SSB 3172 (LSB 5859XC (4) 91)

SENATE FILE _____ 

BY  (PROPOSED COMMITTEE ON LOCAL GOVERNMENT BILL BY CHAIRPERSON WEBSTER)

A BILL FOR

An Act relating to the establishment of a health insurance pool for municipal employees.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  NEW SECTION.  8A.440  Municipal employee health insurance pool.
   1.  As used in this section:
   a.  “Health benefit plan” means the same as defined in section 514J.102.
   b.  “Health carrier” means the same as defined in section 514J.102.
   c.  “Health carrier reverse auction” means a transparent and competitive bidding process conducted online that starts with an opening round of bids and allows qualified health carrier bidders to counteroffer a lower price for as many rounds of bidding as determined by the department.
   d.  “Market check” means a technology-driven evaluation of an incumbent health carrier’s health benefit plan pricing based on benchmark comparators derived from health carrier reverse auction processes conducted in the United States over the immediately preceding twelve months.
   e.  “Municipality” means any city or county in the state.
   f.  “Participant bidding agreement” means an online agreement that details common definitions, rules, data access and use rights, and other optimal contract terms that benefit the state and that all bidders must accept as a prerequisite for participation in a health carrier reverse auction.
   g.  “Price” means the projected cost of a health carrier’s bid to provide health benefit plans to allow direct comparison of the comparably calculated costs of competing health carriers’ proposals over the duration of the health benefit plans.
   2.  Consistent with section 8A.311, and notwithstanding any other law to the contrary, the department shall enter into a contract with a health carrier for the administration of a municipal employee health insurance pool in compliance with this section.
   3.  The department shall conduct a reverse auction to accept bids from health carriers to provide health benefit plans for the health insurance pool before July 1, 2028, as follows:
   a.  Prior to November 1, 2027, the department shall procure all of the following based on price, capabilities, and other factors deemed relevant by the department:
   (1)  A technology platform with the capabilities to conduct a health carrier reverse auction. The department shall ensure that the technology platform possesses, at a minimum, the capacity to do all of the following:
   (a)  Conduct an online reverse auction of health benefit plans using a software application and high-performance data infrastructure to intake, cleanse, and normalize health carrier data with development methods and information security standards that have been validated by receiving service organization control 2 and national institute of standards and technology certification, or successor information technology security certifications, as identified by the office of the chief information officer.
   (b)  Simultaneously evaluate diverse and complex multiple proposals from health carriers.
   (c)  Produce an automated report and analysis of health carriers’ bids, including ranking of health carriers’ bids based on comparative costs and qualitative aspects of the bids following the close of each round of reverse auction bidding.
   (d)  Perform electronic, line-by-line, claim-by-claim review of one hundred percent of invoiced health benefit plan claims, and identify all deviations from the specific terms of the health benefit plan that resulted from the reverse auction process.
   (2)  Related services from the operator of the technology platform identified in subparagraph (1), which at a minimum shall include all of the following:
   (a)  Evaluation of the qualifications of health carrier bidders.
   (b)  Health carrier reverse auction services to support the department in comparing pricing for the health benefit plan procurement.
   (c)  Related professional services.
   b.  The department shall not award a contract for the technology platform and technology operator services to a vendor that is a health carrier or to a vendor that is managed by, or a subsidiary or affiliate of, a health carrier.
   c.  The vendor awarded the contract by the department shall not outsource any part of the health carrier reverse auction or any part of the electronic, line-by-line, claim-by-claim review of invoiced health benefit plan claims.
   d.  With technical assistance and support provided by the technology platform operator, the department shall specify the terms of the participant bidding agreement. The terms of the participant bidding agreement shall not be modified except by specific consent of the department.
   e.  (1)  The technology platform used to conduct the reverse auction shall be repurposed over the duration of the health benefit plan as a health carrier claims adjudication engine to perform electronic, line-by-line, claim-by-claim review of one hundred percent of invoiced health benefit plan claims, and to identify all deviations from the specific terms of the health benefit plan.
