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H0306......................................................by STATE AFFAIRS HEALTH INSURANCE PROVIDERS - Amends existing law to clarify that all entities providing health insurance in Idaho are subject to the reporting requirements relating to annual assessments levied by the Small Employer Reinsurance Program and the Individual High Risk Reinsurance Pool. 02/26 House intro - 1st rdg - to printing 02/27 Rpt prt - to Bus 03/06 Rpt out - rec d/p - to 2nd rdg 03/07 2nd rdg - to 3rd rdg 03/11 3rd rdg - PASSED - 68-0-2 AYES -- Andersen, Barraclough, Barrett, Bauer, Bedke, Bell, Bieter, Block, Boe, Bolz, Bradford, Campbell, Cannon, Clark, Collins, Crow, Cuddy, Deal, Denney, Douglas, Eberle, Edmunson, Ellsworth, Eskridge, Field(18), Field(23), Gagner, Garrett, Harwood, Henbest, Jaquet, Jones, Kellogg, Kulczyk, Lake, Langford, Langhorst(Wallace), Martinez, McGeachin, McKague, Meyer, Miller, Mitchell, Moyle, Naccarato, Nielsen, Raybould, Ridinger, Ring, Ringo, Roberts, Robison, Rydalch, Sali, Sayler, Schaefer, Shepherd, Shirley, Skippen, Smith(30), Smith(24), Smylie, Snodgrass, Stevenson, Tilman, Trail, Wills, Mr. Speaker NAYS -- None Absent and excused -- Black, Wood Floor Sponsor - Deal Title apvd - to Senate 03/12 Senate intro - 1st rdg - to Com/HuRes 03/26 Rpt out - rec d/p - to 2nd rdg 03/27 2nd rdg - to 3rd rdg 04/01 3rd rdg - PASSED - 35-0-0 AYES -- Andreason, Bailey, Brandt, Bunderson, Burkett(Roberts), Burtenshaw, Calabretta, Cameron, Compton, Darrington, Davis, Gannon, Geddes, Goedde, Hill, Ingram, Kennedy, Keough, Little, Lodge, Malepeai, Marley, McKenzie, McWilliams, Noble, Noh, Pearce, Richardson, Schroeder, Sorensen, Stegner, Stennett, Sweet, Werk, Williams NAYS -- None Absent and excused -- None Floor Sponsor - Cameron Title apvd - to House 04/02 To enrol 04/03 Rpt enrol - Sp signed 04/04 Pres signed 04/07 To Governor 04/08 Governor signed Session Law Chapter 267 Effective: 04/08/03
|||| LEGISLATURE OF THE STATE OF IDAHO |||| Fifty-seventh Legislature First Regular Session - 2003IN THE HOUSE OF REPRESENTATIVES HOUSE BILL NO. 306 BY STATE AFFAIRS COMMITTEE 1 AN ACT 2 RELATING TO HEALTH INSURANCE, THE SMALL EMPLOYER REINSURANCE PROGRAM AND THE 3 HIGH RISK REINSURANCE POOL; AMENDING SECTION 41-4703, IDAHO CODE, TO FUR- 4 THER DEFINE THE TERM "CARRIER"; AMENDING SECTION 41-4711, IDAHO CODE, TO 5 PROVIDE THAT ALL CARRIERS SHALL BE SUBJECT TO THE SMALL EMPLOYER CARRIER 6 REINSURANCE PROGRAM, TO REVISE PROCEDURES AND TO CLARIFY THAT ALL AUTHO- 7 RIZED HEALTH INSURERS ARE SUBJECT TO THE REPORTING REQUIREMENTS RELATING 8 TO THE ASSESSMENT PROCESS IN THE SMALL EMPLOYER REINSURANCE PROGRAM; 9 AMENDING SECTION 41-5501, IDAHO CODE, TO FURTHER DEFINE THE TERM 10 "CARRIER"; AND AMENDING SECTION 41-5505, IDAHO CODE, TO PROVIDE THAT ANY 11 INDIVIDUAL CARRIER ISSUING AN INDIVIDUAL BASIC, STANDARD, CATASTROPHIC A 12 OR CATASTROPHIC B HEALTH BENEFIT PLAN SHALL BE REINSURED BY THE INDIVIDUAL 13 HIGH RISK REINSURANCE POOL TO THE LEVEL OF COVERAGE PROVIDED IN THE PLAN 14 AND SHALL BE LIABLE TO THE POOL OR THE REINSURANCE PREMIUM; AND DECLARING 15 AN EMERGENCY. 16 Be It Enacted by the Legislature of the State of Idaho: 17 SECTION 1. That Section 41-4703, Idaho Code, be, and the same is hereby 18 amended to read as follows: 19 41-4703. DEFINITIONS. As used in this chapter: 20 (1) "Actuarial certification" means a written statement by a member of 21 the American academy of actuaries or other individual acceptable to the direc- 22 tor that a small employer carrier is in compliance with the provisions of sec- 23 tion 41-4706, Idaho Code, based upon the person's examination and including a 24 review of the appropriate records and the actuarial assumptions and methods 25 used by the small employer carrier in establishing premium rates for applica- 26 ble health benefit plans. 27 (2) "Affiliate" or "affiliated" means any entity or person who directly 28 or indirectly through one (1) or more intermediaries, controls or is con- 29 trolled by, or is under common control with, a specified entity or person. 30 (3) "Agent" means a producer as defined in section 41-1003(9), Idaho 31 Code. 32 (4) "Base premium rate" means, for each class of business as to a rating 33 period, the lowest premium rate charged or that could have been charged under 34 a rating system for that class of business by the small employer carrier to 35 small employers with similar case characteristics for health benefit plans 36 with the same or similar coverage. 