S.F. _____ DIVISION I 1 IOWA HEALTH BENEFIT EXCHANGE 2 Section 1. NEW SECTION . 514M.1 Short title. 3 This Act shall be known and may be cited as the “Iowa Health 4 Benefit Exchange Act” . 5 Sec. 2. NEW SECTION . 514M.2 Findings. 6 The general assembly finds the following: 7 1. The cost of health insurance for individuals and 8 employers in Iowa is increasing. 9 2. The cost of health insurance for state and local 10 governments in Iowa is increasing. 11 3. The number of uninsured and underinsured persons in Iowa 12 is increasing. 13 4. The federal Patient Protection and Affordable Care 14 Act, Pub. L. No. 111-148, as amended by the federal Health 15 Care and Education Reconciliation Act of 2010, Pub. L. No. 16 111-152, requires each state, by January 1, 2014, to establish 17 an American health benefit exchange that facilitates the 18 purchase of qualified health plans by qualified individuals 19 and qualified small employers, as specified, and meets certain 20 other requirements. The federal Act also requires each state 21 to inform the secretary by January 1, 2013, that the state has 22 the ability to implement the exchange by January 1, 2014. 23 5. The establishment of the Iowa health benefit exchange 24 provides an opportunity to increase access to health care, 25 expand health care coverage, lower the costs of health care, 26 and provide the foundation for a sustainable health care system 27 for Iowa citizens and employers. 28 Sec. 3. NEW SECTION . 514M.3 Purpose and intent. 29 It is the purpose of this chapter to do all of the following: 30 1. Enact the necessary state laws to be consistent with the 31 federal Act. 32 2. Provide for the establishment of an American health 33 benefit exchange as required by the federal Act to facilitate 34 the purchase and sale of qualified health benefit plans in 35 -1- LSB 2121SC (2) 84 pf:av/rj 1/ 32

S.F. _____ the individual market in this state and to provide for the 1 establishment of a small business health options program, known 2 as a small business health options program exchange, to assist 3 qualified small employers in this state in facilitating the 4 enrollment of their employees in qualified health benefit plans 5 offered in the small group market. 6 3. Reduce the number of uninsured Iowans by creating an 7 organized, transparent, and easy-to-navigate health insurance 8 marketplace with low administrative costs that offers a 9 choice of high-value health benefit plans for individuals and 10 employers. 11 4. Provide qualified individuals and employers with the 12 ability to claim available federal tax credits and cost-sharing 13 subsidies, and to meet the personal responsibility requirements 14 imposed under the federal Act. 15 Sec. 4. NEW SECTION . 514M.4 Definitions. 16 As used in this chapter, unless the context otherwise 17 requires: 18 1. “Board” means the board of directors of the Iowa health 19 benefit exchange. 20 2. “Commissioner” means the commissioner of insurance. 21 3. “Defined contribution arrangement health benefit plan” 22 means an employer group health benefit plan individually 23 selected by an employee of a small employer, within the 24 actuarial tier of platinum, gold, silver, or bronze, as defined 25 in the federal Act, selected by the small employer. 26 4. “Exchange” means the Iowa health benefit exchange 27 established pursuant to section 514M.5. 28 5. “Federal Act” means the federal Patient Protection and 29 Affordable Care Act, Pub. L. No. 111-148, as amended by the 30 federal Health Care and Education Reconciliation Act of 2010, 31 Pub. L. No. 111-152, and any amendments thereto, or regulations 32 or guidance issued under, those acts. 33 6. a. “Health benefit plan” means a policy, contract, 34 certificate, or agreement offered or issued by a health carrier 35 -2- LSB 2121SC (2) 84 pf:av/rj 2/ 32

S.F. _____ to provide, deliver, arrange for, pay for, or reimburse any of 1 the costs of health care services. 2 b. “Health benefit plan” does not include any of the 3 following: 4 (1) Coverage only for accident, or disability income 5 insurance, or any combination thereof. 6 (2) Coverage issued as a supplement to liability insurance. 7 (3) Liability insurance, including general liability 8 insurance and automobile liability insurance. 9 (4) Workers’ compensation or similar insurance. 10 (5) Automobile medical payment insurance. 11 (6) Credit-only insurance. 12 (7) Coverage for on-site medical clinics. 13 (8) Other similar insurance coverage, specified in federal 14 regulations issued pursuant to Tit. XXVII of the federal Public 15 Health Service Act, as enacted by the federal Health Insurance 16 Portability and Accountability Act of 1996, Pub. L. No. 17 104-191, and amended by the federal Act, under which benefits 18 for health care services are secondary or incidental to other 19 insurance benefits. 20 c. “Health benefit plan” does not include any of the 21 following benefits if they are provided under a separate 22 policy, certificate, or contract of insurance or are otherwise 23 not an integral part of the plan: 24 (1) Limited scope dental or vision benefits. 25 (2) Benefits for long-term care, nursing home care, home 26 health care, community-based care, or any combination thereof. 27 (3) Other similar, limited benefits specified in federal 28 regulations issued pursuant to the federal Health Insurance 29 Portability and Accountability Act of 1996, Pub. L. No. 30 104-191. 31 d. “Health benefit plan” does not include any of the 32 following benefits if the benefits are provided under a 33 separate policy, certificate, or contract of insurance, there 34 is no coordination between the provision of the benefits 35 -3- LSB 2121SC (2) 84 pf:av/rj 3/ 32

S.F. _____ and any exclusion of benefits under any group health plan 1 maintained by the same plan sponsor, and the benefits are paid 2 with respect to an event without regard to whether benefits are 3 provided with respect to such an event under any group health 4 plan maintained by the same plan sponsor: 5 (1) Coverage only for a specified disease or illness. 6 (2) Hospital indemnity or other fixed indemnity insurance. 7 e. “Health benefit plan” does not include any of the 8 following if offered as a separate policy, certificate, or 9 contract of insurance: 10 (1) Medicare supplemental health insurance as defined under 11 section 1882(g)(1) of the federal Social Security Act. 12 (2) Coverage supplemental to the coverage provided under 10 13 U.S.C. ch. 55, by the civilian health and medical program of 14 the uniformed services. 15 (3) Supplemental coverage similar to that provided under a 16 group health plan. 17 7. “Health carrier” means an entity subject to the insurance 18 laws and rules of this state, or subject to the jurisdiction 19 of the commissioner, that contracts or offers to contract to 20 provide, deliver, arrange for, pay for, or reimburse any of 21 the costs of health care services, including an insurance 22 company offering sickness and accident plans, a health 23 maintenance organization, a nonprofit hospital or health 24 service corporation, or any other entity providing a plan of 25 health insurance, health benefits, or health services. 26 8. “Insurance producer” means a person required to be 27 licensed under chapter 522B to sell, solicit, or negotiate 28 insurance. 29 9. “Qualified dental plan” means a limited scope dental plan 30 that has been certified in accordance with section 514M.10. 31 10. “Qualified employer” means a small employer that 32 elects to make its full-time employees eligible for one or 33 more qualified health benefit plans offered through the small 34 business health options program exchange, and at the option of 35 -4- LSB 2121SC (2) 84 pf:av/rj 4/ 32

