House File 519 - Introduced HOUSE FILE BY STRUYK Passed House, Date Passed Senate, Date Vote: Ayes Nays Vote: Ayes Nays Approved A BILL FOR 1 An Act authorizing certain association group health care plans, 2 wellness initiatives, and providing an effective date. 3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 4 TLSB 1960YH 82 5 av/cf/24 PAG LIN 1 1 DIVISION I 1 2 ASSOCIATION GROUP HEALTH CARE PLANS 1 3 Section 1. Section 509.1, Code 2007, is amended by adding 1 4 the following new subsection: 1 5 NEW SUBSECTION. 7A. A policy of group health insurance 1 6 coverage, as defined in section 513B.2, issued by a small 1 7 employer carrier, as defined in section 513B.2, to a bona fide 1 8 association, subject to the following requirements: 1 9 a. The policy provides group health insurance coverage to 1 10 eligible employees of members of a bona fide association that 1 11 are small employers as defined in section 513B.2, and to the 1 12 spouses and dependents of such employees. 1 13 b. The policy is issued to a bona fide association. For 1 14 the purposes of this subsection, a bona fide association is an 1 15 association which meets all of the following requirements: 1 16 (1) The association is a trade, industry, or professional 1 17 association which is organized in good faith as a nonprofit 1 18 corporation under chapter 504 for purposes other than 1 19 obtaining insurance and has been in existence and actively 1 20 maintained for at least five continuous years at the time the 1 21 policy is issued. 1 22 (2) The association does not condition membership in the 1 23 association on the health status of employees of its members 1 24 or the health status of the spouses and dependents of such 1 25 employees. 1 26 (3) Group health insurance coverage offered by the 1 27 association is available to all eligible employees of its 1 28 members that are small employers as defined in section 513B.2 1 29 who choose to participate in the health insurance coverage 1 30 offered, and to the spouses and dependents of such employees, 1 31 regardless of the health status of such employees or their 1 32 spouses and dependents. 1 33 (4) Group health insurance coverage offered by the 1 34 association is available only to persons who are eligible 1 35 employees of a small employer as defined in section 513B.2 2 1 that is a member of the association, or to the spouses or 2 2 dependents of such employees. 2 3 Sec. 2. Section 509.1, subsection 8, unnumbered paragraph 2 4 1, Code 2007, is amended to read as follows: 2 5 A policy issued to a resident of this state under a group 2 6 life, accident, or health insurance policy issued to a group 2 7 other than one described in subsections 1 through77A, 2 8 subject to the following requirements: 2 9 Sec. 3. Section 513B.2, subsection 6, paragraph a, 2 10 subparagraph (3), Code 2007, is amended by striking the 2 11 subparagraph and inserting in lieu thereof the following: 2 12 (3) The coverages are provided by a policy of group health 2 13 insurance coverage through a bona fide association as provided 2 14 in section 509.1, subsection 7A, which meets the requirements 2 15 for a class of business under section 513B.4. A small 2 16 employer carrier may condition coverages under such a policy 2 17 of group health insurance coverage on any of the following 2 18 requirements: 2 19 (a) Minimum levels of participation by employees of each 2 20 member of a bona fide association that offers the coverage to 2 21 its employees. 2 22 (b) Minimum levels of contribution by each member of a 2 23 bona fide association that offers the coverage to its 2 24 employees. 2 25 (c) A specified policy term, subject to annual premium 2 26 rate adjustments as permitted by section 513B.4. 2 27 Sec. 4. Section 513B.2, subsection 6, paragraph a, Code 2 28 2007, is amended by adding the following new subparagraph: 2 29 NEW SUBPARAGRAPH. (4) The coverages are provided by a 2 30 policy of group health insurance coverage through two or more 2 31 bona fide associations as provided in section 509.1, 2 32 subsection 7A, which a small employer carrier has aggregated 2 33 as a distinct grouping that meets the requirements for a class 2 34 of business under section 513B.4. After a distinct grouping 2 35 of bona fide associations is established as a class of 3 1 business, the small group carrier shall not remove a bona fide 3 2 association from the class based on the claims experience of 3 3 that association. A small employer carrier may condition 3 4 coverages under such a policy of group health insurance 3 5 coverage on any of the following requirements: 3 6 (a) Minimum levels of participation by employees of each 3 7 member of a bona fide association in the class that offers the 3 8 coverage to its employees. 3 9 (b) Minimum levels of contribution by each member of a 3 10 bona fide association in the class that offers the coverage to 3 11 its employees. 3 12 (c) A specified policy term, subject to annual premium 3 13 rate adjustments as permitted by section 513B.4. 3 14 Sec. 5. Section 513B.2, subsection 6, paragraph b, Code 3 15 2007, is amended to read as follows: 3 16 b. A small employer carrier may establishno more than two3 17 additional groupings under each of the subparagraphs in 3 18 paragraph "a" on the basis of underwriting criteria which are 3 19 expected to produce substantial variation in the health care 3 20 costs. 3 21 DIVISION II 3 22 WELLNESS INITIATIVES 3 23 Sec. 6. Section 513B.4, Code 2007, is amended by adding 3 24 the following new subsection: 3 25 NEW SUBSECTION. 6. Notwithstanding subsection 4, a small 3 26 employer carrier may offer to transfer a small employer into a 3 27 different class of business with a lower index rate based upon 3 28 claims experience, implementation of managed care or wellness 3 29 programs, or health status improvement of the small employer 3 30 since issue. 3 31 Sec. 7. NEW SECTION. 513B.4B SMALL EMPLOYER INCENTIVES 3 32 == SUSPENSION OR MODIFICATION OF PREMIUM RATE RESTRICTIONS. 