37 (5) "Board" means the board of directors of the small employer reinsur- 38 ance program and the individual high risk reinsurance pool as provided for in 39 section 41-5502, Idaho Code. 40 (6) "Carrier" means any entity that provides, or is authorized to pro- 41 vide, health insurance in this state. For the purposes of this chapter, car- 42 rier includes an insurance company, a hospital or professional service corpo- 43 ration, a fraternal benefit society, a health maintenance organization, any 2 1 entity providing health insurance coverage or benefits to residents of this 2 state as certificate holders under a group policy issued or delivered outside 3 of this state, and any other entity providing a plan of health insurance or 4 health benefits subject to state insurance regulation. 5 (7) "Case characteristics" means demographic or other objective charac- 6 teristics of a small employer that are considered by the small employer car- 7 rier in the determination of premium rates for the small employer, provided 8 that claim experience, health status and duration of coverage shall not be 9 case characteristics for the purposes of this chapter. 10 (8) "Catastrophic health benefit plan" means a higher limit health bene- 11 fit plan developed pursuant to section 41-4712, Idaho Code. 12 (9) "Class of business" means all or a separate grouping of small employ- 13 ers established pursuant to section 41-4705, Idaho Code. 14 (10) "Control" shall be defined in the same manner as in section 15 41-3801(2), Idaho Code. 16 (11) "Dependent" means a spouse, an unmarried child under the age of nine- 17 teen (19) years, an unmarried child who is a full-time student under the age 18 of twenty-three (23) years and who is financially dependent upon the parent, 19 and an unmarried child of any age who is medically certified as disabled and 20 dependent upon the parent. 21 (12) "Director" means the director of the department of insurance of the 22 state of Idaho. 23 (13) "Eligible employee" means an employee who works on a full-time basis 24 and has a normal work week of thirty (30) or more hours or, by agreement 25 between the employer and the carrier, an employee who works between twenty 26 (20) and thirty (30) hours per week. The term includes a sole proprietor, a 27 partner of a partnership, and an independent contractor, if the sole propri- 28 etor, partner or independent contractor is included as an employee under a 29 health benefit plan of a small employer, but does not include an employee who 30 works on a part-time, temporary, seasonal or substitute basis. The term eligi- 31 ble employee may include public officers and public employees without regard 32 to the number of hours worked when designated by a small employer. 33 (14) "Established geographic service area" means a geographic area, as 34 approved by the director and based on the carrier's certificate of authority 35 to transact insurance in this state, within which the carrier is authorized to 36 provide coverage. 37 (15) "Health benefit plan" means any hospital or medical policy or certif- 38 icate, any subscriber contract provided by a hospital or professional service 39 corporation, or managed care organization subscriber contract. Health benefit 40 plan does not include policies or certificates of insurance for specific dis- 41 ease, hospital confinement indemnity, accident-only, credit, dental, vision, 42 medicare supplement, long-term care, or disability income insurance, student 43 health benefits only coverage issued as a supplement to liability insurance, 44 worker's compensation or similar insurance, automobile medical payment insur- 45 ance or nonrenewable short-term coverage issues for a period of twelve (12) 46 months or less. 47 (16) "Index rate" means, for each class of business as to a rating period 48 for small employers with similar case characteristics, the arithmetic average 49 of the applicable base premium rate and the corresponding highest premium 50 rate. 51 (17) "Late enrollee" means an eligible employee or dependent who requests 52 enrollment in a health benefit plan of a small employer following the initial 53 enrollment period during which the individual is entitled to enroll under the 54 terms of the health benefit plan, provided that the initial enrollment period 55 is a period of at least thirty (30) days. However, an eligible employee or 3 1 dependent shall not be considered a late enrollee if: 2 (a) The individual meets each of the following: 3 (i) The individual was covered under qualifying previous coverage 4 at the time of the initial enrollment; 5 (ii) The individual lost coverage under qualifying previous coverage 6 as a result of termination of employment or eligibility, or the 7 involuntary termination of the qualifying previous coverage; and 8 (iii) The individual requests enrollment within thirty (30) days 9 after termination of the qualifying previous coverage. 10 (b) The individual is employed by an employer which offers multiple 11 health benefit plans and the individual elects a different plan during an 12 open enrollment period. 