SB 114: "An Act establishing the Alaska Health Care Authority; relating to the delivery, quality, access, and financing of health care; requiring the establishment of health care expenditure limits; relating to approval of disability insurance rates; relating to the issuance of certificates of need; relating to health insurance for small employers; and providing for an effective date."
00SENATE BILL NO. 114 01 "An Act establishing the Alaska Health Care Authority; relating to the delivery, 02 quality, access, and financing of health care; requiring the establishment of health 03 care expenditure limits; relating to approval of disability insurance rates; relating 04 to the issuance of certificates of need; relating to health insurance for small 05 employers; and providing for an effective date." 06 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 07 * Section 1. PURPOSE. (a) The purpose of secs. 4 - 6 and 8 - 12 of this Act are to 08 (1) promote the availability of health insurance coverage to small employers 09 regardless of their health status or claims experience; 10 (2) prevent abusive rating practices; 11 (3) require disclosure of rating practices to purchasers; 12 (4) establish rules regarding renewability of coverage; 13 (5) establish limitations on the use of preexisting condition exclusions; 14 (6) provide for development of "basic" and "standard" health benefit plans to
01 be offered to all small employers; 02 (7) provide for establishment of a reinsurance program; and 03 (8) improve the overall fairness and efficiency of the small group health 04 insurance market. 05 (b) It is not the purpose of secs. 4 - 6 and 8 - 12 of this Act to shift the cost of 06 providing health insurance to small employers, to other insured persons, or to the state. 07 (c) The purpose of secs. 2, 3, and 13 - 17 of this Act is to provide for the 08 (1) development of statewide health care expenditure limits, and access and 09 quality goals; 10 (2) development of reimbursement schedules, utilization standards, and 11 performance of other activities necessary to achieve expenditure limits developed under (1) 12 of this section; 13 (3) establishment of reimbursement schedules, utilization standards, and other 14 measures that may include increased utilization of managed care, increased utilization of 15 alternatives to institutionalization, and procedures for the allocation and limitation of capital 16 investment necessary to achieve the health care budget goals, while maintaining quality, and 17 improving accessibility to health care; 18 (4) health care needs of certain children and pregnant women who are 19 presently uninsured; 20 (5) preparation and submission to the legislature, and to the general public, of 21 an annual report concerning the success in achieving the limits and goals established under 22 (1) of this section, together with recommendations the authority considers appropriate to 23 further the objectives of providing access to affordable, quality health care for all Alaskans; 24 (6) development of a single payer health care financing system; 25 (7) establishment of uniform billing and claim forms and mandatory reporting 26 requirements to 27 (A) measure the success in meeting the limits and goals established 28 under (1) of this section; 29 (B) permit the authority, to the extent practicable, to analyze data 30 acquired under reporting requirements to assist purchasers and consumers in evaluating 31 the quality and cost of care offered by different providers; and
01 (C) reduce the administrative cost of the health care system; 02 (8) recommendation of reimbursement schedules, facility licensing standards, 03 and other measures as appropriate and consistent with expenditure limits developed by the 04 authority to ensure access to quality affordable health care under health insurance programs 05 and programs under which the state provides or enters into contracts for the delivery of health 06 care and to minimize cost-shifting; 07 (9) recommendation of ways to attract and retain qualified health care 08 professionals in medically underserved areas of the state; recommendations may include 09 forgiveness of student loans, in-state family practice residency programs, and recruitment of 10 residents into health care professions; 11 (10) development of more flexible facility licensing standards that reflect the 12 different needs of urban and rural areas of the state for health care facilities; 13 (11) performance of studies, issuance of reports, and gathering of data to 14 contribute to the objective of providing access to high quality affordable health care; and 15 (12) performance of any other activities determined to be necessary to further 16 the goal of making available affordable, accessible, high quality health care in the state. 17 * Sec. 2. AS 18.07.035 is amended to read: 18 Sec. 18.07.035. APPLICATION AND FEES. Application for a certificate of 19 need shall be made to the department upon a form provided by the department and 20 must contain the information the department requires to reach a decision under 21 AS 18.07.041 - 18.07.111. Each application for a certificate of need must be 22 accompanied by an application fee established by the department by regulation. A 23 copy of each application for a certificate of need, except an application for a 24 temporary or emergency certificate issued under AS 18.07.071, shall be provided 25 to the Alaska Health Care Authority. 26 * Sec. 3. AS 18.07.041 is amended to read: 27 Sec. 18.07.041. STANDARD OF REVIEW FOR APPLICATIONS FOR 28 CERTIFICATES OF NEED. The office shall grant a sponsor a certificate of need or 29 modify a certificate of need if the availability and quality of existing health care 30 resources or the accessibility to those resources is less than the current or projected 31 requirement for health services required to maintain the good health of citizens of this
01 state. In determining the availability and quality of existing health care resources, 02 the office shall consider the different needs of urban and rural areas of the state. 03 A certificate of need may not be issued, except for a temporary or emergency 04 certificate under AS 18.07.071, unless the office has received a determination from 05 the Alaska Health Care Authority regarding the effect of the certificate of need 06 on the cost of group health insurance. 07 * Sec. 4. AS 21.36 is amended by adding a new section to read: 08 Sec. 21.36.025. UNFAIR MARKETING PRACTICES PROHIBITED. A 09 person may not violate the applicable provisions of AS 21.56.180. 10 * Sec. 5. AS 21.36.090(d) is amended to read: 11 (d) Except to the extent necessary to comply with AS 21.42.365 and 12 AS 21.56, a person may not practice or permit unfair discrimination against a person 13 who provides a service covered under a group disability policy that extends coverage 14 on an expense incurred basis, or under a group service or indemnity type contract 15 issued by a nonprofit corporation, if the service is within the scope of the provider's 16 occupational license. In this subsection, "provider" means a state licensed physician, 17 dentist, osteopath, optometrist, chiropractor, nurse midwife, advanced nurse 18 practitioner, naturopath, physical therapist, occupational therapist, psychologist, 19 psychological associate, or licensed clinical social worker. 20 * Sec. 6. AS 21.36.090(d) is repealed and reenacted to read: 21 (d) Except to the extent necessary to comply with AS 21.42.365, a person may 22 not practice or permit unfair discrimination against a person who provides a service 23 covered under a group disability policy that extends coverage on an expense incurred 24 basis, or under a group service or indemnity type contract issued by a nonprofit 25 corporation, if the service is within the scope of the provider's occupational license. 26 In this subsection, "provider" means a state licensed physician, dentist, osteopath, 27 optometrist, chiropractor, nurse midwife, advanced nurse practitioner, naturopath, 28 physical therapist, occupational therapist, psychologist, psychological associate, or 29 licensed clinical social worker. 30 * Sec. 7. AS 21.39.020 is amended to read: 31 Sec. 21.39.020. APPLICABILITY. (a) This chapter applies to all forms of
01 disability insurance and to casualty insurance, including fidelity, surety, and guaranty 02 bonds, to all forms of fire, marine, and inland marine insurance, and to a combination 03 of any of them, or risks or operations in this state. Inland marine insurance includes 04 insurance defined by statute, or by interpretation of statute, or if not defined or 05 interpreted, by ruling of the director, or as established by general custom of the 06 business, as inland marine insurance. 07 (b) This chapter does not apply to 08 (1) reinsurance, other than joint reinsurance to the extent stated in 09 AS 21.39.110; 10 (2) [DISABILITY INSURANCE; 11 (3)] insurance of vessels or craft, their cargoes, marine builders' risks, 12 marine protection and indemnity, or other risks commonly insured under marine, as 13 distinguished from inland marine insurance policies; 14 (3) [(4)] insurance against loss of or damage to aircraft or against 15 liability, other than workers' compensation and employer's liability, arising out of the 16 ownership, maintenance, or use of aircraft; or, to insurance of hulls of aircraft, 17 including their accessories and equipment. 18 * Sec. 8. AS 21 is amended by adding a new chapter to read: 19 CHAPTER 56. SMALL EMPLOYER HEALTH INSURANCE. 20 ARTICLE 1. SMALL EMPLOYER HEALTH REINSURANCE ASSOCIATION. 21 Sec. 21.56.010. CREATION; MEMBERSHIP. A nonprofit incorporated legal 22 entity to be known as the Small Employer Health Reinsurance Association is 23 established. Membership consists of all insurers licensed to transact health insurance 24 in the state that offer a health benefit plan. All members shall maintain membership 25 in the association as a condition of doing health insurance business, or being able to 26 offer subscriber contracts, in the state. 27 Sec. 21.56.020. BOARD OF DIRECTORS; ORGANIZATION. (a) The board 28 of directors of the association consists of nine individuals selected by participating 29 members, subject to approval by the director. The director shall endeavor to appoint 30 at least six board members who are also small employer insurers. If the director is 31 unable to appoint six board members who are also small employer insurers, the
01 director may fill the remaining seats with any insurer. In selecting members of the 02 board, the director shall consider, among other things, whether all types of 03 participating members are fairly represented. 04 (b) To the extent possible, one board member shall represent a health 05 maintenance organization, one board member shall represent a hospital or medical 06 service corporation, one board members' principal health insurance business shall be 07 in the small employer market, and one board member's principal health insurance 08 business shall be in the large employer market. Members of the board may be 09 reimbursed from the association for expenses incurred by them as members, but may 10 not otherwise be compensated by the association for their services. The costs of 11 conducting meetings of the association and its board of directors shall be borne by the 12 association. 13 (c) A member of the board serves for a term of three years and may be 14 reappointed to an unlimited number of terms. The term of a board member shall 15 continue until a successor is appointed. A vacancy on the board shall be filled by 16 participating members, subject to approval by the director. A board member may be 17 removed by the director for cause. 18 Sec. 21.56.030. GENERAL POWERS. The association may 19 (1) exercise the powers granted to insurers under the laws of the state, 20 except that the association may not issue insurance; 21 (2) sue or be sued; 22 (3) enter into contracts with insurers, similar associations in other 23 states, or with other persons for the performance of administrative functions; 24 (4) establish administrative and accounting procedures for the operation 25 of the association; 26 (5) take legal action as necessary to avoid the payment of improper 27 claims against the association; 28 (6) define the array of health coverage products for which reinsurance 29 will be provided and issue reinsurance policies; 30 (7) establish rules, conditions, and procedures pertaining to the 31 reinsurance of members' risks by the association;
01 (8) establish actuarial functions appropriate to the operation of the 02 association; 03 (9) assess members under the provisions of this chapter and make 04 advance interim assessments as may be reasonable and necessary for organizational 05 and interim operating expenses; interim assessments shall be credited as offsets against 06 regular assessments due following the close of the calendar year; 07 (10) appoint appropriate legal, actuarial, and other committees as are 08 necessary to provide technical assistance in the operation of the association, design of 09 a policy or contract, or to assist in other functions of the association; 10 (11) borrow money to accomplish the purposes of the association; notes 11 or other evidence of indebtedness of the association that are not in default are 12 investments for insurers and may be carried as admitted assets. 13 Sec. 21.56.040. PLAN OF OPERATION. (a) The association shall submit 14 to the director a plan of operation and amendments necessary or suitable to assure the 15 fair, reasonable, and equitable administration of the association. The director may, 16 after notice and hearing, approve the plan of operation if the director determines it to 17 be suitable to assure the fair, reasonable, and equitable administration of the program 18 on a proportionate basis under the provisions of this section and it does not shift 19 program costs to other insured persons or the state. The plan of operation and 20 amendments become effective upon approval in writing by the director. 21 (b) All members of the association shall comply with the plan of operation. 22 (c) The plan of operation must establish procedures for 23 (1) handling and accounting of program assets and money of the 24 association and for an annual fiscal report to the director; 25 (2) reinsuring risks under the provisions of this section; 26 (3) collecting assessments from all members to provide for claims 27 reinsured by the association and for administrative expenses incurred or estimated to 28 be incurred by the association; 29 (4) selection of an administering insurer and establish the administering 30 insurer's powers and duties; and 31 (5) provisions necessary or proper for the execution of the powers and
