House File 2790 - Introduced
HOUSE FILE
BY COMMITTEE ON WAYS AND MEANS
(SUCCESSOR TO HF 2529)
(SUCCESSOR TO HF 696)
Passed House, Date Passed Senate, Date
Vote: Ayes Nays Vote: Ayes Nays
Approved
A BILL FOR
1 An Act providing for association group health care plans,
2 wellness incentives for small employers, health benefit
3 coverage for independent contractors, and a small business
4 wellness program tax credit, providing an appropriation, and
5 providing for effective, retroactive, and applicability dates.
6 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
7 TLSB 6530HZ 81
8 av/cf/24
PAG LIN
1 1 DIVISION I
1 2 ASSOCIATION GROUP HEALTH CARE PLANS
1 3 Section 1. Section 509.1, subsection 6, Code 2005, is
1 4 amended by striking the subsection and inserting in lieu
1 5 thereof the following:
1 6 6. A policy issued to a bona fide association, subject to
1 7 the following requirements:
1 8 a. The policy provides group health insurance coverage to
1 9 employees of members of a bona fide association and to the
1 10 spouses and dependents of such employees. For the purposes of
1 11 this subsection, "health insurance coverage" means the same as
1 12 defined in section 513B.2.
1 13 b. The policy is issued to a bona fide association. For
1 14 the purposes of this subsection, a bona fide association is an
1 15 association which meets all of the following requirements:
1 16 (1) The association is a trade, industry, or professional
1 17 association which is organized in good faith as a nonprofit
1 18 corporation under chapter 504 for purposes other than
1 19 obtaining insurance and has been in existence and actively
1 20 maintained for at least five continuous years at the time the
1 21 policy is issued.
1 22 (2) The association accepts any person for membership in
1 23 the association who qualifies for membership.
1 24 (3) The association does not condition membership in the
1 25 association on the health status of employees of its members
1 26 or the health status of the spouses and dependents of such
1 27 employees.
1 28 (4) Group health insurance coverage offered by the
1 29 association is available to all eligible employees of its
1 30 members, and to the spouses and dependents of such employees
1 31 regardless of the health status of such employees, or their
1 32 spouses and dependents. For the purposes of this subsection,
1 33 "eligible employee" means an employee who works on a full=time
1 34 basis and has a normal work week of thirty or more hours.
1 35 (5) Group health insurance coverage offered by the
2 1 association is available only to persons who are eligible
2 2 employees of an employer that is a member of the association,
2 3 or to the spouses and dependents of such employees.
2 4 (6) Notwithstanding chapter 513B, members of the
2 5 association may include small employers as defined in section
2 6 513B.2, so long as the total number of eligible employees of
2 7 all of the association's members is more than fifty.
2 8 c. The insurance premiums are paid by members to the
2 9 association but a member of the association may collect part
2 10 of the premium from its insured employees, and the method of
2 11 apportionment of the premium payment between the member and
2 12 the member's employees shall be determined by each member.
2 13 d. Not less than eighty=five percent of the eligible
2 14 employees of each member of the association shall be insured
2 15 under the association policy, excluding employees who are
2 16 enrolled in or eligible for Medicare or who receive health
2 17 insurance coverage under another contract or policy.
2 18 Employees who receive or are eligible for the medical
2 19 assistance program under chapter 249A are not excluded from
2 20 this requirement.
2 21 e. The policy shall not exclude from coverage an employee
2 22 or an employee's spouse or dependents on the basis of the
2 23 eligibility of the employee or the employee's spouse or
2 24 dependents for medical assistance under chapter 249A. This
2 25 paragraph shall also apply to corporations operating within
2 26 the state that provide health insurance coverage for their
2 27 employees directly, and the commissioner shall have the
2 28 authority to enforce the provisions of this paragraph.
2 29 f. Premium rates for the policy shall be determined by the
2 30 total number of lives insured by the plan, not the number of
2 31 lives insured of each member of the association.
2 32 g. A member of an association shall not offer any valuable
2 33 consideration or inducement to any of its employees for
2 34 nonparticipation in the association policy offered.
2 35 h. A member of an association that participates in group
3 1 health insurance coverage for its employees under a policy
3 2 issued to a bona fide association pursuant to this subsection
3 3 shall not be permitted to withdraw from such coverage for two
3 4 years without payment of a penalty. The penalty for early
3 5 withdrawal from the coverage shall be established by the
3 6 association.