3 33 1. In order to encourage voluntary participation in 3 34 wellness or disease management programs, a small employer 3 35 carrier may offer premium credits or discounts to a small 4 1 employer for the benefit of eligible employees of that small 4 2 employer who participate in such a program. An employee shall 4 3 not be penalized in any way for not participating in such a 4 4 program. 4 5 2. The commissioner shall adopt, by rule or order, 4 6 provisions allowing suspension or modification of premium rate 4 7 restrictions to enable a small employer carrier to provide 4 8 premium credits or discounts to a small employer based on 4 9 measurable reductions in costs of that small employer, 4 10 including but not limited to tobacco use cessation, 4 11 participation in established wellness or disease management 4 12 programs, and reduced administrative or distribution costs. 4 13 DIVISION III 4 14 EFFECTIVE DATE 4 15 Sec. 8. EFFECTIVE DATE. This Act, being deemed of 4 16 immediate importance, takes effect upon enactment. 4 17 EXPLANATION 4 18 This bill authorizes certain association group health care 4 19 plans, and wellness initiatives. 4 20 DIVISION I == ASSOCIATION GROUP HEALTH CARE PLANS. The 4 21 bill creates Code section 509.1, subsection 7A, which 4 22 authorizes issuance of a group health insurance policy issued 4 23 by a small employer carrier, as defined in Code section 4 24 513B.2, to a bona fide association to provide health insurance 4 25 coverage to employees of association members and to the 4 26 spouses and dependents of such employees. 4 27 The bill defines what constitutes a bona fide association 4 28 to whom such a policy may be issued and requires that the 4 29 insurance offered be available only to employees and their 4 30 spouses and dependents, of association members which are small 4 31 employers as defined in Code section 513B.2. 4 32 The bill requires that a bona fide association for the 4 33 purposes of this type of policy must be a trade, industry, or 4 34 professional association which is organized in good faith as a 4 35 nonprofit corporation under Code chapter 504 for purposes 5 1 other than obtaining insurance and has been in existence and 5 2 actively maintained for at least five continuous years at the 5 3 time the policy is issued; not condition membership in the 5 4 association on the health status of employees of members or 5 5 their spouses or dependents; make coverage offered by the 5 6 association available to all eligible employees and their 5 7 spouses and dependents, of its members that are small 5 8 employers who choose to participate in the coverage; and make 5 9 the coverage offered available only to persons who are 5 10 eligible employees and their spouses and dependents, of a 5 11 small employer that is a member of the association. 5 12 For the purposes of Code section 509.1, subsection 7A, a 5 13 "small employer" means a person actively engaged in business 5 14 who, on at least 50 percent of the employer's working days 5 15 during the preceding year, employed not less than two and not 5 16 more than 50 full=time equivalent, eligible employees. 5 17 The bill amends Code section 513B.2, subsection 6, 5 18 paragraph "a", to provide that coverages provided by a group 5 19 health insurance policy through a bona fide association 5 20 pursuant to Code section 509.1, subsection 7A, can constitute 5 21 a class of business and a small employer carrier may condition 5 22 coverages under such a policy on minimum levels of 5 23 participation by employees of each association member, minimum 5 24 levels of contribution by each association member that offers 5 25 the coverage to its employees, and a specified policy term, 5 26 subject to annual premium rate adjustments as permitted by 5 27 Code section 513B.4. 5 28 Code section 513B.2, subsection 6, paragraph "a", is also 5 29 amended to provide that coverages provided by a group health 5 30 insurance policy through two or more bona fide associations as 5 31 provided in Code section 509.1, subsection 7A, which a small 5 32 employer carrier has aggregated as a distinct grouping can 5 33 constitute a class of business and a small employer carrier 5 34 may condition coverages under such a policy as set forth 5 35 above. A small employer carrier cannot remove a bona fide 6 1 association from such a class based on the claims experience 6 2 of that association. 6 3 Code section 513B.2, subsection 6, paragraph "b", is 6 4 amended to allow a small employer carrier to establish more 6 5 than two additional groupings as classes of business under 6 6 Code section 513B.2, subsection 6, paragraph "a", on the basis 6 7 of underwriting criteria which are expected to produce 6 8 substantial variation in the health care costs. 6 9 DIVISION II == WELLNESS INITIATIVES. Code section 513B.4 6 10 is amended to allow a small employer carrier to transfer a 6 11 small employer into a different class of business with a lower 6 12 index rate based upon claims experience, implementation of 6 13 managed care or wellness programs, or health status 6 14 improvement of the small employer since issuance of the 6 15 policy. 6 16 New Code section 513B.4B allows a small employer carrier to 6 17 offer premium credits or discounts to a small employer for the 6 18 benefit of eligible employees of that employer who voluntarily 6 19 participate in wellness or disease management programs. The 6 20 bill requires the commissioner of insurance to adopt rules or 6 21 orders allowing suspension or modification of premium rate 6 22 restrictions to enable a small employer carrier to provide 6 23 such premium credits or discounts to a small employer based on 6 24 measurable reductions in costs of that small employer, 6 25 including but not limited to tobacco use cessation, 6 26 participation in established wellness or disease management 6 27 programs, and reduced administrative or distribution costs. 6 28 The bill prohibits an employee from being penalized in any way 6 29 for not participating in a wellness or disease management 6 30 program. 6 31 DIVISION III == EFFECTIVE DATE. The bill takes effect upon 6 32 enactment. 6 33 LSB 1960YH 82 6 34 av:rj/cf/24