the individual or employee and through a mechanism
acceptable to the administrator. The administrator shall establish a
mechanism for receiving premium payments from the United States
internal revenue service for eligible individuals who are eligible for
benefits under section 210 of the federal trade act of 2002, at 26
U.S.C. Sec. 35(c).
(5) The connector shall remit the premium assistance in an amount
determined under subsection (3) of this section to the carrier offering
the health plan in which the eligible individual or employee of a
participating small employer plan has chosen to enroll. If, however,
such individual or employee has chosen to enroll in a high deductible
health plan, any difference between the amount of premium assistance
that the individual or employee would receive and the applicable
premium rate for the high deductible health plan shall be deposited
into a health savings account for the benefit of that individual or
employee.
(6) As of January 1, 2009, all basic health plan enrollees under
chapter 70.47 RCW shall transition to the premium assistance program.
The authority shall provide information and assistance necessary to
allow enrollees to successfully transition to the premium assistance
program, including assistance with enrolling in the connector and
choosing a health plan during the 2008 open enrollment period.
NEW SECTION. Sec. 210
NEW SECTION. Sec. 211
NEW SECTION. Sec. 212
(2) Each carrier participating in the connector shall be required
to furnish such reasonable reports as the board determines necessary to
enable the executive director to carry out his or her duties under this
chapter.
NEW SECTION. Sec. 213
NEW SECTION. Sec. 214
(1) The operation and administration of the connector, including
surveys and reports of health benefit plans available to participating
individuals and on the experience of the plans. The experience on the
plans shall include data on enrollees in the connector, the operation
and administration of the connector premium assistance program,
expenses, claims statistics, complaints data, how the connector met its
goals, and other information deemed pertinent by the connector; and
(2) Any significant observations regarding utilization and adoption
of the connector.
NEW SECTION. Sec. 215
(1) The impact of active and retired state employees, political
subdivision employees, and school employees participating in the
connector, with respect to the utilization of services and cost of
health plans offered through the connector;
(2) Whether any distinction should be made in connector
participation between active and retired employees, giving
consideration to the implicit subsidy that nonmedicare eligible
retirees currently benefit from by being pooled with active employees,
and to how medicare-eligible retirees would be affected;
(3) The impact of applying the insurance regulations in section 303
of this act, RCW 48.43.015, 48.43.025, 48.43.035, and section 307 of
this act on access to health services and the cost of coverage for
active and retired state employees, political subdivision employees,
and school employees;
(4) Whether the reinsurance program established in section 501 of
this act could appreciably lower premium costs if applied to active and
retired state employees, political subdivision employees, and school
employees participating in the connector; and
(5) If the board recommends participation of any of these employee
groups in the connector, how the composition of the board should be
modified to reflect their participation.
NEW SECTION. Sec. 216
Sec. 301 RCW 48.43.005 and 2006 c 25 s 16 are each amended to
read as follows:
Unless otherwise specifically provided, the definitions in this
section apply throughout this chapter.
(1) "Adjusted community rate" means the rating method used to
establish the premium for health plans adjusted to reflect actuarially
demonstrated differences in utilization or cost attributable to
geographic region, age, family size, and use of wellness activities.
(2) "Basic health plan" means the plan described under chapter
70.47 RCW, as revised from time to time.
(3) "Basic health plan model plan" means a health plan as required
in RCW 70.47.060(2)(e).
(4) "Basic health plan services" means that schedule of covered
health services, including the description of how those benefits are to
be administered, that are required to be delivered to an enrollee under
the basic health plan, as revised from time to time.
(5) "Catastrophic health plan" means:
(a) In the case of a contract, agreement, or policy covering a
single enrollee, a health benefit plan requiring a calendar year
deductible of, at a minimum, one thousand five hundred dollars and an
annual out-of-pocket expense required to be paid under the plan (other
than for premiums) for covered benefits of at least three thousand
dollars; and
(b) In the case of a contract, agreement, or policy covering more
than one enrollee, a health benefit plan requiring a calendar year
deductible of, at a minimum, three thousand dollars and an annual out-of-pocket expense required to be paid under the plan (other than for
premiums) for covered benefits of at least five thousand five hundred
dollars; or
(c) Any health benefit plan that provides benefits for hospital
inpatient and outpatient services, professional and prescription drugs
provided in conjunction with such hospital inpatient and outpatient
services, and excludes or substantially limits outpatient physician
services and those services usually provided in an office setting.
(6) "Certification" means a determination by a review organization
that an admission, extension of stay, or other health care service or
procedure has been reviewed and, based on the information provided,
meets the clinical requirements for medical necessity, appropriateness,
level of care, or effectiveness under the auspices of the applicable
health benefit plan.
(7) "Concurrent review" means utilization review conducted during
a patient's hospital stay or course of treatment.
(8) "Connector" means the Washington state health insurance
connector established in sections 203 through 205 of this act.
(9) "Covered person" or "enrollee" means a person covered by a
health plan including an enrollee, subscriber, policyholder,
beneficiary of a group plan, or individual covered by any other health
plan.
(((9))) (10) "Dependent" means, at a minimum, the enrollee's legal
spouse and unmarried dependent children who qualify for coverage under
the enrollee's health benefit plan.