S.F. _____ the employer, some or all of its part-time employees, provided 1 that the employer does either of the following: 2 a. Has its principal place of business in this state and 3 elects to provide coverage through the small business health 4 options program exchange to all of its eligible employees 5 wherever employed. 6 b. Elects to provide coverage through the small business 7 health options program exchange to all of its eligible 8 employees who are principally employed in this state. 9 11. “Qualified health benefit plan” means a health benefit 10 plan that has in effect a certification that the plan meets the 11 criteria for certification described in section 1311(c) of the 12 federal Act and section 514M.10. 13 12. “Qualified individual” means an individual, including a 14 minor, who is all of the following: 15 a. Is seeking to enroll in a qualified health plan offered 16 to individuals through the exchange. 17 b. Is a resident of this state. 18 c. At the time of enrollment, is not incarcerated, other 19 than incarceration pending the disposition of charges. 20 d. Is, and is reasonably expected to be, for the entire 21 period for which enrollment is sought, a citizen or national of 22 the United States or an alien lawfully present in the United 23 States. 24 13. “Resident” means a person who is a resident of this 25 state for state income tax purposes. 26 14. “Secretary” means the secretary of the United States 27 department of health and human services. 28 15. “Small business health options program exchange” means 29 the small business health options program exchange established 30 under section 514M.9. 31 16. a. “Small employer” means an employer that employed an 32 average of one to fifty employees during the preceding calendar 33 year. 34 b. For the purposes of this subsection: 35 -5- LSB 2121SC (2) 84 pf:av/rj 5/ 32

S.F. _____ (1) All persons treated as a single employer under 1 subsection (b), (c), (m), or (o) of section 414 of the Internal 2 Revenue Code of 1986 shall be treated as a single employer. 3 (2) An employer and any predecessor employer shall be 4 treated as a single employer. 5 (3) All employees shall be counted, including part-time 6 employees and employees who are not eligible for coverage 7 through the employer. 8 (4) If an employer was not in existence throughout the 9 preceding calendar year, the determination of whether that 10 employer is a small employer shall be based on the average 11 number of employees that is reasonably expected that employer 12 will employ on business days in the current calendar year. 13 (5) An employer that makes enrollment in qualified health 14 plans available to its employees through the small business 15 health options program exchange, and would cease to be a 16 small employer by reason of an increase in the number of its 17 employees, shall continue to be treated as a small employer 18 for purposes of this chapter as long as it continuously makes 19 enrollment through the small business health options program 20 exchange available to its employees. 21 Sec. 5. NEW SECTION . 514M.5 Iowa health benefit exchange 22 established. 23 1. The Iowa health benefit exchange is established as a 24 nonprofit corporation under the purview of the office of the 25 governor. 26 2. The exchange shall operate under a plan of operation 27 established and approved under section 514M.8 and shall 28 exercise its powers through a board of directors established 29 under section 514M.6. The board shall implement and direct 30 the activities of the exchange, whose purpose is to create and 31 administer a state-based exchange, as described in section 1311 32 of the federal Act and this chapter. 33 3. The exchange shall facilitate the availability, choice, 34 and adoption of private health benefit plans to eligible 35 -6- LSB 2121SC (2) 84 pf:av/rj 6/ 32

S.F. _____ individuals and groups as described in this chapter and in the 1 federal Act. 2 4. The exchange shall make individual and small employer 3 group coverage available to Iowa residents no later than 4 January 1, 2014. 5 5. The exchange shall be considered a governmental body 6 for the purposes of chapter 21 and a government body for the 7 purposes of chapter 22. 8 Sec. 6. NEW SECTION . 514M.6 Board of directors. 9 1. There is a board of directors of the exchange which shall 10 carry out the powers and duties of the exchange as set forth in 11 this chapter. 12 2. The board of directors of the exchange shall consist 13 of seven voting members and two nonvoting members. The 14 voting members shall be appointed by the governor, subject to 15 confirmation by the senate. The governor shall designate one 16 voting member as chairperson and one as vice chairperson. The 17 nonvoting members shall be the commissioner of insurance and 18 the director of human services or their designees. 19 3. Each member of the board appointed by the governor shall 20 be a resident of this state and the composition of the voting 21 members of the board shall be in compliance with sections 22 69.16, 69.16A, and 69.16C. 23 4. The voting members of the board shall be appointed for 24 staggered terms of three years within sixty days after the 25 effective date of this Act and by December 15 of each year 26 thereafter. The initial terms of the voting members of the 27 board shall be staggered at the discretion of the governor. A 28 voting member of the board is eligible for reappointment. The 29 governor shall fill a vacancy on the board in the same manner 30 as the original appointment for the remainder of the term. A 31 voting member of the board may be removed by the governor for 32 misfeasance, malfeasance, willful neglect of duty, failure to 33 actively participate in the affairs of the board, or other 34 cause after notice and a public hearing unless the notice and 35 -7- LSB 2121SC (2) 84 pf:av/rj 7/ 32

S.F. _____ hearing are waived by the member in writing. 1 5. The voting members of the board shall include 2 representatives of consumers and small employers as well as 3 individuals that are knowledgeable about health insurance, 4 health finance, and health systems. 5 6. A voting member of the board shall not be an employee 6 of, a consultant to, a member of the board of directors of, 7 affiliated with, have an ownership interest in, or otherwise 8 be a representative of any health carrier, insurance producer 9 agency, insurance consultant organization, trade association of 10 insurers, or association offering health insurance coverage to 11 its members, while serving on the board. 12 7. Voting members of the board may be reimbursed from 13 the moneys of the exchange for expenses incurred by them as 14 members, but shall not be otherwise compensated by the exchange 15 for their services. 16 8. A majority of the voting members of the board constitutes 17 a quorum. The affirmative vote of a majority of the voting 18 members is necessary for any action taken by the board. The 19 majority shall not include a member who has a conflict of 20 interest and a statement by a member of a conflict of interest 21 is conclusive for this purpose. A vacancy in the membership 22 of the board does not impair the right of a quorum to exercise 23 the rights and perform the duties of the board. An action 24 taken by the board under this chapter may be authorized by 25 resolution at a regular or special meeting and each resolution 26 shall take effect immediately and need not be published or 27 posted. Meetings of the board shall be held at the call of 28 the chairperson or at the request of a majority of the voting 29 members. 30 9. The voting members of the board shall give bond as 31 required for public officers in chapter 64. 32 10. The voting members of the board are subject to and are 33 officials within the meaning of chapter 68B. 34 Sec. 7. NEW SECTION . 514M.7 Executive director —— staff. 35 -8- LSB 2121SC (2) 84 pf:av/rj 8/ 32

