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HB 29: "An Act relating to health care insurance and to the Comprehensive Health Insurance Association; and providing for an effective date."

00                              HOUSE BILL NO. 29                                                                          
01 "An Act relating to health care insurance and to the Comprehensive Health Insurance                                     
02 Association; and providing for an effective date."                                                                      
03 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA:                                                                
04    * Section 1.  AS 21.12.050(c) is amended to read:                                                                  
05            (c)  In this section, "stop-loss insurance" means insurance that protects a self-                        
06       insured entity from the risk of paying medical benefits in excess of a specified                              
07       amount [PURCHASED BY A SELF-INSURED EMPLOYER TO COVER                                                         
08       BENEFITS THE EMPLOYER INCURS IN EXCESS OF A PRESET LIMIT].                                                        
09    * Sec. 2.  AS 21.55.010 is repealed and reenacted to read:                                                         
10            Sec. 21.55.010.  Creation; membership.  (a)  There is established a nonprofit                            
11       incorporated legal entity to be known as the Comprehensive Health Insurance                                       
12       Association.  Membership consists of (1) health care insurers licensed or required to                             
13       be licensed in this state that offer, issue for delivery, deliver, or renew major medical                         
14       insurance in this state; and (2) to the extent permitted under federal law, all self-                             
01       insured entities that provide major medical benefits.  All members shall maintain                                 
02       membership in the association and submit reports and provide information required by                              
03       the board or the director to implement this chapter as a condition of offering, issuing                           
04       for delivery, delivering, or renewing health insurance in this state.                                             
05            (b)  A health care insurer that offers, issues for delivery, delivers, or renews                             
06       health insurance and a self-insured entity that provides major medical benefits in this                           
07       state are members of the Comprehensive Health Insurance Association, unless the                                   
08       health care insurer or self-insured entity demonstrates to the satisfaction of the director                       
09       that the health care insurer has not offered, insured for delivery, delivered, or renewed                         
10       major medical insurance or the self-insured entity has not provided major medical                                 
11       benefits in the state during the year in which assessments under AS 21.55.220(d) are                              
12       imposed on members.                                                                                               
13    * Sec. 3.  AS 21.55.020(c) is amended to read:                                                                     
14            (c)  In determining voting rights at association meetings, an association                                    
15       member is entitled to vote in person or by proxy.  The vote shall be a weighted vote                              
16       based on the association member's share of assessments as determined under                                    
17       AS 21.55.220 [PREMIUMS FOR HEALTH INSURANCE FOR MAJOR MEDICAL                                                 
18       COVERAGE ON AN EXPENSE INCURRED BASIS, OR THE ASSOCIATION                                                         
19       MEMBER'S SUBSCRIBER FEES, DERIVED FROM OR ON BEHALF OF STATE                                                      
20       RESIDENTS IN THE PREVIOUS CALENDAR YEAR, AS DETERMINED BY                                                         
21       THE DIRECTOR].                                                                                                    
22    * Sec. 4.  AS 21.55.220(c) is repealed and reenacted to read:                                                      
23            (c)  A member of the association is liable for its share of the claims, operating,                           
24       and administrative expenses of the state plans that exceed premium payments by                                    
25       enrollees in the state plans, and the board shall assess each member its share.  A                                
26       member's share equals, in the case of a health care insurer, the number of covered                                
27       lives for major medical insurance offered, issued for delivery, delivered, or renewed                             
28       by the health care insurer or, in the case of a self-insured entity, the number of covered                        
29       lives for major medical benefits provided by the self-insured entity in the state,                                
30       divided by the total number of covered lives for major medical insurance offered,                                 
31       issued for delivery, delivered, or renewed by all health care insurers and for major                              
01       medical benefits provided by all self-insured entities.                                                           
02    * Sec. 5.  AS 21.55.220 is amended by adding new subsections to read:                                              
03            (f)  A member shall, each year by April 1, file with the director a report of                                
04       major medical insurance and major medical benefits on a form prescribed by the                                    
05       director.  The report must include the number of covered lives at the beginning of the                            
06       prior year, the number of covered lives at the end of the prior year, and the amount of                           
07       premium reported for that type of major medical insurance in the state in the annual                              
08       statement filed under AS 21.09.200 for, in the case of a health care insurer, each type                           
09       of major medical insurance offered, issued for delivery, or delivered in the state in the                         
10       prior year or, in the case of a self-insured entity, each type of major medical benefits                          