(((10))) (11) "Eligible employee" means an employee who works on a
full-time basis with a normal work week of thirty or more hours. The
term includes a self-employed individual, including a sole proprietor,
a partner of a partnership, and may include an independent contractor,
if the self-employed individual, sole proprietor, partner, or
independent contractor is included as an employee under a health
benefit plan of a small employer, but does not work less than thirty
hours per week and derives at least seventy-five percent of his or her
income from a trade or business through which he or she has attempted
to earn taxable income and for which he or she has filed the
appropriate internal revenue service form. Persons covered under a
health benefit plan pursuant to the consolidated omnibus budget
reconciliation act of 1986 shall not be considered eligible employees
for purposes of minimum participation requirements of chapter 265, Laws
of 1995.
(((11))) (12) "Eligible individual" means an individual, including
a sole proprietor, who is a resident of Washington state who is not
offered subsidized health insurance by an employer with more than fifty
employees. "Eligible individual" includes any individual who is
eligible for benefits under section 210 of the federal trade act of
2002, at 26 U.S.C. Sec. 35(c).
(13) "Emergency medical condition" means the emergent and acute
onset of a symptom or symptoms, including severe pain, that would lead
a prudent layperson acting reasonably to believe that a health
condition exists that requires immediate medical attention, if failure
to provide medical attention would result in serious impairment to
bodily functions or serious dysfunction of a bodily organ or part, or
would place the person's health in serious jeopardy.
(((12))) (14) "Emergency services" means otherwise covered health
care services medically necessary to evaluate and treat an emergency
medical condition, provided in a hospital emergency department.
(((13))) (15) "Enrollee point-of-service cost-sharing" means
amounts paid to health carriers directly providing services, health
care providers, or health care facilities by enrollees and may include
copayments, coinsurance, or deductibles.
(((14))) (16) "Grievance" means a written complaint submitted by or
on behalf of a covered person regarding: (a) Denial of payment for
medical services or nonprovision of medical services included in the
covered person's health benefit plan, or (b) service delivery issues
other than denial of payment for medical services or nonprovision of
medical services, including dissatisfaction with medical care, waiting
time for medical services, provider or staff attitude or demeanor, or
dissatisfaction with service provided by the health carrier.
(((15))) (17) "Health care facility" or "facility" means hospices
licensed under chapter 70.127 RCW, hospitals licensed under chapter
70.41 RCW, rural health care facilities as defined in RCW 70.175.020,
psychiatric hospitals licensed under chapter 71.12 RCW, nursing homes
licensed under chapter 18.51 RCW, community mental health centers
licensed under chapter 71.05 or 71.24 RCW, kidney disease treatment
centers licensed under chapter 70.41 RCW, ambulatory diagnostic,
treatment, or surgical facilities licensed under chapter 70.41 RCW,
drug and alcohol treatment facilities licensed under chapter 70.96A
RCW, and home health agencies licensed under chapter 70.127 RCW, and
includes such facilities if owned and operated by a political
subdivision or instrumentality of the state and such other facilities
as required by federal law and implementing regulations.
(((16))) (18) "Health care provider" or "provider" means:
(a) A person regulated under Title 18 or chapter 70.127 RCW, to
practice health or health-related services or otherwise practicing
health care services in this state consistent with state law; or
(b) An employee or agent of a person described in (a) of this
subsection, acting in the course and scope of his or her employment.
(((17))) (19) "Health care service" means that service offered or
provided by health care facilities and health care providers relating
to the prevention, cure, or treatment of illness, injury, or disease.
(((18))) (20) "Health carrier" or "carrier" means a disability
insurer regulated under chapter 48.20 or 48.21 RCW, a health care
service contractor as defined in RCW 48.44.010, or a health maintenance
organization as defined in RCW 48.46.020.
(((19))) (21) "Health plan" or "health benefit plan" means any
policy, contract, or agreement offered by a health carrier to provide,
arrange, reimburse, or pay for health care services except the
following:
(a) Long-term care insurance governed by chapter 48.84 RCW;
(b) Medicare supplemental health insurance governed by chapter
48.66 RCW;
(c) Coverage supplemental to the coverage provided under chapter
55, Title 10, United States Code;
(d) Limited health care services offered by limited health care
service contractors in accordance with RCW 48.44.035;
(e) Disability income;
(f) Coverage incidental to a property/casualty liability insurance
policy such as automobile personal injury protection coverage and
homeowner guest medical;
(g) Workers' compensation coverage;
(h) Accident only coverage;
(i) Specified disease and hospital confinement indemnity when
marketed solely as a supplement to a health plan;
(j) Employer-sponsored self-funded health plans;
(k) Dental only and vision only coverage; and
(l) Plans deemed by the insurance commissioner to have a short-term
limited purpose or duration, or to be a student-only plan that is
guaranteed renewable while the covered person is enrolled as a regular
full-time undergraduate or graduate student at an accredited higher
education institution, after a written request for such classification
by the carrier and subsequent written approval by the insurance
commissioner.
(((20))) (22) "Material modification" means a change in the
actuarial value of the health plan as modified of more than five
percent but less than fifteen percent.
(((21))) (23) "Participating individual" means a person who has
been determined by the connector to be, and continues to be, an
eligible individual, an employee of a participating small employer
plan, or a member of an association health plan for purposes of
obtaining coverage through the connector. As used in this section,
"association health plan" includes health plans offered through
associations, trusts, and member-governed groups.
(24) "Participating small employer plan" means a group health plan,
as defined in federal law, Sec. 706 of ERISA (29 U.S.C. Sec. 1186),
that is sponsored by a small employer and for which the plan sponsor
has entered into an agreement with the connector, in accordance with
the provisions of section 208 of this act, for the connector to offer
and administer health insurance benefits for enrollees in the plan.
