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NINETY-NINTH DAY

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AFTERNOON SESSION

__________

House Chamber, Olympia, Monday, April 17, 1995

The House was called to order at 1:00 p.m. by the Speaker (Representative Horn presiding). The Clerk called the roll and a quorum was present.

The flag was escorted to the rostrum by a Sergeant at Arms Color Guard, Pages Kelly Smith and Annalisa Woods. Prayer was offered by Wes Johnson, of the Bethel Baptist Church of Everett.

Reading of the Journal of the previous day was dispensed with and it was ordered to stand approved.

POINT OF PERSONAL PRIVILEGE

Representative Campbell: Thank you Mr. Speaker. Mr. Speaker, over the weekend since we adjourned I have to report that a good friend and comrade died in a very tragic car accident and I just wanted to point out his passing today. Dr. David Cantwell who's up on Canyon Rd. when some irresponsible drunken mad man ran into him, killed him. A wonderful man, a good friend 36 yrs old, left his wife and three children. They live in an adjoining district, the 25th, but they're good friends of ours. And I have to tell you this is a grievous loss and we're certainly going to be saddened for it.

He wasn't alone, another gentleman was killed in the wreck and two young ladies are tragically in the hospital and probably crippled for life. I hate to start this session this week on this note but I wanted to thank the body for the outstanding work we did on the drunk driving legislation and I hope and pray that these types of injuries and incidents will be reduced in the years to come. I just wanted to mention David, because the world certainly is going to be a lesser place without him, he was a wonderful person and my heart goes out to his family and all the family members from the other families that are going to miss their uncle and that gentleman who was killed also from people that were good samaritans, just to try to help move a car off the road. I thank you Mr. Speaker for indulging me and thank the body once again for really acting and, I think in very positive way, this very tragic menace that we're dealing with.

MESSAGE FROM THE SECRETARY OF STATE

The Honorable Speaker of House of Representatives

The Legislature of the State of Washington

Olympia, Washington

Mr. Speaker:

I, Ralph Munro, Secretary of State of the State of Washington and custodian of its seal, certify that according to records on file in my office Mark K. Sterk is to fill the vacancy of State Representative of the 4th District by action of the King County Council.

IN TESTIMONY WHEREOF, I have hereunto set my hand, and affixed the seal of the State of Washington, this 17th day of April, 1995.

(Seal)

Ralph Munro, Secretary of State.

OATH OF OFFICE

The Speaker (Representative Horn presiding) instructed the Sergeant at Arms to escort Mark K. Sterk to the rostrum.

Justice Utter administered the oath of office to Mr. Sterk. The Speaker (Representative Horn presiding) and Secretary of State presented Representative Sterk with the certificate of appointment, and he was escorted to his seat in the House Chamber.

RESOLUTIONS

HOUSE RESOLUTION NO. 95-4667, by Representatives Cairnes, Cooke, Campbell, Kremen, Dyer, D. Schmidt, Koster and Hatfield

WHEREAS, It is the policy of the Washington State Legislature to recognize excellence in service and contribution to the great state of Washington and these United States; and

WHEREAS, A great many citizens of the great state of Washington served in the American Merchant Marine during the years surrounding World War II, and many other Washington state citizens continue to serve today; and

WHEREAS, During World War II the United States depended heavily upon the Merchant Marine for the war effort, to man the "Liberty Ships," that carried forty-one Merchant Seaman and twenty-six United States Navy Armed Guard gunners, bringing much needed cargo, foodstuffs, munitions, supplies, and other raw material to our Allies and vital war theaters, by way of large ship convoys crossing the treacherous Atlantic and Pacific Oceans; and

WHEREAS, These convoys faced untold dangers and perils, including being methodically hunted by U-boats in "wolf-packs," which, for example, in the first twenty days of March 1943 sank ninety-seven Allied merchant ships. The convoys also faced the hazards of mines, enemy aircraft, surface warships, armed raiders, and not least of all the North Atlantic gales and Pacific typhoons; and

WHEREAS, The Merchant Marines surmounted and conquered these perils and served the United States readily and reliably, unselfishly and unwaveringly, valiantly and proudly, courageously and patriotically; and

WHEREAS, The fight for freedom in World War II would have been immeasurably affected without the selfless and determined contributions by the Merchant Marines to vanquish and defeat the Axis powers, heretofore the greatest enemies of freedom the world had known; and

WHEREAS, During times of peace, the Merchant Marines faithfully ensure strong, robust seaborne commerce, bolstering and fostering international trade and continued prosperity for the great state of Washington and these United States;

NOW, THEREFORE, BE IT RESOLVED, That the House of Representatives of the State of Washington, honor the excellence in service and contribution to the great state of Washington and these United States by those who serve in the Merchant Marines, helping to assure continued economic prosperity through trade, and especially those who have served during the years surrounding World War II, who, by their courage, patriotism, and selfless and unwavering sacrifices have contributed to ensuring that the forces of tyranny will never triumph over the bright light of freedom.

Representative Cairnes moved adoption of the resolution.

Representative Cairnes spoke in favor of adoption of the resolution.

House Resolution No. 4667 was adopted.

HOUSE RESOLUTION NO. 95-4670, by Representatives Johnson, Carrell, K. Schmidt, Huff, Buck, Sheldon, Hymes, Sheahan, Brumsickle, Silver, Honeyford, Sehlin, Backlund, Dyer, Boldt, Koster, McMahan, Pelesky, Fuhrman, D. Schmidt, L. Thomas, Lisk, Hickel, Foreman, Casada, Pennington, Lambert, Benton, Cooke, Skinner, Mitchell, Talcott, Mulliken, Thompson, Beeksma, McMorris, Stevens, Robertson, B. Thomas, Hargrove, Goldsmith, Chandler, Ballard, Smith, Clements, Campbell, Kremen, Basich, Wolfe, Hankins, Regala, Chappell, Morris, Elliot, Carlson and Horn

WHEREAS, Home schools and private schools provide families the opportunity for their children to receive a sound academic education integrated with high ethical standards taught within a safe and secure environment; and

WHEREAS, Home schools and private schools allow parents to ensure that the positive character traits and moral values instilled in their children at home are reinforced by the educational process; and

WHEREAS, It is a fundamental principle that precedes both the federal and state constitutions that parents have the ultimate authority and responsibility for the care and upbringing of their children; and

