Senate Bill No. 650

(By Senator Redd, Minard, Caldwell, Hunter, Rowe, Mitchell, Kessler, Edgell and Ross)

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[Introduced February 18, 2002; referred to the Committee

on Small Business; and then to the Committee on Finance.]

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A BILL to amend and reenact sections one-a and two, article sixteen, chapter thirty-three of the code of West Virginia, one thousand nine hundred thirty-one, as amended, all relating to removing the impediments to small business corporations combining to form a "bona fide association" and thereby qualifying to provide group insurance for their employees.

Be it enacted by the Legislature of West Virginia:
That sections one-a and two, article sixteen, chapter thirty-three of the code of West Virginia, one thousand nine hundred thirty-one, as amended, be amended and reenacted, all to read as follows:
ARTICLE 16. GROUP ACCIDENT AND SICKNESS INSURANCE.

 §33-16-1a. Definitions.
As used in this article:
(a) "Bona fide association" means an association which has been actively in existence for at least five years or an affiliation of corporate entities all of which have been actively in existence for at least five years; has been formed and maintained in good faith for purposes other than obtaining insurance or, if a qualified affiliation of corporate entities, has been formed and maintained solely for the purpose of securing group insurance for its members; does not condition membership in the association on any health status-related factor relating to an individual; makes accident and sickness insurance offered through the association available to all members regardless of any health status-related factor relating to members or individuals eligible for coverage through a member; does not make accident and sickness insurance coverage offered through the association available other than in connection with a member of the association; and meets any additional requirements as may be set forth in this chapter or by rule.
(b) "Commissioner" means the commissioner of insurance.
(c) "Creditable coverage" means, with respect to an individual, coverage of the individual after the thirtieth day of June, one thousand nine hundred ninety-six, under any of the following, other than coverage consisting solely of excepted benefits:
(1) A group health plan;
(2) A health benefit plan;
(3) Medicare Part A or Part B, 42 U.S.C. §1395 et seq.; Medicaid, 42 U.S.C. §1396a et seq. (other than coverage consisting solely of benefits under Section 1928 of the Social Security Act); Civilian Health and Medical Program of the Uniformed Services (CHAMPUS), 10 U.S.C., Chapter 55; and a medical care program of the Indian Health Service or of a tribal organization;
(4) A health benefits risk pool sponsored by any state of the United States or by the District of Columbia; a health plan offered under 5 U.S.C., chapter 89; a public health plan as defined in regulations promulgated by the federal secretary of health and human services; or a health benefit plan as defined in the Peace Corps Act, 22 U.S.C. §2504(e).
(d) "Dependent" means an eligible employee's spouse or any unmarried child or stepchild under the age of eighteen or unmarried, dependent child or stepchild under age twenty-three if a full-time student at an accredited school.
(e) "Eligible employee" means an employee, including an individual who either works or resides in this state, who meets all requirements for enrollment in a health benefit plan.
(f) "Excepted benefits" means:
(1) Any policy of liability insurance or contract supplemental thereto; coverage only for accident or disability income insurance or any combination thereof; automobile medical payment insurance; credit-only insurance; coverage for on-site medical clinics; workers' compensation insurance; or other similar insurance under which benefits for medical care are secondary or incidental to other insurance benefits; or
(2) If offered separately, a policy providing benefits for long-term care, nursing home care, home health care, community-based care or any combination thereof, dental or vision benefits, or other similar, limited benefits; or
(3) If offered as independent, noncoordinated benefits under separate policies or certificates, specified disease or illness coverage, hospital indemnity or other fixed indemnity insurance, or coverage, such as medicare supplement insurance, supplemental to a group health plan; or
(4) A policy of accident and sickness insurance covering a period of less than one year.
(g) "Group health plan" means an employee welfare benefit plan, including a church plan or a governmental plan, all as defined in section three of the Employee Retirement Income Security Act of 1974, 29 U.S.C. §1003, to the extent that the plan provides medical care.
(h) "Health benefit plan" means benefits consisting of medical care provided directly, through insurance or reimbursement, or indirectly, including items and services paid for as medical care, under any hospital or medical expense incurred policy or certificate; hospital, medical or health service corporation contract; health maintenance organization contract; or plan provided by a multiple-employer trust or a multiple-employer welfare arrangement. "Health benefit plan" does not include excepted benefits.
(i) "Health insurer" means an entity licensed by the commissioner to transact accident and sickness in this state and subject to this chapter. "Health insurer" does not include a group health plan.
(j) "Health status-related factor" means an individual's health status, medical condition (including both physical and mental illnesses), claims experience, receipt of health care, medical history, genetic information, evidence of insurability (including conditions arising out of acts of domestic violence) or disability.
(k) "Medical care" means amounts paid for, or paid for insurance covering, the diagnosis, cure, mitigation, treatment or prevention of disease, or amounts paid for the purpose of affecting any structure or function of the body, including amounts paid for transportation primarily for and essential to such care.
(l) "Mental health benefits" means benefits with respect to mental health services, as defined under the terms of a group health plan or a health benefit plan offered in connection with the group health plan.
(m) "Network plan" means a health benefit plan under which the financing and delivery of medical care are provided, in whole or in part, through a defined set of providers under contract with the health insurer.
(n) "Preexisting condition exclusion" means, with respect to a health benefit plan, a limitation or exclusion of benefits relating to a condition based on the fact that the condition was present before the enrollment date for such coverage, whether or not any medical advice, diagnosis, care or treatment was recommended or received before the enrollment date.
§33-16-2. Eligible groups.

Any insurer licensed to transact accident and sickness insurance in this state may issue group accident and sickness policies coming within any of the following classifications:
(a) A policy issued to an employer, who shall be deemed considered the policyholder, insuring at least ten employees of such employer, for the benefit of persons other than the employer, and conforming to the following requirements:
(1) If the premium is paid by the employer the group shall comprise all employees or all of any class or classes thereof determined by conditions pertaining to the employment; or
(2) If the premium is paid by the employer and employees jointly, or by the employees, the group shall comprise not less than seventy percent of all employees of the employer or not less than seventy-five percent of all employees of any class or classes thereof determined by conditions pertaining to the employment; or
(3) The term "employee" as used herein shall be deemed considered to include the officers, managers, and employees of the employer, the partners, if the employer is a partnership, the officers, managers, and employees of subsidiary or affiliated corporations of a corporation employer, and the individual proprietors, partners and employees of individuals and firms, the business of which is controlled by the insured employer through stock ownership, contract, or otherwise. The term "employer" as used herein may be deemed considered to include any municipal or governmental corporation, unit, agency or department thereof and the proper officers, as such, of any unincorporated municipality or department thereof, as well as private individuals, partnerships and corporations.
(b) A policy issued to an a bona fide association which has a constitution and bylaws, and which has been organized and is maintained in good faith for purposes other than that of obtaining insurance insuring at least ten members of the association for the benefit of persons other than the association or its officers or trustees, as such.
(c) A policy issued to a college, school or other institution of learning or to the head or principal thereof, insuring at least ten students, or students and employees, of such institution.
(d) A policy issued to or in the name of any volunteer fire department, insuring all of the members of such department or all of any class or classes thereof against any one or more of the hazards to which they are exposed by reason of such membership but in each case not less than ten such members.
(e) A policy issued to any person or organization to which a policy of group life insurance may be issued or delivered in this state, to insure any class or classes of individuals that could be insured under such group life policy.


 NOTE: The purpose of this bill is to allow small businesses to combine for the purpose of securing a group insurance plan for its members.

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