HB613 (2023) Detail

Relative to regulation of the individual health insurance market under RSA 404-G.


HB 613-FN - AS INTRODUCED

 

 

2023 SESSION

23-0312

05/04

 

HOUSE BILL 613-FN

 

AN ACT relative to regulation of the individual health insurance market under RSA 404-G.

 

SPONSORS: Rep. Hunt, Ches. 14; Sen. Bradley, Dist 3

 

COMMITTEE: Commerce and Consumer Affairs

 

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ANALYSIS

 

This bill makes various changes to RSA 404-G, relative to the individual health insurance market.

 

The bill is a request of the insurance department.

 

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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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

23-0312

05/04

 

STATE OF NEW HAMPSHIRE

 

In the Year of Our Lord Two Thousand Twenty Three

 

AN ACT relative to regulation of the individual health insurance market under RSA 404-G.

 

Be it Enacted by the Senate and House of Representatives in General Court convened:

 

1  Individual Health Insurance Market; Purpose.  Amend RSA 404-G:1-4 to read as follows:

404-G:1  Purpose of Provisions.  The [purpose] purposes of this chapter [is] are to:

I.  Protect the citizens of this state who participate in the individual health insurance market by providing a mechanism to equitably distribute the excessive risk sometimes associated with this market and to [enable insurers to better protect against the costs of covering high risk individuals] promote market stability.

II.  [Create a nonprofit, voluntary organization to facilitate the availability of affordable individual nongroup health insurance by establishing an assessment mechanism and an individual health insurance market mandatory risk sharing plan as a mechanism to distribute the risks associated within the individual nongroup market and to support the New Hampshire granite advantage health care program established in RSA 126-AA.]  Authorize the creation of a nonprofit, voluntary organization which shall be known as the New Hampshire individual health plan benefit association, "the association" or "the New Hampshire health plan", to promote the purposes and carry out the requirements of this chapter under the oversight by the commissioner.

III.  [Establish a high risk pool that will provide access to health insurance to all residents of the state who are denied health insurance for medical or health reasons.  The premiums charged for coverage in the high risk pool shall be affordable and the coverage provided shall be reasonably comprehensive and comparable to coverage available outside of the high risk pool.  It is the intent of the legislature that the high risk pool shall be adequately funded through an annual, and if necessary, a special assessment mechanism, that the high risk pool shall utilize cost containment measures, including, but not limited to, providing network based coverage, and that measures shall be taken to avoid inappropriate shifting of costs and risk to the high risk pool.]  Support the affordability and accessibility of health insurance in the state's individual market.

IV.  [Authorize the association to establish a federally qualified high risk pool pursuant to section 1101 of the Patient Protection and Affordable Care Act of 2009 (PL 111-148), as amended by the Health Care and Education Reconciliation Act of 2010 (PL 111-152).]  Establish one or more individual health insurance market mandatory risk sharing plans as a mechanism to distribute the risks associated within the nongroup, individual market.

V.  Support the New Hampshire granite advantage health care program established in RSA 126-AA or any successor program.

VI.  Establish an assessment mechanism to fund the association’s programs as defined in RSA 404-G:2, X and the association’s support of the New Hampshire granite advantage health care program established in RSA 126-AA or any successor program.

2  Definitions; Association Powers, Duties, Membership and Governance.  Amend RSA 404-G:2 through 404-G:4 to read as follows:

404-G:2  Definitions.  In this chapter:

I.  ["Actively marketing" means actively marketing, issuing, and renewing all of the health coverages the respective carrier sells in the individual market to all individuals.

I-a. " Act " means the Patient Protection and Affordable Care Act of 2009 (PL 111-148), as amended by the Health Care and Education Reconciliation Act of 2010 (PL 111-152).]  “Assessable entity” means any:

(a)  Health maintenance organization, as defined by RSA 420-B:1, VI.

(b)  Third party administrator, as defined by RSA 402-H:1, I.

