BILL REQ. #: H-0966.1
| State of Washington | 61st Legislature | 2009 Regular Session |
Read first time 01/30/09. Referred to Committee on Health Care & Wellness.
AN ACT Relating to access to health insurance for small employers and their employees; and amending RCW 48.21.045, 48.44.023, and 48.46.066.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
Sec. 1 RCW 48.21.045 and 2008 c 143 s 6 are each amended to read
as follows:
(1)(((a))) An insurer offering any health benefit plan to a small
employer, either directly or through an association or member-governed
group formed specifically for the purpose of purchasing health care,
may offer and actively market to the small employer a health benefit
plan featuring a limited schedule of covered health care services.
((Nothing in this subsection shall preclude an insurer from offering,
or a small employer from purchasing, other health benefit plans that
may have more comprehensive benefits than those included in the product
offered under this subsection. An insurer offering a health benefit
plan under this subsection shall clearly disclose all covered benefits
to the small employer in a brochure filed with the commissioner.)) (a) The plan offered under this subsection may be offered
with a choice of cost-sharing arrangements, and may, but is not
required to, comply with: RCW 48.21.130 through 48.21.241, 48.21.244
through 48.21.280, 48.21.300 through 48.21.320, 48.43.045(1) except as
required in (b) of this subsection, 48.43.093, 48.43.115 through
48.43.185, 48.43.515(5), or 48.42.100.
(b) A health benefit plan offered under this subsection shall
provide coverage for hospital expenses and services rendered by a
physician licensed under chapter 18.57 or 18.71 RCW but is not subject
to the requirements of RCW 48.21.130, 48.21.140, 48.21.141, 48.21.142,
48.21.144, 48.21.146, 48.21.160 through 48.21.197, 48.21.200,
48.21.220, 48.21.225, 48.21.230, 48.21.235, 48.21.244, 48.21.250,
48.21.300, 48.21.310, or 48.21.320.
(2)
(b) In offering the plan under this subsection, the insurer must
offer the small employer the option of permitting every category of
health care provider to provide health services or care for conditions
covered by the plan pursuant to RCW 48.43.045(1).
(2) An insurer offering the plan under subsection (1) of this
section must also offer and actively market to the small employer at
least one additional health benefit plan.
(3) Nothing in this section shall prohibit an insurer from
offering, or a purchaser from seeking, health benefit plans with
benefits in excess of the health benefit plan offered under subsection
(1) of this section. All forms, policies, and contracts shall be
submitted for approval to the commissioner, and the rates of any plan
offered under this section shall be reasonable in relation to the
benefits thereto.
(((3))) (4) Premium rates for health benefit plans for small
employers as defined in this section shall be subject to the following
provisions:
(a) The insurer shall develop its rates based on an adjusted
community rate and may only vary the adjusted community rate for:
(i) Geographic area;
(ii) Family size;
(iii) Age; and
(iv) Wellness activities.
(b) The adjustment for age in (a)(iii) of this subsection may not
use age brackets smaller than five-year increments, which shall begin
with age twenty and end with age sixty-five. Employees under the age
of twenty shall be treated as those age twenty.
(c) The insurer 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 shall be subject to the requirements of this
subsection (((3))) (4).
(d) The permitted rates for any age group shall be no more than
four hundred twenty-five percent of the lowest rate for all age groups
on January 1, 1996, four hundred percent on January 1, 1997, and three
hundred seventy-five percent on January 1, 2000, and thereafter.
(e) A discount for wellness activities shall be permitted to
reflect actuarially justified differences in utilization or cost
attributed to such programs.
(f) The rate charged for a health benefit plan offered under this
section may not be adjusted more frequently than annually except that
the premium may be changed to reflect:
(i) Changes to the enrollment of the small employer;
(ii) Changes to the family composition of the employee;
(iii) Changes to the health benefit plan requested by the small
employer; or
(iv) Changes in government requirements affecting the health
benefit plan.
(g) Rating factors shall produce premiums for identical groups that
differ only by the amounts attributable to plan design, with the
exception of discounts for health improvement programs.