WHEREAS, Parents have the paramount right to direct the education of their children and to oversee what their children learn and how they are taught; and

WHEREAS, The Washington State Legislature has appropriately and statutorily recognized home education and private schooling as legitimate and viable education alternatives; and

WHEREAS, The Washington State Legislature has also recognized the rights of parents to teach and train their children according to the dictates of their sincerely held religious beliefs; and

WHEREAS, Home education and private school education were the predominant if not singular forms of education for much of the early years of America's past; and

WHEREAS, Many notable Americans, including George Washington, Patrick Henry, John Marshall, Abraham Lincoln, Booker T. Washington, and Woodrow Wilson were primarily educated at home; and

WHEREAS, Washington now has more children being educated at home schools and private schools than ever before in the history of our state; and

WHEREAS, Parents of students in home schools and private schools must not only pay for the education of their own children but as taxpayers they also pay for the education of their neighbors' children saving the state millions of dollars each year; and

WHEREAS, Contemporary studies continue to confirm that children who are educated at home or in private schools score exceptionally well on nationally normed achievement tests, exhibit confidence, conviction, poise, and purpose, and are fully prepared to meet the challenges of today's society; and

WHEREAS, It is appropriate that home and private school educators throughout Washington be recognized for their sacrificial contributions to the diversity and quality of education in this great state;

NOW, THEREFORE, BE IT RESOLVED, That the Washington State House of Representatives honor, thank, and celebrate the home school and private school educators of our state and recognize the first week of June as Washington State Home School and Private School Education Week.

Representative Johnson moved adoption of the resolution.

Representatives Johnson, Sheldon, Kremen, Pennington, Ebersole, McMahan, Skinner, Regala, Campbell, Hargrove, Koster and Clements spoke in favor of adoption of the resolution.

House Resolution No. 4670 was adopted.

MESSAGES FROM THE SENATE

April 17, 1995

Mr. Speaker:

The President has signed:

SUBSTITUTE HOUSE BILL NO. 1241,

SUBSTITUTE HOUSE BILL NO. 1483,

SUBSTITUTE HOUSE BILL NO. 1929,

SUBSTITUTE HOUSE BILL NO. 2060,

and the same are herewith transmitted.

Brad Hendrickson, Deputy Secretary

April 17, 1995

Mr. Speaker:

The President has signed:

SENATE BILL NO. 5728,

ENGROSSED SENATE BILL NO. 5876,

and the same are herewith transmitted.

Marty Brown, Secretary

April 14, 1995

Mr. Speaker:

The Senate has passed:

SUBSTITUTE HOUSE BILL NO. 1220,

SUBSTITUTE HOUSE BILL NO. 1432,

ENGROSSED SUBSTITUTE HOUSE BILL NO. 2090,

and the same are herewith transmitted.

Brad Hendrickson, Deputy Secretary

The Speaker (Representative Horn presiding) declared the House to ease.

The Speaker called the House to order.

There being no objection, the House advanced to the seventh order of business.

SENATE AMENDMENTS TO HOUSE BILL

April 14, 1995

Mr. Speaker:

The Senate has passed ENGROSSED SUBSTITUTE HOUSE BILL NO. 1046 with the following amendments:

Strike everything after the enacting clause and insert the following:

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

BASIC HEALTH PLAN--EXPANDED ENROLLMENT. (1) The legislature finds that the basic health plan has been an effective program in providing health coverage for uninsured residents. Further, since 1993, substantial amounts of public funds have been allocated for subsidized basic health plan enrollment.

(2) It is the intent of the legislature that the basic health plan enrollment be expanded expeditiously, consistent with funds available in the health services account, with the goal of two hundred thousand adult subsidized basic health plan enrollees and one hundred thirty thousand children covered through expanded medical assistance services by June 30, 1997, with the priority of providing needed health services to children in conjunction with other public programs.

(3) Effective January 1, 1996, basic health plan enrollees whose income is less than one hundred twenty-five percent of the federal poverty level shall pay at least a ten-dollar premium share.

(4) No later than July 1, 1996, the administrator shall implement procedures whereby hospitals licensed under chapters 70.41 and 71.12 RCW, health carrier, rural health care facilities regulated under chapter 70.175 RCW, and community and migrant health centers funded under RCW 41.05.220, may expeditiously assist patients and their families in applying for basic health plan or medical assistance coverage, and in submitting such applications directly to the health care authority or the department of social and health services. The health care authority and the department of social and health services shall make every effort to simplify and expedite the application and enrollment process.

(5) No later than July 1, 1996, the administrator shall implement procedures whereby health insurance agents and brokers, licensed under chapter 48.17 RCW, may expeditiously assist patients and their families in applying for basic health plan or medical assistance coverage, and in submitting such applications directly to the health care authority or the department of social and health services. Brokers and agents shall be entitled to receive a commission for each individual sale of the basic health plan to anyone not at anytime previously signed up and a commission for each group sale of the basic health plan. No commission shall be provided upon a renewal. Commissions shall be determined based on the estimated annual cost of the basic health plan, however, commissions shall not result in a reduction in the premium amount paid to health carriers. For purposes of this section "health carrier" is as defined in section 4 of this act. The health care authority and the department of social and health services shall make every effort to simplify and expedite the application and enrollment process.

NEW SECTION. Sec. 2. HEALTH CARE SAVINGS ACCOUNTS. (1) This chapter shall be known as the health care savings account act.

(2) The legislature recognizes that the costs of health care are increasing rapidly and most individuals are removed from participating in the purchase of their health care.

As a result, it becomes critical to encourage and support solutions to alleviate the demand for diminishing state resources. In response to these increasing costs in health care spending, the legislature intends to clarify that health care savings accounts may be offered as health benefit options to all residents as incentives to reduce unnecessary health services utilization, administration, and paperwork, and to encourage individuals to be in charge of and participate directly in their use of service and health care spending. To alleviate the possible impoverishment of residents requiring long-term care, health care savings accounts may promote savings for long-term care and provide incentives for individuals to protect themselves from financial hardship due to a long-term health care need.

(3) Health care savings accounts are authorized in Washington state as options to employers and residents.