   (2)  The department shall reconcile the electronically adjudicated health benefit plan claims, as described in subparagraph (1), with a health carrier’s invoices on a monthly or quarterly basis to ensure that payments do not exceed the terms specified in any health benefit plan.
   f.  (1)  The first health carrier reverse auction shall be completed and the services contract shall be awarded to the winning health carrier with an effective date beginning July 1, 2028. Subsequent contracts must be awarded no later than three months prior to termination or expiration of the current health benefit plan for a covered group, that includes only active employees and dependents, but does not include retiree participants in a Medicare part D employer group waiver program pursuant to the federal Medicare Prescription Drug, Improvement, and Modernization Act of 2003, Pub. L. No. 108-173.
   (2)  In the event an eligible covered group that includes retiree participants in a Medicare part D employer group waiver program pursuant to the federal Medicare Prescription Drug, Improvement, and Modernization Act of 2003, Pub. L. No. 108-173, opts to use the processes and procedures under this section, the relevant health carrier reverse auction shall be completed and the health carrier contract shall be awarded to the winning health carrier no later than six months prior to termination or expiration of the health benefit plan currently covering the retiree employer group waiver program participants.
   g.  The department may perform a market check for providing health benefit plans during the term of the current health benefit plan in order to ensure continuing competitiveness of incumbent health benefit plan pricing during the term of a health benefit plan.
   h.  The department may elect to vacate the outcome of a health carrier reverse auction if the lowest-cost health carrier’s bid is not less than the projected cost trend for the incumbent health benefit plan as verified by the department. The department may utilize a consultant to conduct the verification. The cost trend shall be projected by the technology platform operator using industry-recognized data sources and shall be subject to review and approval by the department in advance of the health carrier reverse auction. Methodology shall be applied consistently in projection of cost and savings with regard to the incumbent health benefit plan and competing health carrier reverse auction bids.
   4.  A municipality shall submit a letter of intent to opt in or opt out of participating in the health insurance pool to the department before July 1, 2027. A health insurance pool shall not be established unless ten percent of the counties in the state and ten percent of the cities in the state submit a letter of intent to opt in to the health insurance pool.
   5.  If the required percentage of counties and cities under subsection 4 submit a letter of intent to opt in to the health insurance pool, the department shall establish the health insurance pool on or before July 1, 2028. Once established, any municipality may participate in the health insurance pool.
   6.  a.  The department shall establish and administer the health insurance pool, including administration of the health benefit plan selected through the reverse auction.
   b.  Each municipality shall reimburse the department for all administrative costs, including costs associated with the reverse auction, in an amount proportional to the size of the municipality.
   c.  Each municipality shall reimburse the department for the municipality’s actual cost of employee health benefit plans.
   7.  The commissioner of insurance shall adopt rules pursuant to chapter 17A to administer this section.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   This bill relates to the establishment of a health insurance pool for municipal employees.
   The bill requires the department of administrative services (department) to enter into a contract with a health carrier (carrier) for the administration of a municipal employee health insurance pool (insurance pool) in compliance with the bill.
   The department shall conduct a reverse auction to accept bids from carriers to provide health benefit plans (plans) for the insurance pool pursuant to the requirements of the bill.
   A municipality shall submit a letter of intent to opt in or opt out of participating in the insurance pool to the department before July 1, 2027. An insurance pool shall not be established unless 10 percent of the counties in the state and 10 percent of the cities in the state submit a letter of intent to opt in to the insurance pool.
   If the required percentage of counties and cities submit a letter of intent to opt in to the insurance pool, the department shall establish the insurance pool on or before July 1, 2028. Once established, any municipality may participate in the insurance pool.
   The department shall establish and administer the insurance pool, including the plan selected through the reverse auction. Each municipality shall reimburse the department for all administrative costs in an amount proportional to the size of the municipality. Each municipality shall reimburse the department for the municipality’s actual costs of employee plans.
   The commissioner of insurance shall adopt rules to administer the bill.