(25) "Preexisting condition" means any medical condition, illness,
or injury that existed any time prior to the effective date of
coverage.
(((22))) (26) "Premium" means all sums charged, received, or
deposited by a health carrier as consideration for a health plan or the
continuance of a health plan. Any assessment or any "membership,"
"policy," "contract," "service," or similar fee or charge made by a
health carrier in consideration for a health plan is deemed part of the
premium. "Premium" shall not include amounts paid as enrollee point-of-service cost-sharing.
(((23))) (27) "Review organization" means a disability insurer
regulated under chapter 48.20 or 48.21 RCW, health care service
contractor as defined in RCW 48.44.010, or health maintenance
organization as defined in RCW 48.46.020, and entities affiliated with,
under contract with, or acting on behalf of a health carrier to perform
a utilization review.
(((24))) (28) "Small employer" or "small group" means any person,
firm, corporation, partnership, association, political subdivision,
sole proprietor, or self-employed individual that is actively engaged
in business that, on at least fifty percent of its working days during
the preceding calendar quarter, employed at least two but no more than
fifty eligible employees, with a normal work week of thirty or more
hours, the majority of whom were employed within this state, and is not
formed primarily for purposes of buying health insurance and in which
a bona fide employer-employee relationship exists. In determining the
number of eligible employees, companies that are affiliated companies,
or that are eligible to file a combined tax return for purposes of
taxation by this state, shall be considered an employer. Subsequent to
the issuance of a health plan to a small employer and for the purpose
of determining eligibility, the size of a small employer shall be
determined annually. Except as otherwise specifically provided, a
small employer shall continue to be considered a small employer until
the plan anniversary following the date the small employer no longer
meets the requirements of this definition. A self-employed individual
or sole proprietor must derive at least seventy-five percent of his or
her income from a trade or business through which the individual or
sole proprietor has attempted to earn taxable income and for which he
or she has filed the appropriate internal revenue service form 1040,
schedule C or F, for the previous taxable year except for a self-employed individual or sole proprietor in an agricultural trade or
business, who must derive at least fifty-one percent of his or her
income from the trade or business through which the individual or sole
proprietor has attempted to earn taxable income and for which he or she
has filed the appropriate internal revenue service form 1040, for the
previous taxable year. A self-employed individual or sole proprietor
who is covered as a group of one on the day prior to June 10, 2004,
shall also be considered a "small employer" to the extent that
individual or group of one is entitled to have his or her coverage
renewed as provided in RCW 48.43.035(6).
(((25))) (29) "Utilization review" means the prospective,
concurrent, or retrospective assessment of the necessity and
appropriateness of the allocation of health care resources and services
of a provider or facility, given or proposed to be given to an enrollee
or group of enrollees.
(((26))) (30) "Wellness activity" means an explicit program of an
activity consistent with department of health guidelines, such as,
smoking cessation, injury and accident prevention, reduction of alcohol
misuse, appropriate weight reduction, exercise, automobile and
motorcycle safety, blood cholesterol reduction, and nutrition education
for the purpose of improving enrollee health status and reducing health
service costs.
NEW SECTION. Sec. 302
(2) No health benefit plan may be offered through the connector
unless the commissioner has first certified to the connector that:
(a) The carrier seeking to offer the plan is an admitted carrier in
Washington state and is in good standing with the office of the
insurance commissioner;
(b) The plan meets the benefit design specifications established by
the connector board under section 205(1) of this act, the rating
specifications under section 303 of this act, the preexisting condition
provisions under RCW 48.43.015 and 48.43.025, the issue and renewal
provisions of RCW 48.43.035, and the requirements of this section; and
(c) The plan and the carrier are in compliance with all other
applicable Washington state laws.
(3) No plan shall be certified that excludes from coverage any
individual otherwise determined by the connector as meeting the
eligibility requirements for individual or small group participation.
(4) Each certification shall be valid for a uniform term of at
least one year, but may be made automatically renewable from term to
term in the absence of notice of either:
(a) Withdrawal by the commissioner; or
(b) Discontinuation of participation in the connector by the
carrier.
(5) Certification of a plan may be withdrawn only after notice to
the carrier and opportunity for hearing. The commissioner may,
however, decline to renew the certification of any carrier at the end
of a certification term.
(6) Each plan certified by the commissioner as eligible to be
offered through the connector shall contain a detailed description of
benefits offered including maximums, limitations, exclusions, and other
benefit limits.
NEW SECTION. Sec. 303
(1) The carrier shall develop its rates based on an adjusted
community rate and may only vary the adjusted community rate for:
(a) Geographic area;
(b) Family size;
(c) Age; and
(d) Wellness activities.
(2) The adjustment for age in subsection (1)(c) of this section may
not use age brackets smaller than five-year increments, which shall
begin with age twenty and end with age sixty-five. Participating
individuals under the age of twenty shall be treated as those age
twenty.
(3) The contractor shall be permitted to develop separate rates for
individuals age sixty-five or older for coverage for which medicare is
the primary payer and coverage for which medicare is not the primary
payer. Both rates are subject to the requirements of this section.
(4) The permitted rates for any age group shall be no more than
three hundred seventy-five percent of the lowest rate for all age
groups.