(c)  Entity providing administrator services and required to register with the insurance commissioner under RSA 402-H:11-a or RSA 402-H:11-b.

(d)  Insurance company licensed pursuant to RSA 401:1, IV.

(e)  Health service corporation, as defined by RSA 420-A:1, III.

(f)  Any entity providing group excess loss insurance to an employer with a principal place of business in New Hampshire or to an employer that covers lives in New Hampshire.

II.  "Assessment" means the liability of the [member insurer] assessable entity to the association under RSA 404-G:5-a.

III.  "Association" means [the entity created within this chapter which shall be the same association as that created under the order, defined in paragraph X] the New Hampshire individual health plan benefit association, also known as, the “New Hampshire health plan,” a not-for-profit, voluntary corporation created as directed under this chapter in order to promote the purposes and carry out the requirements of this chapter under the oversight of the commissioner.

IV.  "Commissioner" means the insurance commissioner.

V.  "Covered lives" shall include all persons who are:

(a)  Covered under an individual health insurance policy issued or delivered in New Hampshire;

(b)  Covered under a group health insurance policy that is issued or delivered in New Hampshire;

(c)  Covered under a group health insurance policy evidenced by a certificate of insurance that is issued or delivered in New Hampshire;

(d)  Protected, in part, by a group excess loss insurance policy where the policy or certificate of coverage has been issued or delivered in New Hampshire;

(e)  Protected by health insurance as defined in RSA 404-G:2, VII where the person is a New Hampshire resident.

V-a.  " Group excess loss insurance " means coverage purchased by an employer against the risk that any one claim made against the employer's health plan will exceed a specified dollar amount or coverage purchased by an employer against the risk that the employer's total liability for the health plan will exceed a specified amount.

VI.  "Group health insurance" means health insurance coverage other than individual health insurance coverage.

VII.  " Health insurance " means health insurance coverage issued in accordance with RSA 415, 420-A, or 420-B.  For the purposes of this chapter, health insurance shall not include accident only, credit, dental, vision, Medicare supplement, Medicare Risk, Medicare Advantage, [Medicare+Choice,] Managed Medicaid, long-term care, disability income (or similar insurance products regulated by administrative rule Ins 8000), coverage issued as a supplement to a liability insurance, workers' compensation or similar insurance, automobile medical payment insurance, policies or certificates of specified disease, hospital confinement indemnity, limited benefit health insurance (or similar insurance products regulated by administrative rule Ins 6000), and coverage provided through the Federal Employees' Program. Health insurance does include group excess loss insurance.

VIII.  "Individual health insurance" means health insurance sold directly to an individual and not on a group remittance basis. Individual health insurance shall include franchise health insurance.

IX.  ["Insurer" means any entity licensed pursuant to RSA 402, RSA 420-A, or RSA 420-B.]  “Program” means any initiative undertaken by the association with the approval of the commissioner to fulfill any stated purpose of this chapter, including but not limited to the reinsurance program and supporting the New Hampshire granite advantage health care program.

[X. "Order" means the insurance department findings and final order dated November 26, 1997, in the matter of the individual health insurance market in New Hampshire pursuant to RSA 404-C.

X-a.  " Plan of operation " means the plan of operation of the risk sharing mechanism, the high risk pool, support for the program established in RSA 126-AA, and the federally qualified high risk pool, including articles, bylaws and operating rules, procedures and policies adopted by the association.

X-b.  " Pool " means the New Hampshire health insurance high risk pool.

X-c.  [Repealed.]

XI.  "Writer" means a writing carrier.]

404-G:3  Association's Powers and Duties.  

I.  The association shall be a not-for-profit, voluntary corporation formed under RSA 292 and shall possess all [general] powers as derive from that status and such additional powers and duties as are approved by the commissioner or as specified [below] in this chapter.

II.  The board of directors of the association shall have the following general powers:

(a)  Enter into contracts and retain such vendors or administrators, with or without a competitive bidding process in the discretion of the board of directors, as necessary or proper to administer the plan of operation.

