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PAG LIN
1 1 Section 1. Section 422.7, Code 1995, is amended by adding
1 2 the following new subsection:
1 3 NEW SUBSECTION. 32. Subtract, to the extent not otherwise
1 4 deducted in computing adjusted gross income, the amounts paid
1 5 by the taxpayer for the purchase of health benefits coverage
1 6 or insurance for the taxpayer or taxpayer's spouse or
1 7 dependent.
1 8 Sec. 2. Section 422.9, subsection 2, Code 1995, is amended
1 9 by adding the following new paragraph:
1 10 NEW PARAGRAPH. i. If the taxpayer has a deduction for
1 11 medical care expenses under section 213 of the Internal
1 12 Revenue Code, the taxpayer shall recompute for the purposes of
1 13 this subsection the amount of the deduction under section 213
1 14 by excluding from medical care, as defined in section 213, the
1 15 amount subtracted under section 422.7, subsection 32.
1 16 Sec. 3. NEW SECTION. 513C.1 SHORT TITLE.
1 17 This chapter shall be known and may be cited as the
1 18 "Individual Health Insurance Market Reform Act".
1 19 Sec. 4. NEW SECTION. 513C.2 PURPOSE.
1 20 The purpose and intent of this chapter is to promote the
1 21 availability of health insurance coverage to individuals
1 22 regardless of their health status or claims experience, to
1 23 prevent abusive rating practices, to require disclosure of
1 24 rating practices to purchasers, to establish rules regarding
1 25 the renewal of coverage, to establish limitations on the use
1 26 of preexisting condition exclusions, to assure fair access to
1 27 health plans, and to improve the overall fairness and
1 28 efficiency of the individual health insurance market.
1 29 Sec. 5. NEW SECTION. 513C.3 DEFINITIONS.
1 30 As used in this chapter, unless the context otherwise
1 31 requires:
1 32 1. "Actuarial certification" means a written statement by
1 33 a member of the American academy of actuaries or other
1 34 individual acceptable to the commissioner that an individual
1 35 carrier is in compliance with the provision of section 513C.5
2 1 which is based upon the actuary's or individual's examination,
2 2 including a review of the appropriate records and the
2 3 actuarial assumptions and methods used by the carrier in
2 4 establishing premium rates for applicable individual health
2 5 benefit plans.
2 6 2. "Affiliate" or "affiliated" means any entity or person
2 7 who directly or indirectly through one or more intermediaries,
2 8 controls or is controlled by, or is under common control with,
2 9 a specified entity or person.
2 10 3. "Basic or standard health benefit plan" means the core
2 11 group of health benefits developed pursuant to section 513C.8.
2 12 4. "Block of business" means all the individuals insured
2 13 under the same individual health benefit plan.
2 14 5. "Carrier" means any entity that provides individual
2 15 health benefit plans in this state. For purposes of this
2 16 chapter, carrier includes an insurance company, a group
2 17 hospital or medical service corporation, a fraternal benefit
2 18 society, a health maintenance organization, and any other
2 19 entity providing an individual plan of health insurance or
2 20 health benefits subject to state insurance regulation.
2 21 "Carrier" does not include an organized delivery system.
2 22 6. "Commissioner" means the commissioner of insurance.
2 23 7. "Director" means the director of public health
2 24 appointed pursuant to section 135.2.
2 25 8. "Eligible individual" means an individual who is a
2 26 resident of this state and who either has qualifying existing
2 27 coverage or has had qualifying existing coverage within the
2 28 immediately preceding thirty days, or an individual who has
2 29 had a qualifying event occur within the immediately preceding
2 30 thirty days.
2 31 9. "Established service area" means a geographic area, as
2 32 approved by the commissioner and based upon the carrier's
2 33 certificate of authority to transact business in this state,
2 34 within which the carrier is authorized to provide coverage or
2 35 a geographic area, as approved by the director and based upon
3 1 the organized delivery system's license to transact business
3 2 in this state, within which the organized delivery system is
3 3 authorized to provide coverage.
3 4 10. "Filed rate" means, for a rating period related to
3 5 each block of business, the rate charged to all individuals
3 6 with similar rating characteristics for individual health
3 7 benefit plans.
