Bill Text: HI SB3050 | 2014 | Regular Session | Amended
Bill Title: Hawaii Health Connector; Hawaii Health Insurance Exchange Special Fund; Hawaii Health Insurance Exchange Surcharge; Budget Request; Sustainability
Spectrum: Partisan Bill (Democrat 2-0)
Status: (Introduced - Dead) 2014-02-14 - Report adopted; Passed Second Reading, as amended (SD 1) and referred to WAM. [SB3050 Detail]
Download: Hawaii-2014-SB3050-Amended.html
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THE SENATE |
S.B. NO. |
3050 |
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TWENTY-SEVENTH LEGISLATURE, 2014 |
S.D. 1 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
RELATING TO HEALTH INSURERS ASSESSMENTS.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. The legislature finds that the federal Patient Protection and Affordable Care Act of 2010 (Affordable Care Act) enabled Hawaii to establish its own state-based health insurance exchange.
The legislature further finds and declares that the Hawaii health connector, codified under chapter 435H, Hawaii Revised Statutes, is the designated health insurance exchange for the State of Hawaii.
The legislature additionally finds that the Affordable Care Act mandates health insurance exchanges to be self-sustaining beginning in 2015. To comply with this requirement, and pursuant to section 435H-3, Hawaii Revised Statutes, the Hawaii health connector authorized a two per cent rate increase on all health plans sold to individuals through the connector beginning on January 1, 2014. The connector further authorized an additional two per cent rate increase on all plans sold to small businesses through the connector beginning on July 1, 2014.
The additional connector levy applies only to issuers that sell products through the connector. The Affordable Care Act requires those issuers to price their products sold outside of the connector at the same level as the products sold through the connector. Consequently, issuers that only sell plans outside of the connector do not bear the burden of having the prices of their products increased by the connector levy.
The legislature is concerned that this discrepancy creates an inequity that: (1) provides a competitive advantage to issuers that only sell plans outside of the connector; and (2) creates a disincentive for issuers to participate in the connector. This situation goes against the intent of the Affordable Care Act, which is to create a competitive marketplace through which the uninsured may receive health care coverage.
The legislature also finds that while it is imperative to ensure the long-term sustainability of the connector, it must be done in a way that promotes competition and ensures equity amongst the competitors. The state insurance commissioner would be in the best position to strike the balance between promoting competition, a self-sustaining health insurance exchange market, and reasonable health insurance rates.
The legislature further finds that the financial support of the Hawaii health connector is in the public interest and for the public health, safety, and general welfare of the State.
Therefore, the purpose of this Act is to clarify the status of the Hawaii health connector as the official health insurance exchange for the State, ensure the sustainability of the Hawaii health connector, and ensure competition amongst health plans by:
(1) Establishing the Hawaii health insurance exchange special fund, to be administered by the department of commerce and consumer affairs;
(2) Beginning January 1, 2015, assessing a Hawaii health insurance exchange surcharge of .345 per cent of the premiums derived from the sale of comprehensive medical insurance plans, including dental plans, in the State, to be deposited into the Hawaii health insurance exchange special fund;
(3) Requiring the board of directors of the Hawaii health connector to prepare and submit to the legislature a fully documented biennial budget request for the connector;
(4) Annually appropriating the funds collected from the Hawaii health insurance exchange surcharge to the Hawaii health insurance exchange, pursuant to a documented budget request demonstrating the need for and use of the surcharge for connector sustainability; and
(5) Clarifying that the Hawaii health connector must submit the results of the connector's annual audit to the legislature.
SECTION 2. Chapter 435H, Hawaii Revised Statutes, is amended by adding three new sections to be appropriately designated and to read as follows:
"§435H-A Hawaii health insurance exchange special fund; establishment; budget request; appropriation. (a) There is established in the state treasury the Hawaii health insurance exchange special fund, into which shall be deposited:
(1) All revenues from the collection of the Hawaii health insurance exchange surcharge established pursuant to section 435H-B; and
(2) Appropriations made by the legislature to the special fund.
