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
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."
3 2. Insurance plan; purpose; planning; development and
(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.
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 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.
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
(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
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
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.
8 7. Exemption from state antitrust laws and insurance
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.
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.
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
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
(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
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