01 duties of the association. 02 Sec. 21.56.050. HEALTH CARE REINSURANCE. (a) A member may 03 reinsure coverage of an eligible employee of a small employer or a dependent of an 04 eligible employee of a small employer with the association only under the following 05 provisions: 06 (1) regarding a small employer basic or standard health benefit plan, 07 the association shall reinsure the level of coverage provided; 08 (2) regarding a plan other than a small employer health benefit plan, 09 the association shall reinsure the level of coverage provided up to, but not exceeding, 10 the level of coverage provided in a small employer basic or standard health benefit 11 plan; 12 (3) a small employer insurer may reinsure an entire employer group 13 within 60 days of the commencement of the group's coverage under a health benefit 14 plan; 15 (4) a small employer insurer may reinsure an eligible employee or 16 dependent within a period of 60 days following the commencement of the coverage 17 with the small employer; a newly eligible employee or dependent of a reinsured small 18 employer may be reinsured within 60 days of the commencement of coverage; 19 (5) the association may not reimburse a reinsuring insurer regarding the 20 claims of a reinsured employee or dependent until the insurer has paid an initial level 21 of claims for the employee or dependent of $5,000 in a calendar year for benefits 22 covered by the association; 23 (6) a small employer insurer may terminate reinsurance for one or more 24 of the reinsured employees or dependents of a small employer on any plan anniversary. 25 (b) Premium rates charged for coverage reinsured by the association shall be 26 established as required under (e) of this section and adjusted as follows: 27 (1) for whole group small employer reinsurance coverage, 1.5 28 multiplied by the base premium rate established by the association for eligible 29 employees, and dependents of eligible employees, of a small employer all of whose 30 coverage is reinsured with the association; 31 (2) for eligible employee or dependent reinsurance coverage, 5.0
01 multiplied by the base premium rate established by the association. 02 (c) If a health benefit plan coverage for a small employer is entirely or 03 partially reinsured with the association, the premium charged to the small employer for 04 a rating period for the coverage issued under this section shall meet the premium rate 05 requirements established under AS 21.56.120. 06 (d) On or before March 1 of each year, the board shall determine and report 07 to the director the association's net loss for the previous calendar year, including 08 administrative expenses and incurred losses for the year, taking into account 09 investment income and other appropriate gains and losses. A net loss for the year 10 shall be recovered by assessments collected from reinsuring insurers. The board shall 11 establish, as part of the plan of operation, a formula by which to make assessments 12 against reinsuring insurers. The assessment formula must be based on each reinsuring 13 insurer's share of the total premiums earned in the preceding calendar year from health 14 benefit plans delivered or issued for delivery to small employers in this state by 15 reinsuring carriers and each reinsuring insurer's share of the premiums earned in the 16 preceding calendar year from newly issued health benefit plans delivered or issued for 17 delivery during the calendar year to small employers in this state by reinsuring 18 insurers. In determining an assessment, if any, that is collected from a member, the 19 following provisions apply: 20 (1) the formula established under this subsection may not result in a 21 reinsuring insurer having an assessment share that is less than 50 percent or more than 22 150 percent of an amount that is based on the proportion of the reinsuring insurer's 23 total premiums earned in the preceding calendar year from health benefit plans 24 delivered or issued for delivery to small employers in this state by reinsuring insurers 25 to total premiums earned in the preceding calendar year from health benefit plans 26 delivered or issued for delivery to small employers in this state by all reinsuring 27 carriers; 28 (2) the board may, with approval of the director, change the assessment 29 formula established under this section from time to time as appropriate; the board may 30 provide for the shares of the assessment base attributable to premiums from all health 31 benefit plans and to premiums from newly issued health benefit plans to vary during
01 a transition period; 02 (3) subject to the approval of the director, the board shall make an 03 adjustment to the assessment formula for reinsuring carriers that are approved health 04 maintenance organizations that are federally qualified under 42 U.S.C. 300, to the 05 extent, if any, that restrictions are imposed on those organizations that are not imposed 06 on other small employer carriers; 07 (4) premiums and benefits paid by a reinsuring insurer that are less than 08 an amount determined by the board to justify the cost of collection may not be 09 considered for purposes of determining assessments; 10 (5) annually before March 1, the board shall determine and file with 11 the director an estimate of the assessments needed to fund losses incurred by the 12 association in the previous calendar year; 13 (6) if the board determines that the assessments needed to fund the 14 losses incurred by the association in the previous calendar year will exceed five 15 percent of total premiums earned in the previous year from health benefit plans 16 delivered or issued for delivery to small employers in this state by reinsuring insurers, 17 the board shall evaluate the operation of the program and report its findings, including 18 any recommendations for changes to the plan of operation, to the director within 90 19 days following the end of the calendar year in which the losses were incurred; the 20 evaluation must include an estimate of future assessments, the administrative costs of 21 the program, the appropriateness of the premiums charged, and the level of insurer 22 retention under the program and the costs of coverage for small employers; if the 23 board fails to file a report with the director within 90 days following the end of the 24 applicable calendar year, the director may evaluate the operations of the program and 25 implement amendments to the plan of operation the director determines necessary to 26 reduce future losses and assessments; 27 (7) if assessments exceed net losses of the association, the excess shall 28 be held in an interest bearing account and used by the board to offset future losses or 29 to reduce association premiums; in this paragraph, "future losses" include a reserve for 30 incurred but not reported claims; 31 (8) the board shall annually determine a member's proportion of
01 participation in the association based on annual statements and other reports 02 determined necessary by the board and filed by the member with the board; an insurer 03 shall report to the board a claim payment made and administrative expense incurred 04 in this state on a semi-annual basis on a form prescribed by the director; 05 (9) the plan of operation must include a provision for the imposition 06 of an interest penalty for late payment of assessments; 07 (10) a member may request a deferment from the director, in whole or 08 in part, from an assessment issued by the board; the director may defer, in whole or 09 in part, the assessment of a member if, in the opinion of the director payment of the 10 assessment would endanger the ability of the member to fulfill the member's 11 contractual obligations; 12 (11) in the event an assessment against a member is deferred in whole 13 or in part, the amount by which the assessment is deferred may be assessed against the 14 other members in a manner consistent with the basis for assessments set out in this 15 subsection; the member receiving a deferment shall remain liable to the association for 16 the amount deferred; the director may attach conditions to a deferment; a member 17 receiving a deferment may not reinsure an individual or group as provided under this 18 section until the assessment is paid. 19 (e) The board, as part of the plan of operation, shall establish a methodology 20 for determining premium rates to be charged by the program for reinsuring small 21 employers and individuals under this section. The methodology must include a system 22 for classification of small employers that reflects the types of case characteristics 23 commonly used by small employer insurers in the state. The methodology must 24 provide for the development of base reinsurance premium rates that shall be multiplied 25 by the factors set out in (b) of this section to determine the premium rates for the 26 association. The base reinsurance premium rates shall be established by the board, 27 subject to the approval of the director, and shall be set at levels that reasonably 28 approximate gross premiums charged to small employers by small employer insurers 29 for health benefit plans with benefits similar to the standard health benefit plan. The 30 board shall review the methodology established under this subsection to ensure that the 31 methodology reasonably reflects the claims experience of the program. Changes to the
01 methodology may be proposed by the board, and are subject to approval by the 02 director. 03 Sec. 21.56.060. HEALTH BENEFIT PLAN COMMITTEE. (a) The health 04 benefit plan committee is established in the association. The committee is composed 05 of seven members selected by the director as follows: 06 (1) three members who are representatives of participating insurers; 07 (2) one member who represents small employers; 08 (3) one member who represents employees of small employers; and 09 (4) one member who represents health care providers; and 10 (5) one member who represents agents or brokers. 11 (b) The committee shall recommend benefit levels, cost sharing levels, 12 exclusions and limitations for the basic and standard health benefit plan offered under 13 AS 21.56.140. The committee shall also design a basic health benefit plan and a 14 standard health benefit plan that contain benefit and cost sharing levels that are 15 consistent with the basic method of operation and the benefit plans of health 16 maintenance organizations, including restrictions imposed by federal law. The plans 17 recommended by the committee may include the following cost containment features: 18 (1) utilization review of health care services, including review of the 19 medical necessity of hospital and physician services; 20 (2) case management; 21 (3) selective contracting with hospitals, physicians, and other health 22 care providers; 23 (4) reasonable benefit differentials applicable to providers that 24 participate or do not participate in arrangements using restricted network provisions; 25 and 26 (5) other managed care provisions. 27 Sec. 21.56.070. REQUIRED REPORT. The board shall study and report at 28 least once every two years to the director and to the legislature on the effectiveness 29 of this chapter. The report must analyze the effectiveness of the chapter in promoting 30 rate stability, product availability, and coverage affordability. The report may contain 31 recommendations for actions to improve the overall effectiveness, efficiency, and
01 fairness of the small group health insurance marketplace. The report must address 02 whether insurers, agents, brokers, managing general agents, and third-party 03 administrators are fairly and actively marketing or issuing health benefit plans to small 04 employers in fulfillment of the purposes of the chapter. The report may contain 05 recommendations for market conduct or other regulatory standards or action. 06 Sec. 21.56.080. ADMINISTRATIVE PROCEDURE ACT. The association is 07 exempt from AS 44.62 (Administrative Procedure Act). 08 Sec. 21.56.090. TAX EXEMPTION. The association is exempt from the 09 payment of fees and taxes levied by the state or any of its political subdivisions except 10 taxes levied on real or personal property. 11 Sec. 21.56.100. LIMITATION OF LIABILITY. A member of the association 12 is not liable for civil damages resulting from an act or omission of the member on 13 behalf of the association unless the member acts with gross negligence or intentional 14 misconduct. 15 ARTICLE 2. SMALL EMPLOYER HEALTH INSURANCE PLANS. 16 Sec. 21.56.110. APPLICABILITY. (a) An individual or group health benefit 17 plan is subject to the provisions of this chapter if the plan provides health care benefits 18 covering employees of a small employer and if one of the following conditions are 19 met: 20 (1) any portion of the premium or benefits is paid by a small employer; 21 (2) a covered individual or dependent is reimbursed, through wage 22 adjustments or otherwise, by or on behalf of a small employer for all or a portion of 23 the premium; or 24 (3) the health benefit plan is treated by the employer or any of the 25 eligible employees or dependents as part of a plan or program for the purposes of 26 26 U.S.C. 106 or 26 U.S.C. 162 (Internal Revenue Code). 27 (b) Except as provided in this chapter, other provisions of law requiring the 28 coverage or the offer of coverage of a health care service or benefit and other 29 provisions of law requiring the reimbursement, utilization, or consideration of a 30 specific category of a licensed or certified health care practitioner do not apply to a 31 health benefit plan offered or delivered to a small employer.