NEW SECTION. Sec. 3. HEALTH CARE SAVINGS ACCOUNTS--REQUEST FOR TAX EXEMPTION. The governor and responsible agencies shall:

(1) Request that the United States congress amend the internal revenue code to treat premiums and contributions to health benefits plans, such as health care savings account programs, basic health plans, conventional and standard health plans offered through a health carrier, by employers, self-employed persons, and individuals, as fully excluded employer expenses and deductible from individual adjusted gross income for federal tax purposes.

(2) Request that the United States congress amend the internal revenue code to exempt from federal income tax interest that accrues in health care savings accounts until such money is withdrawn for expenditures other than eligible health expenses as defined in law.

(3) If all federal statute or regulatory waivers necessary to fully implement this chapter have not been obtained by the effective date of this section, this chapter shall remain in effect.

NEW SECTION. Sec. 4. DEFINITIONS. 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) "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.

(3) "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 this act.

(4) "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.

(5) "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.

(6) "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.

(7) "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.

(8) "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.

(9) "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 service 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;

(d) Disability income;

(e) Coverage incidental to a property/casualty liability insurance policy such as automobile personal injury protection coverage and homeowner guest medical;

(f) Workers' compensation coverage;

(g) Accident only coverage;

(h) Specified disease and hospital confinement indemnity when marketed solely as a supplement to a health plan;

(i) Employer-sponsored self-funded health plans; and

(j) Dental only and vision only coverage.

(10) "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.

(11) "Preexisting condition" means any medical condition, illness, or injury that existed any time prior to the effective date of coverage.

(12) "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.

(13) "Small employer" means any person, firm, corporation, partnership, association, political subdivision except school districts, 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 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. The term "small employer" includes a self-employed individual or sole proprietor. The term "small employer" also includes a self-employed individual or sole proprietor who derives 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.

(14) "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.

(15) "Basic health plan" means the plan described under chapter 70.47 RCW, as revised from time to time.

NEW SECTION. Sec. 5. INSURANCE REFORM--PORTABILITY. (1) Every health carrier shall waive any preexisting condition exclusion or limitation for persons or groups who had similar health coverage under a different health plan at any time during the three-month period immediately preceding the date of application for the new health plan if such person was continuously covered under the immediately preceding health plan. If the person was continuously covered for at least three months under the immediately preceding health plan, the carrier may not impose a waiting period for coverage of preexisting conditions. If the person was continuously covered for less than three months under the immediately preceding health plan, the carrier must credit any waiting period under the immediately preceding health plan toward the new health plan. For the purposes of this subsection, a preceding health plan includes an employer provided self-funded health plan.

(2) Subject to the provisions of subsection (1) 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.

NEW SECTION. Sec. 6. INSURANCE REFORM--PREEXISTING CONDITIONS. (1) 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.

(2) 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.

NEW SECTION. Sec. 7. INSURANCE REFORM--GUARANTEED ISSUE. (1) All health carriers shall accept for enrollment any state resident 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. In the case of group plans, 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; or

(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; or

(c) 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.

NEW SECTION. Sec. 8. A new section is added to chapter 48.43 RCW to read as follows:

Every health plan delivered, issued for delivery, or renewed by a health carrier on and after January 1, 1996, shall:

(1) Permit every category of health care provider to provide health services or care for conditions included in the basic health plan services to the extent that:

(a) The provision of such health services or care is within the health care providers' permitted scope of practice; and

(b) The providers agree to abide by standards related to:

(i) Provision, utilization review, and cost containment of health services;

(ii) Management and administrative procedures; and

(iii) Provision of cost-effective and clinically efficacious health services.

(2) Annually report the names and addresses of all officers, directors, or trustees of the health carrier during the preceding year, and the amount of wages, expense reimbursements, or other payments to such individuals.

NEW SECTION. Sec. 9. WASHINGTON HEALTH CARE POLICY BOARD. (1) There is hereby created the Washington health care policy board. The board shall consist of: (a) Five members appointed by the governor; (b) two members of the senate appointed by the president of the senate, one of whom shall be a member of the minority party; and (c) two members of the house of representatives appointed by the speaker of the house of representatives, one of whom shall be a member of the minority party. One member of the board shall be designated by the governor as chair and shall serve at the pleasure of the governor. All legislative members shall be appointed before the close of each regular or special session during an odd-numbered year.

(2) Of the members appointed by the governor, two shall be appointed to two-year terms and two shall be appointed to three-year terms. Thereafter, members shall be appointed to three-year terms. The chair shall serve at the pleasure of the governor. Vacancies shall be filled by appointment for the remainder of the unexpired term of the position being vacated. A majority of the voting members shall constitute a quorum.

(3) Members of the board appointed by the governor shall occupy their positions on a full-time basis and are exempt from the provisions of chapter 41.06 RCW. They shall be paid a salary to be fixed by the governor in accordance with RCW 43.03.040.

NEW SECTION. Sec. 10. CHAIR--POWERS AND DUTIES. The chair shall be the chief administrative officer and the appointing authority of the board. The chair shall have the authority to employ personnel of the board in accordance with chapter 41.06 RCW and prescribe their duties. The chair may employ up to eight personnel exempt from the provisions of chapter 41.06 RCW. The chair shall also have the following powers and duties:

(1) Enter into contracts on behalf of the board;

(2) Accept and expend donations, grants, and other funds received by the board;

(3) Appoint advisory committees and undertake studies, research, and analysis necessary to support activities of the board.

NEW SECTION. Sec. 11. BOARD--POWERS AND DUTIES. The board shall have the following powers and duties:

(1) Periodically make recommendations to the appropriate committees of the legislature and the governor on issues including, but not limited to the following:

(a) The scope, financing, and delivery of health care benefit plans including access for both the insured and uninsured population;

(b) Long-term care services including the finance and delivery of such services in conjunction with the basic health plan by 1999;

(c) The use of health care savings accounts including their impact on the health of participants and the cost of health insurance;

(d) Rural health care needs;

(e) Whether Washington is experiencing an increase in immigration as a result of health insurance reforms and the availability of subsidized and unsubsidized health care benefits;

(f) The status of medical education and make recommendations regarding steps possible to encourage adequate availability of health care professionals to meet the needs of the state's populations with particular attention to rural areas;

(g) The implementation of community rating and its impacts on the marketplace including costs and access;

(h) The status of quality improvement programs in both the public and private sectors;

