02/23/2011 03:15 PM House LABOR & COMMERCE

             HB 164-INSURANCE: HEALTH CARE & OTHER                                                                          
                                                                                                                                
3:26:33 PM                                                                                                                    
                                                                                                                                
CHAIR OLSON  announced that the  only order of business  would be                                                               
HOUSE BILL  NO. 164, "An  Act relating to insurance;  relating to                                                               
health care insurance, exemption  of certain insurers, reporting,                                                               
notice,   and    record-keeping   requirements    for   insurers,                                                               
biographical   affidavits,  qualifications   of  alien   insurers                                                               
assuming  ceded  insurance,   risk-based  capital  for  insurers,                                                               
insurance holding companies,  licensing, federal requirements for                                                               
nonadmitted insurers,  surplus lines insurance,  insurance fraud,                                                               
life insurance  policies and annuity  contracts, rate  filings by                                                               
health  care  insurers,   long-term  care  insurance,  automobile                                                               
service corporations, guaranty fund  deposits of a title insurer,                                                               
joint  title plants,  delinquency proceedings,  fraternal benefit                                                               
societies, multiple  employer welfare arrangements,  hospital and                                                               
medical    service   corporations,    and   health    maintenance                                                               
organizations; and providing for an effective date."                                                                            
                                                                                                                                
3:27:02 PM                                                                                                                    
                                                                                                                                
LINDA HALL,  Director, Division  of Insurance,  Anchorage Office,                                                               
Department of  Community &  Economic Development  (DCCED), stated                                                               
she had some additional comments on HB 164.                                                                                     
                                                                                                                                
MS. HALL referred to page 49,  to proposed Section 78, of HB 164.                                                               
She  recalled  prior   discussions,  noting  that  Representative                                                               
Johnson previously had  questions on this proposed  section.  She                                                               
asked to readdress  this proposed section, relating  that she has                                                               
since discussed  this bill  with her  actuarial and  believes she                                                               
could better  explain what this proposed  change will accomplish.                                                               
Under  current Alaska  Statutes (AS),  an employer  cannot cancel                                                               
his/her group  health insurance policy and  make contributions to                                                               
an individual employee's health insurance  costs.  She recalled a                                                               
scenario  she previously  used,  in which  an employer  cancelled                                                               
his/her group  insurance and  offered $200  per month  to his/her                                                               
employee use to  purchase health insurance.   That activity would                                                               
violate  the current  AS,  the small  group  insurance laws,  and                                                               
would be  an action taken to  get around the guarantee  issue and                                                               
rating guarantees  contained in the small  group health insurance                                                               
laws.                                                                                                                           
                                                                                                                                
MS. HALL provided  a brief history, which she  thought dated back                                                               
to  early 1990s  when  the definitions  of  group insurance  were                                                               
enacted.  This proposed provision  would allow an employer, under                                                               
certain  circumstances, to  do  what she  just  described as  not                                                               
allowed under  the current statutes.   Proposed Section  78 would                                                               
allow employers who have never  offered health insurance to their                                                               
employees, but who wanted to  start health reimbursement accounts                                                               
(HRA)  for  their  employees  to  do so.    The  employers  could                                                               
contribute    money   to    their   employees'    HRA   accounts.                                                               
Additionally, if an employer had  a break in health insurance and                                                               
six months later  wanted to do something  similar in establishing                                                               
HRA accounts,  it would be  allowed.   She added the  caveat that                                                               
employers could not simply cancel  their health insurance because                                                               
employees had preexisting conditions nor  could an employer pay a                                                               
monthly allowance  towards an employee's health  insurance.  This                                                               
proposed section would also allow  employers a means to help part                                                               
time and seasonal employees obtain  health insurance.  Often this                                                               
class of employee is not  eligible for group health insurance due                                                               
to limited  hours or  because the employee  could not  meet other                                                               
eligibility  requirements for  health insurance.   This  proposed                                                               
change would  allow an employer to  contribute to an HRA  for the                                                               
part  time  or temporary  employee.    She reiterated  that  this                                                               
proposed  section   literally  "opens  this  up"   to  make  more                                                               
opportunities for employers and employees.                                                                                      
                                                                                                                                
3:31:45 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOHNSON asked whether she was sure.                                                                              
                                                                                                                                
MS. HALL answered that she is as sure as she can be.  She then                                                                  
reaffirmed and answered yes.                                                                                                    
                                                                                                                                
REPRESENTATIVE JOHNSON said he would accept that.                                                                               
                                                                                                                                
REPRESENTATIVE HOLMES commented she was still wading through 70                                                                 
pages of insurance language.                                                                                                    
                                                                                                                                
MS. HALL offered to answer any additional questions that may                                                                    
arise.  She acknowledged that HB 164 is complex.  She reiterated                                                                
that she would be happy to discuss the bill.                                                                                    
                                                                                                                                
3:33:20 PM                                                                                                                    
                                                                                                                                
CHAIR OLSON left the public testimony open on HB 164.                                                                           
                                                                                                                                
[HB 164 was held over.]