(5) A discount for wellness activities is permitted to reflect
actuarially justified differences in utilization or cost attributed to
such programs.
(6) Rating factors shall produce premiums for identical eligible
individuals that differ only by the amounts attributable to plan
design, with the exception of discounts for health improvement
programs.
(7)(a) Except to the extent provided otherwise in (b) of this
subsection, adjusted community rates established under this section
shall pool the medical experience of all eligible individuals
purchasing coverage through the connector.
(b) Carriers may treat persons under age thirty as a separate
experience pool for purposes of establishing rates for health plans
approved by the connector board under section 205(1)(a) (i) and (ii).
The rates charged for this age group are not subject to subsection (4)
of this section.
(8) The rates for health plans available to eligible individuals
and participating employers who are described in section 501 of this
act shall reflect the availability of reimbursement from the
reinsurance account.
Sec. 304 RCW 48.43.015 and 2004 c 192 s 5 are each amended to
read as follows:
(1) For a health benefit plan offered to a group or through the
connector established in sections 203 through 205 of this act, every
health carrier shall reduce any preexisting condition exclusion,
limitation, or waiting period in the group health plan in accordance
with the provisions of section 2701 of the federal health insurance
portability and accountability act of 1996 (42 U.S.C. Sec. 300gg).
(2) For a health benefit plan offered to a group other than a small
group:
(a) If the individual applicant's immediately preceding health plan
coverage terminated during the period beginning ninety days and ending
sixty-four days before the date of application for the new plan and
such coverage was similar and continuous for at least three months,
then the carrier shall not impose a waiting period for coverage of
preexisting conditions under the new health plan.
(b) If the individual applicant's immediately preceding health plan
coverage terminated during the period beginning ninety days and ending
sixty-four days before the date of application for the new plan and
such coverage was similar and continuous for less than three months,
then the carrier shall credit the time covered under the immediately
preceding health plan toward any preexisting condition waiting period
under the new health plan.
(c) For the purposes of this subsection, a preceding health plan
includes an employer-provided self-funded health plan, the basic health
plan's offering to health coverage tax credit eligible enrollees as
established by chapter 192, Laws of 2004, and plans of the Washington
state health insurance pool.
(3) For a health benefit plan offered ((to a small group)) through
the connector established in sections 203 through 205 of this act:
(a) If the individual applicant's immediately preceding health plan
coverage terminated during the period beginning ninety days and ending
sixty-four days before the date of application for the new plan and
such coverage was similar and continuous for at least nine months, then
the carrier shall not impose a waiting period for coverage of
preexisting conditions under the new health plan.
(b) If the individual applicant's immediately preceding health plan
coverage terminated during the period beginning ninety days and ending
sixty-four days before the date of application for the new plan and
such coverage was similar and continuous for less than nine months,
then the carrier shall credit the time covered under the immediately
preceding health plan toward any preexisting condition waiting period
under the new health plan.
(c) For the purpose of this subsection, a preceding health plan
includes an employer-provided self-funded health plan, the basic health
plan's offering to health coverage tax credit eligible enrollees as
established by chapter 192, Laws of 2004, and plans of the Washington
state health insurance pool.
(4) ((For a health benefit plan offered to an individual, other
than an individual to whom subsection (5) of this section applies,
every health carrier shall credit any preexisting condition waiting
period in that plan for a person who was enrolled at any time during
the sixty-three day period immediately preceding the date of
application for the new health plan in a group health benefit plan or
an individual health benefit plan, other than a catastrophic health
plan, and (a) the benefits under the previous plan provide equivalent
or greater overall benefit coverage than that provided in the health
benefit plan the individual seeks to purchase; or (b) the person is
seeking an individual health benefit plan due to his or her change of
residence from one geographic area in Washington state to another
geographic area in Washington state where his or her current health
plan is not offered, if application for coverage is made within ninety
days of relocation; or (c) the person is seeking an individual health
benefit plan: (i) Because a health care provider with whom he or she
has an established care relationship and from whom he or she has
received treatment within the past twelve months is no longer part of
the carrier's provider network under his or her existing Washington
individual health benefit plan; and (ii) his or her health care
provider is part of another carrier's provider network; and (iii)
application for a health benefit plan under that carrier's provider
network individual coverage is made within ninety days of his or her
provider leaving the previous carrier's provider network. The carrier
must credit the period of coverage the person was continuously covered
under the immediately preceding health plan toward the waiting period
of the new health plan. For the purposes of this subsection (4), a
preceding health plan includes an employer-provided self-funded health
plan, the basic health plan's offering to health coverage tax credit
eligible enrollees as established by chapter 192, Laws of 2004, and
plans of the Washington state health insurance pool.)) Subject to the provisions of subsections (1) through ((
(5) Every health carrier shall waive any preexisting condition
waiting period in its individual plans for a person who is an eligible
individual as defined in section 2741(b) of the federal health
insurance portability and accountability act of 1996 (42 U.S.C. Sec.
300gg-41(b)).
(6)(5)))
(3) of this section, nothing contained in this section requires a
health carrier to amend a health plan to provide new benefits in its
existing health plans. In addition, nothing in this section requires
a carrier to waive benefit limitations not related to an individual or
group's preexisting conditions or health history.