(i) Models for billing and claims processing forms, ensuring that these procedures minimize administrative burdens on health care providers, facilities, carriers, and consumers. These standards shall also apply to state-purchased health services where appropriate;

(j) Guidelines to health carriers for utilization management and review, provider selection and termination policies, and coordination of benefits and premiums; and

(k) Study the feasibility of including long-term care services in a medicare supplemental insurance policy offered according to RCW 41.05.197;

(2) Review rules prepared by the insurance commissioner, health care authority, department of social and health services, department of labor and industries, and department of health, and make recommendations where appropriate to facilitate consistency with the goals of health reform;

(3) Make recommendations on a system for managing health care services to children with special needs and report to the governor and the legislature on their findings by January 1, 1997;

(4) Conduct a comparative analysis of individual and group insurance markets addressing: Relative costs; utilization rates; adverse selection; and specific impacts upon small businesses and individuals. The analysis shall address, also, the necessity and feasibility of establishing explicit related policies, to include, but not be limited to, establishing the maximum allowable individual premium rate as a percentage of the small group premium rate. The board shall submit an interim report on its findings to the governor and appropriate committees of the legislature by December 15, 1995, and a final report on December 15, 1996;

(5) Develop sample enrollee satisfaction surveys that may be used by health carriers.

NEW SECTION. Sec. 12. STUDY. In January 1999 the legislative budget committee shall commence a study of the necessity of the existence of the board and report its recommendations to the appropriate committees of the legislature by December 1, 1999.

NEW SECTION. Sec. 13. A new section is added to chapter 48.20 RCW to read as follows:

(1)(a) An insurer offering any health benefit plan to any individual shall offer and actively market to all individuals a health benefit plan providing benefits identical to the schedule of covered health services that are required to be delivered to an individual enrolled in the basic health plan. Nothing in this subsection shall preclude an insurer from offering, or an individual from purchasing, other health benefit plans that may have more or less comprehensive benefits than the basic health plan, provided such plans are in accordance with this chapter. An insurer offering a health benefit plan that does not include benefits provided in the basic health plan shall clearly disclose these differences to the individual in a brochure approved by the commissioner.

(b) A health benefit plan 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 48.20.390, 48.20.393, 48.20.395, 48.20.397, 48.20.410, 48.20.411, 48.20.412, 48.20.416, and 48.20.420 if the health benefit plan is the mandatory offering under (a) of this subsection that provides benefits identical to the basic health plan, to the extent these requirements differ from the basic health plan.

(2) Premiums for health benefit plans for individuals shall be calculated using the adjusted community rating method that spreads financial risk across the carrier's entire individual product population. All such rates shall conform to the following:

(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. Individuals 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.

(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 not to exceed twenty percent.

(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 family composition;

(ii) Changes to the health benefit plan requested by the individual; or

(iii) Changes in government requirements affecting the health benefit plan.

(g) 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. This subsection does not restrict or enhance the portability of benefits as provided in section 5 of this act.

(3) Adjusted community rates established under this section shall pool the medical experience of all individuals purchasing coverage, and shall not be required to be pooled with the medical experience of health benefit plans offered to small employers under RCW 48.21.045.

(4) As used in this section, "health benefit plan," "basic health plan," "adjusted community rate," and "wellness activities" mean the same as defined in section 4 of this act.

Sec. 14. RCW 48.21.045 and 1990 c 187 s 2 are each amended to read as follows:

((A basic group disability insurance policy may be offered to employers of fewer than twenty-five employees. Such a basic group disability insurance policy)) (1)(a) An insurer offering any health benefit plan to a small employer shall offer and actively market to the small employer a health benefit plan providing benefits identical to the schedule of covered health services that are required to be delivered to an individual enrolled in the basic health plan. Nothing in this subsection shall preclude an insurer from offering, or a small employer from purchasing, other health benefit plans that may have more or less comprehensive benefits than the basic health plan, provided such plans are in accordance with this chapter. An insurer offering a health benefit plan that does not include benefits in the basic health plan shall clearly disclose these differences to the small employer in a brochure approved by the commissioner.

(b) A health benefit plan 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, 48.21.240, 48.21.244, 48.21.250, 48.21.300, 48.21.310, or 48.21.320 if: (i) The health benefit plan is the mandatory offering under (a) of this subsection that provides benefits identical to the basic health plan, to the extent these requirements differ from the basic health plan; or (ii) the health benefit plan is offered to employers with not more than twenty-five employees.

(2) Nothing in this section shall prohibit an insurer from offering, or a purchaser from seeking, benefits in excess of the basic ((coverage authorized herein)) health plan services. 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) 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.

(e) A discount for wellness activities shall be permitted to reflect actuarially justified differences in utilization or cost attributed to such programs not to exceed twenty percent.

(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. This subsection does not restrict or enhance the portability of benefits as provided in section 5 of this act.

(i) Adjusted community rates established under this section shall pool the medical experience of all small groups purchasing coverage.

(4) The ((policy)) health benefit plans authorized by this section that are lower than the required offering shall not supplant or supersede any existing policy for the benefit of employees in this state. Nothing in this section shall restrict the right of employees to collectively bargain for insurance providing benefits in excess of those provided herein.

(5)(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.

(6) 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) As used in this section, "health benefit plan," "small employer," "basic health plan," "adjusted community rate," and "wellness activities" mean the same as defined in section 4 of this act.

NEW SECTION. Sec. 15. A new section is added to chapter 48.44 RCW to read as follows:

(1)(a) A health care service contractor offering any health benefit plan to any individual shall offer and actively market to all individuals a health benefit plan providing benefits identical to the schedule of covered health services that are required to be delivered to an individual enrolled in the basic health plan. Nothing in this subsection shall preclude a contractor from offering, or an individual from purchasing, other health benefit plans that may have more or less comprehensive benefits than the basic health plan, provided such plans are in accordance with this chapter. A contractor offering a health benefit plan that does not include benefits provided in the basic health plan shall clearly disclose these differences to the individual in a brochure approved by the commissioner.

(b) A health benefit plan 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, 48.44.340, 48.44.344, 48.44.360, 48.44.400, 48.44.440, 48.44.450, and 48.44.460 if the health benefit plan is the mandatory offering under (a) of this subsection that provides benefits identical to the basic health plan, to the extent these requirements differ from the basic health plan.

(2) Premium rates for health benefit plans for individuals shall be subject to the following provisions:

(a) The health care service 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.