3 8 11. "Individual health benefit plan" means any hospital or
3 9 medical expense incurred policy or certificate, hospital or
3 10 medical service plan, or health maintenance organization
3 11 subscriber contract sold to an individual, or any
3 12 discretionary group trust or association policy, whether
3 13 issued within or outside of the state, providing hospital or
3 14 medical expense incurred coverage to individuals residing
3 15 within this state. Individual health benefit plan does not
3 16 include a self-insured group health plan, a self-insured
3 17 multiple employer group health plan, a group conversion plan,
3 18 an insured group health plan, accident-only, specified
3 19 disease, short-term hospital or medical, hospital confinement
3 20 indemnity, credit, dental, vision, Medicare supplement, long-
3 21 term care, or disability income insurance coverage, coverage
3 22 issued as a supplement to liability insurance, workers'
3 23 compensation or similar insurance, or automobile medical
3 24 payment insurance.
3 25 12. "Organized delivery system" means an organized
3 26 delivery system licensed by the director.
3 27 13. "Premium" means all moneys paid by an individual and
3 28 eligible dependents as a condition of receiving coverage from
3 29 a carrier or an organized delivery system, including any fees
3 30 or other contributions associated with an individual health
3 31 benefit plan.
3 32 14. "Qualifying event" means any of the following:
3 33 a. Loss of eligibility for medical assistance provided
3 34 pursuant to chapter 249A or Medicare coverage provided
3 35 pursuant to Title XVIII of the federal Social Security Act.
4 1 b. Loss or change of dependent status under qualifying
4 2 previous coverage.
4 3 c. The attainment by an individual of the age of majority.
4 4 15. "Qualifying existing coverage" or "qualifying previous
4 5 coverage" means benefits or coverage provided under any of the
4 6 following:
4 7 a. Any group health insurance that provides benefits
4 8 similar to or exceeding benefits provided under the standard
4 9 health benefit plan, provided that such policy has been in
4 10 effect for a period of at least one year.
4 11 b. An individual health insurance benefit plan, including
4 12 coverage provided under a health maintenance organization
4 13 contract, a hospital or medical service plan contract, or a
4 14 fraternal benefit society contract, that provides benefits
4 15 similar to or exceeding the benefits provided under the
4 16 standard health benefit plan, provided that such policy has
4 17 been in effect for a period of at least one year.
4 18 c. An organized delivery system that provides benefits
4 19 similar to or exceeding the benefits provided under the
4 20 standard health benefit plan, provided that the benefits
4 21 provided by the organized delivery system have been in effect
4 22 for a period of at least one year.
4 23 16. "Rating characteristics" means demographic
4 24 characteristics of individuals which are considered by the
4 25 carrier in the determination of premium rates for the
4 26 individuals and which are approved by the commissioner.
4 27 17. "Rating period" means the period for which premium
4 28 rates established by a carrier are in effect.
4 29 18. "Restricted network provision" means a provision of an
4 30 individual health benefit plan that conditions the payment of
4 31 benefits, in whole or in part, on the use of health care
4 32 providers that have entered into a contractual arrangement
4 33 with the carrier or the organized delivery system to provide
4 34 health care services to covered individuals.
4 35 Sec. 6. NEW SECTION. 513C.4 APPLICABILITY AND SCOPE.
5 1 1. Except as provided in subsection 2, for purposes of
5 2 this chapter, carriers that are affiliated companies or that
5 3 are eligible to file a consolidated tax return shall be
5 4 treated as one carrier and any restrictions or limitations
5 5 imposed by this chapter shall apply as if all individual
5 6 health benefit plans delivered or issued for delivery to
5 7 residents of this state by such affiliated carriers were
5 8 issued by one carrier.
5 9 2. An affiliated carrier that is a health maintenance
5 10 organization having a certificate of authority under section
5 11 513C.5 shall be considered to be a separate carrier for the
5 12 purposes of this chapter.
5 13 Sec. 7. NEW SECTION. 513C.5 RESTRICTIONS RELATING TO
5 14 PREMIUM RATES.