S.F. _____ 1. The voting members of the board shall meet, and within 1 forty-five days of their appointment to the board, appoint an 2 executive director to supervise the administrative affairs 3 and general management and operations of the exchange. The 4 executive director shall not be a member of the board, 5 shall serve at the pleasure of the board, and shall receive 6 compensation as fixed by the board. 7 2. The executive director of the exchange shall keep 8 a record of the proceedings of the board and shall be the 9 custodian of all books, documents, and papers filed with 10 the board, the minute book or journal of the board, and the 11 official seal of the board. The executive director may cause 12 copies to be made of minutes and other records and documents of 13 the board and may give certificates under the official seal of 14 the board that the copies are true copies, and persons dealing 15 with the board may rely upon the certificates. 16 3. The executive director shall, with the approval of the 17 board, do all of the following: 18 a. Plan, direct, coordinate, and execute administrative 19 functions of the exchange in conformity with the policies and 20 directives of the board. 21 b. Employ professional and clerical staff as necessary. 22 c. Report to the board on all operations under the executive 23 director’s control and supervision. 24 d. Prepare an annual budget and manage the administrative 25 expenses of the exchange. 26 e. Undertake any other activities necessary to implement the 27 powers and duties of the board. 28 Sec. 8. NEW SECTION . 514M.8 General requirements for the 29 exchange —— plan of operation. 30 1. The exchange shall be organized as a nonprofit 31 corporation and shall submit to the commissioner a plan 32 of operation for the exchange within ninety days after the 33 appointment of the board of directors. After notice and 34 hearing, the commissioner shall approve the plan of operation 35 -9- LSB 2121SC (2) 84 pf:av/rj 9/ 32

S.F. _____ if the plan is determined to be suitable to assure the fair, 1 reasonable, and equitable administration of the exchange and 2 to meet the requirements of federal and state law for a state 3 health benefit exchange. In addition to other requirements, 4 the plan of operation shall provide for all of the following: 5 a. The handling and accounting of assets and moneys of the 6 exchange, including the power to borrow money, and to establish 7 lines of credit and cash and investment accounts. 8 b. The amount and method of reimbursing members of the board 9 for expenses incurred by them as members. 10 c. Regular times and places for meetings of the board. 11 d. Records to be kept of all financial transactions, and 12 the annual audit and fiscal reporting to the secretary, the 13 governor, the commissioner, the general assembly, and the 14 public. 15 e. Hiring independent consultants as necessary. 16 f. Procedures and criteria detailing the implementation of 17 the activities and duties assigned to the exchange pursuant to 18 this chapter and applicable federal law. 19 g. Adoption of bylaws to regulate the affairs and the 20 conduct of the exchange’s business. 21 h. Maintenance of an office within the state at such place 22 or places as the exchange may designate. 23 i. The power to approve the use of trademarks, brand names, 24 seals, logos, and other similar instruments by participating 25 health carriers, employers, or organizations. 26 j. Additional provisions necessary or proper for the 27 execution of the powers and duties of the exchange. 28 k. The assessment of health carriers in the state to fund 29 the operation of the exchange as provided in section 514M.12. 30 2. The exchange has the power to enter into agreements with 31 other state and federal agencies. 32 3. The exchange shall do the following: 33 a. Beginning no later than January 1, 2014, make qualified 34 health benefit plans available to qualified individuals and 35 -10- LSB 2121SC (2) 84 pf:av/rj 10/ 32

S.F. _____ qualified employers and facilitate the purchase and sale of 1 such plans. 2 b. Beginning no later than January 1, 2014, provide for 3 the establishment of a small business health options program 4 exchange that is designed to assist qualified small employers 5 in this state in facilitating the enrollment of their employees 6 in qualified health benefit plans offered in the small group 7 market in this state. 8 c. Beginning no later than January 1, 2014, provide an 9 option for an eligible small employer to choose to participate 10 in a defined contribution arrangement health benefit plan made 11 available by the exchange. 12 d. Within sixty days of appointment of the board of 13 directors, begin to collaborate with the commissioner to 14 integrate the functions of the Iowa insurance information 15 exchange established in section 505.32 into the Iowa health 16 benefit exchange in order to ensure the most seamless 17 transition possible from an insurance information exchange 18 to the Iowa health benefit exchange within the time period 19 prescribed by the federal Act. 20 4. The exchange may contract with an eligible entity for 21 any of its functions described in this chapter, not otherwise 22 delegated to the commissioner or the board. An eligible 23 entity includes but is not limited to the department of public 24 health, the department of human services, or an entity that 25 has experience in individual and small group health insurance, 26 benefit administration, or other experience relevant to the 27 responsibilities of the exchange. However, a health carrier or 28 an affiliate of a health carrier is not an eligible entity for 29 the purposes of this subsection. 30 5. The exchange shall not make available any health benefit 31 plan that is not a qualified health benefit plan. 32 6. The exchange shall allow a health carrier to offer a 33 plan that provides limited scope dental benefits meeting the 34 requirements of section 9832(c)(2)(A) of the Internal Revenue 35 -11- LSB 2121SC (2) 84 pf:av/rj 11/ 32

S.F. _____ Code of 1986 through the exchange, either separately or in 1 conjunction with a qualified health benefit plan, if the plan 2 provides pediatric dental benefits meeting the requirements of 3 section 1302(b)(1)(J) of the federal Act. 4 7. The exchange or a health carrier offering health benefit 5 plans through the exchange shall not charge an individual a 6 fee or penalty for termination of coverage if the individual 7 enrolls in another type of minimum essential coverage because 8 the individual has become newly eligible for that coverage 9 or because the individual’s employer-sponsored coverage has 10 become affordable under the standards of the federal Act, to be 11 codified at section 36B(c)(2)(C) of the Internal Revenue Code 12 of 1986. 13 Sec. 9. NEW SECTION . 514M.9 Powers and duties of the 14 exchange. 15 1. The exchange shall, according to the provisions of this 16 chapter, applicable rules, and applicable federal laws and 17 regulations do all of the following: 18 a. Implement procedures for the certification, 19 recertification, and decertification of health benefit plans 20 as qualified health benefit plans, consistent with guidelines 21 developed by the secretary under section 1311(c) of the federal 22 Act and applicable state law. 23 b. Provide for the operation of a toll-free telephone 24 hotline to respond to requests for assistance. 25 c. Provide for enrollment periods, as determined by the 26 secretary under section 1311(c)(6) of the federal Act and 27 applicable state law. 28 d. Maintain an internet site through which enrollees, 29 employers, and prospective enrollees of qualified health 30 benefit plans, at a minimum, may obtain standardized 31 comparative information on such plans. In developing the 32 electronic clearinghouse, the board may require health carriers 33 participating in the exchange to make available and regularly 34 update an electronic directory of contracting health care 35 -12- LSB 2121SC (2) 84 pf:av/rj 12/ 32