Sec. 305 RCW 48.43.025 and 2001 c 196 s 9 are each amended to
read as follows:
(1) For group health benefit plans for groups other than small
groups, no carrier may reject an individual for health plan coverage
based upon preexisting conditions of the individual and no carrier may
deny, exclude, or otherwise limit coverage for an individual's
preexisting health conditions; except that a carrier may impose a
three-month benefit waiting period for preexisting conditions for which
medical advice was given, or for which a health care provider
recommended or provided treatment within three months before the
effective date of coverage. Any preexisting condition waiting period
or limitation relating to pregnancy as a preexisting condition shall be
imposed only to the extent allowed in the federal health insurance
portability and accountability act of 1996.
(2) For group health benefit plans ((for small groups)) offered
through the connector established in sections 203 through 205 of this
act, no carrier may reject an individual for health plan coverage based
upon preexisting conditions of the individual and no carrier may deny,
exclude, or otherwise limit coverage for an individual's preexisting
health conditions. Except that a carrier may impose a nine-month
benefit waiting period for preexisting conditions for which medical
advice was given, or for which a health care provider recommended or
provided treatment within six months before the effective date of
coverage. Any preexisting condition waiting period or limitation
relating to pregnancy as a preexisting condition shall be imposed only
to the extent allowed in the federal health insurance portability and
accountability act of 1996.
(3) No carrier may avoid the requirements of this section through
the creation of a new rate classification or the modification of an
existing rate classification. A new or changed rate classification
will be deemed an attempt to avoid the provisions of this section if
the new or changed classification would substantially discourage
applications for coverage from individuals or groups who are higher
than average health risks. These provisions apply only to individuals
who are Washington residents.
Sec. 306 RCW 48.43.035 and 2004 c 244 s 4 are each amended to
read as follows:
For group health benefit plans and for health benefit plans offered
through the connector established in sections 203 through 205 of this
act, the following shall apply:
(1) All health carriers shall accept for enrollment any state
resident within the group to whom the plan is offered and within the
carrier's service area and provide or assure the provision of all
covered services regardless of age, sex, family structure, ethnicity,
race, health condition, geographic location, employment status,
socioeconomic status, other condition or situation, or the provisions
of RCW 49.60.174(2). The insurance commissioner may grant a temporary
exemption from this subsection, if, upon application by a health
carrier the commissioner finds that the clinical, financial, or
administrative capacity to serve existing enrollees will be impaired if
a health carrier is required to continue enrollment of additional
eligible individuals.
(2) Except as provided in subsection (5) of this section, all
health plans shall contain or incorporate by endorsement a guarantee of
the continuity of coverage of the plan. For the purposes of this
section, a plan is "renewed" when it is continued beyond the earliest
date upon which, at the carrier's sole option, the plan could have been
terminated for other than nonpayment of premium. The carrier may
consider the group's anniversary date as the renewal date for purposes
of complying with the provisions of this section.
(3) The guarantee of continuity of coverage required in health
plans shall not prevent a carrier from canceling or nonrenewing a
health plan for:
(a) Nonpayment of premium;
(b) Violation of published policies of the carrier approved by the
insurance commissioner;
(c) Covered persons entitled to become eligible for medicare
benefits by reason of age who fail to apply for a medicare supplement
plan or medicare cost, risk, or other plan offered by the carrier
pursuant to federal laws and regulations;
(d) Covered persons who fail to pay any deductible or copayment
amount owed to the carrier and not the provider of health care
services;
(e) Covered persons committing fraudulent acts as to the carrier;
(f) Covered persons who materially breach the health plan; or
(g) Change or implementation of federal or state laws that no
longer permit the continued offering of such coverage.
(4) The provisions of this section do not apply in the following
cases:
(a) A carrier has zero enrollment on a product;
(b) A carrier replaces a product and the replacement product is
provided to all covered persons within that class or line of business,
includes all of the services covered under the replaced product, and
does not significantly limit access to the kind of services covered
under the replaced product. The health plan may also allow
unrestricted conversion to a fully comparable product;
(c) No sooner than January 1, 2005, a carrier discontinues offering
a particular type of health benefit plan offered for groups of up to
two hundred if: (i) The carrier provides notice to each group of the
discontinuation at least ninety days prior to the date of the
discontinuation; (ii) the carrier offers to each group provided
coverage of this type the option to enroll, with regard to small
employer groups, in any other small employer group plan, or with regard
to groups of up to two hundred, in any other applicable group plan,
currently being offered by the carrier in the applicable group market;
and (iii) in exercising the option to discontinue coverage of this type
and in offering the option of coverage under (c)(ii) of this
subsection, the carrier acts uniformly without regard to any health
status-related factor of enrolled individuals or individuals who may
become eligible for this coverage;
(d) A carrier discontinues offering all health coverage in the
small group market or for groups of up to two hundred, or both markets,
in the state and discontinues coverage under all existing group health
benefit plans in the applicable market involved if: (i) The carrier
provides notice to the commissioner of its intent to discontinue
offering all such coverage in the state and its intent to discontinue
coverage under all such existing health benefit plans at least one
hundred eighty days prior to the date of the discontinuation of
coverage under all such existing health benefit plans; and (ii) the
carrier provides notice to each covered group of the intent to
discontinue the existing health benefit plan at least one hundred
eighty days prior to the date of discontinuation. In the case of
discontinuation under this subsection, the carrier may not issue any
group health coverage in this state in the applicable group market
involved for a five-year period beginning on the date of the
discontinuation of the last health benefit plan not so renewed. This
subsection (4) does not require a carrier to provide notice to the
commissioner of its intent to discontinue offering a health benefit
plan to new applicants when the carrier does not discontinue coverage
of existing enrollees under that health benefit plan; or
(e) A carrier is withdrawing from a service area or from a segment
of its service area because the carrier has demonstrated to the
insurance commissioner that the carrier's clinical, financial, or
administrative capacity to serve enrollees would be exceeded.
