Senate File 2261 - Introduced
SENATE FILE
BY HATCH
Passed Senate, Date Passed House, Date
Vote: Ayes Nays Vote: Ayes Nays
Approved
A BILL FOR
1 An Act creating a small business and school district health care
2 reinsurance program for certain health care claims and making
3 an appropriation from the healthy Iowans tobacco trust.
4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
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PAG LIN
1 1 Section 1. NEW SECTION. 513B.13A SMALL BUSINESS AND
1 2 SCHOOL DISTRICT HEALTH CARE REINSURANCE PROGRAM.
1 3 1. DEFINITIONS.
1 4 As used in this section, unless the context otherwise
1 5 requires:
1 6 a. "Fund" means the small business and school district
1 7 health carrier reinsurance fund.
1 8 b. "Qualified carrier" means a carrier, as defined in
1 9 section 513B.2, that meets the requirements contained in
1 10 subsection 4 of this section.
1 11 c. "School district group health insurance plan" means a
1 12 group health insurance plan that provides health insurance
1 13 coverage for employees of a school district, including plans
1 14 authorized under chapter 509A.
1 15 d. "Small business" means a person actively engaged in
1 16 business who, on at least fifty percent of the business's
1 17 working days during the preceding year, employed not less than
1 18 two and not more than twenty=five full=time equivalent
1 19 eligible employees. In determining the number of eligible
1 20 employees, businesses which are affiliated businesses or which
1 21 are eligible to file a combined tax return for purposes of
1 22 state taxation are considered one business employer.
1 23 e. "Small business group health insurance plan" means a
1 24 group health insurance plan that provides health insurance
1 25 coverage for employees of a small business.
1 26 2. REINSURANCE FUND.
1 27 a. A small business and school district health care
1 28 reinsurance fund is created as a separate fund in the state
1 29 treasury under the control of the commissioner of insurance.
1 30 b. The treasurer of state shall act as custodian of the
1 31 fund and shall disburse amounts contained in the fund as
1 32 directed by the commissioner.
1 33 c. The commissioner shall keep accounts in relation to the
1 34 appropriation of moneys to the fund and all amounts of
1 35 approved vouchers for reimbursements to qualified carriers
2 1 chargeable to the fund.
2 2 3. REINSURANCE PROGRAM.
2 3 a. A reinsurance program is created in the insurance
2 4 division of the department of commerce to administer the fund
2 5 and to make expenditures from the fund pursuant to this
2 6 section.
2 7 b. Moneys in the fund shall be used to reimburse a
2 8 qualified carrier that offers a small business group health
2 9 insurance plan or a school district group health insurance
2 10 plan in which at least eighty=five percent of the eligible
2 11 employees of the small business or the school district
2 12 participate, for certain claims paid by the qualified carrier.
2 13 The amount of reimbursement shall be fifty percent of the cost
2 14 of each claim that amounts to at least twenty=five thousand
2 15 dollars but not more than one hundred thousand dollars and
2 16 that is paid by a qualified carrier under such a plan in a
2 17 year.
2 18 c. The commissioner shall submit an annual report not
2 19 later than January 1 to the governor, the general assembly,
2 20 and the legislative services agency evaluating the fund and
2 21 reinsurance program, including but not limited to
2 22 consideration of the factors contained in subsection 5,
2 23 paragraph "b", summarizing the status of the fund and
2 24 reinsurance program, and proposing modifications to or
2 25 suspension of the operation of the fund and reinsurance
2 26 program as deemed necessary by the commissioner.
2 27 4. QUALIFIED CARRIERS.
2 28 a. In order to qualify for participation in the
2 29 reinsurance program for the first time, a carrier shall
2 30 certify to the commissioner that the carrier will immediately
2 31 reduce its base premium rates or otherwise demonstrate to the
2 32 commissioner that the carrier will immediately effectively
2 33 reduce premiums, according to accepted actuarial guidelines
2 34 adopted by the commissioner by rule under chapter 17A, for all
2 35 small business group health insurance plans or school district
3 1 group health insurance plans offered by the carrier for the
3 2 plan benefit year in an amount that reflects the estimated
3 3 reimbursement the carrier will receive from participating in
3 4 the reinsurance program during that plan benefit year, as
3 5 determined by the commissioner according to accepted actuarial
3 6 guidelines adopted by rule under chapter 17A.
3 7 b. In order to qualify for continued participation in the
3 8 reinsurance program, a carrier shall certify to the
3 9 commissioner that for the plan benefit year for which
3 10 reimbursement from the fund is claimed, the carrier reduced
3 11 its base premium rates or otherwise demonstrate to the
3 12 commissioner that the carrier effectively reduced premiums,
3 13 according to accepted actuarial guidelines adopted by the
3 14 commissioner by rule under chapter 17A, for all small business
3 15 group health insurance plans or school district group health
3 16 insurance plans offered by the carrier for that plan benefit
3 17 year.
3 18 c. A qualified carrier may claim reimbursement from the
3 19 fund for the cost of eligible claims annually, by filing, with
3 20 the commissioner, a claim in a form prescribed by the
3 21 commissioner by rule.
3 22 5. MONITORING AND EVALUATION.
3 23 a. The commissioner shall develop and implement criteria
3 24 to monitor and evaluate the fund and reinsurance program on an
3 25 ongoing basis and may make recommendations to the general
3 26 assembly, including proposed modifications to or suspension of
3 27 the operation of the fund and reinsurance program.