01 (c) Except as provided in this subsection, for purposes of this chapter insurers 02 that are affiliated companies or that are eligible to file a consolidated tax return shall 03 be treated as one insurer and a restriction or limitation imposed under this chapter shall 04 apply as if all health benefit plans delivered or issued for delivery to a small employer 05 in this state by an affiliated insurer were issued by one insurer. An affiliated insurer 06 that is a health maintenance organization having a certificate of authority under 07 AS 21.86 may be considered to be a separate insurer for the purposes of this chapter. 08 Sec. 21.56.120. PREMIUM RATE RESTRICTIONS; DISCLOSURES; 09 REPORTS; CONFIDENTIALITY. (a) A premium rate for a health benefit plan 10 subject to this chapter is subject to the following provisions: 11 (1) the premium rate charged or offered during a rating period to small 12 employers with similar case characteristics as determined by the insurer for the same 13 or similar coverage may not vary between small employers in the same geographic 14 region, except as provided in this subsection; 15 (2) premium rates for small employers in the same geographic region 16 may be adjusted for differences in age, occupation, industry, or family composition, 17 but the adjustments may not result in a premium rate greater than twice the lowest 18 premium rate charged in that geographic region for the same or similar coverage; 19 (3) the percentage increase in the premium rate charged to a small 20 employer for a new rating period may not exceed the sum of the following: 21 (A) the percentage change in the new business premium rate 22 measured from the first day of the prior rating period to the first day of the 23 new rating period; in the case of a health benefit plan into which the small 24 employer insurer is no longer enrolling new small employers, the small 25 employer insurer shall use the percentage change in the base premium rate, 26 provided that the change does not exceed, on a percentage basis, the change in 27 the new business premium rate for the most similar health benefit plan into 28 which the small employer insurer is actively enrolling new small employers; 29 (B) any adjustment, not to exceed 10 percent annually and 30 adjusted pro rata for rating periods of less than one year, due to the claim 31 experience, health status, or duration of coverage of the employees or
01 dependents of the small employer as determined from the small employer 02 insurer's rate manual; and 03 (C) any adjustment due to change in coverage or change in the 04 case characteristics of the small employer, as determined from the small 05 employer insurer's rate manual; 06 (4) adjustments in rates for claim experience, health status, and duration 07 of coverage may not be charged to individual employees or dependents; any 08 adjustment must be applied uniformly to the rates charged for all employees and 09 dependents of the small employer; 10 (5) a premium rate for a health benefit plan shall comply with the 11 requirements of this section notwithstanding an assessment paid or payable by small 12 employer insurers under AS 21.56.050(d); 13 (6) a small employer insurer shall 14 (A) apply rating factors, including case characteristics, 15 consistently with respect to all small employers; rating factors must produce 16 premiums for identical groups that differ only by amounts attributable to plan 17 design and do not reflect differences due to the nature of the groups assumed 18 to select particular health benefit plans; and 19 (B) treat all health benefit plans issued or renewed in the same 20 calendar month as having the same rating period; 21 (7) for the purposes of this subsection, a health benefit plan that utilizes 22 a restricted provider network may not be considered similar coverage to a health 23 benefit plan that does not utilize a restricted provider network; 24 (8) a small employer insurer may not use case characteristics, other 25 than those specified under (a)(2) of this subsection; however, a small employer insurer 26 may offer a premium discount for nonsmoking or participation in wellness programs. 27 (b) In connection with the offering for sale of a health benefit plan to a small 28 employer, a small employer insurer shall make a reasonable disclosure, as part of its 29 solicitation and sales materials, of the following: 30 (1) the extent that premium rates for a specified small employer are 31 established or adjusted based upon the actual or expected variation in claims costs or
01 actual or expected variation in health status of the employees of the small employer 02 and their dependents; and 03 (2) the provisions of the health benefit plan 04 (A) concerning the small employer insurer's right to change 05 premium rates and factors, other than claim experience, that affect changes in 06 premium rates; 07 (B) relating to renewability of policies and contracts; and 08 (C) relating to any preexisting condition provision. 09 (c) A small employer insurer shall 10 (1) maintain at its principal place of business a complete and detailed 11 description of its rating practices and renewal underwriting practices, including 12 information and documentation that demonstrate that its rating methods and practices 13 are based upon commonly accepted actuarial assumptions and are in accordance with 14 sound actuarial principles; 15 (2) file with the director annually, on or before March 15, an actuarial 16 certification certifying that the insurer is in compliance with this chapter and that the 17 rating methods of the small employer insurer are actuarially sound; the certification 18 shall be in a form and manner, and must contain information, as specified by the 19 director; a copy of the certification shall be retained by the small employer insurer at 20 its principal place of business; 21 (3) make the information and documentation described in (1) of this 22 subsection available to the director upon request; the information is confidential and 23 not subject to disclosure, except 24 (A) as agreed to by the small employer insurer; 25 (B) as ordered by a court of competent jurisdiction; or 26 (C) the director may use the information or other discovered 27 information in a judicial or administrative proceeding. 28 (d) The director shall adopt regulations that establish geographic regions of the 29 state for determining premium rates and may adopt regulations to ensure that rating 30 practices used by small employer insurers are consistent with the purposes of this 31 chapter including ensuring that differences in rates charged for health benefit plans by
01 small employer insurers are reasonable and reflect objective differences in plan design, 02 not including differences due to the nature of the groups assumed to select particular 03 health benefit plans. 04 Sec. 21.56.130. RENEWABILITY OF COVERAGE. (a) A health benefit 05 plan subject to this chapter shall be renewable with respect to all eligible employees 06 and dependents at the option of the small employer, except for 07 (1) nonpayment of the required premiums; 08 (2) fraud or misrepresentation of the small employer or, with respect 09 to coverage of individual insureds, the insureds or their representatives; 10 (3) noncompliance with the minimum participation or employer 11 contribution requirements; 12 (4) repeated misuse of a provider network provision; or 13 (5) a small employer insurer who elects to nonrenew all of its health 14 benefit plans delivered or issued for delivery to small employers in this state; an 15 insurer who elects to nonrenew as described in this paragraph shall 16 (A) provide advance notice of the decision to the director and 17 to the director or commissioner of insurance in each state in which the insurer 18 is licensed; and 19 (B) provide notice of the decision not to renew coverage to all 20 affected small employers and to the insurance regulatory office in each state 21 in which an affected covered individual is known to reside at least 180 days 22 before the nonrenewal of the health benefit plan by the insurer; notice to the 23 director under this subparagraph shall be provided at least three working days 24 before the notice to the affected small employers; 25 (6) a health benefit plan for which the director finds that the 26 continuation of the coverage would 27 (A) not be in the best interests of the policyholders or certificate 28 holders; or 29 (B) impair the insurer's ability to meet its contractual 30 obligations. 31 (b) A small employer insurer that elects not to renew a health benefit plan
01 under (a)(5) of this section may not write new business in the small employer market 02 in this state for a period of five years from the date of notice to the director. 03 (c) If a small employer insurer is doing business in only one established 04 geographic service area of the state, the provisions in this section apply only to the 05 insurer's operations in that established service area. 06 Sec. 21.56.140. REQUIRED OFFER OF COVERAGE. (a) Except as 07 provided under AS 21.56.160, a small employer insurer shall, as a condition of 08 transacting business in this state with small employers, offer to small employers at 09 least two health benefit plans. One health benefit plan offered by a small employer 10 insurer shall be a basic health benefit plan and one plan shall be a standard health 11 benefit plan. A small employer insurer shall issue a basic health benefit plan or a 12 standard health benefit plan to an eligible small employer that applies for either plan, 13 agrees to make the required premium payments, and agrees to satisfy the other 14 reasonable provisions of the health benefit plan not inconsistent with this chapter. 15 (b) A small employer insurer shall file with the director, under AS 21.42, the 16 basic health benefit plans and the standard health benefit plans to be used by the 17 insurer. 18 (c) The director at any time may, after providing notice and an opportunity for 19 a hearing to a small employer insurer as provided under AS 21.06.180 - 21.06.210, 20 disapprove the continued use by the small employer insurer of a basic or standard 21 health benefit plan if the plan does not meet the requirements of this chapter. 22 Sec. 21.56.150. REQUIRED HEALTH BENEFIT PROVISIONS. A health 23 benefit plan covering a small employer must include the following provisions: 24 (1) a health benefit plan may not deny, exclude, or limit benefits for 25 a covered individual for losses incurred more than 12 months following the effective 26 date of the individual's coverage due to a preexisting condition; a health benefit plan 27 may not define a preexisting condition more restrictively than 28 (A) a condition that would have caused an ordinarily prudent 29 person to seek medical advice, diagnosis, care, or treatment during the six 30 months immediately preceding the effective date of coverage; 31 (B) a condition for which medical advice, diagnosis, care, or