5 15 1. Premium rates for any block of individual health
5 16 benefit plan business issued on or after January 1, 1996, or
5 17 the date rules are adopted by the commissioner of insurance
5 18 and the director of public health and become effective,
5 19 whichever date is later, by a carrier subject to this chapter
5 20 shall be limited to the composite effect of allocating costs
5 21 among the following:
5 22 a. After making actuarial adjustments based upon benefit
5 23 design and rating characteristics, the filed rate for any
5 24 block of business shall not exceed the filed rate for any
5 25 other block of business by more than twenty percent.
5 26 b. The filed rate for any block of business shall not
5 27 exceed the filed rate for any other block of business by more
5 28 than thirty percent due to factors relating to rating
5 29 characteristics.
5 30 c. The filed rate for any block of business shall not
5 31 exceed the filed rate for any other block of business by more
5 32 than thirty percent due to any other factors approved by the
5 33 commissioner.
5 34 d. Premium rates for individual health benefit plans shall
5 35 comply with the requirements of this section notwithstanding
6 1 any assessments paid or payable by the carrier pursuant to any
6 2 reinsurance program or risk adjustment mechanism.
6 3 e. An adjustment applied to a single block of business
6 4 shall not exceed the adjustment applied to all blocks of
6 5 business by more than fifteen percent due to the claim
6 6 experience or health status of that block of business.
6 7 f. For purposes of this subsection, an individual health
6 8 benefit plan that contains a restricted network provision
6 9 shall not be considered similar coverage to an individual
6 10 health benefit plan that does not contain such a provision,
6 11 provided that the differential in payments made to network
6 12 providers results in substantial differences in claim costs.
6 13 2. Notwithstanding subsection 1, the commissioner, with
6 14 the concurrence of the board of the Iowa individual health
6 15 benefit reinsurance association established in section
6 16 513C.10, may by order reduce or eliminate the allowed rating
6 17 bands provided under subsection 1, paragraphs "a", "b", "c",
6 18 and "e", or otherwise limit or eliminate the use of experience
6 19 rating. The commissioner shall also develop a recommendation
6 20 for the elimination of age as a rating characteristic, and
6 21 shall submit such recommendation by January 8, 1996.
6 22 3. A carrier shall not transfer an individual
6 23 involuntarily into or out of a block of business.
6 24 4. The commissioner may suspend for a specified period the
6 25 application of subsection 1, paragraph "a", as to the premium
6 26 rates applicable to one or more blocks of business of a
6 27 carrier for one or more rating periods upon a filing by the
6 28 carrier requesting the suspension and a finding by the
6 29 commissioner that the suspension is reasonable in light of the
6 30 financial condition of the carrier.
6 31 5. A carrier shall make a reasonable disclosure at the
6 32 time of the offering for sale of any individual health benefit
6 33 plan of all of the following:
6 34 a. The extent to which premium rates for a specified
6 35 individual are established or adjusted based upon rating
7 1 characteristics.
7 2 b. The carrier's right to change premium rates, and the
7 3 factors, other than claim experience, that affect changes in
7 4 premium rates.
7 5 c. The provisions relating to the renewal of policies and
7 6 contracts.
7 7 d. Any provisions relating to any preexisting condition.
7 8 e. All plans offered by the carrier, the prices of such
7 9 plans, and the availability of such plans to the individual.
7 10 6. A carrier shall maintain at its principal place of
7 11 business a complete and detailed description of its rating
7 12 practices, including information and documentation that
7 13 demonstrate that its rating methods and practices are based
7 14 upon commonly accepted actuarial assumptions and are in
7 15 accordance with sound actuarial principles.
7 16 7. A carrier shall file with the commissioner annually on
7 17 or before March 15, an actuarial certification certifying that
7 18 the carrier is in compliance with this chapter and that the
7 19 rating methods of the carrier are actuarially sound. The
7 20 certification shall be in a form and manner and shall contain
7 21 information as specified by the commissioner. A copy of the
7 22 certification shall be retained by the carrier at its
7 23 principal place of business. Rate adjustments made in order
7 24 to comply with this section are exempt from loss ratio
7 25 requirements.