3 7 i. The policy complies with the health care access,
3 8 portability, and renewability requirements of the federal
3 9 Health Insurance Portability and Accountability Act of 1996,
3 10 Pub. L. No. 104=191.
3 11 j. The policy shall include coverage for wellness programs
3 12 including preventative health care and wellness services in
3 13 each plan offered and shall offer one high deductible health
3 14 plan qualified under section 223(c) of the Internal Revenue
3 15 Code, to allow eligibility for contribution to a health
3 16 savings account on behalf of an employee of a member of the
3 17 association. For purposes of this subsection, "health savings
3 18 account" means a health savings account as defined in section
3 19 223(d) of the Internal Revenue Code.
3 20 Sec. 2. Section 509.1, Code 2005, is amended by adding the
3 21 following new subsection:
3 22 NEW SUBSECTION. 9. A policy of group health insurance
3 23 coverage, as defined in section 513B.2, issued by a small
3 24 employer carrier, as defined in section 513B.2, to a bona fide
3 25 association, subject to the following requirements:
3 26 a. The policy provides group health insurance coverage to
3 27 eligible employees of members of a bona fide association that
3 28 are small employers as defined in section 513B.2, and to the
3 29 spouses and dependents of such employees.
3 30 b. The policy is issued to a bona fide association. For
3 31 the purposes of this subsection, a bona fide association is an
3 32 association which meets all of the following requirements:
3 33 (1) The association is a trade, industry, or professional
3 34 association which is organized in good faith as a nonprofit
3 35 corporation under chapter 504 for purposes other than
4 1 obtaining insurance and has been in existence and actively
4 2 maintained for at least five continuous years at the time the
4 3 policy is issued.
4 4 (2) The association does not condition membership in the
4 5 association on the health status of employees of its members
4 6 or the health status of the spouses and dependents of such
4 7 employees.
4 8 (3) Group health insurance coverage offered by the
4 9 association is available to all eligible employees of its
4 10 members that are small employers as defined in section 513B.2
4 11 who choose to participate in the health insurance coverage
4 12 offered, and to the spouses and dependents of such employees
4 13 regardless of the health status of such employees, or their
4 14 spouses and dependents.
4 15 (4) Group health insurance coverage offered by the
4 16 association is available only to persons who are eligible
4 17 employees of a small employer as defined in section 513B.2
4 18 that is a member of the association, or to the spouses or
4 19 dependents of such employees.
4 20 Sec. 3. Section 513B.2, subsection 6, paragraph a,
4 21 subparagraph (3), Code 2005, is amended by striking the
4 22 subparagraph and inserting in lieu thereof the following:
4 23 (3) The coverages are provided by a policy of group health
4 24 insurance coverage through a bona fide association as provided
4 25 in section 509.1, subsection 9, which meets the requirements
4 26 for a class of business under section 513B.4. A small
4 27 employer carrier may condition coverages under such a policy
4 28 of group health insurance coverage on any of the following
4 29 requirements:
4 30 (a) Minimum levels of participation by employees of each
4 31 member of a bona fide association that offers the coverage to
4 32 its employees.
4 33 (b) Minimum levels of contribution by each member of a
4 34 bona fide association that offers the coverage to its
4 35 employees.
5 1 (c) A specified policy term, subject to annual premium
5 2 rate adjustments as permitted by section 513B.4.
5 3 Sec. 4. Section 513B.2, subsection 6, paragraph a, Code
5 4 2005, is amended by adding the following new subparagraph:
5 5 NEW SUBPARAGRAPH. (4) The coverages are provided by a
5 6 policy of group health insurance coverage through two or more
5 7 bona fide associations as provided in section 509.1,
5 8 subsection 9, which a small employer carrier has aggregated as
5 9 a distinct grouping that meets the requirements for a class of
5 10 business under section 513B.4. After a distinct grouping of
5 11 bona fide associations is established as a class of business,
5 12 the small group carrier shall not remove a bona fide
5 13 association from the class based on the claims experience of
5 14 that association. A small employer carrier may condition
5 15 coverages under such a policy of group health insurance
5 16 coverage on any of the following requirements:
5 17 (a) Minimum levels of participation by employees of each
5 18 member of a bona fide association in the class that offers the
5 19 coverage to its employees.