01 treatment was recommended or received during the six months immediately 02 preceding the effective date of coverage; or 03 (C) a pregnancy existing on the effective date of coverage; 04 (2) a health benefit plan must waive any time period applicable to a 05 preexisting condition exclusion or limitation period with respect to particular services 06 for the period of time an individual was previously covered by qualifying previous 07 coverage that provided benefits with respect to the services, provided that the 08 qualifying previous coverage was continuous to a date not more than 30 days before 09 the effective date of the new coverage; this paragraph does not preclude application 10 of a waiting period applicable to all new enrollees under the health benefit plan; 11 (3) a health benefit plan may exclude coverage for late enrollees for the 12 greater of 18 months or for an 18-month preexisting condition exclusion, provided that 13 if both a period of exclusion from coverage and a preexisting condition exclusion are 14 applicable to a late enrollee, the combined period may not exceed 18 months from the 15 date the individual enrolls for coverage under the health benefit plan; 16 (4) requirements used by a small employer insurer in determining 17 whether to provide coverage to a small employer shall be applied uniformly among all 18 small employers with the same number of eligible employees applying for coverage 19 or receiving coverage from the small employer insurer, except that a small employer 20 insurer may vary application of minimum participation requirements and minimum 21 employer contribution requirements by the size of the small employer group; 22 (5) a small employer insurer may not increase a requirement for 23 minimum employee participation or a requirement for minimum employer contribution 24 applicable to a small employer at any time after the small employer has been accepted 25 for coverage, except as allowed under (4) of this section; 26 (6) if a small employer insurer offers coverage to a small employer, the 27 small employer insurer shall offer coverage to all of the eligible employees of a small 28 employer and their dependents; a small employer insurer may not offer coverage to 29 only certain individuals in a small employer group or to only part of the group, except 30 in the case of late enrollees as provided in (3) of this section; 31 (7) a health benefit plan may not, by a rider or amendment applicable
01 to a specific individual, restrict or exclude coverage by type of illness, treatment, 02 medical condition, or accident, except for preexisting conditions as allowed under this 03 section. 04 Sec. 21.56.160. EXEMPTION FROM REQUIRED OFFER OF COVERAGE. 05 (a) A small employer insurer is not required to offer coverage or accept applications 06 under AS 21.56.140(a) 07 (1) if the small employer is not physically located in the insurer's 08 established geographic service area; 09 (2) if the employee does not work or reside within the insurer's 10 established geographic service area; 11 (3) within an established geographic service area where the small 12 employer insurer reasonably anticipates, and demonstrates to the satisfaction of the 13 director, that it will not have the capacity to deliver service adequately to the members 14 of the groups because of its obligations to existing group policyholders and enrollees; 15 or 16 (4) if the certificate of authority or bylaws of the insurer do not permit 17 the insurer to issue coverage on a marketwide basis; an insurer described in this 18 subparagraph shall comply with AS 21.56.140 regarding small employers that meet the 19 requirements of the insurer's certificate of authority or bylaws; this subparagraph does 20 not apply to insurers who limit coverage based on health status or health risk. 21 (b) A small employer insurer that cannot offer coverage under (a)(3) of this 22 section may not offer coverage in the applicable area to new cases of employer groups 23 with more than 25 eligible employees or to small employer groups until the later of 24 180 days following each refusal or the date on which the insurer notifies the director 25 that it has regained capacity to deliver services to small employer groups. 26 (c) A small employer insurer may not be required to provide coverage to small 27 employers for any period of time for which the director determines that requiring the 28 acceptance of small employers would place the small employer insurer in a financially 29 impaired condition. 30 Sec. 21.56.170. CONDITIONS FOR CEASING TO DO BUSINESS. A small 31 employer insurer or a welfare arrangement may cease doing business in the small
01 employer market if the insurer or welfare arrangement provides notice of the decision 02 to cease doing business in the small employer market to the division, the board, the 03 policyholder or contract holder, and the employer, and coverage under a health benefit 04 plan subject to this chapter is continued for one year after the date of the notice 05 required under this section. A small employer insurer or a welfare arrangement that 06 ceases doing business in the small employer marketplace may not reenter the small 07 employer marketplace for a period of five years from the date of the notice required 08 under this section. 09 Sec. 21.56.180. FAIR MARKETING STANDARDS. (a) A small employer 10 insurer shall actively market health benefit plan coverage, including the basic and 11 standard health benefit plans, to eligible small employers in the state. If a small 12 employer insurer denies coverage to a small employer on the basis of the health status 13 or claims experience of the small employer or its employees or dependents, the small 14 employer insurer shall offer the small employer the opportunity to purchase a basic 15 health benefit plan and a standard health benefit plan. 16 (b) Except as provided in this subsection, a small employer insurer may not, 17 directly or indirectly, encourage or direct small employers to refrain from filing an 18 application for coverage with the small employer insurer because of the health status, 19 claims experience, industry, occupation, or geographic location of the small employer, 20 or encourage or direct small employers to seek coverage from another insurer because 21 of the health status, claims experience, industry, occupation, or geographic location of 22 the small employer. This subsection does not apply to information provided by a 23 small employer insurer to a small employer regarding the established geographic 24 service area or a restricted network provision of a small employer insurer. 25 (c) Except as provided in this subsection, a small employer insurer may not, 26 directly or indirectly, enter into a contract, agreement, or arrangement with an agent, 27 broker, managing general agent, or third-party administrator that provides for or results 28 in the compensation paid to an agent or broker for the sale of a health benefit plan to 29 be varied because of the health status, claims experience, industry, occupation, or 30 geographic location of the small employer. This subsection does not apply to a 31 compensation arrangement that provides compensation to an agent, broker, managing
01 general agent, or third-party administrator on the basis of a percentage of premium, 02 provided that the percentage does not vary because of the health status, claims 03 experience, industry, occupation, or geographic area of the small employer. 04 (d) A small employer insurer 05 (1) shall provide reasonable compensation, as provided under the plan 06 of operation of the program, to an agent, broker, managing general agent, or third-party 07 administrator, if any, for the sale of a basic or standard health benefit plan; 08 (2) or agent, broker, managing general agent, or third-party 09 administrator may not induce or otherwise encourage a small employer to separate or 10 otherwise exclude an employee from health coverage or benefits provided in 11 connection with the employee's employment; 12 (3) may only deny an application for coverage from a small employer 13 in writing and if the reasons for the denial are stated. 14 (e) The director may by regulation establish additional standards to provide for 15 the fair marketing and broad availability of health benefit plans to small employers in 16 this state. 17 (f) If a small employer insurer enters into a contract, agreement, or other 18 arrangement with a third-party administrator to provide administrative, marketing, or 19 other services related to the offering of health benefit plans to small employers in this 20 state, the third-party administrator is subject to this section as if it were a small 21 employer insurer. 22 (g) A violation of this section by a person is an unfair trade practice for 23 purposes of AS 21.36. 24 Sec. 21.56.250. DEFINITIONS. In this chapter, 25 (1) "actuarial certification" means a written statement by a member of 26 the American Academy of Actuaries or another individual acceptable to the director 27 indicating that based on the person's examination, including a review of the 28 appropriate records, actuarial assumptions, and methods used by the insurer in 29 establishing premium rates for applicable health insurance plans that a small employer 30 insurer is in compliance with the provisions of AS 21.56.120; 31 (2) "affiliate" or "affiliated" means a person who directly or indirectly,
01 through one or more intermediaries, controls or is controlled by or is under common 02 control with, a specified person; 03 (3) "association" means the Small Employer Health Reinsurance 04 Association created in AS 21.56.010; 05 (4) "basic health benefit plan" means a lower cost plan offered under 06 AS 21.56.140; 07 (5) "board" means the board of directors of the association; 08 (6) "case characteristics" means demographic or other objective 09 characteristics of a small employer that are considered by the small employer insurer 10 in the determination of premium rates for the small employer, provided that claim 11 experience, health status, and duration of coverage may not be case characteristics for 12 the purposes of this chapter; 13 (7) "committee" means the health benefit plan committee established 14 in AS 21.56.060; 15 (8) "dependent" means the spouse or an unmarried child of an eligible 16 employee who is not yet 19 years of age; an unmarried child who is a full-time 17 student, who is not yet 23 years of age, and who is financially dependent upon the 18 parent; and an unmarried child of any age who is medically certified as disabled and 19 dependent upon the parent, subject to applicable terms of the health benefit plan 20 covering the employee; 21 (9) "eligible employee" means an employee who works on a full-time 22 basis, with a normal work week of 30 or more hours, and includes a sole proprietor, 23 a partner of a partnership or an independent contractor, provided the sole proprietor, 24 partner, or contractor is included as an employee under a health benefit plan of a small 25 employer, but does not include an employee who works on a part-time, temporary, or 26 substitute basis; 27 (10) "established geographic service area" means a geographic area 28 within which the insurer is authorized to provide coverage under the insurer's 29 certificate of authority as approved by the director; 30 (11) "health benefit plan" means a hospital or medical expense policy, 31 health, hospital, or medical service corporation contract, a plan provided by an insurer
01 or welfare arrangement, and a health maintenance organization contract offered by an 02 employer, but does not include a policy covering only accident, credit, dental, 03 disability income, long-term care, hospital indemnity, fixed indemnity, Medicare 04 supplement, specified disease, vision care, coverage issued as a supplement to liability 05 insurance, worker's compensation insurance, automobile medical payment insurance; 06 (12) "insurer" has the meaning given in AS 21.90.900 and includes a 07 welfare arrangement, a fraternal benefit society, a health maintenance organization, a 08 hospital service corporation, and a medical service corporation; 09 (13) "late enrollee" means an eligible employee or dependent who 10 requests enrollment in a small employer's health benefit plan following the initial 11 enrollment period for which the employee or dependent was eligible to enroll under 12 the terms of the health benefit plan except that an eligible employee or dependent may 13 not be considered a late enrollee if 14 (A) the individual 15 (i) was covered under qualifying previous coverage at 16 the time of the initial enrollment; 17 (ii) has lost coverage under qualifying previous coverage 18 as a result of the termination of employment or eligibility, the 19 involuntary termination of the qualifying previous coverage, death of a 20 spouse, or divorce or dissolution of marriage; and 21 (iii) requests enrollment within 30 days after the 22 termination of the qualifying previous coverage; or 23 (B) the individual is employed by an employer who offers 24 multiple health benefit plans and the individual elects a different health benefit 25 plan during an open enrollment period; or 26 (C) a court has ordered coverage to be provided for a spouse 27 or minor child under a covered employee's plan and request for enrollment is 28 made within 30 days after issuance of the court order; 29 (14) "member" means all insurers issuing health benefit plans, welfare 30 arrangements and, to the extent permitted under 29 U.S.C. 1001 - 1459 (Employee 31 Retirement Income Security Act), other benefit arrangements providing health benefit
