House File 696 - Introduced
HOUSE FILE
BY KAUFMANN
Passed House, Date Passed Senate, Date
Vote: Ayes Nays Vote: Ayes Nays
Approved
A BILL FOR
1 An Act authorizing voluntary health care purchasing pools for
2 certain employers.
3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
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PAG LIN
1 1 Section 1. NEW SECTION. 513E.1 VOLUNTARY HEALTH CARE
1 2 PURCHASING POOLS == LEGISLATIVE INTENT.
1 3 The purpose of authorizing voluntary health care purchasing
1 4 pools is to make health care coverage more affordable for
1 5 certain employers and their employees.
1 6 Sec. 2. NEW SECTION. 513E.2 DEFINITIONS.
1 7 As used in this chapter:
1 8 1. "Commissioner" means the commissioner of insurance.
1 9 2. "Employer" means a small employer or an employer who
1 10 employs employees while engaging in a business licensed,
1 11 certified, or registered under chapter 135C, 231C, or 237A.
1 12 3. "Member" means an employer that joins together with
1 13 other employers to form an employer voluntary health care
1 14 purchasing pool.
1 15 4. "Small employer" means a person actively engaged in
1 16 business who, on at least fifty percent of the employer's
1 17 working days during the preceding year, employed not less than
1 18 two and not more than fifty full=time equivalent eligible
1 19 employees. In determining the number of eligible employees,
1 20 companies which are affiliated companies or which are eligible
1 21 to file a combined tax return for purposes of state taxation
1 22 are considered one employer.
1 23 5. "Voluntary health care purchasing pool" or "pool" means
1 24 a group of employers who join together for the purpose of
1 25 negotiating to purchase and purchasing health insurance or
1 26 health care benefits for their employees.
1 27 Sec. 3. NEW SECTION. 513E.3 PERMISSION TO FORM.
1 28 Notwithstanding any law in this state relating to the
1 29 creation of groups for the purchase of insurance, any
1 30 prohibition of group purchasing, or any law that discriminates
1 31 against a purchasing group or its members, or any law of this
1 32 state that prohibits providing or offering to provide, to a
1 33 purchasing group or its members, advantages based upon their
1 34 loss and expense experience not afforded to other persons with
1 35 respect to rates, policy forms, coverage, or other matters,
2 1 employers may voluntarily organize pools, solely for the
2 2 purpose of negotiating to purchase and purchasing health
2 3 insurance or health care benefits for members of the pool and
2 4 their employees. A pool is subject to all other applicable
2 5 laws of this state including chapter 522B.
2 6 Sec. 4. NEW SECTION. 513E.4 COMMON FACTORS.
2 7 All participants in a pool shall live within a common
2 8 geographic region, be employed in a similar occupation, or
2 9 share some other common factor as approved by the
2 10 commissioner. The membership criteria shall not be designed
2 11 to include disproportionately employers likely to experience
2 12 low costs for health coverage or to exclude disproportionately
2 13 employers likely to experience high costs for health coverage.
2 14 Sec. 5. NEW SECTION. 513E.5 GOVERNANCE OF POOLS.
2 15 1. A pool shall have a governing structure controlled by
2 16 members of the pool.
2 17 2. The governing structure of a pool is responsible for
2 18 administration of the pool.
2 19 3. The governing structure of a pool shall review and
2 20 evaluate all bids for the provision of health insurance or
2 21 health care benefits by health benefit plan companies, shall
2 22 determine the criteria for joining and withdrawing from the
2 23 pool, and may design incentives for healthy lifestyle and
2 24 health promotion programs.
2 25 4. The governing structure of a pool may design uniform
2 26 entrance standards for membership in the pool.
2 27 5. A pool shall provide as much choice in health benefit
2 28 plans available to members as is financially feasible.
2 29 6. The governing structure of a pool may charge each
2 30 member a fee for administrative costs of the pool.
2 31 Sec. 6. NEW SECTION. 513E.6 ENROLLMENT.
2 32 1. A pool shall have an annual open enrollment period of
2 33 not less than fifteen days, during which all employers that
2 34 qualify for membership in the pool may enter the pool without
2 35 the imposition of any preexisting condition limitations,
3 1 exclusions, or exclusionary riders, except those otherwise
3 2 permitted in chapter 513B for small employers.
3 3 2. A pool organized pursuant to this chapter shall reach
3 4 and maintain an enrolled population of at least one thousand
3 5 individuals within six months of formation of the pool. If a
3 6 pool fails to reach and maintain the minimum number of
3 7 enrolled individuals within that time, this chapter is not
3 8 applicable to any health insurance or health care benefits
3 9 subsequently purchased by the pool.
3 10 Sec. 7. NEW SECTION. 513E.7 MEMBERSHIP == DURATION.
3 11 The governing structure of a pool shall require a minimum
3 12 time period during which a member is not permitted to withdraw
3 13 from the pool without payment of a penalty. The penalty for
3 14 early withdrawal from the pool shall be established by the
3 15 governing structure.
3 16 Sec. 8. NEW SECTION. 513E.8 RATES.
3 17 1. The experience of a pool organized pursuant to this
3 18 chapter shall be pooled and the rates shall be blended across
3 19 all members of the pool.