(h) For the purposes of this section, a health benefit plan that
contains a restricted network provision shall not be considered similar
coverage to a health benefit plan that does not contain such a
provision, provided that the restrictions of benefits to network
providers result in substantial differences in claims costs. A carrier
may develop its rates based on claims costs ((due to network provider
reimbursement schedules or type of network)) for a plan. This
subsection does not restrict or enhance the portability of benefits as
provided in RCW 48.43.015.
(i) Except for small group health benefit plans that qualify as
insurance coverage combined with a health savings account as defined by
the United States internal revenue service, adjusted community rates
established under this section shall pool the medical experience of all
small groups purchasing coverage, including the small group
participants in the health insurance partnership established in RCW
70.47A.030. However, annual rate adjustments for each small group
health benefit plan may vary by up to plus or minus four percentage
points from the overall adjustment of a carrier's entire small group
pool((, such overall adjustment to be approved by the commissioner,
upon a showing by the carrier, certified by a member of the American
academy of actuaries that: (i) The variation is a result of deductible
leverage, benefit design, or provider network characteristics; and (ii)
for a rate renewal period, the projected weighted average of all small
group benefit plans will have a revenue neutral effect on the carrier's
small group pool. Variations of greater than four percentage points
are subject to review by the commissioner, and must be approved or
denied within sixty days of submittal.)) if certified by a member of
the American academy of actuaries, that: (i) The variation is a result
of deductible leverage, benefit design, claims cost trend for the plan,
or provider network characteristics; and (ii) for a rate renewal
period, the projected weighted average of all small group benefit plans
will have a revenue neutral effect on the carrier's small group pool.
Variations of greater than eight percentage points are subject to
review by the commissioner, and must be approved or denied within
thirty days of submittal. A variation that is not denied within
((sixty)) thirty days shall be deemed approved. The commissioner must
provide to the carrier a detailed actuarial justification for any
denial ((within thirty days)) at the time of the denial.
(j) For health benefit plans purchased through the health insurance
partnership established in chapter 70.47A RCW:
(i) Any surcharge established pursuant to RCW 70.47A.030(2)(e)
shall be applied only to health benefit plans purchased through the
health insurance partnership; and
(ii) Risk adjustment or reinsurance mechanisms may be used by the
health insurance partnership program to redistribute funds to carriers
participating in the health insurance partnership based on differences
in risk attributable to individual choice of health plans or other
factors unique to health insurance partnership participation. Use of
such mechanisms shall be limited to the partnership program and will
not affect small group health plans offered outside the partnership.
(((4))) (5) Nothing in this section shall restrict the right of
employees to collectively bargain for insurance providing benefits in
excess of those provided herein.
(((5))) (6)(a) Except as provided in this subsection, requirements
used by an insurer in determining whether to provide coverage to a
small employer shall be applied uniformly among all small employers
applying for coverage or receiving coverage from the carrier.
(b) An insurer shall not require a minimum participation level
greater than:
(i) One hundred percent of eligible employees working for groups
with three or less employees; and
(ii) Seventy-five percent of eligible employees working for groups
with more than three employees.
(c) In applying minimum participation requirements with respect to
a small employer, a small employer shall not consider employees or
dependents who have similar existing coverage in determining whether
the applicable percentage of participation is met.
(d) An insurer may not increase any requirement for minimum
employee participation or modify any requirement for minimum employer
contribution applicable to a small employer at any time after the small
employer has been accepted for coverage.
(e) Minimum participation requirements and employer premium
contribution requirements adopted by the health insurance partnership
board under RCW 70.47A.110 shall apply only to the employers and
employees who purchase health benefit plans through the health
insurance partnership.
(((6))) (7) An insurer must offer coverage to all eligible
employees of a small employer and their dependents. An insurer may not
offer coverage to only certain individuals or dependents in a small
employer group or to only part of the group. An insurer may not modify
a health plan with respect to a small employer or any eligible employee
or dependent, through riders, endorsements or otherwise, to restrict or
exclude coverage or benefits for specific diseases, medical conditions,
or services otherwise covered by the plan.
