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: 5 TLSB 5649XS 81 6 av/sh/8 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. 6 26 LSB 5649XS 81 6 27 av:rj/sh/8