3 20 2. The governing structure of a pool may create tiers
3 21 within the pool based on the experience of members. Such
3 22 tiers shall be designed in compliance with the requirements of
3 23 chapter 513B. The governing structure of a pool may establish
3 24 criteria that limits the movement of members between tiers.
3 25 All tiers created within a pool shall be phased out within two
3 26 years of the organization of the pool.
3 27 Sec. 9. NEW SECTION. 513E.9 REPORTS.
3 28 Prior to the effective date of health insurance or health
3 29 care benefits offered by a pool, and each July 1 thereafter, a
3 30 pool shall file a report with the commissioner that contains
3 31 all of the following information:
3 32 1. The number of individuals enrolled in the pool.
3 33 2. The geographic region that the pool intends to cover.
3 34 3. The number of health benefit plans offered.
3 35 4. A description of the benefits available under each
4 1 health benefit plan offered.
4 2 5. A description of the premium structure, including any
4 3 copayments or deductibles, of each health benefit plan
4 4 offered.
4 5 6. Evidence that the pool is in compliance with chapter
4 6 513B.
4 7 7. Samples of marketing information used by the pool,
4 8 including a telephone number where the governing structure of
4 9 the pool can be contacted.
4 10 8. A list of all administrative fees charged to members of
4 11 the pool.
4 12 Sec. 10. NEW SECTION. 513E.10 ENFORCEMENT.
4 13 1. A pool must register with the commissioner prior to
4 14 offering health insurance or health care benefits and each
4 15 July 1 thereafter on a form prescribed by the commissioner by
4 16 rule.
4 17 2. The commissioner shall enforce this chapter and shall
4 18 adopt rules deemed necessary for the administration and
4 19 enforcement of this chapter in accordance with chapter 17A.
4 20 3. The commissioner may charge pools an annual
4 21 registration fee sufficient to meet the costs of performing
4 22 the commissioner's duties under this chapter.
4 23 EXPLANATION
4 24 This bill authorizes the formation of voluntary health care
4 25 purchasing pools by certain employers.
4 26 The bill creates a new Code chapter 513E that provides that
4 27 an employer voluntary health care purchasing pool is a group
4 28 of employers who join together for the purpose of negotiating
4 29 to purchase and purchasing health insurance or health care
4 30 benefits for their employees. A "small employer" is defined
4 31 as a person actively engaged in business, who on at least 50
4 32 percent of the employer's working days during the preceding
4 33 year employed not less than two and not more than 50 full=
4 34 time equivalent eligible employees. The definition of "small
4 35 employer" is the same as that contained in Code chapter 513B
5 1 relating to small group health coverage. An employer is
5 2 defined as a small employer or an employer engaging in a
5 3 business licensed, certified, or registered as a health care
5 4 facility under Code chapter 135C, an assisted living program
5 5 under Code chapter 231C, or a child care facility under Code
5 6 chapter 237A.
5 7 The bill allows the formation of such pools notwithstanding
5 8 other laws in this state that may prohibit the creation of
5 9 such a group.
5 10 The bill provides that participants in a pool shall live
5 11 within a common geographic region, be employed in a similar
5 12 occupation, or share other common factors as approved by the
5 13 commissioner of insurance.
5 14 The bill provides that a pool shall have a governing
5 15 structure that is controlled by members of the pool and that
5 16 administers the pool, reviews and evaluates bids for the
5 17 provision of health insurance or health care benefits,
5 18 determines criteria for joining and withdrawing from the pool,
5 19 and may design incentives for healthy lifestyle and health
5 20 promotion programs and uniform entrance standards for
5 21 membership in the pool. The bill also requires the governing
5 22 structure to provide as much choice in health care plans
5 23 available to members as is financially feasible and allows the
5 24 governing structure to charge a fee for the administrative
5 25 costs of the pool.
5 26 The bill sets requirements for an annual open enrollment
5 27 period and requires a pool to reach and maintain an enrolled
5 28 population of at least 1,000 covered lives within six months
5 29 after formation of the pool or else lose the applicability of
5 30 the new chapter to coverage purchased by the pool.
5 31 The bill allows the governing structure to set a minimum
5 32 term of membership in a pool during which a member is not
5 33 permitted to withdraw from the pool without paying a penalty.
5 34 The bill requires that the experience of a pool shall be
5 35 pooled. The bill also allows the governing structure of a
6 1 pool to create tiers within the pool based on the experience
6 2 of its members although all such tiers established must be
6 3 phased out within two years of the pool's creation.
6 4 The bill requires a pool to file a report with the
6 5 commissioner of insurance prior to the effective date of
6 6 coverage offered by the pool, and every July 1 thereafter,
6 7 that contains information specified in the bill.
6 8 The bill provides that a pool must register with the
6 9 commissioner of insurance prior to offering health insurance
6 10 or health care benefits, and each July 1 thereafter, and may
6 11 be charged a registration fee by the commissioner to cover the
6 12 commissioner's costs of administering and enforcing the new
6 13 Code chapter. The commissioner has the power to enforce the
6 14 new Code chapter and to adopt rules deemed necessary to
6 15 administer and enforce the new Code chapter.
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