S.F. _____ providers so individuals seeking coverage through the exchange 1 can search by health care provider name to determine which 2 health benefit plans in the exchange include that health 3 care provider in their network, and whether that health care 4 provider is accepting new patients for that particular health 5 benefit plan. 6 e. Assign a rating to each qualified health benefit plan 7 offered through the exchange in accordance with criteria 8 developed by the secretary under section 1311(c)(3) of the 9 federal Act, and determine the level of coverage of each 10 qualified health benefit plan in accordance with regulations 11 issued by the secretary under section 1302(d)(2)(A) of the 12 federal Act and applicable state law. 13 f. Utilize a standardized format for presenting health 14 benefit plan options in the exchange, including the use of the 15 uniform outline of coverage established under section 2715 of 16 the Public Health Service Act and applicable state law. 17 g. In accordance with section 1413 of the federal Act 18 and applicable state law, inform individuals of eligibility 19 requirements for the Medicaid program under Tit. XIX of the 20 federal Social Security Act, the children’s health insurance 21 program under Tit. XXI of the federal Social Security Act, or 22 any applicable state or local public program and if through 23 screening of an application by the exchange, the exchange 24 determines that any individual is eligible for any such 25 program, enroll that individual in that program. 26 h. Establish and make available by electronic means a 27 calculator to determine the actual cost of coverage after 28 application of any premium tax credit under the standards of 29 the federal Act to be codified at section 36B(c)(2)(C) of the 30 Internal Revenue Code of 1986 and any cost-sharing reduction 31 under section 1402 of the federal Act. 32 i. Establish a small business health options program 33 exchange through which individuals employed by qualified 34 employers may enroll in any qualified health benefit plan 35 -13- LSB 2121SC (2) 84 pf:av/rj 13/ 32

S.F. _____ offered through the small business health options program 1 exchange at the level of coverage specified by the employer. 2 In establishing a small business health options program 3 exchange, the exchange shall do all of the following: 4 (1) Provide consolidated billing and premium payment by 5 employers including detailed information to employers on health 6 benefit plans and costs chosen by their employees. 7 (2) Establish an electronic interface and facilitate 8 the flow of funds between health carriers, employers, and 9 employees, including subsidies and the use of free choice 10 vouchers as provided in the federal Act. 11 (3) Provide plan enrollment information to employers. 12 j. Establish guidelines consistent with procedures 13 established pursuant to the federal Act that allow insurance 14 producers to assist individuals and small employers in 15 purchasing qualified health benefit plans from the exchange 16 and receive a commission from the exchange for the services 17 provided by them. If an insurance producer receives a 18 commission from the carrier that issues a qualified health 19 benefit plan, the producer shall not collect a commission from 20 the exchange. 21 k. Subject to section 1411 of the federal Act and applicable 22 state law, grant a certification attesting that, for purposes 23 of the individual responsibility penalty under the standards 24 of the federal Act to be codified at section 5000A of the 25 Internal Revenue Code of 1986, an individual is exempt from 26 the individual responsibility requirement or from the penalty 27 imposed by that section because of any of the following: 28 (1) There is no affordable qualified health benefit plan 29 available through the exchange, or the individual’s employer, 30 covering the individual. 31 (2) The individual meets the requirements for any other 32 such exemption from the individual responsibility requirement 33 or penalty. 34 l. Transfer to the United States secretary of the treasury 35 -14- LSB 2121SC (2) 84 pf:av/rj 14/ 32

S.F. _____ all of the following: 1 (1) A list of the individuals who are issued a certification 2 under paragraph “k” , subparagraph (1), including the name and 3 taxpayer identification number of each individual. 4 (2) The name and taxpayer identification number of each 5 individual who was an employee of an employer but who was 6 determined to be eligible for the premium tax credit under 7 the standards of the federal Act to be codified at section 8 36B(c)(2)(C) of the Internal Revenue Code of 1986 because of 9 either of the following: 10 (a) The employer did not provide minimum essential health 11 benefits coverage. 12 (b) The employer provided the minimum essential health 13 benefits coverage, but it was determined under the standards of 14 the federal Act to be codified at section 36B(c)(2)(C) of the 15 Internal Revenue Code of 1986 to either be unaffordable to the 16 employee or not provide the required minimum actuarial value. 17 (3) The name and taxpayer identification number of all of 18 the following: 19 (a) Each individual who notifies the exchange under section 20 1411(b)(4) of the federal Act that the individual has changed 21 employers. 22 (b) Each individual who ceases coverage under a qualified 23 health benefit plan during a plan year and the effective date 24 of that cessation. 25 m. Provide to each employer the name of each employee of 26 the employer described in paragraph “l” , subparagraph (2), who 27 ceases coverage under a qualified health benefit plan during a 28 plan year and the effective date of the cessation. 29 n. Perform duties required of, or delegated to, the exchange 30 by the secretary, the United States secretary of the treasury, 31 or the commissioner related to determining eligibility for 32 premium tax credits, reduced cost-sharing, or individual 33 responsibility requirement exemptions. 34 o. Select entities qualified to serve as navigators 35 -15- LSB 2121SC (2) 84 pf:av/rj 15/ 32

S.F. _____ in accordance with section 1311(i) of the federal Act and 1 applicable state law and award grants to enable navigators to 2 do the following: 3 (1) Conduct public education activities for individuals 4 and small employers to raise awareness of the availability of 5 qualified health benefit plans. 6 (2) Distribute fair and impartial information concerning 7 enrollment in qualified health benefit plans, and the 8 availability of premium tax credits under the standards of 9 the federal Act to be codified at section 36B(c)(2)(C) of the 10 Internal Revenue Code of 1986, cost-sharing reductions under 11 section 1402 of the federal Act, federal employer health tax 12 credits, and state employer health tax credits and subsidies. 13 (3) Facilitate enrollment in qualified health benefit 14 plans. 15 (4) Provide referrals to the office of health insurance 16 consumer assistance established under the federal Act pursuant 17 to section 2793 of the federal Public Health Service Act 18 and the office of the commissioner or any other appropriate 19 state agency, for any enrollee with a grievance, complaint, 20 or question regarding the enrollee’s health benefit plan, 21 coverage, or a determination under that plan or coverage. 22 (5) Provide information in a manner that is culturally and 23 linguistically appropriate to the needs of the population being 24 served by the exchange. 25 p. In consultation with the commissioner, review the rate of 26 premium growth within the exchange and outside the exchange, 27 and consider the information in developing recommendations on 28 whether to continue limiting qualified employer status to small 29 employers. 30 q. Credit the amount of any free choice voucher to the 31 monthly premium of the plan in which a qualified employee is 32 enrolled, in accordance with section 10108 of the federal Act, 33 and collect the amount credited from the offering employer. 34 r. Consult with stakeholders who are relevant to carrying 35 -16- LSB 2121SC (2) 84 pf:av/rj 16/ 32