(b)  Sue or be sued, including taking any legal action necessary or proper for the recovery of any assessments for, on behalf of, or against members of the association, assessable entities, or other participating person.

(c)  [Take legal action as necessary to avoid the payment of improper claims against the plan or to defend the coverage provided by or through the pool.

(d) Oversee the issuance of policies of insurance and certificates or evidences of coverage.

(e)] Retain appropriate legal, actuarial, and other persons as necessary to provide technical assistance in the operation of the plan, policy development, and other [contract] program design and in any other function within the authority of the plan of operation.

[(f)](d)  Borrow money and/or establish reserve funds to carry out the plan of operation and protect against unexpected or unforeseeable expenses and losses.

[(g)  Provide for reinsurance of risks incurred.]  (e) Adopt bylaws, which may be amended from time to time, to establish additional procedural and governance provisions of the association, which provisions shall not be inconsistent with the provisions of this chapter.

[(h)](f)  Perform any other functions within the authority of the association as may be necessary or proper to carry out the plan of operation.

[(i)  Perform additional powers as set forth in RSA 404-G:5-g. ]

III.  The board of directors of the association shall have the following duties:

(a)  Fulfill the plan of operation as approved by the commissioner.

(b)  [Issue policies of insurance to persons eligible for the high risk pool.

(c)  Prepare certificate of eligibility forms and enrollment instruction forms.

(d)]  Determine and collect assessments [for the risk sharing mechanism and for the high risk pool] from assessable entities as provided in RSA 404-G:5-a and in the plan of operation.

[(e)](c)  Disburse assessment payments, as provided in the plan of operation for the high risk pool.

[(f) Establish appropriate rates, rate schedules, rate adjustments, expense allowances, agent referral fees, claim reserve formulas and any other actuarial functions appropriate to the plan of operation for the high risk pool.

(g) Provide for and employ cost-containment measures and requirements, which shall include but not be limited to, preadmission screening, second surgical opinion, concurrent utilization review, and individual case management for the purpose of making the benefit plan more cost effective.

(h) Develop a list of medical or health conditions the existence or history of which makes an individual eligible for participation in the high risk pool without first requiring application to a carrier for health coverage.

(i) In connection with the managed care or network based coverage options required pursuant to RSA 404-G:5-b, III, design, utilize, contract or otherwise arrange for the delivery of cost-effective health care services, including establishing or contracting for administration and operation of the pool with a carrier, a preferred provider organization, a health maintenance organization, or any other network provider arrangement.]

IV.  Neither the association nor its employees or agents shall be liable for any obligations of the plan.  No member or employee of the association shall be liable, and no cause of action of any nature may arise against them, for any act or omission related to the performance of their powers and duties under this chapter unless such act or omission constitutes willful or wanton misconduct.  The association may provide in its bylaws or rules for indemnification of, and legal representation for, its members, [and] employees, and agents.

404-G:4  Association Membership and Governance.  

I.  The association shall be comprised of all [writers of health insurance] assessable entities as defined in RSA 404-G:2, I.

II.  The [initial] board of directors of the association shall [be the same as that set forth in the order.  Except as provided in paragraph IV, each successor board shall] consist of 9 individuals who are representative of categories of members of the association, health care providers, [consumers who have purchased or are likely to purchase coverage from the pool,] insurance brokers, small employers, and the commissioner who shall be an ex-officio member.  [In the initial and in each successor board,] The board shall include:  3 directors [shall be] representative of and elected by qualified writers of group health insurance, 2 directors [shall be] representative of and elected by qualified writers of individual health insurance, one director [shall be] representative of the health care provider community and [shall be] appointed by the commissioner, one director [shall be] representative of [consumers covered through the high risk pool] third party administrators and [shall be] appointed by the commissioner, one director [shall be a] representative of insurance brokers and [shall be] appointed by the commissioner, and one director [shall be a] representative of small employers and [shall be] appointed by the commissioner.

