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S1506......................................................by STATE AFFAIRS SMALL EMPLOYER HEALTH REINSURANCE - Amends existing law relating to the small employer health reinsurance program to clarify that newborn dependents are not eligible for reinsurance unless a parent is already reinsured. 03/05 Senate intro - 1st rdg - to printing 03/06 Rpt prt - to Com/HuRes 03/08 Rpt out - rec d/p - to 2nd rdg 03/11 2nd rdg - to 3rd rdg Rls susp - PASSED - 30-0-5 AYES -- Andreason, Brandt, Bunderson, Burtenshaw, Cameron, Darrington, Davis, Deide, Frasure, Geddes, Goedde, Hawkins, Hill, Keough, King-Barrutia, Little, Lodge, Marley, Noh, Richardson, Risch, Sandy, Schroeder, Sims, Sorensen, Stegner, Stennett, Thorne, Wheeler, Williams NAYS -- None Absent and excused -- Boatright, Branch(Bartlett), Dunklin, Ingram, Ipsen Floor Sponsor - Cameron Title apvd - to House 03/12 House intro - 1st rdg - to Bus 03/14 Rpt out - rec d/p - to 2nd rdg 03/15 2nd rdg - to 3rd rdg Rls susp - PASSED - 69-0-1 AYES -- Barraclough, Barrett, Bedke, Bell, Bieter, Black, Block, Boe, Bolz, Bradford, Bruneel, Callister, Campbell, Clark, Collins, Crow, Cuddy, Deal, Denney, Ellis, Ellsworth, Eskridge, Field(13), Field(20), Gagner, Gould, Hadley, Hammond, Harwood, Henbest, Higgins, Hornbeck, Jaquet, Jones, Kellogg, Kendell, Kunz, Lake, Langford, Loertscher, Mader, Martinez, McKague, Meyer, Montgomery, Mortensen, Moyle, Pearce, Pischner, Pomeroy, Raybould, Ridinger, Roberts, Robison, Sali, Schaefer, Sellman, Shepherd, Smith(33), Smith(23), Smylie, Stevenson, Stone, Tilman, Trail, Wheeler, Wood, Young, Mr. Speaker NAYS -- None Absent and excused -- Aikele Floor Sponsor - Deal Title apvd - to Senate 03/15 To enrol 03/18 Rpt enrol - Pres signed - Sp signed 03/18 To Governor 03/21 Governor signed Session Law Chapter 197 Effective: 07/01/00
|||| LEGISLATURE OF THE STATE OF IDAHO |||| Fifty-sixth Legislature Second Regular Session - 2002IN THE SENATE SENATE BILL NO. 1506 BY STATE AFFAIRS COMMITTEE 1 AN ACT 2 RELATING TO THE SMALL EMPLOYER HEALTH REINSURANCE PROGRAM; AMENDING SECTION 3 41-4711, IDAHO CODE, TO CLARIFY THAT NEWBORN DEPENDENTS ARE NOT ELIGIBLE 4 FOR REINSURANCE UNLESS A PARENT IS ALREADY REINSURED; DECLARING AN EMER- 5 GENCY AND PROVIDING RETROACTIVE APPLICATION. 6 Be It Enacted by the Legislature of the State of Idaho: 7 SECTION 1. That Section 41-4711, Idaho Code, be, and the same is hereby 8 amended to read as follows: 9 41-4711. SMALL EMPLOYER CARRIER REINSURANCE PROGRAM. (1) A reinsuring 10 carrier shall be subject to the provisions of this section. 11 (2) There is hereby created an independent public body corporate and pol- 12 itic to be known as the Idaho small employer health reinsurance program. The 13 program will perform an essential governmental function in the exercise of 14 powers conferred upon it in this act and any assessments imposed or collected 15 pursuant to the operation of the program shall at all times be free from taxa- 16 tion of every kind. 17 (3) The program shall operate subject to the supervision and control of 18 the board established in section 41-5502, Idaho Code. 19 (4) Each small employer carrier shall make a filing with the director 20 containing the carrier's earned health insurance premium derived from health 21 benefit plans delivered or issued for delivery to small employers in this 22 state in the previous calendar year. 23 (5) The board shall submit to the director a plan of operation and there- 24 after any amendments thereto necessary or suitable to assure the fair, reason- 25 able and equitable administration of the program. The director may, after 26 notice and hearing, approve the plan of operation if the director determines 27 it to be suitable to assure the fair, reasonable and equitable administration 28 of the program, and to provide for the sharing of program gains or losses on 29 an equitable and proportionate basis in accordance with the provisions of this 30 section. The plan of operation shall become effective upon written approval by 31 the director. 32 (6) If the board fails to submit a suitable plan of operation, the direc- 33 tor shall, after notice and hearing, adopt and promulgate a temporary plan of 34 operation. The director shall approve the plan of operation submitted by the 35 board, or adopt a temporary plan of operation if the board fails to submit a 36 suitable plan. The director shall amend or rescind any plan adopted under the 37 provisions of this subsection at the time a plan of operation is submitted by 38 the board and approved by the director. 