(5) The provisions of this section do not apply to health plans
deemed by the insurance commissioner to be unique or limited or have a
short-term purpose, after a written request for such classification by
the carrier and subsequent written approval by the insurance
commissioner.
(6) Notwithstanding any other provision of this section, the
guarantee of continuity of coverage applies to a group of one only if:
(a) The carrier continues to offer any other small employer group plan
in which the group of one was eligible to enroll on the day prior to
June 10, 2004; and (b) the person continues to qualify as a group of
one under the criteria in place on the day prior to June 10, 2004.
NEW SECTION. Sec. 307
(2) A carrier shall not issue or renew a small group health benefit
plan, including a plan offered through an association or
member-governed group whether or not formed specifically for the
purpose of purchasing health care, other than through the connector
established in section 203 of this act, after January 1, 2009.
NEW SECTION. Sec. 308
NEW SECTION. Sec. 401 The definitions in this section apply
throughout this chapter unless the context clearly requires otherwise.
(1) "Employee" means any individual employed by any employer.
(2) "Employer" means an employer as defined in RCW 49.46.010.
(3) "Connector" means the entity established in sections 203
through 205 of this act.
NEW SECTION. Sec. 402 Each employer with more than five
employees in the state of Washington shall:
(1) Adopt and maintain a cafeteria plan that satisfies 26 U.S.C.
Sec. 125 and the rules adopted by the connector that provides a premium
only plan option so that employees can use salary deductions to pay
health plan premiums. A copy of such cafeteria plan shall be filed
with the connector; and
(2) Collect and transmit amounts designated as payroll deductions
by employees to the connector for those employees purchasing coverage
through the connector.
NEW SECTION. Sec. 403 The attorney general shall enforce
sections 401 and 402 of this act and has the authority to seek and
obtain injunctive relief in a court of appropriate jurisdiction.
NEW SECTION. Sec. 404 Beginning January 1, 2012, any resident of
the state of Washington age eighteen and over shall obtain and maintain
creditable coverage, as defined in the federal health insurance
portability and accountability act of 1996 (42 U.S.C. 300gg(c)), so
long as it is deemed affordable under the schedule set by the board of
the connector under section 205 of this act. Residents who within the
past sixty-three days have terminated any prior creditable coverage,
shall obtain and maintain creditable coverage within sixty-three days
of such termination.
NEW SECTION. Sec. 501 A new section is added to chapter 48.43
RCW to read as follows:
(1) A reinsurance program is hereby established in the office of
the insurance commissioner for the purpose of making health insurance
coverage more affordable for eligible individuals and participating
small employer plans.
(2) The submission of claims for reimbursement is limited to claims
paid on behalf of eligible individuals and persons employed by
participating small employers who have not offered a health benefit
plan that provides benefits on an expense reimbursed or prepaid basis
to their employees during the twelve-month period prior to application
for participation in the connector. The commissioner, in cooperation
with the connector, shall obtain from the small employer written
certification at the time of initial application to participate in the
connector that such employer has not offered a health benefit plan that
provides health benefits to its employees during the twelve-month
period prior to application for participation in the connector.
Submission of claims for reimbursement paid on behalf of persons
employed by participating small employers is limited to two years from
the date upon which the employer begins participation in the connector.
NEW SECTION. Sec. 502 A new section is added to chapter 48.43
RCW to read as follows:
Beginning January 1, 2009, carriers shall be eligible to receive
reimbursement for ninety percent of claims paid between thirty thousand
and one hundred thousand dollars in a calendar year for any enrollee
described in section 501 of this act who is covered under a health plan
offered by the carrier through the connector.
(1) Claims shall be reported and funds shall be distributed from
the reinsurance account on a calendar year basis. Claims are eligible
for reimbursement only for the calendar year in which the claims are
paid. Once claims paid on behalf of an enrollee described in section
501 of this act reach or exceed one hundred thousand dollars in a given
calendar year, no further claims paid on behalf of such person in that
calendar year are eligible for reimbursement.
(2) Each carrier shall submit a request for reimbursement from the
reinsurance account on forms prescribed by the commissioner. Each of
the requests for reimbursement shall be submitted no later than April
1st following the end of the calendar year for which the reimbursement
requests are being made. The commissioner may require carriers to
submit such claims data in connection with the reimbursement requests
as he or she deems necessary to enable distribution of funds and
oversee the operation of the reinsurance account.
(3) The commissioner shall calculate the total claims reimbursement
amount for all carriers for the calendar year for which claims are
being reported.
(a) In the event that the total amount requested for reimbursement
for a calendar year exceeds funds available for distribution for claims
paid during that same calendar year, the commissioner shall provide for
the pro rata distribution of the available funds. Each carrier is
eligible to receive only such proportionate amount of the available
funds as the individual carrier's total eligible claims paid bears to
the total eligible claims paid by all carriers.
(b) In the event that funds available for distribution for claims
paid by all carriers during a calendar year exceeds the total amount
requested for reimbursement by all carriers during that same calendar
year, any excess funds shall be carried forward and made available for
distribution in the next calendar year. Such excess funds shall be in
addition to the funds appropriated for the reinsurance account in the
next calendar year.