S.F. _____ out the activities required under this chapter including but 1 not limited to the following: 2 (1) Educated health care consumers who are individuals 3 that are knowledgeable about the health care system, have a 4 background or experience in making informed decisions regarding 5 health, medical, and scientific matters, and who are enrollees 6 in qualified health benefit plans. 7 (2) Individuals and entities with experience in 8 facilitating enrollment in qualified health benefit plans. 9 (3) Representatives of small businesses and self-employed 10 individuals. 11 (4) The department of human services. 12 (5) The commissioner. 13 (6) The department of public health. 14 (7) Advocates for enrolling hard-to-reach populations. 15 s. Seek and receive federal grants available pursuant 16 to section 1311 of the federal Act and other grant funding 17 available from private or government sources. 18 t. Require qualified health benefit plans to provide 19 information and make disclosures to enrollees required by state 20 and federal law. 21 u. Require qualified health benefit plans to implement 22 activities to reduce health care access disparities, including 23 the use of language services, community outreach, and cultural 24 competency training for employees of such plans. 25 v. Assist in the implementation of reinsurance and risk 26 adjustment mechanisms, as required by state and federal law. 27 w. Publicize the existence of the exchange, the eligibility 28 and enrollment requirements of the exchange, and the benefits 29 and advantages of purchasing coverage through the exchange. 30 x. Develop services that aid small employers in the 31 administration of their group health benefit plans. 32 y. Facilitate the development of cafeteria plans pursuant 33 to section 125 of the Internal Revenue Code of 1986, for use by 34 employers participating in the exchange. 35 -17- LSB 2121SC (2) 84 pf:av/rj 17/ 32

S.F. _____ z. Establish guidelines for determining what state licensure 1 requirements for insurance producers are applicable, if any, to 2 the exchange and to exchange employees and entities or persons 3 who are qualified as navigators. 4 aa. Examine methods to limit health benefit plan design 5 options to create adequate consumer choice and value, while 6 avoiding unnecessary, duplicative, and confusing plan designs. 7 ab. Encourage the development of health benefit plans that 8 promote wellness, preventative health care, and new innovations 9 in health care delivery systems that promote efficiency, curb 10 health care costs, and provide value to health care consumers. 11 ac. Develop strategies that encourage the participation of 12 health carriers in the exchange, including cooperatives and 13 multistate plans, that offer good value to consumers and have 14 high-quality ratings. 15 ad. Develop strategies to ensure the viability of the 16 exchange by minimizing adverse risk selection. 17 ae. Meet all of the following financial integrity 18 requirements: 19 (1) Keep an accurate accounting of all activities, 20 receipts, and expenditures of the exchange and annually submit 21 to the secretary, the governor, the commissioner, the general 22 assembly, and the public, a report concerning such accountings 23 as provided in section 514M.12. 24 (2) Fully cooperate with any investigation conducted by 25 the secretary pursuant to the secretary’s authority under the 26 federal Act and allow the secretary, in coordination with the 27 inspector general of the United States department of health and 28 human services to do all of the following: 29 (a) Investigate the affairs of the exchange. 30 (b) Examine the properties and records of the exchange. 31 (c) Require periodic reports in relation to the activities 32 undertaken by the exchange. 33 (3) In carrying out its activities under this chapter, not 34 use any funds intended for the administrative and operational 35 -18- LSB 2121SC (2) 84 pf:av/rj 18/ 32

S.F. _____ expenses of the exchange for staff retreats, promotional 1 giveaways, excessive executive compensation, or promotion of 2 federal or state legislative and regulatory modifications. 3 2. The exchange has the power to enter into agreements with 4 other state and federal agencies. 5 3. The exchange shall encourage cross-agency consultation 6 and coordination and shall consult regularly with the 7 commissioner, department of human services, department of 8 public health, and where appropriate, the attorney general, all 9 of which shall be required to lend expertise and resources to 10 the exchange as needed. 11 4. The exchange shall coordinate its activities with the 12 Iowa Medicaid enterprise of the department of human services, 13 the department of revenue, and the insurance division of the 14 department of commerce to ensure that the state fulfills the 15 requirements of the federal Act and to ensure that there is 16 a seamless integration of the functions of the exchange, the 17 Medicaid program, and the hawk-i program including eligibility 18 determinations and distribution of premium subsidies and other 19 cost-sharing assistance. 20 5. The exchange may enter into information-sharing 21 agreements with federal and state agencies and other state 22 exchanges to carry out its responsibilities under this chapter 23 provided such agreements include adequate protections with 24 respect to the confidentiality of the information to be shared 25 and comply with all state and federal laws and regulations. 26 6. The exchange may establish and manage a system of 27 aggregating all moneys paid as tax credits, premium subsidies, 28 and premium payments made by, or on behalf of, individuals 29 obtaining coverage through the exchange, including any premium 30 payments made by employers, enrollees, employees, unions, or 31 other organizations and paying those moneys to the health 32 carrier. 33 Sec. 10. NEW SECTION . 514M.10 Health benefit plan 34 certification. 35 -19- LSB 2121SC (2) 84 pf:av/rj 19/ 32

S.F. _____ 1. The exchange may certify a health benefit plan as a 1 qualified health benefit plan if the plan meets all of the 2 following criteria: 3 a. The plan provides the essential health benefit package 4 described in section 1302(a) of the federal Act, except that 5 the plan is not required to provide essential benefits that 6 duplicate the minimum benefits of qualified dental plans, as 7 provided in subsection 7, if all of the following occur: 8 (1) The exchange determines that at least one qualified 9 dental plan is available to supplement the plan’s coverage. 10 (2) The health carrier makes a prominent disclosure at the 11 time it offers the plan, in a form approved by the exchange, 12 that the plan does not provide the full range of essential 13 pediatric benefits and that qualified dental plans providing 14 those benefits and other dental benefits not covered by the 15 plan are offered through the exchange. 16 b. The premium rates and contract language have been 17 approved by the commissioner. 18 c. The plan provides at least a bronze level of coverage, 19 as that level is defined by the federal Act, unless the plan 20 is certified as a qualified catastrophic plan, meets the 21 requirements of the federal Act for catastrophic plans, and 22 will only be offered to individuals eligible for catastrophic 23 coverage. 24 d. The plan’s cost-sharing requirements do not exceed the 25 limits established under section 1302(c)(1) of the federal Act, 26 and if the plan is offered through the small business health 27 options program exchange, the plan’s deductible does not exceed 28 the limits established under section 1302(c)(2) of the federal 29 Act. 30 e. The health carrier offering the plan meets all of the 31 following criteria: 32 (1) Is licensed and in good standing to offer health 33 insurance coverage in this state. 34 (2) Has received form and rate prior approval from the 35 -20- LSB 2121SC (2) 84 pf:av/rj 20/ 32

