House File 389 - Introduced HOUSE FILE BY FORD (COMPANION TO SF 160) Passed House, Date Passed Senate, Date Vote: Ayes Nays Vote: Ayes Nays Approved A BILL FOR 1 An Act relating to small employer voluntary health care 2 purchasing pools. 3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 4 TLSB 1427HH 81 5 av/cf/24 PAG LIN 1 1 Section 1. NEW SECTION. 513E.1 SMALL EMPLOYER VOLUNTARY 1 2 HEALTH CARE PURCHASING POOLS == LEGISLATIVE INTENT. 1 3 The purpose of authorizing small employer voluntary health 1 4 care purchasing pools is to make health care coverage more 1 5 affordable for small employers and their employees. 1 6 Sec. 2. NEW SECTION. 513E.2 DEFINITIONS. 1 7 As used in this section: 1 8 1. "Commissioner" means the commissioner of insurance. 1 9 2. "Member" means a small employer that joins together 1 10 with other small employers to form a small employer voluntary 1 11 health care purchasing pool. 1 12 3. "Small employer" means a person actively engaged in 1 13 business who, on at least fifty percent of the employer's 1 14 working days during the preceding year, employed not less than 1 15 two and not more than fifty full=time equivalent eligible 1 16 employees. In determining the number of eligible employees, 1 17 companies which are affiliated companies or which are eligible 1 18 to file a combined tax return for purposes of state taxation 1 19 are considered one employer. 1 20 4. "Small employer voluntary health care purchasing pool" 1 21 or "pool" means a group of small employers who join together 1 22 for the purpose of negotiating to purchase and purchasing 1 23 health insurance or health care benefits for their employees. 1 24 Sec. 3. NEW SECTION. 513E.3 PERMISSION TO FORM. 1 25 Notwithstanding any law in this state relating to the 1 26 creation of groups for the purchase of insurance, any 1 27 prohibition of group purchasing, or any law that discriminates 1 28 against a purchasing group or its members, or any law of this 1 29 state that prohibits providing or offering to provide, to a 1 30 purchasing group or its members, advantages based upon their 1 31 loss and expense experience not afforded to other persons with 1 32 respect to rates, policy forms, coverage, or other matters, 1 33 small employers may voluntarily organize pools, solely for the 1 34 purpose of negotiating to purchase and purchasing health 1 35 insurance or health care benefits for members of the pool and 2 1 their employees. A pool is subject to all other applicable 2 2 laws of this state including chapter 522B. 2 3 Sec. 4. NEW SECTION. 513E.4 COMMON FACTORS. 2 4 All participants in a pool shall live within a common 2 5 geographic region, be employed in a similar occupation, or 2 6 share some other common factor as approved by the 2 7 commissioner. The membership criteria shall not be designed 2 8 to include disproportionately small employers likely to 2 9 experience low costs for health coverage or to exclude 2 10 disproportionately small employers likely to experience high 2 11 costs for health coverage. 2 12 Sec. 5. NEW SECTION. 513E.5 GOVERNANCE OF POOLS. 2 13 1. A pool shall have a governing structure controlled by 2 14 members of the pool. 2 15 2. The governing structure of a pool is responsible for 2 16 administration of the pool. 2 17 3. The governing structure of a pool shall review and 2 18 evaluate all bids for the provision of health insurance or 2 19 health care benefits by health benefit plan companies, shall 2 20 determine the criteria for joining and withdrawing from the 2 21 pool, and may design incentives for healthy lifestyle and 2 22 health promotion programs. 2 23 4. The governing structure of a pool may design uniform 2 24 entrance standards for membership in the pool. 2 25 5. A pool shall provide as much choice in health benefit 2 26 plans available to members as is financially feasible. 2 27 6. The governing structure of a pool may charge each 2 28 member a fee for administrative costs of the pool. 2 29 Sec. 6. NEW SECTION. 513E.6 ENROLLMENT. 2 30 1. A pool shall have an annual open enrollment period of 2 31 not less than fifteen days, during which all small employers 2 32 that qualify for membership in the pool may enter the pool 2 33 without the imposition of any preexisting condition 2 34 limitations, exclusions, or exclusionary riders, except those 2 35 otherwise permitted in chapter 513B for small employers. 3 1 2. A pool organized pursuant to this chapter shall reach 3 2 and maintain an enrolled population of at least one thousand 3 3 individuals within six months of formation of the pool. If a 3 4 pool fails to reach and maintain the minimum number of 3 5 enrolled individuals within that time, this chapter is not 3 6 applicable to any health insurance or health care benefits 3 7 subsequently purchased by the pool. 3 8 Sec. 7. NEW SECTION. 513E.7 MEMBERSHIP == DURATION. 3 9 The governing structure of a pool shall require a minimum 3 10 time period during which a member is not permitted to withdraw 3 11 from the pool without payment of a penalty. The penalty for 3 12 early withdrawal from the pool shall be established by the 3 13 governing structure. 3 14 Sec. 8. NEW SECTION. 513E.8 RATES. 3 15 1. The experience of a pool organized pursuant to this 3 16 chapter shall be pooled and the rates shall be blended across 3 17 all members of the pool. 3 18 2. The governing structure of a pool may create tiers 3 19 within the pool based on the experience of members. Such 3 20 tiers shall be designed in compliance with the requirements of 3 21 chapter 513B. The governing structure of a pool may establish 3 22 criteria that limits the movement of members between tiers. 