39 (7) The plan of operation shall: 40 (a) Establish procedures for handling and accounting of program assets 41 and moneys and for an annual fiscal reporting to the director; 42 (b) Establish procedures for selecting an administrator, which shall be 43 properly licensed in this state, and setting forth the powers and duties 2 1 of the administrator; 2 (c) Establish procedures for reinsuring risks in accordance with the pro- 3 visions of this section; 4 (d) Establish procedures for collecting assessments from reinsuring car- 5 riers to fund claims and administrative expenses incurred or estimated to 6 be incurred by the program; and 7 (e) Provide for any additional matters necessary for the implementation 8 and administration of the program. 9 (8) The program shall have the general powers and authority granted under 10 the laws of this state to insurance companies and health maintenance organiza- 11 tions licensed to transact business, except the power to issue health benefit 12 plans directly to either groups or individuals. In addition thereto, the pro- 13 gram shall have the specific authority to: 14 (a) Enter into contracts as are necessary or proper to carry out the pro- 15 visions and purposes of this chapter, including the authority, with the 16 approval of the director, to enter into contracts with similar programs of 17 other states for the joint performance of common functions or with persons 18 or other organizations for the performance of administrative functions; 19 (b) Sue or be sued, including taking any legal actions necessary or 20 proper to recover any assessments and penalties for, on behalf of, or 21 against the program or any reinsuring carriers; 22 (c) Take any legal action necessary to avoid the payment of improper 23 claims against the program; 24 (d) Define the health benefit plans, which plans shall allow coordination 25 of benefits, for which reinsurance will be provided, and to issue reinsur- 26 ance policies, in accordance with the requirements of this chapter; 27 (e) Establish rules, conditions and procedures for reinsuring risks under 28 the program, including board discretion to operate separate small employer 29 and individual reinsurance pools; 30 (f) Establish actuarial functions as appropriate for the operation of the 31 program; 32 (g) Assess carriers in accordance with the provisions of subsection (12) 33 of this section, and to make advance interim assessments of carriers as 34 may be reasonable and necessary for organizational and interim operating 35 expenses. Any interim assessments shall be credited as offsets against any 36 regular assessments due following the close of the fiscal year; 37 (h) Appoint appropriate legal, actuarial and other committees as neces- 38 sary to provide technical assistance in the operation of the program, pol- 39 icy and other contract design, and any other function within the authority 40 of the program; 41 (i) Borrow money to effect the purposes of the program. Any notes or 42 other evidence of indebtedness of the program not in default shall be 43 legal investments for carriers and may be carried as admitted assets. 44 (9) A reinsuring carrier may reinsure with the program as provided for in 45 this subsection: 46 (a) With respect to a small employer basic, standard or catastrophic 47 health benefit plan, the program shall reinsure the level of coverage pro- 48 vided and, with respect to other plans, the program shall reinsure up to 49 the level of coverage provided in a small employer basic, standard or cat- 50 astrophic health benefit plan. 51 (b) A small employer carrier may reinsure an entire employer group within 52 sixty (60) days of the commencement of the group's coverage under a health 53 benefit plan. 54 (c) A reinsuring small employer carrier may reinsure an eligible employee 55 or dependent within a period of sixty (60) days following the commencement 3 1 of the coverage with the small employer. A newly eligible employee or 2 dependent of the reinsured small employer may be reinsured within sixty 3 (60) days of the commencement of his coverage. Newborn dependents of 4 insureds are not eligible for reinsurance unless a parent is already rein- 5 sured. 6 (d) (i) The program shall not reimburse a reinsuring carrier with 7 respect to the claims of a reinsured employee or dependent until the car- 8 rier has incurred an initial level of claims for such employee or depend- 9 ent of five thousand dollars ($5,000) in a calendar year for benefits cov- 10 ered by the program. In addition, the reinsuring carrier shall be respon- 11 sible for ten percent (10%) of the next fifty thousand dollars ($50,000) 12 of benefit payments during a calendar year and the program shall reinsure 13 the remainder. 