13 (c) A court has ordered coverage be provided for a spouse or minor or 14 dependent child under a covered employee's health benefit plan and request 15 for enrollment is made within thirty (30) days after issuance of the court 16 order. 17 (d) The individual first becomes eligible. 18 (e) If an individual seeks to enroll a dependent during the first sixty 19 (60) days of eligibility, the coverage of the dependent shall become 20 effective: 21 (i) In the case of marriage, not later than the first day of the 22 first month beginning after the date the completed request for 23 enrollment is received; 24 (ii) In the case of a dependent's birth, as of the date of such 25 birth; or 26 (iii) In the case of a dependent's adoption or placement for adop- 27 tion, the date of such adoption or placement for adoption. 28 (18) "New business premium rate" means, for each class of business as to a 29 rating period, the lowest premium rate charged or offered or which could have 30 been charged or offered by the small employer carrier to small employers with 31 similar case characteristics for newly issued health benefit plans with the 32 same or similar coverage. 33 (19) "Plan of operation" means the plan of operation of the program estab- 34 lished pursuant to section 41-4711, Idaho Code. 35 (20) "Plan year" means the year that is designated as the plan year in the 36 plan document of a group health benefit plan, except that if the plan document 37 does not designate a plan year or if there is no plan document, the year plan 38 is: 39 (a) The deductible/limit year used under the plan; 40 (b) If the plan does not impose deductibles or limits on a yearly basis, 41 then the plan year is the policy year; 42 (c) If the plan does not impose deductibles or limits on a yearly basis 43 or the insurance policy is not renewed on an annual basis, then the plan 44 year is the employer's taxable year; or 45 (d) In any other case, the plan year is the calendar year. 46 (21) "Premium" means all moneys paid by a small employer and eligible 47 employees as a condition of receiving coverage from a small employer carrier, 48 including any fees or other contributions associated with the health benefit 49 plan. 50 (22) "Program" means the Idaho small employer reinsurance program created 51 in section 41-4711, Idaho Code. 52 (23) "Qualifying previous coverage" and "qualifying existing coverage" 53 mean benefits or coverage provided under: 54 (a) Medicare or medicaid, civilian health and medical program for 55 uniformed services (CHAMPUS), the Indian health service program, a state 4 1 health benefit risk pool or any other similar publicly sponsored program; 2 or 3 (b) Any other group or individual health insurance policy or health bene- 4 fit arrangement whether or not subject to the state insurance laws, 5 including coverage provided by a health maintenance organization, hospital 6 or professional service corporation, or a fraternal benefit society, that 7 provides benefits similar to or exceeding benefits provided under the 8 basic health benefit plan. 9 (24) "Rating period" means the calendar period for which premium rates 10 established by a small employer carrier are assumed to be in effect. 11 (25) "Reinsuring carrier" means a small employer carrier participating in 12 the reinsurance program pursuant to section 41-4711, Idaho Code. 13 (26) "Restricted network provision" means any provision of a health bene- 14 fit plan that conditions the payment of benefits, in whole or in part, on the 15 use of health care providers that have entered into a contractual arrangement 16 with the carrier to provide health care services to covered individuals. 17 (27) "Risk-assuming carrier" means a small employer carrier whose applica- 18 tion is approved by the director pursuant to section 41-4710, Idaho Code. 19 (28) "Small employer" means any person, firm, corporation, partnership or 20 association that is actively engaged in business that employed an average of 21 at least two (2) but no more than fifty (50) eligible employees on business 22 days during the preceding calendar year and that employs at least two (2) but 23 no more than fifty (50) eligible employees on the first day of the plan year, 24 the majority of whom were and are employed within this state. In determining 25 the number of eligible employees, companies that are affiliated companies, or 26 that are eligible to file a combined tax return for purposes of state taxa- 27 tion, shall be considered one (1) employer. 28 (29) "Small employer basic health benefit plan" means a lower cost health 29 benefit plan developed pursuant to section 41-4712, Idaho Code. 30 (30) "Small employer carrier" means a carrier that offers health benefit 31 plans covering eligible employees of one (1) or more small employers in this 32 state. 