(c) The health care service 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.

(e) A discount for wellness activities shall be permitted to reflect actuarially justified differences in utilization or cost attributed to such programs not to exceed twenty percent.

(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 family composition;

(ii) Changes to the health benefit plan requested by the individual; or

(iii) Changes in government requirements affecting the health benefit plan.

(4) As used in this section and RCW 48.44.023 "health benefit plan," "small employer," "basic health plan," "adjusted community rates," and "wellness activities" mean the same as defined in section 4 of this act.

Sec. 16. RCW 48.44.023 and 1990 c 187 s 3 are each amended to read as follows:

((A basic health care service contract may be offered to employers of fewer than twenty-five employees. Such a basic health care service contract)) (1)(a) A health care services contractor offering any health benefit plan to a small employer shall offer and actively market to the small employer a health benefit plan providing benefits identical to the schedule of covered health services that are required to be delivered to an individual enrolled in the basic health plan. Nothing in this subsection shall preclude a contractor from offering, or a small employer from purchasing, other health benefit plans that may have more or less comprehensive benefits than the basic health plan, provided such plans are in accordance with this chapter. A contractor offering a health benefit plan that does not include benefits in the basic health plan shall clearly disclose these differences to the small employer in a brochure approved by the commissioner.

(b) A health benefit plan 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, 48.44.340, 48.44.344, 48.44.360, 48.44.400, 48.44.440, 48.44.450, and 48.44.460 if (i) The health benefit plan is the mandatory offering under (a) of this subsection that provides benefits identical to the basic health plan, to the extent these requirements differ from the basic health plan; or (ii) the health benefit plan is offered to employers with not more than twenty-five employees.

(2) Nothing in this section shall prohibit ((an insurer)) a health care service contractor from offering, or a purchaser from seeking, benefits in excess of the basic ((coverage authorized herein)) health plan services. 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) 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.

(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).

(e) A discount for wellness activities shall be permitted to reflect actuarially justified differences in utilization or cost attributed to such programs not to exceed twenty percent.

(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.

(i) Adjusted community rates established under this section shall pool the medical experience of all groups purchasing coverage.

(5)(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.

(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.

(6) 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.

NEW SECTION. Sec. 17. A new section is added to chapter 48.46 RCW to read as follows:

(1)(a) A health maintenance organization offering any health benefit plan to any individual shall offer and actively market to all individuals a health benefit plan providing benefits identical to the schedule of covered health services that are required to be delivered to an individual enrolled in the basic health plan. Nothing in this subsection shall preclude a health maintenance organization from offering, or an individual from purchasing, other health benefit plans that may have more or less comprehensive benefits than the basic health plan, provided such plans are in accordance with this chapter. A health maintenance organization offering a health benefit plan that does not include benefits provided in the basic health plan shall clearly disclose these differences to the individual in a brochure approved by the commissioner.

(b) A health benefit plan 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, 48.26.280, 48.46.285, 48.46.290, 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 if the health benefit plan is the mandatory offering under (a) of this subsection that provides benefits identical to the basic health plan, to the extent these requirements differ from the basic health plan.

(2) Premium rates for health benefit plans for individuals 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.

(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.

(e) A discount for wellness activities shall be permitted to reflect actuarially justified differences in utilization or cost attributed to such programs not to exceed twenty percent.

(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 family composition;

(ii) Changes to the health benefit plan requested by the individual; or

(iii) Changes in government requirements affecting the health benefit plan.

(4) As used in this section and RCW 48.46.066, "health benefit plan," "basic health plan," "adjusted community rate," "small employer," and "wellness activities" mean the same as defined in section 4 of this act.

Sec. 18. RCW 48.46.066 and 1990 c 187 s 4 are each amended to read as follows:

((A basic health maintenance agreement may be offered to employers of fewer than twenty-five employees. Such a basic health maintenance agreement)) (1)(a) A health maintenance organization offering any health benefit plan to a small employer shall offer and actively market to the small employer a health benefit plan providing benefits identical to the schedule of covered health services that are required to be delivered to an individual enrolled in the basich health plan. 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 or less comprehensive benefits than the basic health plan, provided such plans are in accordance with this chapter. A health maintenance organization offering a health benefit plan that does not include benefits in the basic health plan shall clearly disclose these differences to the small employer in a brochure approved by the commissioner.

(b) A health benefit plan 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, 48.46.290, 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 if: (i) The health benefit plan is the mandatory offering under (a) of this subsection that provides benefits identical to the basic health plan, to the extent these requirements differ from the basic health plan; or (ii) the health benefit plan is offered to employers with not more than twenty-five employees.

(2) Nothing in this section shall prohibit ((an insurer)) a health maintenance organization from offering, or a purchaser from seeking, benefits in excess of the basic ((coverage authorized herein)) health plan services. 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) 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.

(e) A discount for wellness activities shall be permitted to reflect actuarially justified differences in utilization or cost attributed to such programs not to exceed twenty percent.

(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.

(i) Adjusted community rates established under this section shall pool the medical experience of all groups purchasing coverage.

(5)(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.

(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.

(6) 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.

NEW SECTION. Sec. 19. A new section is added to chapter 43.70 RCW to read as follows:

(1) The identity of a whistleblower who complains, in good faith, to the department of health about the improper quality of care by a health care provider, or in a health care facility, as defined in RCW 43.72.010, shall remain confidential. The provisions of RCW 4.24.500 through 4.24.520, providing certain protections to persons who communicate to government agencies, shall apply to complaints filed under this section. The identity of the whistleblower shall remain confidential unless the department determines that the complaint was not made in good faith. An employee who is a whistleblower, as defined in this section, and who as a result of being a whistleblower has been subjected to workplace reprisal or retaliatory action has the remedies provided under chapter 49.60 RCW.

(2)(a) "Improper quality of care" means any practice, procedure, action, or failure to act that violates any state law or rule of the applicable state health licensing authority under Title 18 or chapters 70.41, 70.96A, 70.127, 70.175, 71.05, 71.12, and 71.24 RCW, and enforced by the department of health. Each health disciplinary authority as defined in RCW 18.130.040 may, with consultation and interdisciplinary coordination provided by the state department of health, adopt rules defining accepted standards of practice for their profession that shall further define improper quality of care. Improper quality of care shall not include good faith personnel actions related to employee performance or actions taken according to established terms and conditions of employment.