(((7))) (8) As used in this section, "health benefit plan," "small
employer," "adjusted community rate," and "wellness activities" mean
the same as defined in RCW 48.43.005.
Sec. 2 RCW 48.44.023 and 2008 c 143 s 7 are each amended to read
as follows:
(1)(((a))) A health care services contractor offering any health
benefit plan to a small employer, either directly or through an
association or member-governed group formed specifically for the
purpose of purchasing health care, may offer and actively market to the
small employer ((a)) no more than one health benefit plan featuring a
limited schedule of covered health care services. ((Nothing in this
subsection shall preclude a contractor from offering, or a small
employer from purchasing, other health benefit plans that may have more
comprehensive benefits than those included in the product offered under
this subsection. A contractor offering a health benefit plan under
this subsection shall clearly disclose all covered benefits to the
small employer in a brochure filed with the commissioner.)) (a) The plan offered under this subsection may be offered
with a choice of cost-sharing arrangements, and may, but is not
required to, comply with: RCW 48.44.210, 48.44.212, 48.44.225,
48.44.240 through 48.44.245, 48.44.290 through 48.44.341, 48.44.344,
48.44.360 through 48.44.380, 48.44.400, 48.44.420, 48.44.440 through
48.44.460, 48.44.500, 48.43.045(1) except as required in (b) of this
subsection, 48.43.093, 48.43.115 through 48.43.185, 48.43.515(5), or
48.42.100.
(b) A health benefit plan offered under this subsection shall
provide coverage for hospital expenses and services rendered by a
physician licensed under chapter 18.57 or 18.71 RCW but is not subject
to the requirements of RCW 48.44.225, 48.44.240, 48.44.245, 48.44.290,
48.44.300, 48.44.310, 48.44.320, 48.44.325, 48.44.330, 48.44.335,
48.44.344, 48.44.360, 48.44.400, 48.44.440, 48.44.450, and 48.44.460.
(2)
(b) In offering the plan under this subsection, the health care
service contractor must offer the small employer the option of
permitting every category of health care provider to provide health
services or care for conditions covered by the plan pursuant to RCW
48.43.045(1).
(2) A health care service contractor offering the plan under
subsection (1) of this section must also offer and actively market to
the small employer at least one additional health benefit plan.
(3) Nothing in this section shall prohibit a health care service
contractor from offering, or a purchaser from seeking, health benefit
plans with benefits in excess of the health benefit plan offered under
subsection (1) of this section. All forms, policies, and contracts
shall be submitted for approval to the commissioner, and the rates of
any plan offered under this section shall be reasonable in relation to
the benefits thereto.
(((3))) (4) Premium rates for health benefit plans for small
employers as defined in this section shall be subject to the following
provisions:
(a) The contractor shall develop its rates based on an adjusted
community rate and may only vary the adjusted community rate for:
(i) Geographic area;
(ii) Family size;
(iii) Age; and
(iv) Wellness activities.
(b) The adjustment for age in (a)(iii) of this subsection may not
use age brackets smaller than five-year increments, which shall begin
with age twenty and end with age sixty-five. Employees under the age
of twenty shall be treated as those age twenty.
(c) 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 shall be subject to the requirements of this
subsection (((3))) (4).
(d) The permitted rates for any age group shall be no more than
four hundred twenty-five percent of the lowest rate for all age groups
on January 1, 1996, four hundred percent on January 1, 1997, and three
hundred seventy-five percent on January 1, 2000, and thereafter.
(e) A discount for wellness activities shall be permitted to
reflect actuarially justified differences in utilization or cost
attributed to such programs.
(f) The rate charged for a health benefit plan offered under this
section may not be adjusted more frequently than annually except that
the premium may be changed to reflect:
(i) Changes to the enrollment of the small employer;
(ii) Changes to the family composition of the employee;
(iii) Changes to the health benefit plan requested by the small
employer; or
(iv) Changes in government requirements affecting the health
benefit plan.
(g) Rating factors shall produce premiums for identical groups that
differ only by the amounts attributable to plan design, with the
exception of discounts for health improvement programs.