33 (31) "Small employer catastrophic health benefit plan" means a higher 34 limit health benefit plan developed pursuant to section 41-4712, Idaho Code. 35 (32) "Small employer standard health benefit plan" means a health benefit 36 plan developed pursuant to section 41-4712, Idaho Code. 37 SECTION 2. That Section 41-4711, Idaho Code, be, and the same is hereby 38 amended to read as follows: 39 41-4711. SMALL EMPLOYER CARRIER REINSURANCE PROGRAM. (1) Allreinsuring40 carriers shall be subject to the provisions of this section. 41 (2) There is hereby created an independent public body corporate and pol- 42 itic to be known as the Idaho small employer health reinsurance program. The 43 program will perform an essential governmental function in the exercise of 44 powers conferred upon it in this act and any assessments imposed or collected 45 pursuant to the operation of the program shall at all times be free from taxa- 46 tion of every kind. 47 (3) The program shall operate subject to the supervision and control of 48 the board established in section 41-5502, Idaho Code. 49 (4) Eachsmall employercarrier shall make a filing with the director 50 containing the carrier's earned health insurance premium derived from health 51 benefit plans delivered or issued for delivery to small employers in this 52 state in the previous calendar year. 53 (5) The board shall submit to the director a plan of operation and there- 5 1 after any amendments thereto necessary or suitable to assure the fair, reason- 2 able and equitable administration of the program. The director may, after 3 notice and hearing, approve the plan of operation if the director determines 4 it to be suitable to assure the fair, reasonable and equitable administration 5 of the program, and to provide for the sharing of program gains or losses on 6 an equitable and proportionate basis in accordance with the provisions of this 7 section. The plan of operation shall become effective upon written approval by 8 the director. 9 (6) If the board fails to submit a suitable plan of operation, the direc- 10 tor shall, after notice and hearing, adopt and promulgate a temporary plan of 11 operation. The director shall approve the plan of operation submitted by the 12 board, or adopt a temporary plan of operation if the board fails to submit a 13 suitable plan. The director shall amend or rescind any plan adopted under the 14 provisions of this subsection at the time a plan of operation is submitted by 15 the board and approved by the director. 16 (7) The plan of operation shall: 17 (a) Establish procedures for handling and accounting of program assets 18 and moneys and for an annual fiscal reporting to the director; 19 (b) Establish procedures for selecting an administrator, which shall be 20 properly licensed in this state, and setting forth the powers and duties 21 of the administrator; 22 (c) Establish procedures for reinsuring risks in accordance with the pro- 23 visions of this section; 24 (d) Establish procedures for collecting assessments fromreinsuringcar- 25 riers to fund claims and administrative expenses incurred or estimated to 26 be incurred by the program; and 27 (e) Provide for any additional matters necessary for the implementation 28 and administration of the program. 29 (8) The program shall have the general powers and authority granted under 30 the laws of this state to insurance companies and health maintenance organiza- 31 tions licensed to transact business, except the power to issue health benefit 32 plans directly to either groups or individuals. In addition thereto, the pro- 33 gram shall have the specific authority to: 34 (a) Enter into contracts as are necessary or proper to carry out the pro- 35 visions and purposes of this chapter, including the authority, with the 36 approval of the director, to enter into contracts with similar programs of 37 other states for the joint performance of common functions or with persons 38 or other organizations for the performance of administrative functions; 39 (b) Sue or be sued, including taking any legal actions necessary or 40 proper to recover any assessments and penalties for, on behalf of, or 41 against the program or anyreinsuringcarriers; 42 (c) Take any legal action necessary to avoid the payment of improper 43 claims against the program; 44 (d) Define the health benefit plans, which plans shall allow coordination 45 of benefits, for which reinsurance will be provided, and to issue reinsur- 46 ance policies, in accordance with the requirements of this chapter; 47 (e) Establish rules, conditions and procedures for reinsuring risks under 48 the program, includingboardbroad discretion to operateseparatethe 49 small employerand individualreinsurancepoolsprogram; 50 (f) Establish actuarial functions as appropriate for the operation of the 51 program; 52 (g) Assess carriers in accordance with the provisions of subsection (12) 53 of this section, and to make advance interim assessments of carriers as 54 may be reasonable and necessary for organizational and interim operating 55 expenses. Any interim assessments shall be credited as offsets against any 6 1 regular assessments due following the close of the fiscal year; 2 (h) Appoint appropriate legal, actuarial and other committees as neces- 3 sary to provide technical assistance in the operation of the program, pol- 4 icy and other contract design, and any other function within the authority 5 of the program; 6 (i) Borrow money to effect the purposes of the program. Any notes or 7 other evidence of indebtedness of the program not in default shall be 8 legal investments for carriers and may be carried as admitted assets. 