Bill Text: HI SB1348 | 2011 | Regular Session | Amended
Bill Title: Hawaii Health Insurance Exchange; Appropriation
Spectrum: Partisan Bill (Democrat 13-0)
Status: (Passed) 2011-07-11 - (H) Act 205, on 7/8/2011 (Gov. Msg. No. 1309). [SB1348 Detail]
Download: Hawaii-2011-SB1348-Amended.html
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THE SENATE |
S.B. NO. |
1348 |
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TWENTY-SIXTH LEGISLATURE, 2011 |
S.D. 2 |
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STATE OF HAWAII |
H.D. 1 |
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A BILL FOR AN ACT
RELATING TO THE HAWAII HEALTH INSURANCE EXCHANGE.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. This Act shall be known and may be cited as the "Hawaii Health Insurance Exchange Act".
SECTION 2. The federal Patient Protection and Affordable Care Act of 2010 provides for the establishment by January 1, 2014, of health insurance exchanges in every state to connect buyers and sellers of health insurance and to facilitate the purchase and sale of federally-qualified health insurance plans. The intent of the health insurance exchange is to reduce the number of uninsured individuals, provide a transparent marketplace, conduct consumer education, and assist individuals in gaining access to assistance programs, premium assistance tax credits, and cost-share reductions.
The legislature finds that, largely because of Hawaii's current prepaid health care act, chapter 393, Hawaii Revised Statutes, the State already enjoys an overall healthier population, lower uninsured rates, and lower premium costs than mainland states. The prepaid health care act has been and continues to be successful; it is imperative that Hawaii's health insurance exchange work in tandem with the prepaid health care act to preserve its existing benefits for the people of the State.
The legislature further finds that the people of Hawaii will be best served by a health insurance exchange that is operated locally in Hawaii. Therefore, this Act provides the framework for a private, nonprofit health exchange that conforms to the requirements of the federal law and is responsive to the unique needs and circumstances of the State.
The legislature notes that the State is already in receipt of a federal grant to plan for the design and implementation of a Hawaii-based health insurance exchange and, pursuant to federal domestic assistance grant number 93:525, a task force has been convened for this purpose. This Act formally authorizes the task force to work collaboratively with stakeholders and within the policy framework of this Act to propose legislation to the 2012 legislature implementing a Hawaii health insurance exchange, to be known as the Hawaii health connector, to ensure the State's compliance with the federal act. Pursuant to recommendations of the task force, the legislature is committed to providing policy direction and operational guidelines as the State works toward implementing a fully functional health insurance exchange to meet the federally-mandated 2014 implementation deadline.
Recently the United States Department of Health and Human Services issued a request for proposals from states for assistance in establishing state health insurance exchanges. The legislature finds that moving forward now with an enabling statute is the prudent course of action to maximize opportunities to take advantage of forthcoming federal moneys. The framework established by this Act will allow future legislatures to follow the most appropriate course in implementing the health insurance exchange.
SECTION 3. Chapter 431, Hawaii Revised Statutes, is amended by adding a new article to be appropriately designated and to read as follows:
"article
Hawaii health insurance exchange
§431: -101 Definitions. As used in this article:
"Board" means the board of directors of the Hawaii health connector.
"Commissioner" means the insurance commissioner of the State.
"Connector" means the Hawaii health insurance exchange, known as the Hawaii health connector, established by section 431: -102.
"Federal act" means the federal Patient Protection and Affordable Care Act, Public Law 111-148, as amended by the federal Health Care and Education Reconciliation Act of 2010, Public Law 111-152, and any amendments to, or regulations or guidance issued under, those Acts.
"Insurer" means any person or entity that issues a policy of accident and health or sickness insurance subject to article 10A of chapter 431, or chapters 432 or 432D, or dental benefits subject to chapter 423.
"Qualified health plan" means a health benefit plan offered by an insurer that meets the criteria for certification described in Section 1311(c) of the federal act and a dental benefit plan as described in Section 1311(d)(2)(B)(ii) of the federal act.
"Secretary" means the Secretary of the United States Department of Health and Human Services.
"Task force" means the state health insurance exchange task force established within the department of commerce and consumer affairs in compliance with federal domestic assistance grant number 93:525.
§431: -102 Establishment of the Hawaii health insurance exchange; purpose. (a) There is established the Hawaii health insurance exchange, a Hawaii nonprofit organization, to be known as the Hawaii health connector. The connector is not an entity of the State and shall not be subject to laws or rules regulating rulemaking, public employment, or public procurement.