5 20 (b) Minimum levels of contribution by each member of a
5 21 bona fide association in the class that offers the coverage to
5 22 its employees.
5 23 (c) A specified policy term, subject to annual premium
5 24 rate adjustments as permitted by section 513B.4.
5 25 Sec. 5. Section 513B.2, subsection 6, paragraph b, Code
5 26 2005, is amended to read as follows:
5 27 b. A small employer carrier may establish no more than two
5 28 additional groupings under each of the subparagraphs in
5 29 paragraph "a" on the basis of underwriting criteria which are
5 30 expected to produce substantial variation in the health care
5 31 costs.
5 32 DIVISION II
5 33 WELLNESS INITIATIVES
5 34 Sec. 6. Section 513B.4, Code 2005, is amended by adding
5 35 the following new subsections:
6 1 NEW SUBSECTION. 6. Notwithstanding subsection 4, a small
6 2 employer carrier may offer to transfer a small employer into a
6 3 different class of business with a lower index rate based upon
6 4 claims experience, implementation of managed care or wellness
6 5 programs, or health status improvement of the small employer
6 6 since issue.
6 7 NEW SUBSECTION. 7. A small employer that withdraws from
6 8 group health insurance coverage offered pursuant to this
6 9 chapter and participates in group health insurance coverage
6 10 offered by an association pursuant to section 509.1,
6 11 subsection 6, shall not be permitted to participate in such
6 12 coverage again for a period of four years.
6 13 Sec. 7. NEW SECTION. 513B.4B SMALL EMPLOYER INCENTIVES
6 14 == SUSPENSION OR MODIFICATION OF PREMIUM RATE RESTRICTIONS.
6 15 1. In order to encourage voluntary participation in
6 16 wellness or disease management programs, a small employer
6 17 carrier may offer premium credits or discounts to a small
6 18 employer for the benefit of eligible employees of that small
6 19 employer who participate in such a program. An employee shall
6 20 not be penalized in any way for not participating in such a
6 21 program.
6 22 2. The commissioner shall adopt, by rule or order,
6 23 provisions allowing suspension or modification of premium rate
6 24 restrictions to enable a small employer carrier to provide
6 25 premium credits or discounts to a small employer based on
6 26 measurable reductions in costs of that small employer,
6 27 including but not limited to tobacco use cessation,
6 28 participation in established wellness or disease management
6 29 programs, and reduced administrative or distribution costs.
6 30 DIVISION III
6 31 INDEPENDENT CONTRACTORS == HEALTH BENEFIT COVERAGE
6 32 Sec. 8. Section 507A.4, Code 2005, is amended by adding
6 33 the following new subsection:
6 34 NEW SUBSECTION. 10. a. A self=funded health benefit plan
6 35 sponsored by an employer in this state under the federal
7 1 Employee Retirement Income Security Act of 1974, as codified
7 2 in 29 U.S.C. } 1169, which provides health benefits to
7 3 independent contractors of the employer and to spouses and
7 4 dependents of the independent contractors, if the plan is
7 5 granted a waiver from the provisions of this chapter by the
7 6 commissioner and meets all of the following conditions:
7 7 (1) There is a written contract between the sponsor of the
7 8 health benefit plan and the independent contractor which
7 9 establishes the relationship between the parties to the
7 10 contract and provides for the personal services to be provided
7 11 by the independent contractor to the sponsor of the health
7 12 benefit plan pursuant to the contract.
7 13 (2) The personal services to be provided by the
7 14 independent contractor pursuant to the contract are directly
7 15 related to the principal business of the sponsor of the health
7 16 benefit plan.
7 17 (3) The contract provides that the independent contractor
7 18 will provide services to the sponsor of the health benefit
7 19 plan on an exclusive basis.
7 20 (4) The inclusion of the independent contractor in the
7 21 sponsor's health benefit plan is incidental to the contractual
7 22 relationship between the sponsor of the health benefit plan
7 23 and the independent contractor.
7 24 (5) The health benefit plan is administered by an
7 25 authorized insurer or an authorized third=party administrator.
7 26 b. The sponsor of the health benefit plan shall file an
7 27 application for waiver from the provisions of this chapter
7 28 with the commissioner as prescribed by the commissioner and
7 29 shall file periodic statements and information as required by
7 30 the commissioner. The commissioner shall adopt rules pursuant
7 31 to chapter 17A implementing this subsection. All statements
7 32 and information filed with or disclosed to the commissioner
7 33 pursuant to this subsection are confidential records pursuant
7 34 to chapter 22.