(b) "Reprisal or retaliatory action" means but is not limited to: Denial of adequate staff to perform duties; frequent staff changes; frequent and undesirable office changes; refusal to assign meaningful work; unwarranted and unsubstantiated report of misconduct pursuant to Title 18 RCW; letters of reprimand or unsatisfactory performance evaluations; demotion; reduction in pay; denial of promotion; suspension; dismissal; denial of employment; and a supervisor or superior encouraging coworkers to behave in a hostile manner toward the whistleblower.

(c) "Whistleblower" means a consumer, employee, or health care professional who in good faith reports alleged quality of care concerns to the department of health.

(3) Nothing in this section prohibits a health care facility from making any decision exercising its authority to terminate, suspend, or discipline an employee who engages in workplace reprisal or retaliatory action against a whistleblower.

(4) The department shall adopt rules to implement procedures for filing, investigation, and resolution of whistleblower complaints that are integrated with complaint procedures under Title 18 RCW for health professionals or health care facilities.

NEW SECTION. Sec. 20. A new section is added to chapter 48.43 RCW to read as follows:

Each health carrier as defined under section 4 of this act shall file with the commissioner its procedures for review and adjudication of complaints initiated by covered persons or health care providers. Procedures filed under this section shall provide a fair review for consideration of complaints. Every health carrier shall provide reasonable means whereby any person aggrieved by actions of the health carrier may be heard in person or by their authorized representative on their written request for review. If the health carrier fails to grant or reject such request within thirty days after it is made, the complaining person may proceed as if the complaint had been rejected. A complaint that has been rejected by the health carrier may be submitted to nonbinding mediation. Mediation shall be conducted pursuant to mediation rules similar to those of the American arbitration association, the center for public resources, the judicial arbitration and mediation service, RCW 7.70.100, or any other rules of mediation agreed to by the parties.

NEW SECTION. Sec. 21. The health care authority, the office of financial management, and the department of social and health services shall together monitor the enrollee level in the basic health plan and the medicaid caseload of children funded from the health services account. The office of financial management shall adjust the funding levels by interagency reimbursement of funds between the basic health plan and medicaid and adjust the funding levels between the health care authority and the medical assistance administration of the department of social and health services to maximize combined enrollment.

NEW SECTION. Sec. 22. A new section is added to chapter 48.21 RCW to read as follows:

(1) No insurer shall offer any health benefit plan to any small employer without complying with the provisions of RCW 48.21.045(5).

(2) Employers purchasing health plans provided through associations or through member-governed groups formed specifically for the purpose of purchasing health care shall not be considered small employers and such plans shall not be subject to the provisions of RCW 48.21.045(5).

(3) For purposes of this section, "health benefit plan," "health plan," and "small employer" mean the same as defined in section 4 of this act.

NEW SECTION. Sec. 23. A new section is added to chapter 48.44 RCW to read as follows:

(1) No health care service contractor shall offer any health benefit plan to any small employer without complying with the provisions of RCW 48.44.023(5).

(3) For purposes of this section, "health benefit plan," "health plan," and "small employer" mean the same as defined in section 4 of this act.

NEW SECTION. Sec. 24. A new section is added to chapter 48.46 RCW to read as follows:

(1) No health maintenance organization shall offer any health benefit plan to any small employer without complying with the provisions of RCW 48.46.066(5).

(3) For purposes of this section, "health benefit plan," "health plan," and "small employer" mean the same as defined in section 4 of this act.

NEW SECTION. Sec. 25. (1) The legislature recognizes that every individual possesses a fundamental right to exercise their religious beliefs and conscience. The legislature further recognizes that in developing public policy, conflicting religious and moral beliefs must be respected. Therefore, while recognizing the right of conscientious objection to participating in specific health services, the state shall also recognize the right of individuals enrolled with plans containing the basic health plan services to receive the full range of services covered under the plan.

(2)(a) No individual health care provider, religiously sponsored health carrier, or health care facility may be required by law or contract in any circumstances to participate in the provision of or payment for a specific service if they object to so doing for reason of conscience or religion. No person may be discriminated against in employment or professional privileges because of such objection.

(b) The provisions of this section are not intended to result in an enrollee being denied timely access to any service included in the basic health plan services. Each health carrier shall:

(i) Provide written notice to enrollees, upon enrollment with the plan, listing services that the carrier refuses to cover for reason of conscience or religion;

(ii) Provide written information describing how an enrollee may directly access services in an expeditious manner; and

(iii) Ensure that enrollees refused services under this section have prompt access to the information developed pursuant to (b)(ii) of this subsection.

(c) The insurance commissioner shall establish by rule a mechanism or mechanisms to recognize the right to exercise conscience while ensuring enrollees timely access to services and to assure prompt payment to service providers.

(3)(a) No individual or organization with a religious or moral tenet opposed to a specific service may be required to purchase coverage for that service or services if they object to doing so for reason of conscience or religion.

(b) The provisions of this section shall not result in an enrollee being denied coverage of, and timely access to, any service or services excluded from their benefits package as a result of their employer's or another individual's exercise of the conscience clause in (a) of this subsection.

(c) The insurance commissioner shall define by rule the process through which health carriers may offer the basic health plan services to individuals and organizations identified in (a) and (b) of this subsection in accordance with the provisions of subsection (2)(c) of this section.

(4) Nothing in this section requires a health carrier, health care facility, or health care provider to provide any health care services without appropriate payment of premium or fee.

NEW SECTION. Sec. 26. The department of social and health services, in consultation with the health care authority, the office of financial management, and other appropriate state agencies, shall seek necessary federal waivers and state law changes to the medical assistance program of the department to achieve greater coordination in financing, purchasing, and delivering health services to low-income residents of Washington state in a cost-effective manner, and to expand access to care for these low-income residents. Such waivers shall include any waiver needed to require that point-of-service cost-sharing, based on recipient household income, be applied to medical assistance recipients. In negotiating the waiver, consideration shall be given to the degree to which benefits in addition to the minimum list of services should be offered to medical assistance recipients.