S.F. _____ commissioner for that health benefit plan as required by 1 statute. 2 (3) Offers at least one qualified health benefit plan in 3 the silver level and at least one qualified health plan in the 4 gold level, as those levels are defined in the federal Act, 5 through each component of the exchange in which the health 6 carrier participates, where component refers to the small 7 business health options program exchange and to the exchange 8 for individual coverage. 9 (4) Charges the same premium rate for each qualified health 10 benefit plan without regard to whether the plan is offered 11 through the exchange and without regard to whether the plan 12 is offered directly from the health carrier or through an 13 insurance producer. 14 (5) Does not charge any termination of coverage fees or 15 penalties in violation of section 514M.8. 16 (6) Offers at least one qualified health benefit plan in the 17 silver level and at least one qualified health benefit plan in 18 the gold level, as those levels are defined in the federal Act, 19 outside the exchange, unless the health carrier does not offer 20 any health benefit plans outside the exchange. 21 (7) Complies with the regulations developed by the 22 secretary under section 1311(d) of the federal Act, applicable 23 state laws, and such other requirements as the exchange may 24 establish. 25 f. The plan meets the requirements of certification as 26 adopted by rule pursuant to this section and by the secretary 27 under section 1311(c) of the federal Act, which include but 28 are not limited to minimum standards in the areas of marketing 29 practices, network adequacy, essential community providers in 30 underserved areas, accreditation, quality improvement, uniform 31 enrollment forms and descriptions of coverage, and information 32 on quality measures for health benefit plan performance. 33 g. The exchange determines that making the health benefit 34 plan available through the exchange is in the interest of 35 -21- LSB 2121SC (2) 84 pf:av/rj 21/ 32

S.F. _____ qualified individuals and qualified employers in the state. 1 2. The exchange shall not exclude a health benefit plan from 2 certification for any of the following reasons: 3 a. On the basis that the plan is a fee-for-service plan. 4 b. Through the imposition of premium price controls. 5 c. On the basis that the health benefit plan provides 6 treatments necessary to prevent patients’ deaths in 7 circumstances the exchange determines are inappropriate or too 8 costly. 9 3. The exchange has the authority to limit participation in 10 the exchange, to the extent permitted by the federal Act and 11 by the United States department of health and human services, 12 to the health benefit plans that the exchange determines offer 13 the best value, meaning the best combination of price and 14 quality. In making a determination of which health benefit 15 plans offer the best value, the exchange should consider all 16 of the following: 17 a. Rates and rate increases of the health benefit plan. 18 b. Health care effectiveness data, and information set 19 and consumer assessment of health care providers and systems 20 scores. 21 c. Implementation of payment mechanisms by the plan to 22 reduce medical errors and preventable hospitalizations, reduce 23 disparities in access to and quality of health care, and 24 improve language access. 25 d. The extent to which cost-sharing creates barriers to 26 treatment for lower-income enrollees. 27 4. The exchange shall require each health carrier seeking 28 certification of a health benefit plan as a qualified health 29 benefit plan to do the following: 30 a. Provide notice of any proposed premium increase and a 31 justification for the increase to the exchange and to affected 32 policyholders before implementation of that increase. The 33 health carrier shall prominently post the information on its 34 internet site. The exchange shall take this information, along 35 -22- LSB 2121SC (2) 84 pf:av/rj 22/ 32

S.F. _____ with the information and the recommendations provided to the 1 exchange by the commissioner under the federal Act pursuant 2 to section 2794(b) of the federal Public Health Service Act 3 and applicable state law, into consideration when determining 4 whether to allow the health carrier to make health benefit 5 plans available through the exchange. 6 b. Make available to the public, in the format described in 7 paragraph “c” , and submit to the exchange, the secretary, and 8 the commissioner, accurate and timely disclosure of all of the 9 following: 10 (1) Claims payment policies and practices. 11 (2) Periodic financial disclosures. 12 (3) Data on enrollment. 13 (4) Data on disenrollment. 14 (5) Data on the number of claims that are denied. 15 (6) Data on rating practices. 16 (7) Information on cost-sharing and payments with respect 17 to any out-of-network coverage. 18 (8) Information on enrollee and participant rights under 19 Tit. I of the federal Act and applicable state law. 20 (9) Other information as determined appropriate by the 21 secretary, the exchange, or the commissioner. 22 c. The information required in paragraph “b” shall be 23 provided in plain language, as that term is defined in section 24 1311(e) of the federal Act, as amended by section 10104 of the 25 federal Act, and applicable state law. 26 5. The exchange shall permit individuals to learn, in a 27 timely manner upon the request of an individual, the amount 28 of cost-sharing, including deductibles, copayments, and 29 coinsurance, under the individual’s plan or coverage that the 30 individual would be responsible for paying with respect to the 31 furnishing of a specific item or service by a participating 32 provider. At a minimum, this information shall be made 33 available to the individual through an internet site and 34 through other means for individuals without access to the 35 -23- LSB 2121SC (2) 84 pf:av/rj 23/ 32

S.F. _____ internet. 1 6. The exchange shall not exempt any health carrier seeking 2 certification of a health benefit plan, regardless of the type 3 or size of the health carrier, from applicable state licensure 4 or solvency requirements and shall apply the criteria of this 5 section in a manner that assures a level playing field between 6 or among health carriers participating in the exchange. 7 7. a. The provisions of this chapter that are applicable 8 to qualified health benefit plans shall also apply to the 9 extent relevant to qualified dental plans except as modified in 10 accordance with the provisions of paragraphs “b” , “c” , and “d” 11 or by rules adopted by the exchange. 12 b. A health carrier shall be licensed to offer dental 13 coverage, but is not required to be licensed to offer other 14 health benefits. 15 c. A qualified dental plan shall be limited to dental and 16 oral health benefits, without substantially duplicating the 17 benefits typically offered by health benefit plans without 18 dental coverage and shall include, at a minimum, the essential 19 pediatric dental benefits prescribed by the secretary pursuant 20 to section 1302(b)(1)(J) of the federal Act, and such other 21 dental benefits as the exchange or the secretary may specify 22 by regulation or rule. 23 d. Health carriers may jointly offer a comprehensive plan 24 through the exchange in which the dental benefits are provided 25 by a health carrier through a qualified dental plan and the 26 other benefits are provided by a health carrier through a 27 qualified health benefit plan, provided that the plans are 28 priced separately and are also made available for purchase 29 separately at the same price. 30 Sec. 11. NEW SECTION . 514M.11 Advisory committees. 31 1. The board shall establish one or more advisory committees 32 consisting of representatives from the insurance industry, 33 producer organizations, consumer advocacy groups, labor unions, 34 employers, health care providers, and other interested parties. 35 -24- LSB 2121SC (2) 84 pf:av/rj 24/ 32