14 (ii) The board annually may adjust the initial level of claims and 15 the maximum limit to be retained by the carrier to reflect increases 16 in costs and utilization within the standard market for health bene- 17 fit plans within the state. The adjustment shall not be less than the 18 annual change in the medical component of the "Consumer Price Index 19 for All Urban Consumers" of the department of labor, bureau of labor 20 statistics, unless the board proposes and the director approves a 21 lower adjustment factor. 22 (e) A reinsuring carrier may terminate reinsurance with the program for 23 one (1) or more of the reinsured employees or dependents on any anniver- 24 sary of the health benefit plan. 25 (f) A reinsuring carrier shall apply all managed care and claims handling 26 techniques, including utilization review, individual case management, pre- 27 ferred provider provisions, and other managed care provisions or methods 28 of operation consistently with respect to reinsured and nonreinsured busi- 29 ness. 30 (10) (a) The board, as part of the plan of operation, shall establish a 31 methodology for determining premium rates to be charged by the program for 32 reinsuring small employers pursuant to this section. The methodology shall 33 include a system for classification of small employers that reflects the 34 types of case characteristics commonly used by small employer carriers in 35 the state. The methodology shall provide for the development of base rein- 36 surance premium rates, subject to the approval of the director, and shall 37 be set at levels which reasonably approximate gross premiums charged to 38 small employers by small employer carriers for health benefit plans with 39 benefits similar to the standard health benefit plan, adjusted to reflect 40 retention levels required under the provisions of this chapter. 41 (b) Premiums for the program shall be as established by the board. 42 (c) The board periodically shall review the methodology established under 43 the provisions of paragraph (10)(a) of this section, including the system 44 of classification and any rating factors, to assure that it reasonably 45 reflects the claims experience of the program. The board may propose 46 changes to the methodology which shall be subject to the approval of the 47 director. 48 (d) The board may consider adjustments to the premium rates charged by 49 the program to reflect the use of effective cost containment and managed 50 care arrangements. 51 (11) If a health benefit plan for a small employer is entirely or par- 52 tially reinsured with the program, the premium charged to the small employer 53 for any rating period for the coverage issued shall meet the requirements 54 relating to premium rates set forth in section 41-4706, Idaho Code. 55 (12) (a) Prior to March 1 of each year, the board shall determine and 4 1 report to the director the program net loss for the previous calendar 2 year, including administrative expenses and incurred losses for the year, 3 taking into account investment income and other appropriate gains and 4 losses. 5 (b) Any net loss for the year shall be recouped by assessments of carri- 6 ers. 7 (c) (i) For the assessment of March 1, 1995, and prior to March 1 of 8 each succeeding year, the board shall determine and file with the 9 director an estimate of the assessments needed to fund the losses 10 incurred by the program in the previous calendar year. 11 (ii) The individual assessments shall be determined by multiplying 12 net losses, if net earnings are negative, as defined by subsection 13 (12)(a) of this section, by a fraction, the numerator of which shall 14 be the carrier's total premiums earned in the preceding calendar year 15 from all health benefit plans and policies or certificates of insur- 16 ance for specific disease, and hospital confinement indemnity in this 17 state as reported in the carrier's annual report pursuant to subsec- 18 tion (16) of this section, and the denominator of which shall be the 19 total premiums earned in the preceding calendar year from all health 20 benefit plans and policies or certificates of insurance for specific 21 disease and hospital confinement indemnity in this state. 22 (d) If assessments exceed net losses of the program, the excess shall be 23 held at interest and used by the board to offset future losses or to 24 reduce program premiums. As used in this paragraph, "future losses" 25 includes reserves for incurred but not reported claims. 