9 (9) Areinsuringcarrier may reinsure with the program as provided for in 10 this subsection: 11 (a) With respect to a small employer basic, standard or catastrophic 12 health benefit plan, the program shall reinsure the level of coverage pro- 13 vided and, with respect to other plans, the program shall reinsure up to 14 the level of coverage provided in a small employer basic, standard or cat- 15 astrophic health benefit plan. 16 (b) A small employer carrier may reinsure an entire employer group within 17 sixty (60) days of the commencement of the group's coverage under a health 18 benefit plan. 19 (c) Areinsuringsmall employer carrier may reinsure an eligible employee 20 or dependent within a period of sixty (60) days following the commencement 21 of the coverage with the small employer. A newly eligible employee or 22 dependent of the reinsured small employer may be reinsured within sixty 23 (60) days of the commencement of his coverage. Newborn dependents of 24 insureds are not eligible for reinsurance unless a parent is already rein- 25 sured. 26 (d) (i) The program shall not reimburse a reinsuring carrier with 27 respect to the claims of a reinsured employee or dependent until the 28 carrier has incurred an initial level of claims for such employee or 29 dependent of five thousand dollars ($5,000) in a calendar year for 30 benefits covered by the program. In addition, the reinsuring carrier 31 shall be responsible for ten percent (10%) of the next fifty thousand 32 dollars ($50,000) of benefit payments during a calendar year and the 33 program shall reinsure the remainder. 34 (ii) The board annually may adjust the initial level of claims and 35 the maximum limit to be retained by the carrier to reflect increases 36 in costs and utilization within the standard market for health bene- 37 fit plans within the state. The adjustment shall not be less than the 38 annual change in the medical component of the "Consumer Price Index 39 for All Urban Consumers" of the department of labor, bureau of labor 40 statistics, unless the board proposes and the director approves a 41 lower adjustment factor. 42 (e) A reinsuring carrier may terminate reinsurance with the program for 43 one (1) or more of the reinsured employees or dependents on any anniver- 44 sary of the health benefit plan. 45 (f) A reinsuring carrier shall apply all managed care and claims handling 46 techniques, including utilization review, individual case management, pre- 47 ferred provider provisions, and other managed care provisions or methods 48 of operation consistently with respect to reinsured and nonreinsured busi- 49 ness. 50 (10) (a) The board, as part of the plan of operation, shall establish a 51 methodology for determining premium rates to be charged by the program for 52 reinsuring small employers pursuant to this section. The methodology shall 53 include a system for classification of small employers that reflects the 54 types of case characteristics commonly used by small employer carriers in 55 the state. The methodology shall provide for the development of base rein- 7 1 surance premium rates, subject to the approval of the director, and shall 2 be set at levels which reasonably approximate gross premiums charged to 3 small employers by small employer carriers for health benefit plans with 4 benefits similar to the standard health benefit plan, adjusted to reflect 5 retention levels required under the provisions of this chapter. 6 (b) Premiums for the program shall be as established by the board. 7 (c) The board periodically shall review the methodology established under 8 the provisions of paragraph (10)(a) of this section, including the system 9 of classification and any rating factors, to assure that it reasonably 10 reflects the claims experience of the program. The board may propose 11 changes to the methodology which shall be subject to the approval of the 12 director. 13 (d) The board may consider adjustments to the premium rates charged by 14 the program to reflect the use of effective cost containment and managed 15 care arrangements. 