(h) For the purposes of this section, a health benefit plan that
contains a restricted network provision shall not be considered similar
coverage to a health benefit plan that does not contain such a
provision, provided that the restrictions of benefits to network
providers result in substantial differences in claims costs. A carrier
may develop its rates based on claims costs ((due to network provider
reimbursement schedules or type of network)) for a plan. This
subsection does not restrict or enhance the portability of benefits as
provided in RCW 48.43.015.
(i) Except for small group health benefit plans that qualify as
insurance coverage combined with a health savings account as defined by
the United States internal revenue service, adjusted community rates
established under this section shall pool the medical experience of all
groups purchasing coverage, including the small group participants in
the health insurance partnership established in RCW 70.47A.030.
However, annual rate adjustments for each small group health benefit
plan may vary by up to plus or minus ((four)) eight percentage points
from the overall adjustment of a carrier's entire small group pool((,
such overall adjustment to be approved by the commissioner, upon a
showing by the carrier, certified by a member of the American academy
of actuaries that: (i) The variation is a result of deductible
leverage, benefit design, or provider network characteristics; and (ii)
for a rate renewal period, the projected weighted average of all small
group benefit plans will have a revenue neutral effect on the carrier's
small group pool. Variations of greater than four percentage points
are subject to review by the commissioner, and must be approved or
denied within sixty days of submittal)) if certified by a member of the
American academy of actuaries, that: (i) The variation is a result of
deductible leverage, benefit design, claims cost trend for the plan, or
provider network characteristics; and (ii) for a rate renewal period,
the projected weighted average of all small group benefit plans will
have a revenue neutral effect on the carrier's small group pool.
Variations of greater than eight percentage points are subject to
review by the commissioner, and must be approved or denied within
thirty days of submittal. A variation that is not denied within
((sixty)) thirty days shall be deemed approved. The commissioner must
provide to the carrier a detailed actuarial justification for any
denial ((within thirty days)) at the time of the denial.
(j) For health benefit plans purchased through the health insurance
partnership established in chapter 70.47A RCW:
(i) Any surcharge established pursuant to RCW 70.47A.030(2)(e)
shall be applied only to health benefit plans purchased through the
health insurance partnership; and
(ii) Risk adjustment or reinsurance mechanisms may be used by the
health insurance partnership program to redistribute funds to carriers
participating in the health insurance partnership based on differences
in risk attributable to individual choice of health plans or other
factors unique to health insurance partnership participation. Use of
such mechanisms shall be limited to the partnership program and will
not affect small group health plans offered outside the partnership.
(((4))) (5) Nothing in this section shall restrict the right of
employees to collectively bargain for insurance providing benefits in
excess of those provided herein.
(((5))) (6)(a) Except as provided in this subsection, requirements
used by a contractor in determining whether to provide coverage to a
small employer shall be applied uniformly among all small employers
applying for coverage or receiving coverage from the carrier.
(b) A contractor shall not require a minimum participation level
greater than:
(i) One hundred percent of eligible employees working for groups
with three or less employees; and
(ii) Seventy-five percent of eligible employees working for groups
with more than three employees.
(c) In applying minimum participation requirements with respect to
a small employer, a small employer shall not consider employees or
dependents who have similar existing coverage in determining whether
the applicable percentage of participation is met.
(d) A contractor may not increase any requirement for minimum
employee participation or modify any requirement for minimum employer
contribution applicable to a small employer at any time after the small
employer has been accepted for coverage.
(e) Minimum participation requirements and employer premium
contribution requirements adopted by the health insurance partnership
board under RCW 70.47A.110 shall apply only to the employers and
employees who purchase health benefit plans through the health
insurance partnership.
(((6))) (7) A contractor must offer coverage to all eligible
employees of a small employer and their dependents. A contractor may
not offer coverage to only certain individuals or dependents in a small
employer group or to only part of the group. A contractor may not
modify a health plan with respect to a small employer or any eligible
employee or dependent, through riders, endorsements or otherwise, to
restrict or exclude coverage or benefits for specific diseases, medical
conditions, or services otherwise covered by the plan.