3 23 All tiers created within a pool shall be phased out within two 3 24 years of the organization of the pool. 3 25 Sec. 9. NEW SECTION. 513E.9 REPORTS. 3 26 Prior to the effective date of health insurance or health 3 27 care benefits offered by a pool, and each July 1 thereafter, a 3 28 pool shall file a report with the commissioner that contains 3 29 all of the following information: 3 30 1. The number of individuals enrolled in the pool. 3 31 2. The geographic region that the pool intends to cover. 3 32 3. The number of health benefit plans offered. 3 33 4. A description of the benefits available under each 3 34 health benefit plan offered. 3 35 5. A description of the premium structure, including any 4 1 copayments or deductibles, of each health benefit plan 4 2 offered. 4 3 6. Evidence that the pool is in compliance with chapter 4 4 513B. 4 5 7. Samples of marketing information used by the pool, 4 6 including a telephone number where the governing structure of 4 7 the pool can be contacted. 4 8 8. A list of all administrative fees charged to members of 4 9 the pool. 4 10 Sec. 10. NEW SECTION. 513E.10 ENFORCEMENT. 4 11 1. A pool must register with the commissioner prior to 4 12 offering health insurance or health care benefits and each 4 13 July 1 thereafter on a form prescribed by the commissioner by 4 14 rule. 4 15 2. The commissioner shall enforce this chapter and shall 4 16 adopt rules deemed necessary for the administration and 4 17 enforcement of this chapter in accordance with chapter 17A. 4 18 3. The commissioner may charge pools an annual 4 19 registration fee sufficient to meet the costs of performing 4 20 the commissioner's duties under this chapter. 4 21 EXPLANATION 4 22 This bill authorizes the formation of voluntary health care 4 23 purchasing pools by certain small employers. 4 24 The bill creates a new Code chapter 513E that provides that 4 25 a small employer voluntary health care purchasing pool is a 4 26 group of small employers who join together for the purpose of 4 27 negotiating to purchase and purchasing health insurance or 4 28 health care benefits for their employees. A "small employer" 4 29 is defined as a person actively engaged in business, who on at 4 30 least 50 percent of the employer's working days during the 4 31 preceding year, employed not less than two and not more than 4 32 50 full=time equivalent eligible employees. The definition of 4 33 "small employer" is the same as that contained in Code chapter 4 34 513B relating to small group health coverage. 4 35 The bill allows the formation of such pools notwithstanding 5 1 other laws in this state that may prohibit the creation of 5 2 such a group. 5 3 The bill provides that participants in a pool shall live 5 4 within a common geographic region, be employed in a similar 5 5 occupation, or share other common factors as approved by the 5 6 commissioner of insurance. 5 7 The bill provides that a pool shall have a governing 5 8 structure that is controlled by members of the pool and that 5 9 administers the pool, reviews and evaluates bids for the 5 10 provision of health insurance or health care benefits, 5 11 determines criteria for joining and withdrawing from the pool, 5 12 and may design incentives for healthy lifestyle and health 5 13 promotion programs and uniform entrance standards for 5 14 membership in the pool. The bill also requires the governing 5 15 structure to provide as much choice in health care plans 5 16 available to members as is financially feasible and allows the 5 17 governing structure to charge a fee for the administrative 5 18 costs of the pool. 5 19 The bill sets requirements for an annual open enrollment 5 20 period and requires a pool to reach and maintain an enrolled 5 21 population of at least 1,000 covered lives within six months 5 22 after formation of the pool or else lose the applicability of 5 23 the new chapter to coverage purchased by the pool. 5 24 The bill allows the governing structure to set a minimum 5 25 term of membership in a pool during which a member is not 5 26 permitted to withdraw from the pool without paying a penalty. 5 27 The bill requires that the experience of a pool shall be 5 28 pooled. The bill also allows the governing structure of a 5 29 pool to create tiers within the pool based on the experience 5 30 of its members although all such tiers established must be 5 31 phased out within two years of the pool's creation. 5 32 The bill requires a pool to file a report with the 5 33 commissioner of insurance prior to the effective date of 5 34 coverage offered by the pool, and every July 1 thereafter, 5 35 that contains information specified in the bill. 6 1 The bill provides that a pool must register with the 6 2 commissioner of insurance prior to offering health insurance 6 3 or health care benefits, and each July 1 thereafter, and may 6 4 be charged a registration fee by the commissioner to cover the 6 5 commissioner's costs of administering and enforcing the new 6 6 Code chapter. The commissioner has the power to enforce the 6 7 new Code chapter and to adopt rules deemed necessary to 6 8 administer and enforce the new Code chapter. 6 9 LSB 1427HH 81 6 10 av:rj/cf/24