3 28 b. In monitoring and evaluating the reinsurance program,
3 29 the commissioner shall consider such factors as the population
3 30 whose claims are being reimbursed by the reinsurance program,
3 31 the number and percentage of carriers electing to utilize the
3 32 reinsurance program, health care reform measures implemented
3 33 in the state, premium costs of small business group health
3 34 insurance or school district group health insurance plans
3 35 offered by carriers that participate in the reinsurance
4 1 program compared to carriers that do not, and other factors
4 2 deemed relevant by the commissioner.
4 3 Sec. 2. APPROPRIATION. There is appropriated annually
4 4 from the healthy Iowans tobacco trust created in section 12.65
4 5 to the insurance division of the department of commerce the
4 6 sum of forty million dollars for the purpose of establishing
4 7 the small business and school district health care reinsurance
4 8 program and fund. Notwithstanding section 12C.7, subsection
4 9 2, interest or earnings on moneys deposited in the fund shall
4 10 be credited to the fund. Notwithstanding section 8.33, moneys
4 11 credited to the fund shall not revert to the general fund of
4 12 the state at the close of a fiscal year.
4 13 EXPLANATION
4 14 This bill creates a small business and school district
4 15 health care reinsurance program for health care claims made
4 16 under small business or school district group health insurance
4 17 plans.
4 18 The bill provides reimbursement of certain claims paid by
4 19 qualified insurance carriers under group health insurance
4 20 plans that provide health insurance to a small business, which
4 21 employs two to 25 full=time equivalent employees, or to a
4 22 school district.
4 23 The reinsurance fund is created as a separate fund in the
4 24 state treasury under the control of the commissioner of
4 25 insurance. An appropriation of $40 million is made annually
4 26 from the healthy Iowans tobacco trust of the state to the
4 27 insurance division of the department of commerce for the
4 28 purpose of establishing the reinsurance program and fund.
4 29 The reinsurance program is created in the insurance
4 30 division of the department of commerce to administer the
4 31 reinsurance fund and to make expenditures from the fund.
4 32 The reinsurance program is required to reimburse a
4 33 qualified carrier that offers a small business or school
4 34 district group health insurance plan, in which at least 85
4 35 percent of the eligible employees of the small business or the
5 1 school district participate, for certain claims paid. The
5 2 reimbursement amount is 50 percent of the cost of each claim,
5 3 of at least $25,000 but not more than $100,000, which is paid
5 4 by a qualified carrier under such a plan each year.
5 5 For the purposes of the bill, a "carrier" means a carrier
5 6 under Code section 513B.2, which is an entity subject to the
5 7 insurance laws and regulations of this state, or subject to
5 8 the jurisdiction of the commissioner, that contracts or offers
5 9 to contract to provide, deliver, arrange for, pay for, or
5 10 reimburse any of the costs of health care services, including
5 11 an insurance company offering sickness and accident plans, a
5 12 health maintenance organization, a nonprofit health service
5 13 corporation, or any other entity providing a plan of health
5 14 insurance, health benefits, or health services.
5 15 In order to qualify for participation in the reinsurance
5 16 program for the first time, a carrier is required to certify
5 17 to the commissioner that the carrier will immediately reduce
5 18 its base premium rates or otherwise demonstrate to the
5 19 commissioner that the carrier will immediately effectively
5 20 reduce premiums, according to accepted actuarial guidelines
5 21 adopted by the commissioner by rule under Code chapter 17A,
5 22 for all small business or school district group health
5 23 insurance plans offered by the carrier for the plan benefit
5 24 year in an amount that reflects the estimated reimbursement
5 25 the carrier will receive from participating in the reinsurance
5 26 program during that plan benefit year, as determined by the
5 27 commissioner according to accepted actuarial guidelines
5 28 adopted by rule under Code chapter 17A.
5 29 In order to qualify for continued participation in the
5 30 reinsurance program, a carrier shall certify to the
5 31 commissioner that for the plan benefit year for which
5 32 reimbursement from the fund is claimed, the carrier reduced
5 33 its base premium rates or otherwise demonstrate to the
5 34 commissioner that the carrier effectively reduced premiums,
5 35 according to accepted actuarial guidelines adopted by the
6 1 commissioner by rule under Code chapter 17A, for all small
6 2 business or school district group health insurance plans
6 3 offered by the carrier for that plan benefit year.
6 4 The commissioner is required to develop and implement
6 5 criteria to monitor and evaluate the reinsurance program and
6 6 may make recommendations to the general assembly, including
6 7 proposed modifications to or suspension of the operation of
6 8 the reinsurance fund and program. The criteria shall include
6 9 consideration of factors such as the population whose claims
6 10 are being reimbursed by the program, the number and percentage
6 11 of carriers electing to utilize the program, health care
6 12 reform measures implemented in the state, premium costs of
6 13 small business or school district group health insurance plans
6 14 offered by carriers that participate in the program compared
6 15 to carriers that do not, and other factors deemed relevant by
6 16 the commissioner.
6 17 The commissioner is required to submit an annual report by
6 18 January 1 to the governor, general assembly, and legislative
6 19 services agency evaluating the reinsurance fund and program,
6 20 including but not limited to consideration of the factors
6 21 involved in developing and implementing the reinsurance
6 22 program and fund, summarizing the status of the program and
6 23 fund, and proposing modifications to or suspension of the
6 24 operation of the fund and program as deemed necessary by the
6 25 commissioner.
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