16 (11) If a health benefit plan for a small employer is entirely or par- 17 tially reinsured with the program, the premium charged to the small employer 18 for any rating period for the coverage issued shall meet the requirements 19 relating to premium rates set forth in section 41-4706, Idaho Code. 20 (12) (a) Prior to March 1 of each year, the board shall determine and 21 report to the director the program net loss for the previous calendar 22 year, including administrative expenses and incurred losses for the year, 23 taking into account investment income and other appropriate gains and 24 losses. 25 (b) Any net loss for the year shall be recouped by assessments of carri- 26 ers. 27 (c) (i) For the assessment of March 1, 1995, and prior to March 1 of 28 each succeeding year, the board shall determine and file with the 29 director an estimate of the assessments needed to fund the losses 30 incurred by the program in the previous calendar year. 31 (ii) Theindividualassessments shall be determined by multiplying 32 net losses, if net earnings are negative, as defined by subsection 33 (12)(a) of this section, by a fraction, the numerator of which shall 34 be the carrier's total premiums earned in the preceding calendar year 35 from all health benefit plans and policies or certificates of insur- 36 ance for specific disease, and hospital confinement indemnity in this 37 state as reported in the carrier's annual report pursuant to subsec- 38 tion (16) of this section, and the denominator of which shall be the 39 total premiums earned in the preceding calendar year from all health 40 benefit plans and policies or certificates of insurance for specific 41 disease and hospital confinement indemnity in this state. 42 (d) If assessments exceed net losses of the program, the excess shall be 43 held at interest and used by the board to offset future losses or to 44 reduce program premiums. As used in this paragraph, "future losses" 45 includes reserves for incurred but not reported claims. 46 (e) Eachreinsuringcarrier's proportion of the assessment shall be 47 determined annually by the board based on annual statements and other 48 reports deemed necessary by the board and filed by thereinsuringcarriers 49 with the board or with the director. 50 (f) The plan of operation shall provide for the imposition of an interest 51 penalty for late payment of assessments. 52 (g) Areinsuringcarrier may seek from the director a deferment from all 53 or part of an assessment imposed by the board. The director may defer all 54 or part of the assessment of areinsuringcarrier if the director deter- 55 mines that the payment of the assessment would place thereinsuringcar- 8 1 rier in a financially impaired condition. If all or part of an assessment 2 against areinsuringcarrier is deferred the amount deferred shall be 3 assessed against the otherparticipatingcarriers in a manner consistent 4 with the basis for assessment set forth in this subsection. Thereinsuring5 carrier receiving the deferment shall remain liable to the program for the 6 amount deferred and shall be prohibited from reinsuring any groups with 7 the program until such time as it pays the assessments. 8 (13) (a) Neither the participation in the program as reinsuring carriers, 9 the establishment of rates, forms or procedures, nor any other joint or 10 collective action required under the provisions of this chapter shall be 11 the basis of any legal action, criminal or civil liability, or penalty 12 against the program or any of its reinsuring carriers either jointly or 13 separately. 14 (b) Neither the board nor its employees shall be liable for any obliga- 15 tions of the program. No member or employee of the board shall be liable, 16 and no cause of action of any nature may arise against them, for any act 17 or omission related to the performance of their powers and duties under 18 this chapter, unless such act or omission constitutes willful or wanton 19 misconduct. The board may provide for indemnification of, and legal repre- 20 sentation for, its members and employees. 21 (14) The board, as part of the plan of operation, shall develop standards 22 setting forth the manner and levels of compensation to be paid to agents for 23 the sale of small employer basic, standard and catastrophic health benefit 24 plans. In establishing such standards, the board shall take into consideration 25 the need to assure the broad availability of coverages, the objectives of the 26 program, the time and effort expended in placing the coverage, the need to 27 provide ongoing service to the small employer, the levels of compensation cur- 28 rently used in the industry and the overall costs of coverage to small employ- 29 ers selecting these plans. 30 (15) The program shall be exempt from any and all taxes. 