Revision: April 3, 2013, midnight
HB 526-FN – AS AMENDED BY THE HOUSE
13Mar2013… 0349h
2013 SESSION
01/04
HOUSE BILL 526-FN
AN ACT relative to termination of activities and dissolution of the association created under RSA 404-G.
COMMITTEE: Commerce and Consumer Affairs
This bill establishes a procedure for the termination of activities and dissolution of the association created pursuant to RSA 404-G for the operation of the high risk pool.
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Explanation: Matter added to current law appears in bold italics.
Matter removed from current law appears [in brackets and struckthrough.]
Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
13Mar2013… 0349h
13-0541 01/04
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Thirteen
AN ACT relative to termination of activities and dissolution of the association created under RSA 404-G.
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 New Section; Termination of Activities and Dissolution. Amend RSA 404-G by inserting after section 10 the following new section:
404-G:11 Termination of Activities and Dissolution. Notwithstanding the provisions of RSA 404-G:1 – RSA 404-G:7, the association shall undertake the winding down and cessation of the risk sharing subsidy mechanism, the high risk pool and the federally qualified high risk pool, and the dissolution of the association, as follows:
I. The risk sharing subsidy mechanism described in RSA 404-G:5 shall cease. The final subsidies shall be determined based on calendar year 2013 experience and paid to eligible carriers in 2014.
II. The risk adjustment and subsidization established by the commissioner through Ins 1908 with respect to individual health policies to children under age 19 shall cease. The final subsidies shall be determined based on calendar year 2013 experience and disbursed in accordance with the association’s disbursement plan as approved by the commissioner.
III. The high risk pool under RSA 404-G:5-b shall cease in accordance with the following:
(a) Health care coverage provided by the pool shall cease at the close of business on December 31, 2013;
(b) On or before November 1, 2013, the association, through the high risk pool administrator, shall notify all individuals currently enrolled in the pool of the year-end termination of coverage;
(c) The association may renew coverage for existing enrollees or enroll new individuals in the high risk pool until December 1, 2013; provided, that at the time of renewal or application, such enrollees are given notice that pool coverage will terminate on December 31, 2013;
(d) Insurance laws and regulations providing for guaranteed renewal and guaranteed premiums for a period of 12-months, and any similar insurance laws or regulations, shall not apply to the high risk pool to the extent that they are inconsistent with this section;
(e) No individual shall be eligible for coverage through the high risk pool on or after January 1, 2014; and
(f) The association may extend the contract of the existing high risk pool administrator without a competitive bidding process through the period of time required to wind down the operations of the high risk pool.
IV. Coverage under the federally qualified high risk pool described in RSA 404-G:5-g shall cease as of the close of business on December 31, 2013, and the pool shall dissolve in accordance with the Act and as directed by, and under the contract of the association with, the Secretary of the United States Department of Health and Human Services.
V. The board of directors of the association shall prepare and submit to the commissioner for approval within 60 days of the effective date of this section, a plan of termination which shall be an amendment to the plans of operation described in RSA 404-G:5 and RSA 404-G:5-a. The plan of termination shall provide for such administrative measures as are necessary or desirable to terminate the risk sharing subsidy mechanism, under 19 subsidy mechanism, high risk pool and federally qualified high risk pool, and such provisions shall not be inconsistent with this section.
VI. Following the cessation of coverage on December 31, 2013, the association shall take such actions as are necessary and desirable to wind down its affairs under this chapter in accordance with the plan of termination. The association shall retain all of its powers and duties, including, but not limited to, its power to establish and collect regular and special assessments under RSA 404-G:5 and RSA 404-G:5-a, and the immunity provided by RSA 404-G:9 and the bylaws of the association. Any excess funds remaining after the satisfaction of all of the association’s liabilities shall be returned to the association’s members in proportion to their respective liability for the last regular assessments imposed by the association.
VII. When the association has completed the winding down of its affairs under this chapter and satisfied in full all of its liabilities, then it shall submit to the commissioner for approval a plan of dissolution. Upon approval of the plan of dissolution, the association shall file a certificate of dissolution with the secretary of state, whereupon the association shall cease to exist.
2 Effective Date. This act shall take effect upon its passage.
LBAO
13-0541
Revised 04/02/13
Amended 03/18/13
HB 526 FISCAL NOTE
AN ACT relative to termination of activities and dissolution of the association created under RSA 404-G.
FISCAL IMPACT:
The Insurance Department states this bill, as amended by the House (Amendment #2013-0349h), will increase state revenues by $600,000 in FY 2015 and by $300,000 in FY 2016 and each fiscal year thereafter, and may have an indeterminable impact on county and local expenditures in FY 2014 and each fiscal year thereafter. There will be no fiscal impact on county and local revenues or state expenditures.
METHODOLOGY:
The Insurance Department states the proposed legislation establishes a procedure for the termination of activities and the dissolution of the NH Individual Health Plan Benefit Association created pursuant to RSA 404-G for the operation of the state’s high risk pool. The Department notes the Association collects assessments from insurance carriers to fund the high risk pool. The Department states the dissolution of the high risk pool would subsequently require individuals insured through the high risk pool to obtain coverage through the guaranteed individual market. This will result in an increase to the insurance premium tax base and accordingly an increase in insurance premium tax revenues. Based on current premium revenues, the Department estimates the increase in the tax base will result in an increase of $300,000 per fiscal year in insurance premium tax revenues. The Department notes the timing of tax payments will result in the increased revenue being realized in FY 2015 for increased premiums in FY 2014 and 2015 thereby increasing state revenues by $600,000 in FY 2015 and by $300,000 in FY 2016 and each fiscal year thereafter.
The Department also notes the proposed legislation will impact county and local expenditures to the extent counties and municipalities purchase fully insured products or stop loss insurance that would no longer be subjected to assessments as a result of the proposed legislation. The Department is unable to estimate the fiscal impact to county or local expenditures resulting from the elimination of the assessments.