S.F. _____ The advisory committees shall meet when requested by the board. 1 2. An advisory committee may offer input to the board 2 regarding proposed rules, the plan of operation for the 3 exchange, and any other topics relevant to the exchange. 4 3. Public participation and comment, including written 5 comments, shall be encouraged by an advisory committee. 6 Sec. 12. NEW SECTION . 514M.12 Funding for the exchange —— 7 assessments —— annual financial report. 8 1. Funding to operate the exchange shall come from federal 9 and private grants and from assessment fees charged to health 10 carriers. The exchange shall charge an assessment fee to all 11 health carriers in this state, as necessary to support the 12 operations of the exchange as provided under this chapter. 13 No state funding shall be appropriated or allocated for the 14 operation or administration of the exchange. The assessment 15 shall provide for the sharing of exchange losses and expenses 16 on an equitable and proportionate basis among health carriers 17 in the state as provided in this section. 18 2. Following the close of each calendar year, the exchange 19 shall determine the net premiums and payments, the expenses 20 of administration, and the incurred losses of the exchange 21 for the year. The exchange shall certify the amount of any 22 net loss for the preceding calendar year to the commissioner 23 and director of revenue. Any loss shall be assessed by the 24 exchange to all health carriers in proportion to the health 25 carriers’ respective shares of total health insurance premiums 26 or payments for subscriber contracts received in Iowa during 27 the second preceding calendar year, or to their paid losses in 28 the year, coinciding with or ending during the calendar year 29 or on any other equitable basis as provided in the plan of 30 operation. In sharing losses, the exchange may abate or defer 31 in any part the assessment of a health carrier, if, in the 32 opinion of the board, payment of the assessment would endanger 33 the ability of the health carrier to fulfill its contractual 34 obligations. The exchange may also provide for an initial or 35 -25- LSB 2121SC (2) 84 pf:av/rj 25/ 32

S.F. _____ interim assessment against health carriers if necessary to 1 assure the financial capability of the exchange to meet the 2 incurred or estimated claims expenses or operating expenses 3 of the exchange until the next calendar year is completed. 4 Net gains, if any, shall be held at interest to offset future 5 losses or allocated to reduce future expenses of the exchange. 6 a. For purposes of this subsection, “total health insurance 7 premiums” and “payments for subscriber contracts” include, 8 without limitation, premiums or other amounts paid to or 9 received by a health carrier for individual and group health 10 benefit plan coverage provided under any chapter of the Code 11 or of any Iowa Acts, and “paid losses” includes, without 12 limitation, claims paid by a health carrier operating on a 13 self-funded basis for individual and group health benefit plan 14 coverage provided under any chapter of the Code or of any Iowa 15 Acts. 16 b. For purposes of calculating and conducting the 17 assessment, the exchange shall have the express authority to 18 require health carriers to report on an annual basis each 19 health carrier’s total health insurance premiums and payments 20 for subscriber contracts and paid losses. A health carrier is 21 liable for its share of the assessment calculated in accordance 22 with this section regardless of whether it participates in the 23 individual insurance market. 24 3. The exchange is subject to examination by the 25 commissioner. The exchange shall conduct periodic audits to 26 assure the general accuracy of the financial data submitted 27 to the exchange, and the exchange shall have an annual audit 28 of its operations made by an independent certified public 29 accountant. The results of that audit shall be provided to 30 the governor, the commissioner, the general assembly, and the 31 public. Not later than April 30 of each year, the board of 32 directors shall submit to the secretary, the governor, the 33 commissioner, the general assembly, and the public a financial 34 report for the preceding calendar year in a form approved by 35 -26- LSB 2121SC (2) 84 pf:av/rj 26/ 32

S.F. _____ the commissioner and in compliance with federal law. 1 4. The exchange is subject to oversight by the legislative 2 fiscal committee of the legislative council. Not later than 3 April 30 of each year, the board of directors shall submit to 4 the legislative fiscal committee a financial report for the 5 preceding year in a form approved by the committee. 6 5. The exchange is exempt from payment of all fees and 7 all taxes levied by this state or any of its political 8 subdivisions. 9 6. The exchange shall publish the average costs of 10 licensing, regulatory fees, and any other payments required by 11 the exchange, and the administrative costs of the exchange, on 12 the exchange internet site to educate consumers and employers 13 about the costs of operating the exchange. This information 14 shall include moneys lost to waste, fraud, and abuse. 15 Sec. 13. NEW SECTION . 514M.13 Annual exchange status 16 report. 17 1. Every year the board shall examine the operations of 18 the exchange and the demographics of the persons enrolled in 19 the exchange and submit a written exchange status report to 20 the secretary, the governor, the commissioner, the general 21 assembly, and the public. The exchange status report shall 22 include a review of the following: 23 a. The operation and administration of the exchange, 24 including but not limited to: 25 (1) Surveys and reports of health benefit plans available to 26 eligible individuals and employers and the experience of the 27 plans. 28 (2) Administrative costs, claims statistics, complaint 29 data, and goals defined and achieved by the board during the 30 preceding year. 31 b. Information about the experience of health benefit plans 32 available through the exchange including data on enrollees 33 inside the exchange and on enrollees purchasing health benefit 34 plans outside the exchange. 35 -27- LSB 2121SC (2) 84 pf:av/rj 27/ 32

S.F. _____ c. Any other significant observations regarding the 1 utilization of the individual exchange and the small business 2 health options program exchange. 3 2. The first exchange report shall be due on April 15, 2015, 4 and annually on that date thereafter. 5 3. On or before August 1, 2012, the board shall research, 6 investigate, produce, and submit one or more reports as 7 described in subsection 1 on the following topics: 8 a. Feasibility of merging the nongroup and small group 9 health insurance markets and risk pools, and the resulting 10 impact on premiums charged to individuals and small employer 11 groups. 12 b. Feasibility of establishing a multistate exchange and the 13 effects of a multistate exchange on health carriers and health 14 care consumers in the state. 15 c. Development of strategies to reduce health care costs, 16 such as encouraging the use of accountable care organizations 17 and the medical home model, and the effect of such changes on 18 health care costs and health insurance premiums for exchange 19 enrollees. 20 d. Development of strategies to avoid adverse risk selection 21 inside the exchange. 22 e. Feasibility of establishing a basic plan as described 23 in the federal Act for individuals whose income levels fall 24 between one hundred thirty-three percent and two hundred 25 percent of the federal poverty level based on the number of 26 people in the individual’s household as defined by the most 27 recently revised poverty income guidelines published by the 28 United States department of health and human services and the 29 possible impact of such a plan on the exchange, the health 30 insurance market, and health care consumers in the state. 31 f. Feasibility of incorporating certain 32 government-sponsored health benefit plans, such as state 33 employee plans and school district plans, in the exchange and 34 the possible impact on those plans, the exchange, and the 35 -28- LSB 2121SC (2) 84 pf:av/rj 28/ 32