(b) The purposes of the connector shall include:
(1) Facilitating the purchase and sale of qualified health plans in compliance with the federal act;
(2) Connecting consumers to the information necessary to make informed health care choices; and
(3) Enabling consumers to purchase coverage and manage health plans electronically.
(c) The connector shall serve as a clearinghouse for information on all qualified health plans listed or included in the connector. The connector shall determine eligibility for the inclusion of health plans according to the recommendation of the insurance commissioner; provided that all qualified health plans that apply for inclusion shall be included in the connector.
(d) The connector shall be audited annually by the state auditor and shall submit the results of each annual audit to the insurance commissioner no later than thirty days after the connector receives the results. The connector shall retain all annual audits on file, along with any documents, papers, books, records, and other evidence that is pertinent to its budget and operations for a period of three years and shall permit the state auditor, the insurance commissioner, the legislature, or their authorized representatives to have access to, inspect, and make copies of any documents retained pursuant to this subsection.
(e) The board of directors of the connector shall submit an annual report to the legislature that shall include the most recent audit report received pursuant to subsection (d) no later than twenty days prior to the convening of each regular session of the legislature.
§431: -103 Funding. The connector may receive contributions, grants, endowments, fees, or gifts in cash or otherwise from public and private sources including corporations, businesses, foundations, governments, individuals, and other sources subject to rules adopted by the board. The State may appropriate moneys to the connector. As required by Section 1311(d)(5)(A) of the federal act, the exchange shall be self-sustaining by January 1, 2015, and may charge assessments or user fees to participating health carriers, or may otherwise generate funding to support its operations. Moneys received by or under the supervision of the connector shall not be placed into the state treasury and the State shall not administer any moneys of the connector nor be responsible for the financial operations or solvency of the connector.
§431: -104 Board of directors; composition; operation. (a) The Hawaii health connector shall be a nonprofit entity governed by a board of directors that shall be comprised of fifteen members appointed subject to section 26‑34. The Hawaii health connector task force shall recommend qualifications and requirements for board members, which shall include high ethical standards and knowledge or experience in the fields of health care, health insurance, business, or finance.
(b) The membership of the board shall reflect geographic diversity and the diverse interests of stakeholders including consumers, employers, health care providers, insurers, and government entities; provided that if representatives of government or public bodies are appointed to the board in other than an ex officio capacity, the majority of board members shall represent the interests of the private sector.
(c) Board members shall serve staggered terms and the task force shall recommend an appropriate schedule for staggered terms.
(d) The task force shall recommend policies prohibiting conflicts of interest and procedures for recusal of a member in the case of an actual or potential conflict of interest, including policies prohibiting a member from taking part in official action on any matter in which the member had any financial involvement or interest prior to the commencement of service on the board. Members of the board may retain private counsel for matters relating to service on the board according to rules recommended by the task force.
(e) The board shall manage the budget of the connector according to generally accepted accounting principles and a plan for financial organization adopted by the legislature based on recommendations of the task force.
(f) The board shall maintain transparency of board actions, including public disclosure and posting of board minutes on the connector's website according to provisions adopted by the legislature based on recommendations of the task force.
§431: -105 Officers and employees of the Hawaii health connector. (a) The board shall appoint and employ officers and employees, including an executive director who shall be responsible for the day-to-day operations and management of the exchange, according to a staffing plan recommended by the task force and adopted by the legislature. Officers and employees of the board shall not be employees of the State and shall serve at the pleasure of the board.
(b) Subject to approval of the staffing plan by the 2012 legislature based on recommendations of the task force, the board may hire consultants, outside experts, and professional specialists as needed for its efficient operations.
§431: -106 Oversight; rate regulation. (a) The insurance commissioner shall retain full regulatory jurisdiction pursuant to the authority granted to the commissioner by part II of article 2 of chapter 431 over all insurers and qualified health plans included in the Hawaii health connector.
(b) Rate regulation for qualified health plans included in the Hawaii health connector shall be pursuant to applicable state and federal law.
§431: -107 Effect on the prepaid health care act. Nothing in this article shall in any manner diminish or limit the consumer protections contained in or alter the provisions of chapter 393.