01 plans in this state; 02 (15) "new business premium rate" means the lowest premium rate 03 charged or offered, or that could have been charged or offered, by the small employer 04 insurer to small employers with similar case characteristics for newly issued health 05 benefit plans with the same or similar coverage; 06 (16) "plan of operation" means the plan of operation of the association 07 adopted by the board under AS 21.56.040; 08 (17) "qualifying previous coverage" and "qualifying existing coverage" 09 mean benefits or coverage provided under 10 (A) Medicare or Medicaid; 11 (B) an employer-based health insurance or health benefit 12 arrangement that provides benefits similar to or exceeding benefits provided 13 under the basic health benefit plan; or 14 (C) an individual health insurance policy, including coverage 15 issued under AS 21.84, AS 21.86, or AS 21.87 that provides benefits similar 16 to or exceeding the benefits provided under the basic health benefit plan, 17 provided that the policy has been in effect for a period of at least one year; 18 (18) "rating period" means the calendar period for which premium rates 19 established by a small employer insurer are assumed to be in effect; 20 (19) "reinsuring insurer" means a small employer insurer participating 21 in the reinsurance association under AS 21.56.010; 22 (20) "restricted network provision" means a provision of a health 23 benefit plan that conditions the payment of benefits, in whole or in part, on the use of 24 health care providers that have entered into a contractual arrangement with the insurer 25 under AS 21.86 to provide health care services to covered individuals; 26 (21) "small employer" means a person, firm, corporation, partnership, 27 or association actively engaged in business whose total employed work force consisted 28 of, on at least 50 percent of its working days during the preceding 12 months, at least 29 two but not more than 25 eligible employees, the majority of whom are employed 30 within the state; in determining the number of eligible employees, companies that are 31 affiliated companies or that are eligible to file a combined tax return for purposes of
01 federal taxation, are considered one employer; except as otherwise specifically 02 provided, provisions of this chapter that apply to a small employer that has a health 03 benefit plan continue to apply until the plan anniversary following the date the 04 employer no longer meets the requirements of this definition; 05 (22) "small employer insurer" means an insurer that offers a health 06 benefit plan covering eligible employees of one or more small employers; 07 (23) "standard health benefit plan" means a health benefit plan 08 developed under AS 21.56.140; 09 (24) "welfare arrangement" means a multiple employer welfare 10 arrangement as defined in 29 U.S.C. 1003, but does not include a multiple employer 11 welfare arrangement that is fully insured as provided in 26 U.S.C. 1060. 12 * Sec. 9. AS 21.86.260(a) is amended to read: 13 (a) Except as provided in AS 21.56 and in this chapter, this title does not 14 apply to a health maintenance organization that obtains a certificate of authority under 15 this chapter. This subsection does not apply to an insurer licensed under AS 21.09 or 16 a hospital or medical service corporation licensed under AS 21.87 except with respect 17 to its health maintenance organization activities authorized by and regulated under this 18 chapter. 19 * Sec. 10. AS 21.86.260(a) is repealed and reenacted to read: 20 (a) Except as provided in this chapter, this title does not apply to a health 21 maintenance organization that obtains a certificate of authority under this chapter. This 22 subsection does not apply to an insurer licensed under AS 21.09 or a hospital or 23 medical service corporation licensed under AS 21.87 except with respect to its health 24 maintenance organization activities authorized by and regulated under this chapter. 25 * Sec. 11. AS 21.87.340 is amended to read: 26 Sec. 21.87.340. OTHER PROVISIONS APPLICABLE. In addition to the 27 provisions contained or referred to previously in this chapter, the following chapters 28 and provisions of this title also apply with respect to service corporations to the extent 29 applicable and not in conflict with the express provisions of this chapter and the 30 reasonable implications of the express provisions, and for the purposes of the 31 application the corporations shall be considered to be mutual "insurers":
01 (1) AS 21.03 02 (2) AS 21.06 03 (3) AS 21.09, except AS 21.09.090 04 (4) AS 21.18.010 05 (5) AS 21.18.030 06 (6) AS 21.18.040 07 (7) AS 21.18.120 08 (8) AS 21.21.321 09 (9) AS 21.36 10 (10) AS 21.42.345 - 21.42.365, 21.42.375, 21.42.380, and 21.42.385 11 (11) AS 21.51.120 12 (12) AS 21.53 13 (13) AS 21.54.020 14 (14) AS 21.56 15 (15) AS 21.69.400 16 (16) [(15)] AS 21.69.520 17 (17) [(16)] AS 21.69.600, 21.69.620, and 21.69.630 18 (18) [(17)] AS 21.78 19 (19) [(18)] AS 21.89.040 20 (20) [(19)] AS 21.89.060 21 (21) [(20)] AS 21.90. 22 * Sec. 12. AS 21.87.340 is repealed and reenacted to read: 23 Sec. 21.87.340. OTHER PROVISIONS APPLICABLE. In addition to the 24 provisions contained or referred to previously in this chapter, the following chapters 25 and provisions of this title also apply with respect to service corporations to the extent 26 applicable and not in conflict with the express provisions of this chapter and the 27 reasonable implications of the express provisions, and for the purposes of the 28 application the corporations shall be considered to be mutual "insurers": 29 (1) AS 21.03 30 (2) AS 21.06 31 (3) AS 21.09, except AS 21.09.090
01 (4) AS 21.18.010 02 (5) AS 21.18.030 03 (6) AS 21.18.040 04 (7) AS 21.18.120 05 (8) AS 21.21.321 06 (9) AS 21.36 07 (10) AS 21.42.345 - 21.42.365, 21.42.375, 21.42.380, and 21.42.385 08 (11) AS 21.51.120 09 (12) AS 21.53 10 (13) AS 21.54.020 11 (14) AS 21.69.400 12 (15) AS 21.69.520 13 (16) AS 21.69.600, 21.69.620, and 21.69.630 14 (17) AS 21.78 15 (18) AS 21.89.040 16 (19) AS 21.89.060 17 (20) AS 21.90. 18 * Sec. 13. AS 24.20.206 is amended to read: 19 Sec. 24.20.206. DUTIES. The Legislative Budget and Audit Committee shall 20 (1) report to the legislature its recommendations relating to the 21 confirmation of appointees to the Board of Trustees of the Alaska Permanent Fund 22 Corporation; 23 (2) annually review the long-range operating plans of all agencies of 24 the state which perform lending or investment functions; 25 (3) review periodic reports from all agencies of the state which perform 26 lending or investment functions; 27 (4) present a complete report of investment programs, plans, 28 performance, and policies of all agencies of the state which perform lending or 29 investment functions to the legislature within 30 days after the convening of each 30 regular session; 31 (5) present to the legislature within 30 days after the convening of each
01 regular session a review of the report of the governor under AS 37.07.020(d) with 02 recommendations for needed legislation; 03 (6) in conjunction with the finance committee of each house 04 recommend annually to the legislature the investment policy for the general fund 05 surplus and for the income from the permanent fund; 06 (7) provide for an annual post audit and annual operational and 07 performance evaluation of the Alaska Permanent Fund Corporation investments and 08 investment programs; 09 (8) provide for an annual operational and performance evaluation of the 10 Alaska Housing Finance Corporation and the Alaska Industrial Development and 11 Export Authority; the performance evaluation shall include, but is not limited to, a 12 comparison of the effect on various sectors of the economy by public and private 13 lending, the effect on resident and nonresident employment, the effect on real wages, 14 and the effect on state and local operating and capital budgets of the programs of the 15 Alaska Housing Finance Corporation and the Alaska Industrial Development and 16 Export Authority; 17 (9) provide assistance to the trustees of the trust established in 18 AS 37.14.400 - 37.14.450 in carrying out their duties under AS 37.14.415; 19 (10) provide for an annual post audit and annual operational and 20 performance evaluation of the Alaska Health Care Authority. 21 * Sec. 14. AS 37.07.030 is amended to read: 22 Sec. 37.07.030. RESPONSIBILITIES OF THE LEGISLATURE. The 23 legislature shall 24 (1) provide for a budget review function; 25 (2) analyze the comprehensive operating and capital improvements 26 programs and financial plans recommended by the governor; 27 (3) adopt legislation to authorize implementation of the governor's 28 comprehensive operating and capital improvements programs and financial plans or 29 appropriate alternatives to those plans; 30 (4) provide for a post-audit function to cover financial transactions, 31 program accomplishment, and compliance with legislative intent;
01 (5) adopt or revise the estimate of receipts required to balance the 02 succeeding fiscal year's budget in order that proposed expenditures do not exceed 03 estimated receipts for that fiscal year; 04 (6) adopt, revise, or initiate revenue measures in order to balance the 05 succeeding fiscal year's budget and the capital improvements section of the budget for 06 the succeeding six years; 07 (7) appropriate funds for the operation of the Alaska Health Care 08 Authority. 09 * Sec. 15. AS 39.25.110 is amended by adding a new paragraph to read: 10 (30) the executive director of the Alaska Health Care Authority. 11 * Sec. 16. AS 39.50.200(b) is amended by adding a new paragraph to read: 12 (55) Alaska Health Care Authority (AS 44.87). 13 * Sec. 17. AS 44 is amended by adding a new chapter to read: 14 CHAPTER 87. ALASKA HEALTH CARE AUTHORITY. 15 ARTICLE 1. CREATION, POWERS, AND ADMINISTRATION. 16 Sec. 44.87.010. AUTHORITY CREATED; PURPOSE. (a) The Alaska Health 17 Care Authority is established. The authority is a public corporation and an 18 instrumentality of the state within the Department of Administration but has a legal 19 existence independent of and separate from the state. 20 (b) The purpose of the authority is to 21 (1) develop statewide health care expenditure limits, facility licensing 22 standards, and access and quality goals; 23 (2) implement statewide health care expenditure limits through 24 reimbursement schedules and utilization standards; 25 (3) develop a single payer health care financing system; 26 (4) develop a program to provide access to health care insurance or 27 services for all residents of the state; 28 (5) administer the children's health care plan described in this chapter; 29 and 30 (6) where possible, coordinate the delivery, quality, access, and 31 financing of health care in the state.