7 35 c. If at any time the commissioner determines that a
8 1 health benefit plan for which a waiver has been granted does
8 2 not meet all of the conditions of paragraph "a", and the rules
8 3 adopted by the commissioner under paragraph "b", the
8 4 commissioner may terminate the waiver granted to the health
8 5 benefit plan.
8 6 d. A self=funded employer=sponsored health benefit plan
8 7 which has a valid waiver from the provisions of this chapter
8 8 shall not be considered any of the following:
8 9 (1) An insurance company or association of any kind or
8 10 character under section 432.1.
8 11 (2) A member insurer of the Iowa life and health insurance
8 12 guaranty association as defined in section 508C.5, subsection
8 13 8.
8 14 (3) A carrier under chapter 513B.
8 15 (4) A member of the Iowa individual health benefit
8 16 reinsurance association under section 513C.10.
8 17 (5) An entity subject to chapter 514C.
8 18 (6) A multiple employer welfare arrangement as defined in
8 19 subsection 9.
8 20 e. A self=funded employer=sponsored health benefit plan
8 21 which has received a waiver from the provisions of this
8 22 chapter shall be considered to be a self=funded employer=
8 23 sponsored health benefit plan under the federal Employee
8 24 Retirement Income Security Act of 1974, as codified in 29
8 25 U.S.C. } 1169, and not subject to this title so long as the
8 26 waiver is in effect.
8 27 f. The provision of health benefits to an independent
8 28 contractor by a self=funded employer=sponsored health benefit
8 29 plan which meets all of the conditions of paragraph "a" shall
8 30 not in and of itself create an employer=employee relationship
8 31 between the independent contractor and the sponsor of the
8 32 health benefit plan.
8 33 DIVISION IV
8 34 SMALL BUSINESS WELLNESS PROGRAM TAX CREDIT
8 35 Sec. 9. NEW SECTION. 422.11M SMALL BUSINESS WELLNESS
9 1 PROGRAM TAX CREDIT.
9 2 1. a. The taxes imposed under this division, less the
9 3 amounts of nonrefundable credits allowed under this division,
9 4 shall be reduced by a small business wellness program tax
9 5 credit, to the extent available, for the cost to a small
9 6 business of implementing a wellness program for employees of
9 7 the business. Wellness program costs for which a credit is
9 8 available include items such as exercise equipment necessary
9 9 to conduct the wellness program, medical equipment necessary
9 10 to evaluate and monitor the physical condition of participants
9 11 in the wellness program, and costs associated with the
9 12 provision of preventative health care and wellness services
9 13 such as vaccinations, nutrition counseling, and smoking
9 14 cessation programs. The credit is not available for costs not
9 15 directly related to the purposes of the wellness program such
9 16 as office equipment or computers or for reimbursements for
9 17 health club memberships. The amount of the credit shall not
9 18 exceed fifty dollars per year for each employee of a small
9 19 business that participates in a wellness program sponsored by
9 20 the small business.
9 21 b. The total amount of all credits for all employees of a
9 22 small business under paragraph "a" shall not exceed two
9 23 thousand five hundred dollars per year.
9 24 c. For purposes of this section, "small business" means a
9 25 for=profit enterprise that employed during the tax year not
9 26 more than fifty full=time equivalent employees.
9 27 d. Any credit in excess of the tax liability shall be
9 28 refunded. In lieu of claiming a refund, a taxpayer may elect
9 29 to have the overpayment shown on the taxpayer's final,
9 30 completed return credited to the tax liability for the
9 31 following taxable year.
9 32 2. An individual may claim a small business wellness
9 33 program tax credit allowed a partnership, limited liability
9 34 company, S corporation, estate, or trust electing to have the
9 35 income taxed directly to the individual. The amount claimed
10 1 by the individual shall be based upon the pro rata share of
10 2 the individual's earnings of the partnership, limited
10 3 liability company, S corporation, estate, or trust.
10 4 3. A taxpayer claiming a credit under this section shall
10 5 not be precluded, in computing taxable income, from deducting
10 6 the amount of costs for providing wellness program benefits
10 7 allowed under any section of the Internal Revenue Code.