§431: -108 Rules. The board shall adopt rules to implement the provisions of this article. Rules adopted pursuant to this section shall not conflict with or prevent the application of regulations promulgated by the Secretary under the federal act."
SECTION 4. (a) The state health insurance exchange task force established pursuant to federal domestic assistance grant number 93:525 in the department of commerce and consumer affairs for administrative purposes shall recommend to the legislature policies and procedures to further define and operate the Hawaii health connector.
(b) The task force shall make recommendations to the legislature for:
(1) Qualifications of the members of the board of directors of the Hawaii health connector, which shall include requirements for equitable representation across the stakeholder community, including consumers, employers, insurers, and government entities, as well as requirements for knowledge and experience in the fields of health care, insurance, or finance;
(2) A sustainable, fee-based financing mechanism that may incorporate private and public funding for initial start-up costs, but that shall achieve financial self‑sustainability by January 1, 2015, as required by federal law;
(3) Measures to ensure transparency of the Hawaii health connector's finances and for public disclosure of funding sources and expenditures;
(4) Procedures for the application for inclusion by insurers in the Hawaii health connector; provided that all applicant health plans that are qualified according to the requirements of federal law and regulations and national quality measures shall be included;
(5) A phased process of including qualified plans, which may include initially prioritizing qualified plans that target individuals and small businesses over large group plans;
(6) Policies and procedures to ensure continuity of care for consumers transitioning between carriers, including between publicly funded coverage and private qualified health plans; provided that the task force shall form a subgroup to make recommendations for the integration of state subsidized plans with the Hawaii health connector to ensure that consumers who move between publicly funded coverage and unsubsidized private coverage are able to maintain continuity of coverage and continuity of care;
(7) Measures to increase transparency and opportunities for public participation in determinations of insurer eligibility for inclusion in the Hawaii health connector and the regulation of insurers and qualified health plans;
(8) Criteria for determining whether a conflict of interest exists for a board member and policies and procedures for avoiding or mitigating conflicts of interest, including when recusal of the board member is appropriate and when a board member shall be entitled to private counsel for a matter relating to the board;
(9) A schedule of the terms of board members including provisions for staggering terms to ensure continuity;
(10) A staffing plan including organization, duties, wages, and responsibilities of employees of the board of directors of the Hawaii health connector and criteria for hiring contractors, consultants, and outside experts;
(11) A plan of financial organization of the board of the Hawaii health connector and requirements for financial management by its board; and
(12) Policies for the use of electronic media to publicly disseminate information, increase transparency, and allow members of the public to manage their health plans, including by the online purchase of a qualified health plan.
(c) The task force shall submit a report of its findings and recommendations, including any proposed legislation, to the legislature, no later than twenty days prior to the convening of the 2012 regular session, and shall participate in joint informational sessions upon the request of the legislature.
(d) At the request of the task force, the department of commerce and consumer affairs may employ temporary staff not subject to chapter 76, Hawaii Revised Statutes, to assist in carrying out the requirements of this section including:
(1) A facilitator for task force meetings;
(2) Information technology professionals to begin construction of the Internet-based Hawaii health connector system;
(3) A grant writer to pursue additional sources of federal or private funding to assist the operations of the task force; and
(4) Any other staff that the task force or the insurance commissioner deems necessary to carry out the duties of the task force.
(e) The legislative reference bureau shall assist the task force in preparing its findings, recommendations, and proposed legislation; provided that the chairperson of the task force shall submit the task force's proposals to the legislative reference bureau for drafting no later than November 1, 2011, for the report to the 2012 regular session of the legislature.
(f) The task force shall cease to exist on December 31, 2012.
SECTION 5. There is appropriated out of federal funds received pursuant to federal domestic assistance grant number 93:525 the sum of $ or so much thereof as may be necessary for fiscal year 2011-2012 to support the operations of the state health insurance exchange task force.
The sum appropriated shall be expended by the department of commerce and consumer affairs for the purposes of this Act.
SECTION 6. This Act shall take effect on July 1, 2040.
Report Title:
Hawaii Health Insurance Exchange
Description:
Establishes the Hawaii health connector to create a health insurance exchange pursuant to the federal Patient Protection and Affordable Care Act of 2010; creates Hawaii Health Insurance Exchange Council under a board of directors; creates board of directors; creates task force to recommend policies and procedures to implement the governance of the health insurance exchange. Effective July 1, 2040. (SB1348 HD1)
The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.