7 26 8. A carrier shall make the information and documentation
7 27 maintained pursuant to subsection 5 available to the
7 28 commissioner upon request. The information and documentation
7 29 shall be considered proprietary and trade secret information
7 30 and shall not be subject to disclosure by the commissioner to
7 31 persons outside of the division except as agreed to by the
7 32 carrier or as ordered by a court of competent jurisdiction.
7 33 Sec. 8. NEW SECTION. 513C.6 RENEWAL OF COVERAGE.
7 34 1. An individual health benefit plan is renewable at the
7 35 option of the individual, except in any of the following
8 1 cases:
8 2 a. Nonpayment of the required premiums.
8 3 b. Fraud or misrepresentation.
8 4 c. The insured individual becomes eligible for Medicare
8 5 coverage under Title XVIII of the federal Social Security Act.
8 6 d. The carrier elects not to renew all of its individual
8 7 health benefit plans in the state. In such case, the carrier
8 8 shall provide notice of the decision not to renew coverage to
8 9 all affected individuals and to the commissioner in each state
8 10 in which an affected insured individual is known to reside at
8 11 least ninety days prior to the nonrenewal of the health
8 12 benefit plan by the carrier. Notice to the commissioner under
8 13 this paragraph shall be provided at least three working days
8 14 prior to the notice to the affected individuals.
8 15 e. The commissioner finds that the continuation of the
8 16 coverage would not be in the best interests of the
8 17 policyholders or certificate holders, or would impair the
8 18 carrier's ability to meet its contractual obligations.
8 19 2. A carrier that elects not to renew all of its
8 20 individual health benefit plans in this state shall be
8 21 prohibited from writing new individual health benefit plans in
8 22 this state for a period of five years from the date of the
8 23 notice to the commissioner.
8 24 3. With respect to a carrier doing business in an
8 25 established geographic service area of the state, this section
8 26 applies only to the carrier's operations in the service area.
8 27 Sec. 9. NEW SECTION. 513C.7 AVAILABILITY OF COVERAGE.
8 28 1. A carrier or an organized delivery system, as a
8 29 condition of issuing individual health benefit plans in this
8 30 state, shall make available a basic or standard health benefit
8 31 plan to an eligible individual who applies for a plan and
8 32 agrees to make the required premium payments and to satisfy
8 33 other reasonable provisions of the basic or standard health
8 34 benefit plan. A carrier or an organized delivery system is
8 35 not required to issue a basic or standard health benefit plan
9 1 to an individual who meets any of the following criteria:
9 2 a. The individual is covered or is eligible for coverage
9 3 under a health benefit plan provided by the individual's
9 4 employer.
9 5 b. An eligible individual who does not apply for a basic
9 6 or standard health benefit plan within thirty days of a
9 7 qualifying event or within thirty days upon becoming
9 8 ineligible for qualifying existing coverage.
9 9 c. The individual is covered or is eligible for any
9 10 continued group coverage under section 4980b of the Internal
9 11 Revenue Code, sections 601 through 608 of the federal Employee
9 12 Retirement Income Security Act of 1974, sections 2201 through
9 13 2208 of the federal Public Health Service Act, or any state-
9 14 required continued group coverage. For purposes of this
9 15 subsection, an individual who would have been eligible for
9 16 such continuation of coverage, but is not eligible solely
9 17 because the individual or other responsible party failed to
9 18 make the required coverage election during the applicable time
9 19 period, is deemed to be eligible for such group coverage until
9 20 the date on which the individual's continuing group coverage
9 21 would have expired had an election been made.
9 22 2. A carrier or an organized delivery system shall issue
9 23 the basic or standard health benefit plan to an individual
9 24 currently covered by an underwritten benefit plan issued by
9 25 that carrier or an organized delivery system at the option of
9 26 the individual. This option must be exercised within thirty
9 27 days of notification of a premium rate increase applicable to
9 28 the underwritten benefit plan.