III.  There shall be no more than one director representing any one qualified writer or its affiliate.  For purposes of this section, the insurance activities of any elected director's affiliate shall be deemed to be insurance activities of the elected director.

IV.  Qualified writers of individual or group health insurance shall be those that provide coverage for at least 500 covered lives or 5 percent of the total covered lives in the relevant market.  [A member's] An assessable entity's votes for individual or group market representatives shall be proportional to the [member's] assessable entity's assessment in that market.

V.  If[, at any board election subsequent to the establishment of the initial board,] one or more elected group representatives are also qualified individual health insurance writers, then the membership of the board shall be altered at each annual meeting of the association by applying the provisions in subparagraphs (a) through (d) to such elected group representatives.

(a)  If the elected group representative writing in the individual market is also an elected individual representative, then that [member] assessable entity shall take a seat on the board as an individual representative and relinquish the group seat.  The group writer with the next highest number of group votes shall take the relinquished group seat.

(b)  If the elected group representative writing in the individual market is not also an elected individual representative, then up to 2 directors will be added to the board as follows:

(1)  If the total size of the board-elect is 9 or 10, the elected group representative shall remain on the board, but neither as a group or an individual representative, and the group writer with the next highest number of group votes shall join the board as a group representative; but

(2)  If the total size of the board-elect is 11, the elected group representative shall not remain on the board and the group writer with the next highest number of group votes shall take the relinquished group seat.

(c)  The provisions in subparagraphs (a) and (b) shall be applied to elected group representatives in the order of the number of votes received.

(d)  The seats added to the board pursuant to subparagraph (b) shall not survive the term of the seat-holder.

VI.  Members of the board of directors shall be elected to terms of one year.

VII.  The board of directors shall take action by affirmative vote representing a simple majority of the entire board.

VIII.  The board shall elect officers in accordance with the bylaws of the association. The bylaws of the association shall also govern the place and frequency of meetings of directors and their reimbursement for expenses incurred, as well as other customary governance provisions not inconsistent with the provisions of this chapter.

3  Plan of Operations; Assessments.  RSA 404-G:5 and RSA 404-G:5-a are repealed and reenacted to read as follows:

404-G:5  Plan of Operation.  The board of directors of the association shall adopt a plan of operation which shall address each program provided by this chapter.  The plan of operation shall be approved by the commissioner prior to implementation and may be amended from time to time with the approval of the commissioner.  The plan of operation shall provide substantially the following:

I.  Description of each program’s objectives including a description of how the association anticipates fulfilling those objectives.  

II.  Description of how the program will be funded including a description regarding how assessments will be calculated, collected, and distributed, how any excess assessment revenue will be addressed, and the establishment of any reserve funds.  

III.  Administrative matters. The plan of operation shall further provide for all of the following:

(a)  Responsibility for the handling and accounting of funds and other assets of the association.

(b)  The financial and other records required to be kept, including the annual report to be submitted to the commissioner.

(c)  Compliance with this chapter and any other applicable laws and regulations, including without limitation the terms of any federal waiver or other grant that may fund, in whole or in party, any of the association’s programs.

(d)  Such other administrative provisions as are necessary or proper for the execution of the powers and duties of the association.

404-G:5-a  Assessments. The association shall establish and collect assessments for each program in accordance with the plan of operation approved by the commissioner.

I.  Calculation of Assessments.

(a)  Assessments shall be calculated based on the number of covered lives.  The number of covered lives shall be determined each month during the calendar year.  The assessment shall be calculated as the number of covered lives times a specified amount.  The specified amount shall be fixed throughout the calendar year and shall be determined by the board no later than the first day of November preceding the calendar year for which the amount is to be used.  The amount shall be subject to approval by the commissioner.  The board shall provide a basis for recommending the specified amount, including a projection of the calculated assessment and consideration of any prior year shortfalls or overages.