26 (e) Each reinsuring carrier's proportion of the assessment shall be 27 determined annually by the board based on annual statements and other 28 reports deemed necessary by the board and filed by the reinsuring carriers 29 with the board. 30 (f) The plan of operation shall provide for the imposition of an interest 31 penalty for late payment of assessments. 32 (g) A reinsuring carrier may seek from the director a deferment from all 33 or part of an assessment imposed by the board. The director may defer all 34 or part of the assessment of a reinsuring carrier if the director deter- 35 mines that the payment of the assessment would place the reinsuring car- 36 rier in a financially impaired condition. If all or part of an assessment 37 against a reinsuring carrier is deferred the amount deferred shall be 38 assessed against the other participating carriers in a manner consistent 39 with the basis for assessment set forth in this subsection. The reinsuring 40 carrier receiving the deferment shall remain liable to the program for the 41 amount deferred and shall be prohibited from reinsuring any groups with 42 the program until such time as it pays the assessments. 43 (13) (a) Neither the participation in the program as reinsuring carriers, 44 the establishment of rates, forms or procedures, nor any other joint or 45 collective action required under the provisions of this chapter shall be 46 the basis of any legal action, criminal or civil liability, or penalty 47 against the program or any of its reinsuring carriers either jointly or 48 separately. 49 (b) Neither the board nor its employees shall be liable for any obliga- 50 tions of the program. No member or employee of the board shall be liable, 51 and no cause of action of any nature may arise against them, for any act 52 or omission related to the performance of their powers and duties under 53 this chapter, unless such act or omission constitutes willful or wanton 54 misconduct. The board may provide for indemnification of, and legal repre- 55 sentation for, its members and employees. 5 1 (14) The board, as part of the plan of operation, shall develop standards 2 setting forth the manner and levels of compensation to be paid to agents for 3 the sale of small employer basic, standard and catastrophic health benefit 4 plans. In establishing such standards, the board shall take into consideration 5 the need to assure the broad availability of coverages, the objectives of the 6 program, the time and effort expended in placing the coverage, the need to 7 provide ongoing service to the small employer, the levels of compensation cur- 8 rently used in the industry and the overall costs of coverage to small employ- 9 ers selecting these plans. 10 (15) The program shall be exempt from any and all taxes. 11 (16) Each carrier shall file with the director, in a form and manner to be 12 prescribed by the director, an annual report. The report shall state the num- 13 ber of resident persons insured under the carrier's health benefit plan. 14 (17) If a reinsuring small employer carrier attempts to reinsure or 15 reinsures an entire employer group, an employee, or a dependent of such 16 employee that, immediately prior to the commencement of such coverage, it cov- 17 ered under a health benefit plan, the board shall assess all costs and losses 18 incurred by the program for claims and administrative expenses relating to 19 such group, employee or dependent of such employee only to the said reinsuring 20 small employer carrier. 21 (18) Subsection (17) of this section shall apply to assessments made for 22 the 1994 calendar year and each year thereafter. 23 SECTION 2. An emergency existing therefor, which emergency is hereby 24 declared to exist, this act shall be in full force and effect on and after its 25 passage and approval, and retroactively to July 1, 2000.
STATEMENT OF PURPOSE RS12203 The purpose of the bill is to restore wording in the Small Employer Health Insurance Availability Act that was inadvertently repealed as a part of the implementation of the Individual High risk Reinsurance Pool in 2000. The restored wording provides that newborn dependents of insureds are not eligible for reinsurance in the Small Employer Health Reinsurance Program unless a parent is already reinsured. FISCAL NOTE There is no fiscal impact on the state general fund. CONTACT: Senator Dean L. Cameron) Hyatt Erstad, Ch. Small Employer Health Reinsurance Program 343-8899 Bart W. Hartwood Small Employer Health Reinsurance Program 395-8500 STATEMENT OF PURPOSE/ FISCAL NOTE S 1506