9 29 3. a. A carrier shall file with the commissioner, in a
9 30 form and manner prescribed by the commissioner, the basic or
9 31 standard health benefit plan. A basic or standard health
9 32 benefit plan filed pursuant to this paragraph may be used by a
9 33 carrier beginning thirty days after it is filed unless the
9 34 commissioner disapproves of its use.
9 35 The commissioner may at any time, after providing notice
10 1 and an opportunity for a hearing to the carrier, disapprove
10 2 the continued use by a carrier of a basic or standard health
10 3 benefit plan on the grounds that the plan does not meet the
10 4 requirements of this chapter.
10 5 b. An organized delivery system shall file with the
10 6 director, in a form and manner prescribed by the director, the
10 7 basic or standard health benefit plan to be used by the
10 8 organized delivery system. A basic or standard health benefit
10 9 plan filed pursuant to this paragraph may be used by the
10 10 organized delivery system beginning thirty days after it is
10 11 filed unless the director disapproves of its use.
10 12 The director may at any time, after providing notice and an
10 13 opportunity for a hearing to the organized delivery system,
10 14 disapprove the continued use by an organized delivery system
10 15 of a basic or standard health benefit plan on the grounds that
10 16 the plan does not meet the requirements of this chapter.
10 17 4. a. The individual basic or standard health benefit
10 18 plan shall not deny, exclude, or limit benefits for a covered
10 19 individual for losses incurred more than twelve months
10 20 following the effective date of the individual's coverage due
10 21 to a preexisting condition. A preexisting condition shall not
10 22 be defined more restrictively than any of the following:
10 23 (1) A condition that would cause an ordinarily prudent
10 24 person to seek medical advice, diagnosis, care, or treatment
10 25 during the twelve months immediately preceding the effective
10 26 date of coverage.
10 27 (2) A condition for which medical advice, diagnosis, care,
10 28 or treatment was recommended or received during the twelve
10 29 months immediately preceding the effective date of coverage.
10 30 (3) A pregnancy existing on the effective date of
10 31 coverage.
10 32 b. A carrier or an organized delivery system shall waive
10 33 any time period applicable to a preexisting condition
10 34 exclusion or limitation period with respect to particular
10 35 services in an individual health benefit plan for the period
11 1 of time an individual was previously covered by qualifying
11 2 previous coverage that provided benefits with respect to such
11 3 services, provided that the qualifying previous coverage was
11 4 continuous to a date not more than thirty days prior to the
11 5 effective date of the new coverage.
11 6 5. A carrier or an organized delivery system is not
11 7 required to offer coverage or accept applications pursuant to
11 8 subsection 1 from any individual not residing in the carrier's
11 9 or the organized delivery system's established geographic
11 10 access area.
11 11 6. A carrier or an organized delivery system shall not
11 12 modify a basic or standard health benefit plan with respect to
11 13 an individual or dependent through riders, endorsements, or
11 14 other means to restrict or exclude coverage for certain
11 15 diseases or medical conditions otherwise covered by the health
11 16 benefit plan.
11 17 Sec. 10. NEW SECTION. 513C.8 HEALTH BENEFIT PLAN
11 18 STANDARDS.
11 19 The commissioner shall adopt by rule the form and level of
11 20 coverage of the basic health benefit plan and the standard
11 21 health benefit plan for the individual market which shall
11 22 provide benefits substantially similar to those as provided
11 23 for under chapter 513B with respect to small group coverage,
11 24 but which shall be appropriately adjusted to reflect the
11 25 individual market.
11 26 Sec. 11. NEW SECTION. 513C.9 STANDARDS TO ASSURE FAIR
11 27 MARKETING.
11 28 1. A carrier or an organized delivery system issuing
11 29 individual health benefit plans in this state shall make
11 30 available the basic or standard health benefit plan to
11 31 residents of this state. If a carrier or an organized
11 32 delivery system denies other individual health benefit plan
11 33 coverage to an eligible individual on the basis of the health
11 34 status or claims experience of the eligible individual, or the
11 35 individual's dependents, the carrier or the organized delivery
12 1 system shall offer the individual the opportunity to purchase
12 2 a basic or standard health benefit plan.