(b)  Each covered life should be included in the assessment only once.  The board shall adopt procedures by which affiliated assessable entities calculate their assessment on an aggregate basis and procedures to ensure that no covered life is counted more than once.  

II.  Unless otherwise determined by the board, the assessable entity responsible for the payment of the associated claims for the covered lives shall be the entity responsible for reporting assessable lives and payment of the corresponding assessment.

III.  The association may establish a special assessment rate with the approval of the commissioner.

(a) The association shall only establish a special assessment if the association determines that its funds are or will become insufficient to fulfill the program’s purpose.

(b) The association shall only assess, through the special assessment, at a rate necessary to fund the deficiency ascertained in subparagraph (a).

IV.  The commissioner shall approve the regular assessment rate, and any special assessment rate, if he or she finds that the amount petitioned by the board is no greater than is necessary to fulfill the purposes of this chapter.  For the purpose of making this determination, the commissioner may, at the expense of the association, seek independent actuarial certification of the need for the proposed assessment or special assessment amount.

4  Commissioner's Powers and Duties; Examination and Annual Report.  Amend RSA 404-G:6 and 404-G:7 to read as follows:

404-G:6  Commissioner's Powers and Duties.  In addition to duties and powers enumerated elsewhere in this chapter:

I.  The commissioner shall upon request of the board of directors of the association, serve a demand upon the [member insurer] assessable entity to pay an assessment within a reasonable time; the failure of the [member insurer] assessable entity to promptly comply with such demand shall not excuse the association from the performance of its powers and duties under this chapter.

[I-a.  The commissioner shall annually review the report required under RSA 404-G:4-a on association membership, covered lives, and the payment of assessments to ensure that all insurers that should be members of the association are participating in the association and that all association members have accurately reported covered lives and paid the proper assessment.  The association shall remedy any problem identified by the commissioner with respect to membership in the association, reporting of covered lives, or payment of the assessment.]

II.  The commissioner may suspend or revoke, after notice and hearing, the certificate of authority to transact insurance business in this state of any [member insurer] assessable entity which fails to pay an assessment when due or fails to comply with the plan of operation. As an alternative, the commissioner may levy a forfeiture on any [member insurer] assessable entity which fails to pay an assessment when due.  Such forfeiture shall not exceed 5 percent of the unpaid assessment per month, but no forfeiture shall be less than $100 per month.  Any amounts so collected shall be credited to the assessment fund administered by the association.

III.  Any action of the board of directors or the association may be appealed to the commissioner by any [member insurer] assessable entity if the appeal is taken within 30 days of the final action being appealed.  If [a member company] an assessable entity is appealing an assessment, the amount assessed shall be paid to the association and available to meet association obligations during the pendency of an appeal.  If the appeal on the assessment is upheld, the amount paid in error or excess shall be returned to the [member company] assessable entity from available funds of the association.  Any final action or order of the commissioner shall be subject to judicial review, pursuant to RSA 541.

IV.  The commissioner may adopt rules as necessary to carry out the purposes of this chapter.

V.  The powers of the commissioner enumerated in this chapter shall be in addition to those established under RSA 404-C.

404-G:7  Examination and Annual Report.  The association shall be subject to examination by the commissioner.  The cost of any such examination shall be borne by the association.  The board of directors shall submit to the commissioner each year, not later than [120] 180 days after the association's fiscal year, a financial report in a form approved by the commissioner and a report of its activities during the [proceeding] preceding fiscal year.  [The report shall summarize the activities of the risk sharing mechanism and the high risk pool in the preceding calendar year, including the net written and earned premiums, enrollment, the expense of administration, and the paid and incurred losses.]  The report shall list the association membership base, provide a count of covered lives by member, identify changes in association membership and covered lives, describe the collection of assessments and user fees, list payment delinquencies, detail progress made in the fulfillment of the plans of operation, and contain such other related information as the commissioner may require.  The association's fiscal year shall be the calendar year.