NEW SECTION. Sec. 503 A new section is added to chapter 48.43
RCW to read as follows:
The reinsurance account is created in the custody of the state
treasurer. All appropriations for the reinsurance program must be
deposited in the account. Expenditures from the account may be used
only for the purposes of section 502 of this act, including the
reimbursement paid to carriers and the associated administrative
expenses of operating the reinsurance program. Only the commissioner
or the commissioner's designee may authorize expenditures from the
account. The account is subject to allotment procedures under chapter
43.88 RCW, but an appropriation is not required for expenditures.
NEW SECTION. Sec. 504 A new section is added to chapter 48.43
RCW to read as follows:
If the commissioner deems it appropriate for the proper
administration of the reinsurance account, the commissioner or the
administrator of the account, on behalf of and with the prior approval
of the commissioner, may purchase stop loss insurance or reinsurance
from an insurance company licensed to write such type of insurance in
this state. Such stop loss insurance or reinsurance may be purchased
with funds appropriated to the reinsurance account established in
section 503 of this act.
NEW SECTION. Sec. 505 A new section is added to chapter 48.43
RCW to read as follows:
Upon the request of the commissioner, each carrier shall furnish
such data as the commissioner deems necessary to oversee the operation
of the reinsurance account. The commissioner shall adopt rules that
set forth procedures for the operation of the reinsurance account and
distribution of funds therefrom.
NEW SECTION. Sec. 601 (1) Sections 102, 201, and 203 through 216
of this act constitute a new chapter in Title
(2) Sections 302, 303, 307, and 308 of this act are each added to
chapter 48.43 RCW.
(3) Sections 401 through 404 of this act constitute a new chapter
in Title 49 RCW.
NEW SECTION. Sec. 602 Part headings and captions used in this
act are not any part of the law.
NEW SECTION. Sec. 603 The following acts or parts of acts are
each repealed, effective January 1, 2009:
(1) RCW 48.01.260 (Health benefit plans -- Carriers -- Clarification)
and 2000 c 79 s 40;
(2) RCW 48.20.025 (Schedule of rates for individual health benefit
plans -- Loss ratio -- Remittance of premiums -- Definitions) and 2003 c 248
s 8, 2001 c 196 s 1, & 2000 c 79 s 3;
(3) RCW 48.20.028 (Calculation of premiums -- Adjusted community
rating method -- Definitions) and 2006 c 100 s 1, 2000 c 79 s 4, 1997 c
231 s 207, & 1995 c 265 s 13;
(4) RCW 48.20.029 (Calculation of premiums -- Members of a purchasing
pool--Adjusted community rating method--Definitions) and 2006 c 100 s
2;
(5) RCW 48.21.045 (Health plan benefits for small employers--Coverage -- Exemption from statutory requirements -- Premium rates--Requirements for providing coverage for small employers -- Definitions)
and 2004 c 244 s 1, 1995 c 265 s 14, & 1990 c 187 s 2;
(6) RCW 48.21.047 (Requirements for plans offered to small
employers -- Definitions) and 2005 c 223 s 11 & 1995 c 265 s 22;
(7) RCW 48.43.012 (Individual health benefit plans -- Preexisting
conditions) and 2001 c 196 s 6 & 2000 c 79 s 19;
(8) RCW 48.43.018 (Requirement to complete the standard health
questionnaire -- Exemptions -- Results) and 2004 c 244 s 3, 2001 c 196 s 8,
2000 c 80 s 4, & 2000 c 79 s 21;
(9) RCW 48.43.038 (Individual health plans -- Guarantee of continuity
of coverage--Exceptions) and 2000 c 79 s 25;
(10) RCW 48.43.041 (Individual health benefit plans -- Mandatory
benefits) and 2000 c 79 s 26;
(11) RCW 48.44.017 (Schedule of rates for individual contracts--Loss ratio -- Remittance of premiums -- Definitions) and 2001 c 196 s 11 &
2000 c 79 s 29;
(12) RCW 48.44.021 (Calculation of premiums -- Members of a
purchasing pool -- Adjusted community rating method -- Definitions) and
2006 c 100 s 4;
(13) RCW 48.44.022 (Calculation of premiums -- Adjusted community
rate -- Definitions) and 2006 c 100 s 3, 2004 c 244 s 6, 2000 c 79 s 30,
1997 c 231 s 208, & 1995 c 265 s 15;
(14) RCW 48.44.023 (Health plan benefits for small employers--Coverage -- Exemption from statutory requirements -- Premium rates--Requirements for providing coverage for small employers) and 2004 c 244
s 7, 1995 c 265 s 16, & 1990 c 187 s 3;
(15) RCW 48.44.024 (Requirements for plans offered to small
employers -- Definitions) and 2003 c 248 s 15 & 1995 c 265 s 23;
(16) RCW 48.46.062 (Schedule of rates for individual agreements--Loss ratio -- Remittance of premiums -- Definitions) and 2001 c 196 s 12 &
2000 c 79 s 32;
(17) RCW 48.46.063 (Calculation of premiums--Members of a
purchasing pool -- Adjusted community rating method -- Definitions) and
2006 c 100 s 6;
(18) RCW 48.46.064 (Calculation of premiums -- Adjusted community
rate -- Definitions) and 2006 c 100 s 5, 2004 c 244 s 8, 2000 c 79 s 33,
1997 c 231 s 209, & 1995 c 265 s 17;
(19) RCW 48.46.066 (Health plan benefits for small employers--Coverage -- Exemption from statutory requirements -- Premium rates--
Requirements for providing coverage for small employers) and 2004 c 244
s 9, 1995 c 265 s 18, & 1990 c 187 s 4;
(20) RCW 48.46.068 (Requirements for plans offered to small
employers -- Definitions) and 2003 c 248 s 16 & 1995 c 265 s 24;
(21) RCW 70.47A.010 (Finding -- Intent) and 2006 c 255 s 1;
(22) RCW 70.47A.020 (Definitions) and 2006 c 255 s 2;
(23) RCW 70.47A.030 (Program established -- Administrator duties) and
2006 c 255 s 3;
(24) RCW 70.47A.040 (Premium subsidies -- Enrollment verification,
status changes -- Administrator duties -- Rules) and 2006 c 255 s 4;
(25) RCW 70.47A.050 (Enrollment to remain within appropriation) and
2006 c 255 s 5;
(26) RCW 70.47A.060 (Rules) and 2006 c 255 s 6;
(27) RCW 70.47A.070 (Reports) and 2006 c 255 s 7;
(28) RCW 70.47A.080 (Small employer health insurance partnership
program account) and 2006 c 255 s 8;
(29) RCW 70.47A.090 (State children's health insurance program--Federal waiver request) and 2006 c 255 s 9; and
(30) RCW 70.47A.900 (Captions not law -- 2006 c 255) and 2006 c 255
s 11.