12 3 2. A carrier, or an organized delivery system, or an agent
12 4 shall not do either of the following:
12 5 a. Encourage or direct individuals to refrain from filing
12 6 an application for coverage with the carrier or the organized
12 7 delivery system because of the health status, claims
12 8 experience, industry, occupation, or geographic location of
12 9 the individuals.
12 10 b. Encourage or direct individuals to seek coverage from
12 11 another carrier or another organized delivery system because
12 12 of the health status, claims experience, industry, occupation,
12 13 or geographic location of the individuals.
12 14 3. Subsection 2, paragraph "a", shall not apply with
12 15 respect to information provided by a carrier or an organized
12 16 delivery system or an agent to an individual regarding the
12 17 established geographic service area of the carrier or the
12 18 organized delivery system, or the restricted network provision
12 19 of the carrier or the organized delivery system.
12 20 4. A carrier or an organized delivery system shall not,
12 21 directly or indirectly, enter into any contract, agreement, or
12 22 arrangement with an agent that provides for, or results in,
12 23 the compensation paid to an agent for a sale of a basic or
12 24 standard health benefit plan to vary because of the health
12 25 status or permitted rating characteristics of the individual
12 26 or the individual's dependents.
12 27 5. Subsection 4 does not apply with respect to the
12 28 compensation paid to an agent on the basis of percentage of
12 29 premium, provided that the percentage shall not vary because
12 30 of the health status or other permitted rating characteristics
12 31 of the individual or the individual's dependents.
12 32 6. Denial by a carrier or an organized delivery system of
12 33 an application for coverage from an individual shall be in
12 34 writing and shall state the reason or reasons for the denial.
12 35 7. A violation of this section by a carrier or an agent is
13 1 an unfair trade practice under chapter 507B.
13 2 8. If a carrier or an organized delivery system enters
13 3 into a contract, agreement, or other arrangement with a third-
13 4 party administrator to provide administrative, marketing, or
13 5 other services related to the offering of individual health
13 6 benefit plans in this state, the third-party administrator is
13 7 subject to this section as if it were a carrier or an
13 8 organized delivery system.
13 9 Sec. 12. NEW SECTION. 513C.10 IOWA INDIVIDUAL HEALTH
13 10 BENEFIT REINSURANCE ASSOCIATION.
13 11 1. A nonprofit corporation is established to be known as
13 12 the Iowa individual health benefit reinsurance association.
13 13 All persons that provide health benefit plans in this state
13 14 including insurers providing accident and sickness insurance
13 15 under chapter 509, 514, or 514A; fraternal benefit societies
13 16 providing hospital, medical, or nursing benefits under chapter
13 17 512B; health maintenance organizations, organized delivery
13 18 systems, and all other entities providing health insurance or
13 19 health benefits subject to state insurance regulation shall be
13 20 members of this association. The association shall be
13 21 incorporated under chapter 504A, shall operate under a plan of
13 22 operation established and approved pursuant to chapter 504A,
13 23 and shall exercise its powers through a board of directors
13 24 established under this section.
13 25 2. The initial board of directors of the association shall
13 26 consist of seven members appointed by the commissioner as
13 27 follows:
13 28 a. Four members shall be representatives of the four
13 29 largest domestic carriers of individual health insurance in
13 30 the state as of the calendar year ending December 31, 1994.
13 31 b. Three members shall be representatives of the three
13 32 largest carriers of health insurance in the state, excluding
13 33 Medicare supplement coverage premiums, which are not otherwise
13 34 represented. In the event a carrier to be represented
13 35 pursuant to this paragraph does not appoint a representative,
14 1 the board member shall be a representative of the next largest
14 2 carrier which satisfies the criteria.
14 3 After an initial term, board members shall be nominated and
14 4 elected by the members of the association.
14 5 Members of the board may be reimbursed from the funds of
14 6 the association for expenses incurred by them as members, but
14 7 shall not otherwise be compensated by the association for
14 8 their services.