NEW SECTION. Sec. 27. REPEALERS. The following acts or parts of acts are each repealed:

(1) RCW 18.130.320 and 1993 c 492 s 408;

(2) RCW 18.130.330 and 1994 c 102 s 1 & 1993 c 492 s 412;

(3) RCW 43.72.005 and 1993 c 492 s 401;

(4) RCW 43.72.010 and 1994 c 4 s 1, 1993 c 494 s 1, & 1993 c 492 s 402;

(5) RCW 43.72.020 and 1994 c 154 s 311 & 1993 c 492 s 403;

(6) RCW 43.72.030 and 1993 c 492 s 405;

(7) RCW 43.72.040 and 1994 c 4 s 3, 1993 c 494 s 2, & 1993 c 492 s 406;

(8) RCW 43.72.050 and 1993 c 492 s 407;

(9) RCW 43.72.060 and 1994 c 4 s 2 & 1993 c 492 s 404;

(10) RCW 43.72.070 and 1993 c 492 s 409;

(11) RCW 43.72.080 and 1993 c 492 s 425;

(12) RCW 43.72.090 and 1993 c 492 s 427;

(13) RCW 43.72.100 and 1993 c 492 s 428;

(14) RCW 43.72.110 and 1993 c 492 s 429;

(15) RCW 43.72.120 and 1993 c 492 s 430;

(16) RCW 43.72.130 and 1993 c 492 s 449;

(17) RCW 43.72.140 and 1993 c 492 s 450;

(18) RCW 43.72.150 and 1993 c 492 s 451;

(19) RCW 43.72.160 and 1993 c 492 s 452;

(20) RCW 43.72.170 and 1993 c 492 s 453;

(21) RCW 43.72.180 and 1993 c 492 s 454;

(22) RCW 43.72.190 and 1993 c 492 s 455;

(23) RCW 43.72.210 and 1993 c 492 s 463;

(24) RCW 43.72.220 and 1993 c 494 s 3 & 1993 c 492 s 464;

(25) RCW 43.72.225 and 1994 c 4 s 4;

(26) RCW 43.72.230 and 1993 c 492 s 465;

(27) RCW 43.72.240 and 1993 c 494 s 4 & 1993 c 492 s 466;

(28) RCW 43.72.300 and 1993 c 492 s 447;

(29) RCW 43.72.310 and 1993 c 492 s 448;

(30) RCW 43.72.800 and 1993 c 492 s 457;

(31) RCW 43.72.810 and 1993 c 492 s 474;

(32) RCW 43.72.820 and 1993 c 492 s 475;

(33) RCW 43.72.830 and 1993 c 492 s 476;

(34) RCW 43.72.840 and 1993 c 492 s 478;

(35) RCW 43.72.870 and 1993 c 494 s 5;

(36) RCW 48.01.200 and 1993 c 492 s 294;

(37) RCW 48.43.010 and 1993 c 492 s 432;

(38) RCW 48.43.020 and 1993 c 492 s 433;

(39) RCW 48.43.030 and 1993 c 492 s 434;

(40) RCW 48.43.040 and 1993 c 492 s 435;

(41) RCW 48.43.050 and 1993 c 492 s 436;

(42) RCW 48.43.060 and 1993 c 492 s 437;

(43) RCW 48.43.070 and 1993 c 492 s 438;

(44) RCW 48.43.080 and 1993 c 492 s 439;

(45) RCW 48.43.090 and 1993 c 492 s 440;

(46) RCW 48.43.100 and 1993 c 492 s 441;

(47) RCW 48.43.110 and 1993 c 492 s 442;

(48) RCW 48.43.120 and 1993 c 492 s 443;

(49) RCW 48.43.130 and 1993 c 492 s 444;

(50) RCW 48.43.140 and 1993 c 492 s 445;

(51) RCW 48.43.150 and 1993 c 492 s 446;

(52) RCW 48.43.160 and 1993 c 492 s 426;

(53) RCW 48.43.170 and 1993 c 492 s 431;

(54) RCW 48.01.210 and 1993 c 462 s 51;

(55) RCW 48.20.540 and 1993 c 492 s 283;

(56) RCW 48.21.340 and 1993 c 492 s 284;

(57) RCW 48.44.480 and 1993 c 492 s 285;

(58) RCW 48.46.550 and 1993 c 492 s 286;

(59) RCW 70.170.100 and 1993 c 492 s 259, 1990 c 269 s 12, & 1989 1st ex.s. c 9 s 510;

(60) RCW 70.170.110 and 1993 c 492 s 260 & 1989 1st ex.s. c 9 s 511;

(61) RCW 70.170.120 and 1993 c 492 s 261;

(62) RCW 70.170.130 and 1993 c 492 s 262;

(63) RCW 70.170.140 and 1993 c 492 s 263;

(64) RCW 48.44.490 and 1993 c 492 s 288;

(65) RCW 48.46.560 and 1993 c 492 s 289; and

(66) RCW 43.72.200 and 1993 c 492 s 456.

NEW SECTION. Sec. 28. CODIFICATION DIRECTION. (1) Sections 2 and 3 of this act shall constitute a new chapter in Title 48 RCW.

(2) Sections 4 through 7 and 25 of this act are each added to chapter 48.43 RCW.

(3) Sections 9 through 12 of this act shall constitute a new chapter in Title 43 RCW.

NEW SECTION. Sec. 29. CAPTIONS NOT LAW. Captions as used in this act constitute no part of the law.

NEW SECTION. Sec. 30. EFFECTIVE DATE. This act is necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and shall take effect July 1, 1995, except that sections 13 through 18 of this act shall take effect January 1, 1996.

NEW SECTION. Sec. 31. SAVINGS CLAUSE. This act shall not be construed as affecting any existing right acquired or liability or obligation incurred under the sections amended or repealed in this act or under any rule or order adopted under those sections, nor as affecting any proceeding instituted under those sections.

NEW SECTION. Sec. 32. SEVERABILITY CLAUSE. If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected."

