WSR 02-05-078



[ Order 01-09 -- Filed February 20, 2002, 9:25 a.m. ]

Original Notice.

Preproposal statement of inquiry was filed as WSR 02-02-086.

Title of Rule: New section WAC 182-12-230 Employer groups.

Purpose: To define a process for collection of premium due and termination of coverage procedures for employer groups with delinquent accounts.

Statutory Authority for Adoption: RCW 41.05.160, 41.05.021 (1)(h).

Statute Being Implemented: RCW 41.05.050. Additional statutes being implemented RCW 41.05.021 (1)(e) and (g) and 41.05.022(2).

Summary: Add new WAC 182-12-230 to define a process for collection and termination of coverage procedures for employer groups with delinquent accounts.

Reasons Supporting Proposal: The rule is being proposed to define termination of coverage procedures by the Health Care Authority when terminating coverage for those employer groups with delinquent accounts.

Name of Agency Personnel Responsible for Drafting: Renee Bourbeau, Health Care Authority, (360) 923-2813; Implementation: Barbara Scott, Health Care Authority, (360) 923-2642; and Enforcement: MaryAnne Lindeblad, Health Care Authority, (360) 923-2640.

Name of Proponent: Health Care Authority, governmental.

Rule is not necessitated by federal law, federal or state court decision.

Explanation of Rule, its Purpose, and Anticipated Effects: New section WAC 182-12-230 is proposed. This section will define the rights and obligations of the employer groups for participation in the Public Employees Benefits Board (PEBB) program. This new section will provide the Health Care Authority with improved administrative policies, including a defined process for disenrollment of employer groups due to nonpayment of premiums, dispute resolution provisions and termination of coverage procedures for employer groups with delinquent accounts.

In the preproposal statement we identified WAC 182-08-193 as the new section for employer groups. After further review and drafting of language it was determined that the new rule fits best in chapter 182-12 WAC, the section for eligibility.

Proposal does not change existing rules. This is a new rule.

No small business economic impact statement has been prepared under chapter 19.85 RCW. Not required. The Joint Administrative Rules Review Committee has not requested the filing of a small business economic impact statement, and there will be no costs to small businesses.

RCW 34.05.328 does not apply to this rule adoption.

Hearing Location: Health Care Authority, Executive Conference Room, 4th Floor, 600 Woodland Square Loop, Lacey, WA, on March 26, 2002, at 1:00 p.m.

Assistance for Persons with Disabilities: Contact Nikki Johnson by March 19, 2002, TDD (888) 923-5622, or (360) 923-2805.

Submit Written Comments to: Barbara Scott, Health Care Authority, 676 Woodland Square Loop S.E., Olympia, WA 98504-2684, (360) 923-2602, fax (360) 923-2602 by close of business on March 26, 2002.

Date of Intended Adoption: March 28, 2002.

February 20, 2002

Melodie Bankers

Rules Coordinator


WAC 182-12-230   Employer groups.   This section applies to all employer groups participating in PEBB insurance programs.

(1) For purposes of this section, "employer group" means those K-12 school districts, educational service districts, county, municipality, and political subdivisions that meet the participation requirements of WAC 182-12-111 (3) and (4) and that participate in PEBB insurance programs.

(2)(a) Each employer group shall determine an employee's eligibility for PEBB insurance coverage in accordance with the applicable sections of this chapter, (chapter 182-12 WAC).

(b) Each employer group applying for participation in PEBB insurance programs shall submit required documentation and meet all participation requirements set forth in the then-current "PEBB Coverage K-12 and Political Subdivisions" booklet.

(3)(a) Each employer group applying for participation in PEBB insurance programs shall sign an interlocal agreement with the health care authority.

(b) Each employer group already participating in PEBB insurance programs as of the effective date of this section shall sign an interlocal agreement with the health care authority no later than June 30, 2002. Failure to sign such an agreement by that date will result in termination of the employer group's participation in PEBB insurance programs effective as of the end of the month of the last full premium payment, and disenrollment of all employees of the employer group. Termination and disenrollment are subject to subsections (8) and (9) of this section.

(c) Each interlocal agreement shall be renewed no less frequently than once in every two-year period.

(4) At least twenty days prior to the premium due date, the health care authority shall cause each employer group to be sent a monthly billing statement. The statement of premium due will be based upon the enrollment information provided by the employer group.

(a) Changes in enrollment status shall be submitted to the health care authority prior to the twentieth day of the month during which the change occurs. Changes submitted after the twentieth day of each month may not be reflected on the billing statement until the following month.

(b) Changes submitted more than one month late shall be accompanied by a full explanation of the circumstances of the late notification.

(5) Beginning with the July 2002 premium (billed to employer groups no later than June 26, 2002, and due not later than July 20, 2002), an employer group shall remit the monthly premium as billed or as reconciled by it.

(a) If an employer group determines that the invoiced amount requires one or more changes, the employer group may adjust its remittance only if an insurance eligibility adjustment form detailing the adjustment accompanies the remittance. The proper form for reporting adjustments will be attached to the interlocal agreement of Exhibit A.

(b) Each employer group is solely responsible for the accuracy of the amount remitted and the completeness and accuracy of the insurance eligibility adjustment form.

(6) Each employer group shall remit the entire monthly premium due including the employee share, if any. The employer group is solely responsible for the collection of any employee share of the premium. The employer shall not withhold portions of the monthly premium due because it has failed to collect the entire employee share.

(7) Nonpayment of the full premium when due will subject the employer group to disenrollment and termination of each employee of the group.

(a) Prior to termination for nonpayment of premium, the health care authority shall cause a notice of overdue premium to be sent to the employer group, which notice will provide a one-month grace period for payment of all overdue premium.

(b) An employer group that does not remit the entirety of its overdue premium no later than the last day of the grace period will be disenrolled effective the last day of the last month for which premium has been paid in full.

(c) Upon disenrollment, notification will be sent to both the employer group and each affected employee.

(d) Employer groups disenrolled due to nonpayment of premium shall have the right to a dispute resolution hearing in accordance with the terms of the interlocal agreement.

(e) Employees terminated due to the nonpayment of premium by the employer group are not eligible for continuation of group health plan coverage according to the terms of the Consolidated Omnibus Budget Reconciliation Act (COBRA). Terminated employees shall have conversion rights to an individual insurance policy as provided for by the employer group.

(f) Claims incurred by terminated employees of a disenrolled group after the effective date of disenrollment will not be covered.

(g) The employer group is solely responsible for refunding any employee share paid by the employee to the employer group and not remitted to the health care authority.

(8) A disenrolled employer group may apply for reinstatement in PEBB insurance programs under the following conditions:

(a) Reinstatement must be requested and all delinquent premium paid in full no later than ninety days after the date the premium was first due, as well as a reinstatement fee of one thousand dollars.

(b) Reinstatement requested more than ninety days after the effective date of disenrollment will be denied.

(c) Employer groups may be reinstated only once in any two-year period and will be subject to immediate disenrollment if, after the effective date of any such reinstatement, subsequent premiums become more than thirty days delinquent.

(9) Upon written petition by the employer group, disenrollment of an employer group or denial of reinstatement may be waived by the administrator upon a showing of good cause.


Washington State Code Reviser's Office