5  Immunity for Members and Employees; Reference Change.  Amend RSA 404-G:9 to read as follows:

404-G:9  Immunity for Members and Employees.  There shall be no liability on the part of and no cause of action of any nature shall arise against any member [insurer] or its agents or employees, the association or its agents or employees, members of the board of directors, or the commissioner or the commissioner's representatives, for any action or omission by them in the performance of their powers and duties under this chapter.

6  Termination Activities and Dissolution.  RSA 404-G:11 is repealed and reenacted to read as follows:

404-G:11  Termination of Activities and Dissolution.  In the event one or more programs administered by the association are terminated, the association shall undertake the winding down and cessation of the program or programs, and the dissolution of the association if no programs remain, as follows:

I.  The board of directors of the association shall prepare and submit to the commissioner for approval, a plan of termination which shall be an amendment to the plans of operation described in RSA 404-G:5.  The plan of termination shall provide for such administrative measures as are necessary or desirable to terminate the program or programs, and such provisions shall not be inconsistent with this section.

II.  Following the approval of the plan of termination by the commissioner, 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-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 used for the program and for the association's reasonable costs for collecting its share of the remainder amount.

III.  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.

7  Federal Health Care Reform; Waiver; Reference Removed.  Amend RSA 420-N:6-a to read as follows:

  420-N:6-a  Waiver.  If such action is supported by the recommendations of actuarial experts retained by the department as being consistent with the purposes of RSA 404-G:1, I, the commissioner shall, at the earliest practicable date, submit an application on behalf of the state to the United States Secretary of the Treasury, and if required, to the United States Secretary of Health and Human Services, to waive certain provisions of the Act, as provided in section 1332 of the Act, or any other applicable waiver provision in order to create a risk sharing or reinsurance mechanism for the individual market under RSA 404-G which is eligible to draw down federal pass-through funding to support such mechanism.  The commissioner shall publish and accept public comment on the 1332 waiver application and the plan of operation for the individual market mechanism prior to approving such plans.  The commissioner shall implement any federally approved waiver[, including but not limited to overseeing the implementation of a revised plan of operations under RSA 404-G:12].

8  Repeal.  The following are repealed:

I.  RSA 404-G:1-a, relative the commissioner's study and biannual report.

II.  RSA 404-G:4-a, relative to the association's annual report.

III.  RSA 404-G:5-b, relative to the high risk pool.

IV.  RSA 404-G:5-c, relative to the high risk pool administrator.

V.  RSA 404-G:5-d, relative to premiums.

VI.  RSA 404-G:5-e, relative to eligibility.

VII.  RSA 404-G:5-f, relative to application of provision of the insurance code.

VIII.  RSA 404-G:5-g, relative to a federally qualified high risk pool.

IX.  RSA 404-G:12, relative to a contingency plan to support the affordability and accessibility of health insurance.

9  Effective Date.  This act shall take effect January 1, 2024.

 

LBA

23-0312

Revised  1/13/23

 

HB 613-FN- FISCAL NOTE

AS INTRODUCED

 

AN ACT relative to regulation of the individual health insurance market under RSA 404-G.

 

FISCAL IMPACT: [   ] State [   ] County [   ] Local [ X ] None

 

 

METHODOLOGY:

The Insurance Department states this bill has no fiscal impact on state, county and local expenditures or revenue.

 

 

AGENCIES CONTACTED:

Insurance Department

 

Links

Action Dates

Date Body Type
Jan. 26, 2023 House Hearing
Jan. 26, 2023 House Hearing

Bill Text Revisions

HB613 Revision: 37479 Date: Jan. 13, 2023, 10:23 a.m.

Docket


Jan. 19, 2023: Public Hearing: 01/26/2023 01:45 pm LOB 302-304


Jan. 18, 2023: Public Hearing: 01/26/2023 01:45 pm LOB 302-304


Jan. 12, 2023: Introduced (in recess of) 01/05/2023 and referred to Commerce and Consumer Affairs