Sec. 3 RCW 48.46.066 and 2008 c 143 s 8 are each amended to read
as follows:
(1)(((a))) A health maintenance organization offering any health
benefit plan to a small employer, either directly or through an
association or member-governed group formed specifically for the
purpose of purchasing health care, may offer and actively market to the
small employer ((a)) no more than one health benefit plan featuring a
limited schedule of covered health care services. ((Nothing in this
subsection shall preclude a health maintenance organization from
offering, or a small employer from purchasing, other health benefit
plans that may have more comprehensive benefits than those included in
the product offered under this subsection. A health maintenance
organization offering a health benefit plan under this subsection shall
clearly disclose all the covered benefits to the small employer in a
brochure filed with the commissioner.)) (a) The plan offered under this subsection may be offered
with a choice of cost-sharing arrangements, and may, but is not
required to, comply with: RCW 48.46.250, 48.46.272 through 48.46.291,
48.46.320, 48.46.350, 48.46.375, 48.46.440 through 48.46.460,
48.46.480, 48.46.490, 48.46.510, 48.46.520, 48.46.530, 48.46.565,
48.46.570, 48.46.575, 48.43.045(1) except as required in (b) of this
subsection, 48.43.093, 48.43.115 through 48.43.185, 48.43.515(5), or
48.42.100.
(b) A health benefit plan offered under this subsection shall
provide coverage for hospital expenses and services rendered by a
physician licensed under chapter 18.57 or 18.71 RCW but is not subject
to the requirements of RCW 48.46.275, 48.46.280, 48.46.285, 48.46.350,
48.46.355, 48.46.375, 48.46.440, 48.46.480, 48.46.510, 48.46.520, and
48.46.530.
(2)
(b) In offering the plan under this subsection, the health
maintenance organization must offer the small employer the option of
permitting every category of health care provider to provide health
services or care for conditions covered by the plan pursuant to RCW
48.43.045(1).
(2) A health maintenance organization offering the plan under
subsection (1) of this section must also offer and actively market to
the small employer at least one additional health benefit plan.
(3) Nothing in this section shall prohibit a health maintenance
organization from offering, or a purchaser from seeking, health benefit
plans with benefits in excess of the health benefit plan offered under
subsection (1) of this section. All forms, policies, and contracts
shall be submitted for approval to the commissioner, and the rates of
any plan offered under this section shall be reasonable in relation to
the benefits thereto.
(((3))) (4) Premium rates for health benefit plans for small
employers as defined in this section shall be subject to the following
provisions:
(a) The health maintenance organization shall develop its rates
based on an adjusted community rate and may only vary the adjusted
community rate for:
(i) Geographic area;
(ii) Family size;
(iii) Age; and
(iv) Wellness activities.
(b) The adjustment for age in (a)(iii) of this subsection may not
use age brackets smaller than five-year increments, which shall begin
with age twenty and end with age sixty-five. Employees under the age
of twenty shall be treated as those age twenty.
(c) The health maintenance organization 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 shall be subject to the
requirements of this subsection (((3))) (4).
(d) The permitted rates for any age group shall be no more than
four hundred twenty-five percent of the lowest rate for all age groups
on January 1, 1996, four hundred percent on January 1, 1997, and three
hundred seventy-five percent on January 1, 2000, and thereafter.
(e) A discount for wellness activities shall be permitted to
reflect actuarially justified differences in utilization or cost
attributed to such programs.
(f) The rate charged for a health benefit plan offered under this
section may not be adjusted more frequently than annually except that
the premium may be changed to reflect:
(i) Changes to the enrollment of the small employer;
(ii) Changes to the family composition of the employee;
(iii) Changes to the health benefit plan requested by the small
employer; or
(iv) Changes in government requirements affecting the health
benefit plan.
(g) Rating factors shall produce premiums for identical groups that
differ only by the amounts attributable to plan design, with the
exception of discounts for health improvement programs.