01 Sec. 44.87.020. BOARD OF DIRECTORS; ORGANIZATION. (a) The 02 authority shall be managed by a board of directors composed of nine members 03 appointed by the governor. In appointing members to the board, the governor shall 04 ensure that 05 (1) the interests of health care providers and purchasers are fairly 06 represented; and 07 (2) a majority of the board are experts in health care issues and fairly 08 represent the interests of the general public in having access to quality and affordable 09 health care. 10 (b) Members of the board serve staggered terms of four years. The board shall 11 elect from its membership a president, vice-president, and secretary. Members of the 12 board serve without compensation but are entitled to receive per diem and travel 13 expenses authorized for boards and commissions under AS 39.20.180. Members of 14 the board are subject to AS 39.50. 15 Sec. 44.87.030. GENERAL POWERS. The authority may 16 (1) exercise the powers granted to insurers under the laws of the state; 17 if the authority acts as an insurer, the authority shall comply with the requirements 18 applicable to insurers under AS 21; 19 (2) sue or be sued; 20 (3) enter into contracts or agreements; 21 (4) establish administrative or accounting procedures; 22 (5) collect, invest, and disburse funds; 23 (6) charge fees for providing administrative services; 24 (7) establish appropriate levels of reserves to cover the expenses of the 25 authority; 26 (8) adopt necessary regulations and procedures for implementation of 27 this chapter. 28 Sec. 44.87.040. DUTIES OF BOARD; ANNUAL REPORT. The board shall 29 (1) establish reimbursement schedules and utilization standards 30 necessary to implement this chapter; 31 (2) develop uniform billing and common claims forms for health care
01 providers and patients; 02 (3) develop a single payer health care financing system; 03 (4) in procuring or providing group health insurance allowed under this 04 chapter, procure or provide comprehensive coverage at the lowest possible cost per 05 participant; 06 (5) provide to the governor and to the legislature an annual report 07 covering the previous fiscal year's activities of the authority; 08 (6) review each application for a certificate of need under AS 18.07.041 09 and within 60 days after receiving a copy of the application determine the effect of 10 issuing the certificate on the cost of the group health insurance required under this 11 chapter; a copy of the determination shall be provided to the office of planning and 12 research in the Department of Health and Social Services; 13 (7) establish a grievance procedure to resolve disputes between the 14 authority and health care providers or participants; 15 (8) every third fiscal year, include in the annual report a cost and 16 benefit analysis of the activities of the authority; 17 (9) analyze the health care needs of the state population that is 18 uninsured or underinsured; 19 (10) provide recommendations to the legislature on ways to attract and 20 retain qualified health care professionals in medically underserved areas of the state; 21 (11) provide recommendations to the legislature for a systematic 22 approach or plan with alternatives including liabilities and financing alternatives that 23 may be considered to assure access to affordable quality health care for all state 24 residents; the recommendations must be updated each year. 25 Sec. 44.87.050. STAFF AND PROFESSIONAL SERVICES CONTRACTS. 26 The authority shall employ an executive director who serves at the pleasure of the 27 authority as its chief administrative officer. The executive director may, with the 28 approval of the authority, select and employ additional staff as necessary. The 29 executive director is in the exempt service under AS 39.25.110. Employees of the 30 authority other than the executive director are in the classified service under 31 AS 39.25.100. In addition to its staff of regular employees, the authority may contract
01 for the services of consultants and professional, technical, and financial advisors the 02 authority considers necessary for the purpose of developing information, conducting 03 hearings, studies, investigations, or other proceedings, or otherwise exercising its 04 powers. 05 ARTICLE 2. STATE HEALTH CARE PROGRAM. 06 Sec. 44.87.060. STATEWIDE HEALTH CARE DATA SYSTEM. (a) The 07 authority shall develop and periodically update a data system that indicates the total 08 amount expended on health care for residents of the state. To the extent practicable, 09 the data system base year for health care expenditures shall be 1992 and must contain 10 a separate expenditure breakdown for 11 (1) hospital services; 12 (2) physician services; 13 (3) laboratory services; 14 (4) pharmaceutical products; 15 (5) durable medical equipment; and 16 (6) other health services that the authority determines appropriate. 17 (b) In addition to the data collected under (a) of this section, the authority shall 18 collect data on the following: 19 (1) the aging of the population and other factors that may affect the 20 demand for health care in the future; 21 (2) general inflation factors and the costs related to inflation in labor 22 and other inputs used to produce health services; 23 (3) technological advances that may increase or decrease health care 24 costs; 25 (4) appropriate improvements in health care productivity; 26 (5) feasible reductions in unnecessary health care; 27 (6) the need to assure that all sectors of the population have adequate 28 access to health care services; 29 (7) the effect and availability of statewide expenditure goals on the 30 quality of health care; and 31 (8) other factors that the authority determines appropriate.
01 Sec. 44.87.070. STATEWIDE HEALTH CARE EXPENDITURE LIMITS. (a) 02 The authority shall develop statewide health care budget and expenditure limits, based 03 on the data obtained under AS 44.87.060. To the extent practicable, the base year for 04 the statewide health care budget and expenditure limits shall be 1992. 05 (b) The authority shall annually adjust the health care expenditure limits 06 developed under this section to reflect changes in the Consumer Price Index for all 07 urban consumers for all items complied by the Bureau of Labor Statistics, United 08 States Department of Labor, for the preceding calendar year. The annual index for 09 1992 is the reference base index. 10 (c) In developing expenditure limits applicable in a current year the authority 11 shall adjust the expenditure limits for the following factors if these factors would affect 12 the expenditure limits: 13 (1) changes in the size or demographic characteristics of the population 14 of the state; 15 (2) changes in technology and health care delivery that may increase 16 or decrease health care costs; 17 (3) reduction in unnecessary health care; 18 (4) access to adequate health care services; 19 (5) costs of medical malpractice insurance; 20 (6) administrative cost reduction; and 21 (7) other factors determined appropriate by the authority. 22 (d) Health care expenditure limits developed under this section must, to the 23 extent practicable, 24 (1) include a separate expenditure limit for each health care service 25 described under AS 44.87.060(a) and may include limits for other subcategories of 26 health care services that the authority determines appropriate; 27 (2) be based on the following criteria as adjusted under (b) and (c) of 28 this section: 29 (A) for hospitals and health care facilities, the limit must be 30 based on actual costs in the base year; 31 (B) for health care providers other than hospitals and health care
01 facilities, the limit must be based on the actual expenditures or payments in the 02 base year; 03 (C) for other health care services not described in (A) or (B) of 04 this paragraph, limits shall be developed as determined by the authority. 05 Sec. 44.87.080. REQUIRED HEALTH CARE PROVIDER NEGOTIATION. 06 (a) The board shall convene representatives from each class of health care providers 07 to negotiate recommendations for the reimbursement schedules required under 08 AS 44.87.090. A recommendation may not be submitted to the board unless it meets 09 the expenditure limits established under AS 44.87.070. The board shall adopt 10 regulations to establish a good faith negotiating process. 11 (b) Negotiations required under (a) of this section 12 (1) shall be conducted annually, shall commence on or before 13 January 1, and shall be completed on or before March 31 unless the board extends the 14 time for completing the negotiation process; 15 (2) must include an attempt to agree on recommendations to be 16 submitted to the board for reimbursement schedules required under AS 44.87.090; 17 (3) shall endeavor to recommend reimbursement schedules that, if 18 implemented, will result in the achievement of the expenditure limits established under 19 AS 44.87.070. 20 (c) Each health care provider class shall be responsible for providing a three-person negotiating team to represent 21 that class in negotiations required under this 22 section. A negotiating team may not represent a class of health care providers unless 23 the team presents a petition to the authority indicating that at least 50 percent of the 24 health care providers in that class have consented to representation by that negotiating 25 team. A petition required under this subsection shall be submitted annually on or 26 before January 1. 27 (d) If a class of health care providers fails to select a negotiating team as 28 required by this section, the board shall appoint a three-person negotiating team to 29 represent health care providers in that class. 30 (e) A reimbursement schedule to which a majority of the negotiators agree 31 shall be adopted by the board as provided under AS 44.87.090(b). If a majority of the