14 9 3. The association shall submit to the commissioner a plan
14 10 of operation for the association and any amendments to the
14 11 association's articles of incorporation necessary and
14 12 appropriate to assure the fair, reasonable, and equitable
14 13 administration of the association. The plan shall provide for
14 14 the sharing of losses related to basic and standard plans, if
14 15 any, on an equitable and proportional basis among the members
14 16 of the association. If the association fails to submit a
14 17 suitable plan of operation within one hundred eighty days
14 18 after the appointment of the board of directors, the
14 19 commissioner shall adopt rules necessary to implement this
14 20 section. The rules shall continue in force until modified by
14 21 the commissioner or superseded by a plan submitted by the
14 22 association and approved by the commissioner. In addition to
14 23 other requirements, the plan of operation shall provide for
14 24 all of the following:
14 25 a. The handling and accounting of assets and funds of the
14 26 association.
14 27 b. The amount of and method for reimbursing the expenses
14 28 of board members.
14 29 c. Regular times and places for meetings of the board of
14 30 directors.
14 31 d. Records to be kept relating to all financial
14 32 transactions, and annual fiscal reporting to the commissioner.
14 33 e. Procedures for selecting the board of directors.
14 34 f. Additional provisions necessary or proper for the
14 35 execution of the powers and duties of the association.
15 1 4. The plan of operation may provide that the powers and
15 2 duties of the association may be delegated to a person who
15 3 will perform functions similar to those of the association. A
15 4 delegation under this section takes effect only upon the
15 5 approval of the board of directors.
15 6 5. The association has the general powers and authority
15 7 enumerated by this section and executed in accordance with the
15 8 plan of operation approved by the commissioner under
15 9 subsection 3. In addition, the association may do any of the
15 10 following:
15 11 a. Enter into contracts as necessary or proper to
15 12 administer this chapter.
15 13 b. Sue or be sued, including taking any legal action
15 14 necessary or proper for recovery of any assessments for, on
15 15 behalf of, or against members of the association or other
15 16 participating persons.
15 17 c. Appoint from among members appropriate legal,
15 18 actuarial, and other committees as necessary to provide
15 19 technical assistance in the operation of the association,
15 20 including the hiring of independent consultants as necessary.
15 21 d. Perform any other functions within the authority of the
15 22 association.
15 23 6. Rates for basic and standard coverages as provided in
15 24 this chapter shall be determined by each carrier or organized
15 25 delivery system as the average of the lowest rate available
15 26 for issuance by that carrier or organized delivery system
15 27 adjusted for rating characteristics and benefits and the
15 28 maximum rate allowable by law after adjustments for rate
15 29 characteristics and benefits.
15 30 7. Following the close of each calendar year, the
15 31 association, in conjunction with the commissioner, shall
15 32 require each carrier or organized delivery system to report
15 33 the amount of earned premiums and the associated paid losses
15 34 for all basic and standard plans issued by the carrier or
15 35 organized delivery system. The reporting of these amounts
16 1 must be certified by an officer of the carrier or organized
16 2 delivery system.
16 3 8. The board shall develop procedures and make assessments
16 4 and distributions as required to equalize the individual
16 5 carrier and organized delivery system gains or losses so that
16 6 each carrier or organized delivery system receives the same
16 7 ratio of paid claims to ninety percent of earned premiums as
16 8 the aggregate of all basic and standard plans insured by all
16 9 carriers and organized delivery systems in the state.
16 10 9. If the statewide aggregate ratio of paid claims to
16 11 ninety percent of earned premiums is greater than one, the
16 12 dollar difference between ninety percent of earned premiums
16 13 and the paid claims shall represent an assessable loss.
16 14 10. The assessable loss plus necessary operating expenses
16 15 for the association, plus any additional expenses as provided
16 16 by law, shall be assessed by the association to all members in
16 17 proportion to their respective shares of total health
16 18 insurance premiums or payments for subscriber contracts
16 19 received in Iowa during the second preceding calendar year, or
16 20 with paid losses in the year, coinciding with or ending during
16 21 the calendar year, or on any other equitable basis as provided
16 22 in the plan of operation. In sharing losses, the association
16 23 may abate or defer any part of the assessment of a member, if,
16 24 in the opinion of the board, payment of the assessment would
16 25 endanger the ability of the member to fulfill its contractual
16 26 obligations. The association may also provide for an initial
16 27 or interim assessment against the members of the association
16 28 to meet the operating expenses of the association until the
16 29 next calendar year is completed.