31 (16) Each carrier shall file with the director, in a form and manner to be 32 prescribed by the director, an annual report. The report shall state the num- 33 ber of resident persons insured under the carrier's health benefit plan. 34 (17) If a reinsuring small employer carrier attempts to reinsure or 35 reinsures an entire employer group, an employee, or a dependent of such 36 employee that, immediately prior to the commencement of such coverage, it cov- 37 ered under a health benefit plan, the board shall assess all costs and losses 38 incurred by the program for claims and administrative expenses relating to 39 such group, employee or dependent of such employee only to the said reinsuring 40 small employer carrier. 41 (18) Subsection (17) of this section shall apply to assessments made for 42 the 1994 calendar year and each year thereafter. 43 SECTION 3. That Section 41-5501, Idaho Code, be, and the same is hereby 44 amended to read as follows: 45 41-5501. DEFINITIONS. As used in this chapter: 46 (1) "Agent" means a producer as defined in section 41-1003(9), Idaho 47 Code. 48 (2) "Board" means the board of directors of the Idaho high risk individ- 49 ual reinsurance pool established in this chapter and the Idaho small employer 50 reinsurance program established in section 41-4711, Idaho Code. 51 (3) "Carrier" means any entity that provides, or is authorized to pro- 52 vide, health insurance in this state. For purposes of this chapter, carrier 53 includes an insurance company, any other entity providing reinsurance includ- 9 1 ing excess or stop loss coverage, a hospital or professional service corpora- 2 tion, a fraternal benefit society, a managed care organization, any entity 3 providing health insurance coverage or benefits to residents of this state as 4 certificate holders under a group policy issued or delivered outside of this 5 state, and any other entity providing a plan of health insurance or health 6 benefits subject to state insurance regulation. 7 (4) "Dependent" means a spouse, an unmarried child under the age of nine- 8 teen (19) years, an unmarried child who is a full-time student under the age 9 of twenty-three (23) years and who is financially dependent upon the parent, 10 and an unmarried child of any age who is medically certified as disabled and 11 dependent upon the parent. 12 (5) "Director" means the director of the department of insurance of the 13 state of Idaho. 14 (6) "Eligible individual" means an Idaho resident individual or dependent 15 of an Idaho resident who is under the age of sixty-five (65) years, is not 16 eligible for coverage under a group health plan, part A or part B of title 17 XVIII of the social security act (medicare), or a state plan under title XIX 18 (medicaid) or any successor program, and who does not have other health insur- 19 ance coverage. Coverage under a basic, standard, catastrophic A or cata- 20 strophic B health benefit plan shall not be available to any individual who is 21 covered under other health insurance coverage. For purposes of this chapter, 22 to be eligible, an individual must also meet the requirements of section 23 41-5510, Idaho Code. 24 (7) "Health benefit plan" means any hospital or medical policy or certif- 25 icate, any subscriber contract provided by a hospital or professional service 26 corporation, or health maintenance organization subscriber contract. Health 27 benefit plan does not include policies or certificates of insurance for spe- 28 cific disease, hospital confinement indemnity, accident-only, credit, dental, 29 vision, medicare supplement, long-term care, or disability income insurance, 30 student health benefits only, coverage issued as a supplement to liability 31 insurance, worker's compensation or similar insurance, automobile medical pay- 32 ment insurance, or nonrenewable short-term coverage issued for a period of 33 twelve (12) months or less. 34 (8) "Individual basic health benefit plan" means a lower cost health ben- 35 efit plan developed pursuant to section 41-5511, Idaho Code. 36 (9) "Individual carrier" means a carrier that offers health benefit plans 37 covering eligible individuals and their dependents. 38 (10) "Individual catastrophic A health benefit plan" means a higher limit 39 health benefit plan developed pursuant to section 41-5511, Idaho Code. 40 (11) "Individual catastrophic B health benefit plan" means a health bene- 41 fit plan offering limits higher than a catastrophic A health benefit plan 42 developed pursuant to section 41-5511, Idaho Code. 43 (12) "Individual standard health benefit plan" means a health benefit plan 44 developed pursuant to section 41-5511, Idaho Code. 45 (13) "Plan" or "pool plan" means the individual basic, standard, cata- 46 strophic A or catastrophic B plan established pursuant to section 41-5511, 47 Idaho Code. 48 (14) "Plan of operation" means the plan of operation of the individual 49 high risk reinsurance pool established pursuant to this chapter. 