01 negotiators fail to agree on a recommended reimbursement schedule, the board shall 02 adopt regulations establishing reimbursement schedules required under AS 44.87.090. 03 Sec. 44.87.090. ESTABLISHMENT OF REIMBURSEMENT SCHEDULES. 04 (a) Reimbursement schedules established by the authority shall use a base year of 05 1992 to the extent practicable, and incorporate the following criteria as adjusted by 06 factors described in AS 44.87.070(b) and (c): 07 (1) for hospitals, the schedule shall be established to allow payment on 08 a per discharge basis and utilize diagnosis related groups as the classification system; 09 the schedule must reflect uncompensated care or payments received from public 10 programs that are not sufficient to cover costs; 11 (2) for health care facilities other than hospitals, the schedule shall be 12 based on the actual cost of the service in the base year; 13 (3) for physician services, the schedule must include a resource based 14 relative value scale; 15 (4) for other health care services not described in (1) - (3) of this 16 subsection, schedules shall be developed as determined by the authority. 17 (b) A reimbursement schedule established by the board must include the 18 recommendations resulting from the negotiation process under AS 44.87.080, unless 19 the negotiation process fails to result in recommendations or the authority determines 20 that the recommendations would result in the violation of an expenditure limit 21 established under AS 44.87.070. 22 Sec. 44.87.100. MANDATORY HEALTH CARE PROVIDER COMPLIANCE. 23 (a) All health care providers in the state shall comply with the expenditure limits 24 established by the authority under AS 44.87.070 and the reimbursement schedules 25 established by the board. 26 (b) A health care provider may not submit a charge for health care services 27 that fails to comply with this section. A person receiving a charge that does not 28 comply with (a) of this section may not be required to pay that portion of the charge 29 that exceeds the reimbursement schedules established under AS 44.87.090. 30 Sec. 44.87.110. REQUIRED COOPERATION IN EXPENDITURE LIMIT 31 AND GOAL DEVELOPMENT. When requested by the authority, a health care
01 provider, insurer, or an agency of the state shall collect and provide information 02 possessed by the health care provider, insurer, or agency, necessary to the development 03 and revision of the health care expenditure, access, and quality goals established by the 04 authority. 05 Sec. 44.87.120. PROCUREMENT OF INSURANCE. (a) The authority may 06 procure and offer a policy or policies of comprehensive group health insurance to a 07 resident or an employer that the authority determines does not have health insurance 08 or for whom health insurance could be more cost effective if procured by the authority. 09 Group health insurance may include coverage for eligible employees and dependents. 10 The authority shall procure the insurance from an insurer authorized to transact 11 business in the state under AS 21.09, or the authority may elect to act as a self-insurer 12 if approved by the legislature and the authority complies with (d) of this section. 13 (b) The authority may establish a group health insurance pool or pools of 14 eligible residents or employers that elect to participate in the group health insurance 15 procured or provided by the authority. Coverage provided under this subsection must 16 include eligible dependents of residents and employees. 17 (c) Except when acting as a self-insurer, the authority shall procure or provide 18 group health insurance in compliance with the provisions of AS 36.30 and shall make 19 available bid specifications for desired group health insurance benefits to all insurance 20 carriers licensed in the state and qualified to provide the desired benefits. The 21 specifications shall be made available at least once every five years. 22 (d) Before the authority elects to act as a self-insurer, the authority shall solicit 23 proposals for the required coverage from insurers licensed in this state to offer health 24 insurance. If after the proposal process has been completed, the authority determines 25 that the desired coverage or benefits are not available from insurers licensed in this 26 state or the authority can provide the desired coverage and benefits at a lower cost per 27 eligible person, the authority may submit a plan of the intended self-insurance 28 coverage and benefits to the legislature. The authority may not begin acting as a self-insurer until the legislature h 29 approved the self-insurance plan submitted by the 30 authority. 31 ARTICLE 3. CHILDREN'S HEALTH CARE PROGRAM.
01 Sec. 44.87.130. CONTENTS OF PLAN. (a) The children's health care plan 02 consists of the following medical services for children who are eligible under 03 AS 44.87.140: 04 (1) routine examinations; 05 (2) diagnostic and screening services; 06 (3) immunizations and preventive services; 07 (4) laboratory and x-ray services; 08 (5) outpatient physician services; 09 (6) outpatient surgery; 10 (7) emergency room services; 11 (8) prescription lenses, eyeglass frames, and vision care; 12 (9) dental services, except orthodontics; 13 (10) prescription drugs; and 14 (11) other services, as approved by the board under (b) of this section. 15 (b) The board may, by regulations adopted under AS 44.62 (Administrative 16 Procedure Act), determine the scope of the services listed in (a) of this section and add 17 other categories of services for children that will be covered under the plan. A new 18 category of service is not covered under the plan until an insurer agrees to cover it. 19 (c) The plan also includes prenatal services, delivery services, and at least 20 three months of postnatal services for pregnant women. The board may, by regulations 21 adopted under AS 44.62 (Administrative Procedure Act), determine the scope of 22 services covered under this subsection, including the duration of postnatal services 23 beyond the minimum set under this subsection. 24 (d) In addition to the premium copayment required under AS 44.87.170, the 25 board may require a copayment for a service, establish deductibles, set duration and 26 usage limits, develop and implement procedures related to utilization review, and 27 establish other reasonable conditions relating to the provision of services under (a) - 28 (c) of this section to limit the cost of the plan's operation and to ensure the efficiency 29 and efficacy of the services provided under the plan. 30 Sec. 44.87.140. ELIGIBILITY FOR THE PLAN. (a) A child is eligible for 31 coverage under AS 44.87.130(a) and (b) if
01 (1) the child is under the age of 19 and has been a resident of the state 02 for the 12 months immediately preceding application for plan coverage or, if the child 03 is less than one year old, at least one of the child's parents has been a resident of the 04 state for the 12 months immediately preceding application for plan coverage; 05 (2) the child does not have health care coverage under another public 06 or private health insurance plan; 07 (3) the child's household income is below 300 percent of the income 08 level established under AS 47.25.310 - 47.25.420 for eligibility for aid to families with 09 dependent children; 10 (4) the child is not eligible for medical coverage under AS 47.07 11 (Medicaid); and 12 (5) a portion of the premium for plan coverage is paid on behalf of the 13 child, as determined by the board under AS 44.87.170. 14 (b) A pregnant woman is eligible for coverage under AS 44.87.130(c) if 15 (1) the woman has been a resident of the state for the 12 months 16 immediately preceding the woman's application for plan coverage; 17 (2) the woman does not have coverage for prenatal, delivery, or 18 postnatal services under another public or private health insurance plan; 19 (3) the woman's income is below 300 percent of the income level 20 established under AS 47.25.310 - 47.25.420 for eligibility for aid to families with 21 dependent children; 22 (4) the woman is not eligible for medical coverage under AS 47.07 23 (Medicaid); and 24 (5) a portion of the premium for plan coverage is paid on behalf of the 25 woman, as determined by the board under AS 44.87.170. 26 Sec. 44.87.150. APPLICATION PROCESS. (a) A pregnant woman or the 27 parent or guardian of a child may request an application packet for plan coverage by 28 notifying the board directly or by completing the relevant section of the woman's or 29 child's permanent fund dividend application form as provided under AS 43.23.017. 30 (b) Upon direct notification by an interested person or upon notification from 31 the Department of Revenue of the name and mailing address of a person who has
01 requested an application packet for the plan under (a) of this section, the board shall 02 send an application packet to the person requesting it. 03 (c) An application packet sent under (b) of this section must include 04 (1) a description of the health care coverage available under the plan; 05 (2) a copy of the sliding fee schedule used by the board to determine 06 the premium copayment responsibility and a description of deductibles and copayment 07 requirements the board has established under AS 44.87.130(d); 08 (3) an explanation of the eligibility requirements for the plan; and 09 (4) an application form to be returned to the board if the person wants 10 to apply for coverage personally or on behalf of an eligible child. 11 (d) Within 30 days after receiving a completed application for plan coverage, 12 the board shall either notify the applicant about whether the plan coverage is approved 13 or request additional information necessary to determine the eligibility. If the board 14 determines that a pregnant woman or a child is eligible for the plan, the notification 15 of eligibility sent under this subsection must include a determination of amount of the 16 premium copayment required under AS 44.87.170. 17 (e) The board's denial or withdrawal of plan coverage may be appealed to the 18 superior court. 19 Sec. 44.87.160. ADMINISTRATION OF PLAN. (a) The board shall 20 administer the children's health care plan by 21 (1) soliciting and accepting funds from private sources for deposit into 22 the fund created under AS 44.87.180; the board may also accept donations of services, 23 supplies, personnel, and other in-kind donations; 24 (2) evaluating bids and purchasing insurance from one or more insurers 25 to provide plan coverage; 26 (3) marketing the plan in a manner designed to make its existence 27 known to pregnant women and the parents and guardians of children who may be 28 eligible for the plan; 29 (4) evaluating applications for plan coverage and determining eligibility 30 for plan coverage; 31 (5) determining the premium copayment that is required under
01 AS 44.87.170. 02 (b) The board shall adopt regulations under AS 44.62 (Administrative 03 Procedure Act) to implement this chapter. 04 Sec. 44.87.170. COPAYMENTS OF PREMIUMS. (a) Coverage under the 05 plan is contingent upon copayment of part of the insurance premium, as determined 06 by the board. The board shall adopt a sliding scale for copayments that takes into 07 account the income and resources of the eligible person's household. The board shall 08 determine whether two copayments are required when eligible children are in a 09 household that includes a woman who is eligible because of pregnancy. 10 (b) The board, in cooperation with the Department of Revenue, shall adopt 11 regulations under which a pregnant woman or a parent or guardian may request that 12 a permanent fund dividend to which the woman or child is entitled be reduced by the 13 Department of Revenue to provide the premium copayment for the women's or child's 14 plan coverage. 15 (c) The authority shall deposit copayments received under this section into the 16 general fund. The estimated annual balance in the account maintained by the 17 commissioner of administration under AS 37.05.142 may be used by the legislature to 18 make appropriations to the fund established under AS 44.87.180. 19 ARTICLE 4. GENERAL PROVISIONS. 20 Sec. 44.87.180. ALASKA HEALTH CARE FUND. The Alaska health care 21 fund is created in the general fund. The fund consists of money appropriated by the 22 legislature. The fund shall be managed and invested by the board. The board may 23 expend money from the fund to carry out the provisions of this chapter. 24 Sec. 44.87.190. INSURANCE PREMIUMS. The authority shall provide that 25 sufficient funds are collected to provide authorized benefits, reserves, and to pay the 26 expenses of the authority. Reserves remaining at the termination of an insurance con- 27 tract shall be invested by the authority in the same manner as retirement funds are 28 invested under AS 14.25.180. 29 Sec. 44.87.200. PUBLIC RECORDS; ADMINISTRATIVE PROCEDURES. 30 The provisions of AS 09.25.110 - 09.25.120 apply to records of the authority, except 31 for medical records that identify an individual. AS 44.62 (Administrative Procedure
