Print Friendly HOUSE BILL NO. 306 – Health insurance provider/reporting
HOUSE BILL NO. 306
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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,
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
|||| LEGISLATURE OF THE STATE OF IDAHO ||||
Fifty-seventh Legislature First Regular Session - 2003
IN 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
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
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
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
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
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
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
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
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
1 health benefit risk pool or any other similar publicly sponsored program;
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
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) All reinsuring
40 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) Each small employer carrier 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-
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 from reinsuring car-
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 any reinsuring carrier s;
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, including board broad discretion to operate separate the
49 small employer and individual reinsurance pools program;
50 (f) Establish actuarial functions as appropriate for the operation of the
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
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) A reinsuring carrier 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) A reinsuring small 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-
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-
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-
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
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
25 (b) Any net loss for the year shall be recouped by assessments of carri-
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) The individual assessments 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) Each reinsuring carrier'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 the reinsuring carriers
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) A reinsuring carrier 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 a reinsuring carrier if the director deter-
55 mines that the payment of the assessment would place the reinsuring car-
1 rier in a financially impaired condition. If all or part of an assessment
2 against a reinsuring carrier is deferred the amount deferred shall be
3 assessed against the other participating carriers in a manner consistent
4 with the basis for assessment set forth in this subsection. The reinsuring
5 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
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
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-
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:
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;
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 shall receive reinsurance be 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
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.
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
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.
There is no fiscal impact on the state general fund.
Name: Rep. Bill Deal
Sen. Dean Cameron
Hyatt Erstad 208/343-8899
Bart W. Harwood 208/395-8500
STATEMENT OF PURPOSE/FISCAL NOTE H 306