10 8 4. To receive the small business wellness program tax
10 9 credit, a small business must submit an application to the
10 10 department. If the taxpayer meets the criteria for
10 11 eligibility, the department shall issue to the taxpayer a
10 12 certification of entitlement for the small business wellness
10 13 program tax credit. However, the combined amount of tax
10 14 credits that may be approved for a fiscal year under this
10 15 section, section 422.33, subsection 20, section 422.60,
10 16 subsection 11, section 432.12H, and section 533.24, subsection
10 17 8, shall not exceed the amount specified in subsection 5. The
10 18 certification shall contain the taxpayer's name, address, tax
10 19 identification number, the amount of the credit, and tax year
10 20 for which the certificate applies. The taxpayer must file the
10 21 tax credit certificate with the taxpayer's tax return in order
10 22 to claim the tax credit. The department shall adopt rules to
10 23 administer this section and shall provide by rule for the
10 24 method to be used to determine for which fiscal year the tax
10 25 credits are approved.
10 26 If the total amount of tax credits claimed for a calendar
10 27 year exceeds the amount available for distribution pursuant to
10 28 subsection 5, the department shall provide for the pro rata
10 29 distribution of the available tax credits. Each small
10 30 business with an eligible claim for the tax credit shall be
10 31 eligible to receive only the proportionate amount of the
10 32 available credits as the total eligible claim of the small
10 33 business bears to the total eligible claims submitted by all
10 34 other small businesses.
10 35 5. For purposes of subsection 4, the combined amount of
11 1 small business wellness program tax credits that may be
11 2 approved in a fiscal year is ten million dollars.
11 3 Sec. 10. Section 422.33, Code Supplement 2005, is amended
11 4 by adding the following new subsection:
11 5 NEW SUBSECTION. 20. The taxes imposed under this division
11 6 shall be reduced by a small business wellness program tax
11 7 credit, to the extent available, provided for in section
11 8 422.11M. The tax credit shall be subject to the same
11 9 conditions, requirements, and dollar limitations as provided
11 10 for in section 422.11M.
11 11 Sec. 11. Section 422.60, Code Supplement 2005, is amended
11 12 by adding the following new subsection:
11 13 NEW SUBSECTION. 11. The taxes imposed under this division
11 14 shall be reduced by a small business wellness program tax
11 15 credit, to the extent available, provided for in section
11 16 422.11M. The tax credit shall be subject to the same
11 17 conditions, requirements, and dollar limitations as provided
11 18 for in section 422.11M.
11 19 Sec. 12. NEW SECTION. 432.12H SMALL BUSINESS WELLNESS
11 20 PROGRAM TAX CREDIT.
11 21 The taxes imposed under this chapter shall be reduced by a
11 22 small business wellness program tax credit, to the extent
11 23 available, provided for in section 422.11M. The tax credit
11 24 shall be subject to the same conditions, requirements, and
11 25 dollar limitations as provided for in section 422.11M.
11 26 Sec. 13. Section 533.24, Code Supplement 2005, is amended
11 27 by adding the following new subsection:
11 28 NEW SUBSECTION. 8. The moneys and credits tax imposed
11 29 under this section shall be reduced by a small business
11 30 wellness program tax credit, to the extent available, provided
11 31 for in section 422.11M. The tax credit shall be subject to
11 32 the same conditions, requirements, and dollar limitations as
11 33 provided for in section 422.11M.
11 34 DIVISION V
11 35 EFFECTIVE, APPLICABILITY, AND RETROACTIVITY DATES
12 1 Sec. 14. EFFECTIVE DATE. This Act, being deemed of
12 2 immediate importance, takes effect upon enactment.
12 3 Sec. 15. RETROACTIVE AND APPLICABILITY DATE. Division IV
12 4 of this Act applies retroactively to January 1, 2006, for tax
12 5 years beginning on or after that date.
12 6 EXPLANATION
12 7 This bill authorizes certain association group health care
12 8 plans, wellness initiatives, health benefit coverage for
12 9 certain independent contractors, and a small business wellness
12 10 program tax credit.
12 11 DIVISION I == ASSOCIATION GROUP HEALTH CARE PLANS. The
12 12 bill amends Code section 509.1, subsection 6, to authorize the
12 13 issuance of a group health insurance policy to a bona fide
12 14 association to provide health insurance coverage to employees
12 15 of association members and to the spouses and dependents of
12 16 such employees.
