H. B. 4331


(By Delegate Kelley)
[Introduced February 1, 2000; referred to the
Committee on Banking and Insurance then Finance.]




A BILL to amend and reenact article sixteen-a, chapter five of the code of West Virginia, one thousand nine hundred thirty-one, as amended, relating to creating a health insurance program for small business employers; providing for administration through the public employees insurance agency; creating a special revenue fund; defining which small business employers may participate; authorizing legislative rules for implementation and administration of the plan; and directing agency development of a plan for uninsured West Virginia residents.

Be it enacted by the Legislature of West Virginia:
That article sixteen-a, chapter five of the code of West Virginia, one thousand nine hundred thirty-one, as amended, be amended and reenacted to read as follows:
ARTICLE 16A. THE WEST VIRGINIA HEALTH CARE INSURANCE ACT.
§5-16A-1. Short title.
This article may be cited as "The West Virginia Small Business Health Care Insurance Act."
§5-16A-3 2. Insurance plan; purpose; planning; development and implementation.
(a) On the first day of July, one thousand nine hundred eighty-nine two thousand, a small business health care insurance plan in the state shall be commenced and administered by the public employees insurance agency. and the resources available to it solely through the West Virginia health care insurance fund with the advice and assistance of the legislative task force on uncompensated health care and medicaid expenditures The purpose of the plan shall be is to make available affordable health insurance available by pooling in a group for health insurance purposes groups of small businesses to provide for purposes of purchasing acute and primary health care services to working citizens of the state and for employees and their dependents and for West Virginia residents and their dependents. who are without health insurance benefits offered in connection with their employment as well as to any citizen who is unable to obtain health insurance coverage The public employees insurance agency shall be responsible for the development and implementation of the plan. In so doing, the agency may seek the advice and assistance of the legislative task force on uncompensated health care and medicaid expenditures.
(b) The plan is available for any business corporation maintaining its home office in this state and employing no more than fifty persons. Any amount paid by an employer as payment for all or any portion of a premium is subject to adjustment under the provisions of subsection (c), section six, article twenty-four, chapter eleven of this code.
§5-16A-4 3. Funding.