11       provided in the state.  A member shall exclude from the member's reported number of                               
12       covered lives those lives that have been reported by the member, in the case of a                                 
13       health care insurer, under another type of major medical insurance or, in the case of a                           
14       self-insured entity, under another type of program that provides major medical                                    
15       benefits.  The director may require additional data to be filed as necessary for the                              
16       board to determine or verify the number of covered lives.  A member who fails to file                             
17       the report as required in this subsection may have a civil penalty of $100 assessed                               
18       against it for each day the member fails to file the required report and may have the                             
19       member's certificate of authority revoked by the director.                                                        
20            (g)  The board shall determine a member's share under (c) of this section based                              
21       on the data filed with the director under (f) of this section.  The board may use any                             
22       reasonable method of estimating the number of covered lives if the specific number is                             
23       unknown.  The board shall, to the extent practicable, count each covered life only once                           
24       with respect to an assessment.                                                                                    
25    * Sec. 6.  AS 21.55.500(14) is repealed and reenacted to read:                                                     
26                 (14)  "major medical benefits" means hospital, surgical, or medical care                                
27       benefits on an expense incurred basis and includes stop-loss insurance benefits; "major                           
28       medical benefits" does not include medical benefits for dental only, vision only, long-                           
29       term care, nursing home care, home health care, community-based care, accident only,                              
30       disability income, hospital confinement indemnity, or credit insurance;                                           
31    * Sec. 7.  AS 21.90.900 is amended by adding a new paragraph to read:                                              
01                 (45)  "self-insured entity" means an employer, union, association, or                                   
02       other organization that provides medical care services or benefits to employees or                                
03       members in this state, either directly or indirectly through a trust or third-party                               
04       administrator, if the services or benefits are not provided by an insurance policy issued                         
05       by an insurer.                                                                                                    
06    * Sec. 8.  AS 39.30.095(b) is amended to read:                                                                     
07            (b)  After obtaining the advice of an actuary, the commissioner of                                           
08       administration shall determine the amount necessary to provide benefits under                                     
09       AS 39.30.090, 39.30.091, and 39.30.160 and, subject to (e) and (g) of this section,                           
10       shall set the rate of employer contribution and employee contribution, if any.  With                              
11       money in the fund, the commissioner of administration shall pay premiums, claims,                                 
12       and administrative costs required under the insurance policies in effect under                                    
13       AS 39.30.090 and 39.30.160, or required under self-insurance arrangements in effect                               
14       under AS 39.30.091.                                                                                               
15    * Sec. 9.  AS 39.30.095 is amended by adding a new subsection to read:                                             
16            (g)  In setting the rate of contribution by an employer and employee under (b)                               
17       of this section, the commissioner may not increase the amount of the employee                                     
18       contribution if the amount necessary to provide benefits under AS 39.30.090 and                                   
19       39.30.160, or for a self-insurance arrangement under AS 39.30.091, increases as a                                 
20       result of an assessment against the state as a member of the Comprehensive Health                                 
21       Insurance Association under AS 21.55.220.                                                                         
22    * Sec. 10.  The uncodified law of the State of Alaska is amended by adding a new section to                        
23 read:                                                                                                                   
24       TRANSITION.  (a)  Until January 1, 2006, the Comprehensive Health Insurance                                       
25 Association shall determine member assessments under AS 21.55.220(c) as that provision                                  
26 existed before the effective date of this Act.                                                                          
27       (b)  Notwithstanding AS 21.55.220(f), enacted by sec. 5 of this Act, information                                  
28 required to be reported under AS 21.55.220(f), enacted by sec. 5 of this Act, must initially be                         
29 reported to the director of insurance by September 30, 2005.                                                            
30    * Sec. 11.  The uncodified law of the State of Alaska is amended by adding a new section to                        
31 read:                                                                                                                   
01       TRANSITION:  REGULATIONS.  The director of insurance may immediately                                              
02 proceed to adopt regulations necessary to implement the changes made by this Act.  The                                  
03 regulations take effect under AS 44.62 (Administrative Procedure Act), but not before the                               
04 effective date of the statutory change.                                                                                 
05    * Sec. 12.  This Act takes effect immediately under AS 01.10.070(c).