50 (15) "Pool" means the Idaho high risk reinsurance pool. 51 (16) "Premium" means all moneys paid by an individual and eligible depend- 52 ents as a condition of receiving coverage from a carrier, including any fees 53 or other contributions associated with the health benefit plan. 54 (17) "Qualifying previous coverage" and "qualifying existing coverage" 55 mean benefits or coverage provided under: 10 1 (a) Medicare or medicaid, civilian health and medical program for 2 uniformed services (CHAMPUS), the Indian health service program, a state 3 health benefit risk pool, or any other similar publicly sponsored program; 4 or 5 (b) Any group or individual health insurance policy or health benefit 6 arrangement whether or not subject to the state insurance laws, including 7 coverage provided by a managed care organization, hospital or professional 8 service corporation, or a fraternal benefit society, that provides bene- 9 fits similar to or exceeding benefits provided under the basic health ben- 10 efit plan. 11 (18) "Reinsurance premium" means the premium set by the board pursuant to 12 section 41-5506, Idaho Code, to be paid by a reinsuring carrier for plans 13 issued under the pool. 14 (19) "Reinsuring carrier" means a carrier participating in the individual 15 high risk reinsurance pool established by this chapter. 16 (20) "Restricted network provision" means any provision of a health bene- 17 fit plan that conditions the payment of benefits, in whole or in part, on the 18 use of health care providers that have entered into a contractual arrangement 19 with the carrier to provide health care services to covered individuals. 20 SECTION 4. That Section 41-5505, Idaho Code, be, and the same is hereby 21 amended to read as follows: 22 41-5505. REINSURANCE. (1) Any individual carrier issuing an individual 23 basic, standard, catastrophic A, or catastrophic B health benefit plan as pro- 24 vided in this chapter shallreceive reinsurancebe reinsured by the pool to 25 the level of coverage provided in the plan and shall be liable to the pool for 26 the reinsurance premium. 27 (2) (a) The pool shall not reimburse a reinsuring carrier with respect to 28 the claims of a reinsured individual or dependent until the carrier has 29 incurred an initial level of claims for such individual or dependent of 30 five thousand dollars ($5,000) in a calendar year for benefits covered by 31 the pool. In addition, the reinsuring carrier shall be responsible for ten 32 percent (10%) of the next twenty-five thousand dollars ($25,000) of bene- 33 fit payments during a calendar year and the pool shall reinsure the 34 remainder. 35 (b) The board annually may adjust the initial level of claims and the 36 maximum limit to be retained by the carrier to reflect increases in costs 37 and utilization within the standard market for health benefit plans within 38 the state. The adjustment shall not be less than the annual change in the 39 medical component of the "Consumer Price Index for All Urban Consumers" of 40 the department of labor, bureau of labor statistics, unless the board pro- 41 poses and the director approves a lower adjustment factor. 42 (3) A reinsuring carrier shall apply all managed care and claims handling 43 techniques, including utilization review, individual case management, pre- 44 ferred provider provisions, and other managed care provisions or methods of 45 operation consistently with respect to reinsured and nonreinsured business. 46 (4) Each carrier shall make a filing with the director containing the 47 carrier's earned health insurance premium derived from health benefit plans 48 delivered or issued for delivery in this state in the previous calendar year. 49 (5) Each carrier shall file with the director, in a form and manner to be 50 prescribed by the director, an annual report. The report shall state the num- 51 ber of resident persons insured under the carrier's health benefit plan, or 52 through excess or stop loss coverage. 11 1 SECTION 5. An emergency existing therefor, which emergency is hereby 2 declared to exist, this act shall be in full force and effect on and after its 3 passage and approval.
STATEMENT OF PURPOSE RS 13050 The purpose of this bill is to clarify that all entities providing health insurance in Idaho are subject to the reporting requirements relating to annual assessments levied by the Small Employer Reinsurance Program and the Individual High Risk Reinsurance Pool. This conforms to what has been the actual practice of the Program since its inception. This bill also clarifies that for all individuals covered by the High Risk Pool benefit plans, carriers shall receive reinsurance coverage and must pay reinsurance premium to the Pool. FISCAL IMPACT There is no fiscal impact on the state general fund. Contact Name: Rep. Bill Deal Sen. Dean Cameron Phone: 208/332-1000 Hyatt Erstad 208/343-8899 Bart W. Harwood 208/395-8500 STATEMENT OF PURPOSE/FISCAL NOTE H 306