S.F. _____ health insurance market in the state. 1 Sec. 14. NEW SECTION . 514M.14 Relation to other laws. 2 Nothing in this chapter, and no action taken by the exchange 3 pursuant to this chapter, shall be construed to preempt or 4 supersede the authority of the commissioner to regulate the 5 business of insurance in this state. Except as expressly 6 provided to the contrary in this chapter, all health carriers 7 offering qualified health benefit plans in this state shall 8 comply fully with all applicable health insurance laws of this 9 state and rules adopted and orders issued by the commissioner. 10 Sec. 15. EFFECTIVE UPON ENACTMENT. This division of this 11 Act, being deemed of immediate importance, takes effect upon 12 enactment. 13 DIVISION II 14 COORDINATING PROVISIONS 15 IOWA INSURANCE INFORMATION EXCHANGE 16 Sec. 16. REPEAL. Section 505.32, Code 2011, is repealed. 17 Sec. 17. EFFECTIVE DATE. This division of this Act takes 18 effect December 31, 2013. 19 EXPLANATION 20 This bill relates to establishment of an Iowa health benefit 21 exchange, and repeal of a provision establishing the Iowa 22 health insurance information exchange. 23 DIVISION I —— IOWA HEALTH BENEFIT EXCHANGE. Division I of 24 the bill contains new Code chapter 514M, which establishes the 25 Iowa health benefit exchange (exchange) to comply with the 26 requirement of the federal Patient Protection and Affordable 27 Care Act (PPACA) that each state establish a health benefit 28 exchange by January 1, 2014, to facilitate the purchase of 29 qualified health benefit plans by qualified individuals and 30 qualified small employers and meet other requirements specified 31 in state and federal law. 32 The exchange is established as a nonprofit corporation under 33 the purview of the governor. The exchange operates under 34 bylaws and a plan of operation approved by the commissioner of 35 -29- LSB 2121SC (2) 84 pf:av/rj 29/ 32

S.F. _____ insurance. The exchange is subject to the Iowa open meetings 1 and open records laws. 2 The exchange exercises its powers through a nine-member 3 board of directors, seven of whom are voting members and 4 are appointed by the governor and confirmed by the senate, 5 and the commissioner of insurance and director of human 6 services, or their designees, who are nonvoting members. The 7 composition of the board is subject to state requirements 8 of equality in political affiliation, gender balance, and 9 minority representation. The voting members of the board may 10 be reimbursed from the moneys of the exchange only for expenses 11 and do not receive any other compensation for their services. 12 The members of the board must be appointed by the governor 13 within 60 days after enactment of division I of the bill. The 14 plan of operation of the exchange must be submitted to the 15 commissioner within 90 days after the appointment of the board. 16 The board must meet, and within 45 days of their appointment, 17 appoint an executive director to supervise the administrative 18 affairs and general management and operations of the exchange. 19 The executive director may also employ professional and 20 clerical staff for the exchange as necessary. 21 Beginning no later than January 1, 2014, the exchange is 22 required to make qualified health benefit plans available 23 to qualified individuals and qualified employers, and 24 facilitate the purchase and sale of such plans; provide for 25 the establishment of a small business health options program 26 (SHOP) exchange to assist qualified small employers in Iowa in 27 facilitating the enrollment of their employees in qualified 28 health benefit plans offered in the small group market in this 29 state; and provide an option for an eligible small employer to 30 choose to participate in a defined contribution arrangement 31 health benefit plan made available by the exchange. Within 60 32 days of appointment of the board of directors, the exchange 33 is required to begin to collaborate with the commissioner of 34 insurance to integrate the functions of the Iowa insurance 35 -30- LSB 2121SC (2) 84 pf:av/rj 30/ 32

S.F. _____ information exchange into the new Iowa health benefit exchange 1 consistent with state and federal law. The bill specifies the 2 powers and duties of the exchange to carry out the intent of 3 the chapter consistent with the PPACA and state law. 4 The exchange is given parameters for certifying health 5 benefit plans as qualified health benefit plans. Under the 6 PPACA, only qualified health benefit plans can be sold through 7 the exchange and a health benefit plan must be certified as 8 meeting certain minimum standards specified in the PPACA and 9 in this bill to be certified as a qualified health benefit 10 plan. Also, a health carrier must meet certain standards in 11 order to have its plans certified so that the plans can be 12 offered through the exchange. Licensed insurance producers 13 are allowed to assist individuals and small employers with 14 purchasing qualified health benefit plans through the exchange 15 and to receive a commission for doing so. 16 The board of the exchange is authorized to establish one or 17 more advisory committees consisting of various stakeholders to 18 offer input to the board concerning the exchange and topics 19 relevant to the exchange. 20 Funding to operate the exchange comes from federal and 21 private grants and from assessment fees charged to health 22 carriers in the state. Pursuant to federal law, no state 23 funding can be appropriated or allocated for the operation or 24 administration of the exchange. The amount of the assessment 25 for each health carrier to pay the exchange losses and expenses 26 is to be shared on an equitable and proportionate basis based 27 on the health carrier’s respective share of total health 28 insurance premiums or payments for subscriber contracts 29 received in Iowa. The assessment formula to be utilized is 30 similar to that used by HIPIowa. 31 The exchange is required to file an annual financial report 32 including the results of an audit of the exchange by an 33 independent certified public accountant to the secretary of 34 the United States department of health and human services, the 35 -31- LSB 2121SC (2) 84 pf:av/rj 31/ 32

S.F. _____ governor, the commissioner of insurance, the general assembly, 1 the legislative fiscal committee of the legislative council, 2 and the public. The exchange is also required to file an 3 annual exchange status report that examines the operations of 4 the exchange and the demographics of the persons enrolled in 5 the exchange with the secretary of the United States department 6 of health and human services, the governor, the commissioner of 7 insurance, the general assembly, and the public. On or before 8 August 1, 2012, the board of the exchange is required to submit 9 one or more reports to these same persons on topics involving 10 the feasibility of various strategies to reduce health care 11 costs in the state. 12 Division I of the bill, establishing the Iowa health benefit 13 exchange, takes effect upon enactment. 14 DIVISION II —— IOWA INSURANCE INFORMATION EXCHANGE. In 15 division II of the bill, Code section 505.32, which established 16 the Iowa insurance information exchange, is repealed effective 17 December 31, 2013. 18 -32- LSB 2121SC (2) 84 pf:av/rj 32/ 32