12 17 The bill defines what constitutes a bona fide association
12 18 and provides that members of a bona fide association may
12 19 include small employers as defined in Code section 513B.2 so
12 20 long as the total number of eligible employees of all of the
12 21 association's members is more than 50.
12 22 The bill requires that a bona fide association must be a
12 23 trade, industry, or professional association which is
12 24 organized in good faith as a nonprofit corporation under Code
12 25 chapter 504 for purposes other than obtaining insurance, and
12 26 has been in existence and actively maintained for at least
12 27 five continuous years at the time the policy is issued; accept
12 28 any person for membership in the association who qualifies for
12 29 membership; not condition membership on the health status of
12 30 the employees, or their spouses or dependents, of its members;
12 31 make coverage offered by the association available to all
12 32 eligible employees, or their spouses or dependents, of its
12 33 members regardless of their health status; make coverage
12 34 offered by the association available only to employees, or
12 35 their spouses or dependents, of a member of the association.
13 1 The bill requires that not less than 85 percent of eligible
13 2 employees of association members participate in the insurance
13 3 coverage and requires premium rates for the insurance to be
13 4 determined by the total number of lives insured by the plan,
13 5 not the number of lives insured of each association member.
13 6 The bill provides that an association member that
13 7 participates in an association policy cannot withdraw from
13 8 such coverage for two years without payment of a penalty. The
13 9 bill provides that an association policy must comply with the
13 10 access, portability, and renewability requirements of the
13 11 federal Health Insurance Portability and Accountability Act.
13 12 The bill also requires that an association policy include
13 13 coverage for wellness programs including preventative health
13 14 care and wellness services and offer one high deductible
13 15 health plan qualified under section 223(c) of the Internal
13 16 Revenue Code to allow covered employees to be eligible for
13 17 contributions to a health savings account as defined in
13 18 section 223(d) of the Internal Revenue Code.
13 19 The bill creates Code section 509.1, subsection 9, which
13 20 authorizes issuance of a group health insurance policy issued
13 21 by a small employer carrier, as defined in Code section
13 22 513B.2, to a bona fide association to provide health insurance
13 23 coverage to employees of association members and to the
13 24 spouses and dependents of such employees.
13 25 The bill defines what constitutes a bona fide association
13 26 to whom such a policy may be issued and requires that the
13 27 insurance offered be available only to employees and their
13 28 spouses and dependents, of association members which are small
13 29 employers as defined in Code section 513B.2.
13 30 The bill requires that a bona fide association for the
13 31 purposes of this type of policy must be a trade, industry, or
13 32 professional association which is organized in good faith as a
13 33 nonprofit corporation under Code chapter 504 for purposes
13 34 other than obtaining insurance and has been in existence and
13 35 actively maintained for at least five continuous years at the
14 1 time the policy is issued; not condition membership in the
14 2 association on the health status of employees or their spouses
14 3 or dependents, of members; make coverage offered by the
14 4 association available to all eligible employees and their
14 5 spouses and dependents, of its members that are small
14 6 employers who choose to participate in the coverage; and make
14 7 the coverage offered available only to persons who are
14 8 eligible employees and their spouses and dependents, of a
14 9 small employer that is a member of the association.
14 10 For the purposes of Code section 509.1, subsection 9, a
14 11 "small employer" means a person actively engaged in business
14 12 who, on at least 50 percent of the employer's working days
14 13 during the preceding year, employed not less than two and not
14 14 more than 50 full=time equivalent, eligible employees.
14 15 The bill provides that coverages provided by a group health
14 16 insurance policy through a bona fide association pursuant to
14 17 Code section 509.1, subsection 9, can constitute a class of
14 18 business and a small employer carrier may condition coverages
14 19 under such a policy on minimum levels of participation by
14 20 employees of each association member, minimum levels of
14 21 contribution by each association member that offers the
14 22 coverage to its employees, and a specified policy term,
14 23 subject to annual premium rate adjustments as permitted by
14 24 Code section 513B.4.
14 25 The bill also provides that coverages provided by a group
14 26 health insurance policy through two or more bona fide
14 27 associations as provided in Code section 509.1, subsection 9,
14 28 which a small employer carrier has aggregated as a distinct
14 29 grouping can constitute a class of business and a small
14 30 employer carrier may condition coverages under such a policy
14 31 as set forth above. A small employer carrier cannot remove a
14 32 bona fide association from such a class based on the claims
14 33 experience of that association.