Notwithstanding any other provision of this code to the contrary, any moneys assessed and collected from small business employers and nonstate employers and West Virginia residents shall be deposited into the same special revenue fund that is used for payment by state agencies.
§5-16A-5 4. Rules; contents.
(a) The public employees insurance agency shall develop and implement the plan through rules promulgated in accordance with the provisions of chapter twenty-nine-a of this code. The legislative task force on uncompensated health care and medicaid expenditures shall share with the public employees insurance agency any and all pertinent data, studies, reports, analyses, research, summaries, information collected, filed or developed now or in the future in order to effect the development and implementation of the plan contemplated herein. Upon request, in the planning, development and implementation of the plan the insurance commissioner and the commissioner of human services shall cooperate with advice and assistance.
(b) The rules shall provide for the establishment of an insurance pool for the provision of basic acute and primary health care insurance coverage with measurable cost containment provisions to small business employers, and their employees of small businesses and individuals in this state and their respective dependents; shall develop a definition for "small business" which definition shall include that includes nonprofit organizations and nonprofit corporations having nineteen fifty or fewer employees; shall permit bids from qualified and licensed insurance companies or carriers, who may wish to offer plans or reinsurance for the insurance coverage desired; shall address incentives for small business participation in the plan, and a variety of effective cost controls; shall provide for an appropriate application form for participation and procedures for application; shall ensure accurate and appropriate marketing of the health insurance coverage to small businesses throughout the state; and shall establish criteria for monitoring the effectiveness of the insurance pool.
(c) The rules shall provide that the plan will be available to small business employers with nineteen employees or less and to individuals who can demonstrate that they have been without health insurance coverage for a period of at least six months prior to enrollment, except that persons who are not eligible for the COBRA provisions for the unemployed and who can demonstrate that their lack of health insurance is due to a reduction in workforce will be eligible. Beginning on the first day of April, one thousand nine hundred ninety, families that no longer qualify for AFDC but do qualify for Medicaid under the Family Support Act of 1988 will be eligible to participate in the program, and the plan may include a premium for those families.
(d) (c) The rules shall provide that health care provided pursuant to the plan be through an exclusive provider organization consisting of acute care hospitals, primary care centers, clinics, physician groups and physicians. Inpatient care shall be provided by hospitals at a discounted rate which will be at or below cost. Primary care and outpatient services shall be provided on a per capita basis to be negotiated with providers or provider groups and such payment may be made in advance of services rendered. A formulary prescription drug program shall also be included on a near cost basis. Health care provided outside the exclusive provider organization will generally not be covered by the plan. Outpatient services shall include a quality assurance component to ensure that the level of care is adequate and appropriate. Appropriate provisions may be included to ensure that health care providers participating in the plan do not realize a financial windfall from such participation and that subsequent charges reflect the income received therefrom.
(e) The rules shall provide that benefit design and premium structures be developed with recommendations from the legislative task force on uncompensated health care and medicaid expenditures. (d) The plan shall provide for differing premium and benefit structures based upon the enrollee's level of income. To the extent feasible, the plan will limit enrollment to those individuals who have incomes at or below two hundred percent of the federal poverty level. Premium structures may include cost sharing methods including employer and employee sharing of cost and a sliding scale based on ability to pay. Provisions shall be included for a minimum two hundred fifty dollar annual deductible for inpatient acute care and a lifetime cap of two hundred fifty thousand dollars, per individual, for all benefits provided under the plan. The plan may provide for the subsidization of premiums for employees and individuals whose income is below the federal poverty rate but above medicaid payment standards. The plan may include such provisions as are necessary to allow full advantage to be taken of the provisions of the Family Support Act of 1988.
(f) (e) The plan shall begin with a three-year pilot program which shall include, at a minimum, two thousand subscribers. The program will be established in two pilot areas in the state. One pilot area will be located in an urban area defined as a metropolitan statistical area and one in a rural area, defined as a nonmetropolitan statistical area. The plan authorized pursuant to this section is a pilot plan only, and may be discontinued or terminated at the end thereof without further liability on behalf of the state of West Virginia or any small businesses that are participating.
(g) The rules may provide that medical underwriting will take place after, rather than prior, to enrollment in the plan, although all participants will be required to complete a medical screen. Those who do not pass the medical screen may be able to participate. Premiums for such individuals may be at a rate higher than those established for other participants. The cost of the high risk participants' health care insurance premiums may be partially subsidized by the health care insurance fund. The rules shall provide for a schedule of the subsidization, which shall be based on need, cost and funds available.
(h) The rules shall contain provisions that limit any assistance provided pursuant to the plan to that which can be provided within the funds available.
§5-16A-6 5. Legislative report.
The public employees insurance agency with the advice and assistance of the legislative task force on uncompensated health care and medicaid expenditures, shall cooperate to will prepare and submit annual reports to the Legislature before it convenes in the years, one thousand nine hundred ninety, one thousand nine hundred ninety-one and one thousand nine hundred ninety-two, with studies, beginning on the first day of January, two thousand, which includes findings, conclusions and recommendations, including any recommendations for legislation, all relating to the purpose and effect of the health care insurance plan created herein. Said report shall be in addition to any report prepared by the legislative task force on uncompensated health care and medicaid expenditures pursuant to the provisions of article twenty-nine-c, chapter sixteen of this code.
§5-16A-7 6. Availability of data of bureau of employment programs.
In furtherance of the purposes of this article, the bureau of employment programs shall, notwithstanding the provisions of section eleven, article ten, chapter twenty-one-a of this code, cooperate to make available to the public employees insurance agency and the legislative task force on uncompensated health care and medicaid expenditures such any information as they may request requested for purposes consistent with this article to identify and facilitate contact with small business employers who may be eligible for participation in the plan. The provisions of this section shall be liberally construed by the bureau of employment programs in order to effectuate the development of the small business health care insurance plan.
Information thus obtained by the public employees insurance agency and the legislative task force on uncompensated health care and medicaid expenditures shall be maintained as strictly confidential and shall be exempt from disclosure to the public.
§5-16A-8 7. Exemption from state antitrust laws and insurance laws.
The health care insurance plan and those responsible for developing and implementing it under the provisions of this article are exempted from the provisions of section five, article eighteen, chapter forty-seven of this code and any otherwise applicable provisions of chapter thirty-three of this code.
§5-16A-9 8. Termination of health care insurance plan.
The health care insurance plan shall be terminated pursuant to the provisions of article ten, chapter four of this code on the first day of July, one two thousand one nine hundred ninety-two four, unless continued or reestablished pursuant to the provisions of that article.
§5-16A-10 9. Misrepresentation by employee or provider; penalty.
Any person who knowingly secures or attempts to secure benefits payable under this article to which the person is not entitled, or willfully misrepresents any material fact relating to any other information requested by the public employees insurance agency, or who willfully overcharges for services provided, or who willfully misrepresents the diagnosis or nature of the service provided, may be found to be overpaid and shall be civilly liable for any overpayment. In addition to the civil remedy provided herein, the public employees insurance agency shall withhold payment of any benefits due to that person until any overpayment has been recovered or may directly set off, after holding internal administrative proceedings to assure due process, any such overcharges or improperly derived payment against benefits due such person hereunder. Nothing in this section shall be construed to limit any other remedy or civil or criminal penalty provided by law.
§5-16A-10. Exceptions.
Even though a state agency or various state agencies may implement this insurance program, the employers and individuals provided insurance coverage by this article are not entitled to access to health care providers as presently mandated in article twenty-nine-d, chapter sixteen of this code.
Health care providers may be given the right to treat individuals under this plan but shall may not be required to provide health care service to any firm or individual under the insurance plan provided in this article.
§5-16A-11. Development of plan for unemployed, uninsured West Virginia residents.
(a) On or before the first day of January, two thousand two, the public employees insurance agency shall develop an insurance plan for uninsured West Virginia residents, regardless of their employment status, which plan shall be presented to the governor and Legislature prior to implementation. For purposes of this section, "uninsured" includes West Virginia residents who are not eligible for COBRA, have exhausted COBRA benefits or whose COBRA coverage will cost more than twenty percent of their family income.
(b) The plan is to include recommendations for eligibility, enrollment, which may be incremental, benefit limits, underwriting, and financing. The plan may include recommendations for the subsidization of premiums for individuals whose income is below the federal poverty rate but above medicaid payment standards.
(c) Upon specific direction and appropriation, the plan may be implemented with a cost-sharing by plan participants and a subsidization of premiums through appropriations, grants, donations, and any federal moneys available for uninsured individuals.



NOTE: The purpose of this bill is to allow small business employers who employ less than fifty persons to purchase health insurance for their employees and dependants through the PEIA and to provide health insurance coverage for individual West Virginia residents.

The original sections 2, 8 and 10 of this article have been deleted; section 4 has been deleted and completely rewritten; and the remaining sections have been renumbered.

Strike-throughs indicate language that would be stricken from the present law, and underscoring indicates new language that would be added.