NEW SECTION. Sec. 604 The following acts or parts of acts are
each repealed, effective January 1, 2010:
(1) RCW 48.41.010 (Short title) and 1987 c 431 s 1;
(2) RCW 48.41.020 (Intent) and 2000 c 79 s 5 & 1987 c 431 s 2;
(3) RCW 48.41.030 (Definitions) and 2004 c 260 s 25, 2001 c 196 s
2, 2000 c 79 s 6, 1997 c 337 s 6, 1997 c 231 s 210, 1989 c 121 s 1, &
1987 c 431 s 3;
(4) RCW 48.41.037 (Washington state health insurance pool account)
and 2000 c 79 s 36;
(5) RCW 48.41.040 (Health insurance pool -- Creation, membership,
organization, operation, rules) and 2000 c 80 s 1, 2000 c 79 s 7, 1989
c 121 s 2, & 1987 c 431 s 4;
(6) RCW 48.41.050 (Operation plan -- Contents) and 1987 c 431 s 5;
(7) RCW 48.41.060 (Board powers and duties) and 2005 c 7 s 2, 2004
c 260 s 26, 2000 c 79 s 9, 1997 c 337 s 5, 1997 c 231 s 211, 1989 c 121
s 3, & 1987 c 431 s 6;
(8) RCW 48.41.070 (Examination and report) and 1998 c 245 s 98,
1989 c 121 s 4, & 1987 c 431 s 7;
(9) RCW 48.41.080 (Pool administrator -- Selection, term, duties,
pay) and 2000 c 79 s 10, 1997 c 231 s 212, 1989 c 121 s 5, & 1987 c 431
s 8;
(10) RCW 48.41.090 (Financial participation in pool -- Computation,
deficit assessments) and 2005 c 405 s 2, 2000 c 79 s 11, 1989 c 121 s
6, & 1987 c 431 s 9;
(11) RCW 48.41.100 (Eligibility for coverage) and 2001 c 196 s 3,
2000 c 79 s 12, 1995 c 34 s 5, 1989 c 121 s 7, & 1987 c 431 s 10;
(12) RCW 48.41.110 (Policy coverage -- Eligible expenses, cost
containment, limits -- Explanatory brochure) and 2001 c 196 s 4, 2000 c
80 s 2, 2000 c 79 s 13, 1997 c 231 s 213, & 1987 c 431 s 11;
(13) RCW 48.41.120 (Deductibles -- Coinsurance -- Carryover) and 2000
c 79 s 14, 1989 c 121 s 8, & 1987 c 431 s 12;
(14) RCW 48.41.130 (Policy forms -- Approval required) and 2000 c 79
s 15, 1997 c 231 s 215, & 1987 c 431 s 13;
(15) RCW 48.41.140 (Coverage for children, unmarried dependents)
and 2000 c 79 s 16 & 1987 c 431 s 14;
(16) RCW 48.41.150 (Medical supplement policy) and 1989 c 121 s 9
& 1987 c 431 s 15;
(17) RCW 48.41.160 (Renewal, termination, dependents' coverage--Rate changes -- Continuation) and 1987 c 431 s 16;
(18) RCW 48.41.170 (Required rule making) and 1987 c 431 s 17;
(19) RCW 48.41.190 (Civil and criminal immunity) and 1989 c 121 s
10 & 1987 c 431 s 19;
(20) RCW 48.41.200 (Rates -- Standard risk and maximum) and 2000 c 79
s 17, 1997 c 231 s 214, & 1987 c 431 s 20;
(21) RCW 48.41.210 (Last payor of benefits) and 1987 c 431 s 21;
(22) RCW 48.41.900 (Federal supremacy) and 1987 c 431 s 22; and
(23) RCW 48.41.910 (Severability -- 1987 c 431) and 1987 c 431 s 25.
NEW SECTION. Sec. 605 Sections 304 through 306 of this act take
effect January 1, 2009.