14 34 The bill also allows a small employer carrier to establish
14 35 more than two additional groupings as classes of business
15 1 under Code section 513B.2, subsection 6, paragraph "a", on the
15 2 basis of underwriting criteria which are expected to produce
15 3 substantial variation in the health care costs.
15 4 DIVISION II == WELLNESS INITIATIVES. The bill allows a
15 5 small employer carrier to transfer a small employer into a
15 6 different class of business with a lower index rate based upon
15 7 claims experience, implementation of managed care or wellness
15 8 programs, or health status improvement of the small employer
15 9 since issuance of the policy.
15 10 The bill provides that a small employer that withdraws from
15 11 small group health insurance coverage to participate in
15 12 coverage offered by a policy issued to a bona fide association
15 13 pursuant to Code section 509.1, subsection 6, cannot
15 14 participate in small group health insurance coverage again for
15 15 a period of four years.
15 16 The bill also allows a small employer carrier to offer
15 17 premium credits or discounts to a small employer for the
15 18 benefit of eligible employees of that employer who voluntarily
15 19 participate in wellness or disease management programs. The
15 20 bill requires the commissioner of insurance to adopt rules or
15 21 orders allowing suspension or modification of premium rate
15 22 restrictions to enable a small employer carrier to provide
15 23 such premium credits or discounts to a small employer based on
15 24 measurable reductions in costs of that small employer,
15 25 including but not limited to tobacco use cessation,
15 26 participation in established wellness or disease management
15 27 programs, and reduced administrative or distribution costs.
15 28 The bill prohibits an employee from being penalized in any way
15 29 for not participating in a wellness or disease management
15 30 program.
15 31 DIVISION III == INDEPENDENT CONTRACTORS == HEALTH BENEFIT
15 32 COVERAGE. Code section 507A.4 is amended by adding a new
15 33 subsection providing that self=funded health benefit plans
15 34 sponsored by an employer in this state which provide health
15 35 benefits to independent contractors of such an employer, and
16 1 their dependents, are granted a waiver from the requirements
16 2 of Code chapter 507A pertaining to unauthorized insurers, if
16 3 the plans meet specified conditions.
16 4 DIVISION IV == SMALL BUSINESS WELLNESS PROGRAM TAX CREDIT.
16 5 The bill provides for a small business wellness program tax
16 6 credit. The credit can be used to reduce the individual and
16 7 corporate income taxes, franchise tax, premiums tax, and
16 8 moneys and credits tax liabilities. For purposes of the
16 9 credit, a "small business" is a for=profit enterprise that
16 10 employed during the tax year no more than 50 full=time
16 11 equivalent employees.
16 12 To be eligible for the credit, a small business must incur
16 13 costs for implementing a wellness program for its employees.
16 14 Wellness program costs for which the credit is available
16 15 include items such as exercise equipment necessary to conduct
16 16 the wellness program, medical equipment necessary to monitor
16 17 and evaluate the physical condition of program participants,
16 18 and costs associated with the provision of preventative health
16 19 care and wellness services such as vaccinations, nutrition
16 20 counseling, and smoking cessation programs. The credit is not
16 21 available for costs not directly related to the purposes of
16 22 the wellness program such as office equipment or computers or
16 23 for reimbursements for health club memberships.
16 24 The amount of the credit cannot exceed $50 per year for
16 25 each employee participant of a small business or a maximum
16 26 credit of $2,500 per year for each small business.
16 27 The bill provides for a limit of $10 million on the
16 28 combined amount of credits that may be approved in a fiscal
16 29 year. The bill also provides that if the total amount of tax
16 30 credits claimed for a calendar year exceeds $10 million, the
16 31 department of revenue and finance shall provide for the pro
16 32 rata distribution of the available tax credits based on the
16 33 proportionate amount of each eligible claim of a small
16 34 business compared to the total eligible claims submitted by
16 35 all other small businesses.
17 1 DIVISION V == EFFECTIVE, APPLICABILITY, AND RETROACTIVITY
17 2 DATES. The bill takes effect upon enactment. Division IV of
17 3 the bill, providing for a small business wellness program tax
17 4 credit, applies retroactively to January 1, 2006, for tax
17 5 years beginning on or after that date.
17 6 LSB 6530HZ 81
17 7 av:rj/cf/24