(h) For the purposes of this section, a health benefit plan that
contains a restricted network provision shall not be considered similar
coverage to a health benefit plan that does not contain such a
provision, provided that the restrictions of benefits to network
providers result in substantial differences in claims costs. A carrier
may develop its rates based on claims costs ((due to network provider
reimbursement schedules or type of network)) for a plan. This
subsection does not restrict or enhance the portability of benefits as
provided in RCW 48.43.015.
(i) Except for small group health benefit plans that qualify as
insurance coverage combined with a health savings account as defined by
the United States internal revenue service, adjusted community rates
established under this section shall pool the medical experience of all
groups purchasing coverage, including the small group participants in
the health insurance partnership established in RCW 70.47A.030.
However, annual rate adjustments for each small group health benefit
plan may vary by up to plus or minus ((four)) eight percentage points
from the overall adjustment of a carrier's entire small group pool((,
such overall adjustment to be approved by the commissioner, upon a
showing by the carrier, certified by a member of the American academy
of actuaries that: (i) The variation is a result of deductible
leverage, benefit design, or provider network characteristics; and (ii)
for a rate renewal period, the projected weighted average of all small
group benefit plans will have a revenue neutral effect on the carrier's
small group pool. Variations of greater than four percentage points
are subject to review by the commissioner, and must be approved or
denied within sixty days of submittal)) if certified by a member of the
American academy of actuaries, that: (i) The variation is a result of
deductible leverage, benefit design, claims cost trend for the plan, or
provider network characteristics; and (ii) for a rate renewal period,
the projected weighted average of all small group benefit plans will
have a revenue neutral effect on the health maintenance organization's
small group pool. Variations of greater than eight percentage points
are subject to review by the commissioner, and must be approved or
denied within thirty days of submittal. A variation that is not denied
within ((sixty)) thirty days shall be deemed approved. The
commissioner must provide to the carrier a detailed actuarial
justification for any denial ((within thirty days)) at the time of the
denial.
(j) For health benefit plans purchased through the health insurance
partnership established in chapter 70.47A RCW:
(i) Any surcharge established pursuant to RCW 70.47A.030(2)(e)
shall be applied only to health benefit plans purchased through the
health insurance partnership; and
(ii) Risk adjustment or reinsurance mechanisms may be used by the
health insurance partnership program to redistribute funds to carriers
participating in the health insurance partnership based on differences
in risk attributable to individual choice of health plans or other
factors unique to health insurance partnership participation. Use of
such mechanisms shall be limited to the partnership program and will
not affect small group health plans offered outside the partnership.
(((4))) (5) Nothing in this section shall restrict the right of
employees to collectively bargain for insurance providing benefits in
excess of those provided herein.
(((5))) (6)(a) Except as provided in this subsection, requirements
used by a health maintenance organization in determining whether to
provide coverage to a small employer shall be applied uniformly among
all small employers applying for coverage or receiving coverage from
the carrier.
(b) A health maintenance organization shall not require a minimum
participation level greater than:
(i) One hundred percent of eligible employees working for groups
with three or less employees; and
(ii) Seventy-five percent of eligible employees working for groups
with more than three employees.
(c) In applying minimum participation requirements with respect to
a small employer, a small employer shall not consider employees or
dependents who have similar existing coverage in determining whether
the applicable percentage of participation is met.
(d) A health maintenance organization may not increase any
requirement for minimum employee participation or modify any
requirement for minimum employer contribution applicable to a small
employer at any time after the small employer has been accepted for
coverage.
(e) Minimum participation requirements and employer premium
contribution requirements adopted by the health insurance partnership
board under RCW 70.47A.110 shall apply only to the employers and
employees who purchase health benefit plans through the health
insurance partnership.
(((6))) (7) A health maintenance organization must offer coverage
to all eligible employees of a small employer and their dependents. A
health maintenance organization may not offer coverage to only certain
individuals or dependents in a small employer group or to only part of
the group. A health maintenance organization may not modify a health
plan with respect to a small employer or any eligible employee or
dependent, through riders, endorsements or otherwise, to restrict or
exclude coverage or benefits for specific diseases, medical conditions,
or services otherwise covered by the plan.