16 30 11. The board shall develop procedures for distributing
16 31 the assessable loss assessments to each carrier and organized
16 32 delivery system in proportion to the carrier's and organized
16 33 delivery system's respective share of premium for basic and
16 34 standard plans to the statewide total premium for all basic
16 35 and standard plans.
17 1 12. The board shall ensure that procedures for collecting
17 2 and distributing assessments are as efficient as possible for
17 3 carriers and organized delivery systems. The board may
17 4 establish procedures which combine, or offset, the assessment
17 5 from, and the distribution due to, a carrier or organized
17 6 delivery system.
17 7 13. A carrier or an organized delivery system may petition
17 8 the association board to seek remedy from writing a
17 9 significantly disproportionate share of basic and standard
17 10 policies in relation to total premiums written in this state
17 11 for health benefit plans. Upon a finding that a carrier or
17 12 organized delivery system has written a disproportionate
17 13 share, the board may agree to compensate the carrier or
17 14 organized delivery system either by paying to the carrier or
17 15 organized delivery system an additional fee not to exceed two
17 16 percent of earned premiums from basic and standard policies
17 17 for that carrier or organized delivery system or by
17 18 petitioning the commissioner or director, as appropriate for
17 19 remedy.
17 20 14. a. The commissioner, upon a finding that the
17 21 acceptance of the offer of basic and standard coverage by
17 22 individuals pursuant to this chapter would place the carrier
17 23 in a financially impaired condition, shall not require the
17 24 carrier to offer coverage or accept applications for any
17 25 period of time the financial impairment is deemed to exist.
17 26 b. The director, upon a finding that the acceptance of the
17 27 offer of basic and standard coverage by individuals pursuant
17 28 to this chapter would place the organized delivery system in a
17 29 financially impaired condition, shall not required the
17 30 organized delivery system to offer coverage or accept
17 31 applications for any period of time the financial impairment
17 32 is deemed to exist.
17 33 Sec. 13. NEW SECTION. 513C.11 SELF-FUNDED EMPLOYER-
17 34 SPONSORED HEALTH BENEFIT PLAN PARTICIPATION IN IOWA INDIVIDUAL
17 35 HEALTH BENEFIT REINSURANCE ASSOCIATION.
18 1 1. A self-funded employer-sponsored health benefit plan
18 2 qualified under the federal Employee Retirement Income
18 3 Security Act of 1974 may voluntarily elect to participate in
18 4 the Iowa individual health benefit reinsurance association
18 5 established in section 513C.10 in accordance with the plan of
18 6 operation and subject to such terms and conditions adopted by
18 7 the board of the association to provide portability and
18 8 continuity to its covered employees and their covered spouses
18 9 and dependents subject to the same terms and conditions as a
18 10 participating insurer.
18 11 2. If the federal Employee Retirement Income Security Act
18 12 of 1974 is amended such that the state may require the
18 13 participation of a self-funded employer, the individual
18 14 reinsurance requirements shall apply equally to such
18 15 employers.
18 16 3. When and if the federal government imposes conditions
18 17 of portability and continuity on self-funded employers
18 18 qualified under the federal Employee Retirement Income
18 19 Security Act of 1974 that the commissioner deems are
18 20 substantially similar to those required of Iowa insurers,
18 21 coverage under such qualified plan shall be deemed qualified
18 22 prior coverage for purposes of chapters 513B and 513C.
18 23 Sec. 14. EFFECTIVE DATE. Sections 1 and 2 of this Act,
18 24 which amend section 422.7 by adding a new subsection 32, and
18 25 section 422.9, subsection 2, by adding a new paragraph "i",
18 26 are effective January 1, 1996, for tax years beginning on or
18 27 after that date.
18 28 SF 84
18 29 mj/cc/26
Text: SF00083 Text: SF00085 Text: SF00000 - SF00099 Text: SF Index Bills and Amendments: General Index Bill History: General Index
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