On page 1, line 1 of the title, after "improvement;" strike the remainder of the title and insert "amending RCW 48.21.045, 48.44.023, and 48.46.066; adding a new section to chapter 70.47 RCW; adding new sections to chapter 48.43 RCW; adding a new section to chapter 48.20 RCW; adding new sections to chapter 48.44 RCW; adding new sections to chapter 48.46 RCW; adding a new section to chapter 43.70 RCW; adding a new section to chapter 48.21 RCW; adding a new chapter to Title 48 RCW; adding a new chapter to Title 43 RCW; creating new sections; repealing RCW 18.130.320, 18.130.330, 43.72.005, 43.72.010, 43.72.020, 43.72.030, 43.72.040, 43.72.050, 43.72.060, 43.72.070, 43.72.080, 43.72.090, 43.72.100, 43.72.110, 43.72.120, 43.72.130, 43.72.140, 43.72.150, 43.72.160, 43.72.170, 43.72.180, 43.72.190, 43.72.210, 43.72.220, 43.72.225, 43.72.230, 43.72.240, 43.72.300, 43.72.310, 43.72.800, 43.72.810, 43.72.820, 43.72.830, 43.72.840, 43.72.870, 48.01.200, 48.43.010, 48.43.020, 48.43.030, 48.43.040, 48.43.050, 48.43.060, 48.43.070, 48.43.080, 48.43.090, 48.43.100, 48.43.110, 48.43.120, 48.43.130, 70.170.140, 48.43.140, 48.43.150, 48.43.160, 48.43.170, 48.01.210, 48.20.540, 48.21.340, 48.44.480, 48.46.550, 70.170.100, 70.170.110, 70.170.120, 70.170.130, 70.170.140, 48.44.490, 48.46.560, and 43.72.200; providing effective dates; and declaring an emergency."

and the same are herewith transmitted.

Marty Brown, Secretary

MOTION

Representative Dyer moved that the House concur in the Senate amendments to Engrossed Substitute House Bill No. 1046 and pass the bill as amended by the Senate. The motion was carried.

MOTION

On motion of Representative Brown, Representatives Dellwo and Ebersole were excused.

FINAL PASSAGE OF HOUSE BILL AS SENATE AMENDED

The Speaker stated the question before the House to be final passage of Engrossed Substitute House Bill No. 1046 as amended by the Senate.

Representatives Dyer, Kessler, Backlund, Sheldon, Mielke, Hymes, Horn, Chopp and Hargrove spoke in favor of passage of the bill.

Representatives Cody, Thibaudeau, Conway and Veloria spoke against passage of the bill.

POINT OF INQUIRY

Representative Dyer yielded to a question by Representative Mielke.

Representative Mielke: I am concerned about section 7 of the bill concerning Guarantee Issue. I understand that some companies write only individual plans and others write only group plans. I also understand that service to policyholders might suffer if a company were to issue individual plans where their expertise is in group and visa versa. Does this section require this?

Representative Dyer: No. Section 7 does not require plans to issue policies to those beyond their expertise. This section is nothing more than that this is not the case. In addition, a company can only issue a policy approved by the Commissioner and if it does not have a policy form and a rate approved for a group or an individual it cannot issue the policy.

ROLL CALL

The Clerk called the roll on the final passage of Engrossed Substitute House Bill No. 1046 as amended by the Senate, and the bill passed the House by the following vote: Yeas - 77, Nays - 19, Absent - 0, Excused - 2.

Voting yea: Representatives Backlund, Ballasiotes, Basich, Beeksma, Benton, Blanton, Boldt, Brumsickle, Buck, Cairnes, Campbell, Carlson, Carrell, Casada, Chandler, Chappell, Clements, Cooke, Costa, Crouse, Delvin, Dyer, Elliot, Fisher, G., Foreman, Fuhrman, Goldsmith, Grant, Hankins, Hargrove, Hatfield, Hickel, Honeyford, Horn, Huff, Hymes, Johnson, Kessler, Koster, Kremen, Lambert, Lisk, Mastin, McMahan, McMorris, Mielke, Mitchell, Morris, Mulliken, Ogden, Pelesky, Pennington, Poulsen, Quall, Radcliff, Reams, Robertson, Schmidt, D., Schmidt, K., Schoesler, Scott, Sehlin, Sheahan, Sheldon, Sherstad, Silver, Skinner, Smith, Sommers, Sterk, Stevens, Talcott, Thomas, B., Thomas, L., Thompson, Van Luven and Mr. Speaker - 77.

Voting nay: Representatives Appelwick, Brown, Chopp, Cody, Cole, Conway, Dickerson, Fisher, R., Jacobsen, Mason, Patterson, Regala, Romero, Rust, Thibaudeau, Tokuda, Valle, Veloria and Wolfe - 19.

Excused: Representatives Dellwo and Ebersole - 2.

Engrossed Substitute House Bill No. 1046, as amended by the Senate, having received the constitutional majority, was declared passed.

POINT OF PERSONAL PRIVILEGE

Representative Costa: Thank you Mr. Speaker. I would like to let members know that today is the kick off of Sexual Assault Awareness week. There was a press conference held this morning at 9 a.m. I was a little disappointed that I was the only Legislator there. However, I would like to draw your attention to the fact that every single minute in America there are 1.3 forcible rapes of adult women. A study conducted by the National Victim Center in 1992, found that more than 6 out of 10 rape cases, a full 61% occurred before the victims reached the age of 18.

The Bureau of Justice statistics also reports that there were approximately 20,000 of males ages 12 and over in the United States in 1991.

This is a problem of incredible magnitude and I would encourage all of you to read the brochures that have been placed on your desk to kick off Sexual Assault Awareness week. Thank you.

The Speaker declared the House to be at ease.

The Speaker called the House to order.

MESSAGE FROM THE SENATE

April 17, 1995

Mr. Speaker:

The President has signed:

HOUSE JOINT MEMORIAL NO. 4008,

and the same is herewith transmitted.

Marty Brown, Secretary

SIGNED BY THE SPEAKER

The Speaker announced he was signing:

ENGROSSED SUBSTITUTE HOUSE BILL NO. 1046,

SUBSTITUTE HOUSE BILL NO. 1220,

SUBSTITUTE HOUSE BILL NO. 1432,

SUBSTITUTE HOUSE BILL NO. 1248,

SUBSTITUTE HOUSE BILL NO. 1677,

HOUSE JOINT MEMORIAL NO. 4028,

HOUSE JOINT MEMORIAL NO. 4029,

SENATE BILL NO. 5728,

ENGROSSED SENATE BILL NO. 5876,

There being no objection, the House advanced to the eleventh order of business.

MOTION

On motion of Representative Mielke, the House adjourned until 9:00 a.m., Tuesday, April 18, 1995.

CLYDE BALLARD, Speaker

TIMOTHY A. MARTIN, Chief Clerk