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: 4 TLSB 2959YH 81 5 av/cf/24 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. 6 16 LSB 2959YH 81 6 17 av:rj/cf/24