01 Act) applies to the authority. 02 Sec. 44.87.900. DEFINITIONS. In this chapter, 03 (1) "authority" means the Alaska Health Care Authority; 04 (2) "board" means the board of directors of the Alaska Health Care 05 Authority; 06 (3) "class" means a group of health care providers who are practicing 07 the same occupation or profession; 08 (4) "eligible employee" means an employee of a participant who 09 qualifies for group health benefits as determined by the participant; 10 (5) "employer" means the state, a municipality, a district, a collective 11 bargaining unit, the board of a public corporation of the state created within a principal 12 executive department, a self-employed person, or a person employing one or more 13 persons in a business or industry; 14 (6) "fund" means the Alaska health care fund; 15 (7) "group health insurance" means coverage that may include medical 16 care and treatment, dental care, eye care, and other group health coverage as 17 determined by the authority; 18 (8) "health care provider" means an acupuncturist licensed under 19 AS 08.06; a chiropractor licensed under AS 08.20; a dental hygienist licensed under 20 AS 08.32; a dentist licensed under AS 08.36; a marital or family therapist licensed 21 under AS 08.63; a nurse licensed under AS 08.68; a dispensing optician licensed under 22 AS 08.71; an optometrist licensed under AS 08.72; a pharmacist licensed under 23 AS 08.80; a physical therapist or occupational therapist licensed under AS 08.84; a 24 physician licensed under AS 08.64; a podiatrist; a psychologist and a psychological 25 associate licensed under AS 08.86; and a hospital as defined in AS 18.20.130, 26 including a governmentally owned or operated hospital; and an employee of a health 27 care provider acting within the course and scope of employment; 28 (9) "health care services" means services for medical or dental care or 29 hospitalization, furnished for the purpose of alleviating, curing, or healing human 30 illness, injury, or physical disability; 31 (10) "hospital" has the meaning given in AS 18.20.130;
01 (11) "insurer" has the meaning given in AS 21.90.900; 02 (12) "participant" means a person who participates in the group health 03 insurance procured or provided by the authority; 04 (13) "reimbursement schedules" means a schedule or system that 05 streamlines or results in cost efficient payments to health care providers, and includes 06 a schedule of maximum allowable reimbursement for health care services; 07 (14) "resident" means a person who is eligible for a permanent fund 08 dividend under AS 43.23.005; 09 (15) "state" means the executive, legislative, and judicial branches of 10 state government, and includes the University of Alaska and a public corporation of 11 the state created within a principal executive department; 12 (16) "utilization standards" means a system to monitor, track, and verify 13 patterns of treatment by health care providers and to develop utilization review criteria, 14 that assures that cost efficient and cost effective care is provided within accepted 15 medical standards without reducing the quality of care. 16 * Sec. 18. REPORT. The Alaska Health Care Authority shall report to the Alaska State 17 Legislature 18 (1) by January 1, 1994, on the progress made by the authority in establishing 19 a single payer health care financing system; and 20 (2) by March 1, 1994, on the progress made by the authority in establishing 21 a health care provider reimbursement systems and utilization standards. 22 * Sec. 19. PHASED TRANSITION PERIOD. Notwithstanding the provisions of AS 44.87, 23 the Alaska Health Care Authority shall implement the provisions of AS 44.87 on an orderly 24 and gradual basis as follows: 25 (1) by July 1, 1994, the authority shall finish collecting data required under 26 AS 44.87.060; 27 (2) by July 1, 1996, the authority shall complete the statewide health care 28 expenditure budget and reimbursement schedules described in AS 44.87.070 and 44.87.090; 29 (3) by January 1, 1997, the authority shall implement the expenditure limits 30 established under AS 44.87.070, and the reimbursement schedules and utilization standards 31 required under AS 44.87.040(1) and the uniform billing and common claims forms required
01 under AS 44.87.040(2) shall be in operation. 02 * Sec. 20. PREMIUM RATE TRANSITION PERIOD. Regarding a health benefit plan 03 subject to AS 21.56.110, enacted in sec. 8 of this Act, a premium rate for a rating period may 04 exceed the ranges set out in AS 21.56.120(a)(1) and (2), enacted in sec. 8 of this Act, through 05 June 30, 1996; on or after July 1, 1996, the premium rate shall meet the requirements set out 06 in AS 21.56.120(a)(1) and (2), enacted in sec. 8 of this Act. However, through June 30, 1996, 07 the premium rate is subject to the following provisions: 08 (1) the premium rate charged or offered during a rating period to small 09 employers with similar case characteristics as determined by the insurer for the same or 10 similar coverage may not vary from the applicable index rate by more than 35 percent of the 11 applicable index rate; 12 (2) regarding a health benefit plan issued before July 1, 1993, if premium rates 13 charged or offered for the same or similar coverage under a health benefit plan covering a 14 small employer with similar case characteristics as determined by the insurer exceeds the 15 applicable index rate by more than 35 percent, an increase in premium rates for a new rating 16 period may not exceed the sum of 17 (A) a percentage change in the base premium rate measured from the 18 first day of the prior rating period to the first day of the new rating period; plus 19 (B) adjustments due to changes in case characteristics or plan design 20 of the small employer, as determined by the insurer; 21 (3) the percentage increase in the premium rate charged to a small employer 22 for a new rating period may not exceed the sum of 23 (A) the percentage change in the new business premium rate measured 24 from the first day of the prior rating period to the first day of the new rating period; 25 in the case of a health benefit plan into which the small employer insurer is no longer 26 enrolling new small employers, the small employer insurer shall use the percentage 27 change in the base premium rate, provided that the change does not exceed, on a 28 percentage basis, the change in the new business premium rate for the most similar 29 health benefit plan into which the small employer insurer is actively enrolling new 30 small employers; 31 (B) any adjustment due to change in coverage or change in the case
01 characteristics of the small employer, as determined from the insurer's rate manual; 02 and 03 (C) 10 percent of the premium rate charged in the prior rating period. 04 * Sec. 21. TRANSITION. (a) Within 180 days after the board is appointed under 05 AS 21.56.020, enacted in sec. 8 of this Act, the board of directors of the Small Employer 06 Health Reinsurance Association shall submit a small employer health benefit plan to the 07 director of the division of insurance for approval. If the association fails to submit a suitable 08 plan of operation, the director may, after notice and hearing, adopt reasonable regulations 09 necessary or advisable to effectuate the provisions of this chapter. These regulations continue 10 in force until modified by the director or superseded by a plan submitted by the association 11 and approved by the director. 12 (b) Notwithstanding AS 21.56.140(a), enacted in sec. 8 of this Act, a small employer 13 insurer is not required to offer a small employer a basic or standard health benefit plan until 14 180 days after the director of the division of insurance has approved a basic and a standard 15 small employer health benefit plan under AS 21.56.140, except that, if the Small Employer 16 Health Reinsurance Association has not adopted a plan of operation, a small employer insurer 17 is not required to offer a basic or standard health benefit plan until the date a plan of operation 18 is adopted as provided under AS 21.56.040. 19 (c) By September 1, 1993, a small employer insurer shall file with the director the 20 insurer's net insurance premium earned from health benefit plans delivered or issued for 21 delivery to small employers in this state in the previous calendar year. 22 (d) The Health Benefit Plan Committee, enacted in sec. 8 of this Act, shall submit the 23 required health benefit plans within 180 days after the members of the committee are 24 appointed. 25 (e) Notwithstanding AS 21.56.070, enacted in sec. 8 of this Act, the board of directors 26 of the Small Employer Health Reinsurance Association shall provide the report required under 27 AS 21.56.070 to the director of the division of insurance annually until December 31, 1998. 28 * Sec. 22. AS 21.36.025 and AS 21.56 are repealed. 29 * Sec. 23. (a) This Act takes effect only if an Act requiring that a civil action against a 30 health care provider by a person less than two years of age be brought before the claimant's 31 eighth birthday, allowing prejudgment interest on a medical malpractice judgment to bear
01 interest at the prevailing federal discount rate, requiring mandatory arbitration in medical 02 malpractice actions, and changing the expert advisory panel in a medical malpractice action 03 from three persons to one person, is passed by the Eighteenth Alaska State Legislature during 04 its First Regular Session and is signed into law by the governor. 05 (b) If the condition described in (a) of this section is fulfilled 06 (1) secs. 6, 10, 12, and 22 of this Act take effect July 1, 1997; 07 (2) AS 44.87.080, enacted in sec. 17 of this Act, takes effect January 1, 1996; 08 (3) AS 44.87.100, enacted in sec. 17 of this Act, takes effect January 1, 1997; 09 (4) except as provided in (1) - (3) of this subsection, this Act takes effect on 10 the date the Act described in (a) of this section takes effect.