(b) Moneys in the special fund shall be used for the following purposes:
(1) Financial support to the Hawaii health insurance exchange, also known as the Hawaii health connector, to ensure the sustainability of the Hawaii health insurance exchange; and
(2) Administrative expenses of the special fund.
(c) The department of commerce and consumer affairs shall administer the special fund.
§435H-B Hawaii health insurance exchange surcharge; establishment. (a) Beginning January 1, 2015, and each January 1 thereafter, the commissioner shall assess a Hawaii health insurance exchange surcharge of .345 per cent of the premiums derived from the sale of comprehensive medical insurance plans, including dental plans, in the State.
(b) Every insurer shall remit to the commissioner the surcharge imposed by subsection (a) in such form as the commissioner prescribes.
(c) The commissioner shall deposit the surcharges received into the Hawaii health insurance exchange special fund, established pursuant to section 435H-A.
(d) The commissioner shall transfer the accumulated surcharges deposited into the Hawaii health insurance exchange special fund to the Hawaii health insurance exchange established under section 435H-2, pursuant to the legislative appropriation authorized under section 435H-C(b).
(e) Not more than $15,000,000 shall be allocated to the Hawaii health insurance exchange in any calendar year. This ceiling may be increased by action of the legislature through adoption of a subsequent budget request from the connector.
§435H-C Budget requests; annual appropriations. (a) The board shall prepare a fully documented biennial budget request for the connector, detailing the amount of funding required to be appropriated to the connector to finance the operations and ensure the sustainability of the connector. The board shall submit the budget request to the legislature no later than January 31 of each year.
(b) The legislature shall authorize an appropriation based on the request from the connector out of the proceeds of the Hawaii health insurance exchange special fund."
SECTION 3. Section 435H-2, Hawaii Revised Statutes, is amended as follows:
1. By amending subsection (a) to read:
"(a) There is established the Hawaii health insurance exchange to be known as the Hawaii health connector. The connector shall be the designated health insurance exchange for the State. The connector shall not be an agency of the State and shall not be subject to laws or rules regulating rulemaking, public employment, or public procurement. The connector shall be a Hawaii nonprofit corporation organized and governed pursuant to chapter 414D, the Hawaii nonprofit corporations act."
2. By amending subsection (d) to read:
"(d) The connector shall be audited annually by the state auditor who shall submit the results of each annual audit to the commissioner and the legislature 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 ten years and shall permit the state auditor, the commissioner, the state legislature, or their authorized representatives to have access to, inspect, and make copies of any documents retained pursuant to this subsection."
SECTION 4. Section 435H-3, Hawaii Revised Statutes, is amended to read as follows:
"[[]§435H-3[]] 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[.] via the surcharges collected pursuant to section 435H-B.
As required by section 1311(d)(5)(A) of the Federal Act, the connector shall be
self-sustaining by January 1, 2015, and may charge assessments or user fees to
participating health and dental 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. The surcharge authorized by the
connector shall cease to be collected once the surcharge authorized pursuant to
section 435H-B is instituted."
SECTION 5. In codifying the new sections added by section 2 of this Act, the revisor of statutes shall substitute appropriate section numbers for the letters used in designating the new sections in this Act.
SECTION 6. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 7. This Act shall take effect upon its approval.
Report Title:
Hawaii Health Connector; Hawaii Health Insurance Exchange Special Fund; Hawaii Health Insurance Exchange Surcharge; Budget Request; Sustainability
Description:
Designates the Hawaii health connector as the health insurance exchange for the State of Hawaii. Establishes the Hawaii health insurance exchange special fund. Beginning January 1, 2015, assesses a Hawaii health insurance exchange surcharge of .345 per cent of the premiums derived from the sale of comprehensive medical insurance plans, including dental plans, in the State, to be deposited into the Hawaii health insurance exchange special fund. Requires the board of directors of the connector to prepare and submit to the legislature a fully documented biennial budget request for the connector. Permits the legislature to annually appropriate funds collected from the surcharge to the Hawaii health insurance exchange. Clarifies that the connector must submit the results of the connector's annual audit to the legislature. (SD1)
The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.
