Bill Text: OR SB1003 | 2010 | 1st Special Session | Introduced

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Relating to association health plans; and declaring an emergency.

Spectrum: Bipartisan Bill

Status: (Passed) 2010-03-18 - Effective date, March 18, 2010. [SB1003 Detail]

Download: Oregon-2010-SB1003-Introduced.html

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     75th OREGON LEGISLATIVE ASSEMBLY--2010 Special Session

NOTE:  Matter within  { +  braces and plus signs + } in an
amended section is new. Matter within  { -  braces and minus
signs - } is existing law to be omitted. New sections are within
 { +  braces and plus signs + } .

LC 38

                        Senate Bill 1003

Sponsored by Senators MONNES ANDERSON, KRUSE, Representatives
  HARKER, MAURER (Presession filed.)

                             SUMMARY

The following summary is not prepared by the sponsors of the
measure and is not a part of the body thereof subject to
consideration by the Legislative Assembly. It is an editor's
brief statement of the essential features of the measure as
introduced.

  Authorizes Director of Department of Consumer and Business
Services to grant exemption from 95 percent retention rate
requirement for association health plan according to rules
adopted by director.
  Declares emergency, effective on passage.

                        A BILL FOR AN ACT
Relating to association health plans; amending ORS 743.734 and
  section 13, chapter 752, Oregon Laws 2007; and declaring an
  emergency.
Be It Enacted by the People of the State of Oregon:
  SECTION 1. ORS 743.734 is amended to read:
  743.734. (1) Every group health benefit plan shall be subject
to the provisions of ORS 743.733 to 743.737, if the plan provides
health benefits covering one or more employees of a small
employer and if any one of the following conditions is met:
  (a) Any portion of the premium or benefits is paid by a small
employer or any eligible employee is reimbursed, whether through
wage adjustments or otherwise, by a small employer for any
portion of the health benefit plan premium; or
  (b) The health benefit plan is treated by the employer or any
of the eligible employees as part of a plan or program for the
purposes of section 106, section 125 or section 162 of the
Internal Revenue Code of 1986, as amended.
  (2) Except as provided in ORS 743.733 to 743.737, no law
requiring the coverage or the offer of coverage of a health care
service or benefit applies to the basic health benefit plans
offered or delivered to a small employer.
  (3) Except as otherwise provided by law or ORS 743.733 to
743.737, no health benefit plan offered to a small employer
shall:
  (a) Inhibit a small employer carrier from contracting with
providers or groups of providers with respect to health care
services or benefits; or
  (b) Impose any restriction on the ability of a small employer
carrier to negotiate with providers regarding the level or method
of reimbursing care or services provided under health benefit
plans.
  (4) Except to determine the application of a preexisting
conditions provision for a late enrollee, a small employer
carrier shall not use health statements when offering small
employer health benefit plans and shall not use any other method
to determine the actual or expected health status of eligible
enrollees. Nothing in this subsection shall prevent a carrier
from using health statements or other information after
enrollment for the purpose of providing services or arranging for
the provision of services under a health benefit plan.
  (5) Except in the case of a late enrollee and as otherwise
provided in this section, a small employer carrier shall not
impose different terms or conditions on the coverage, premiums or
contributions of any eligible employee in a small employer group
that are based on the actual or expected health status of any
eligible employee.
  (6) A small employer carrier may provide different health
benefit plans to different categories of employees of a small
employer when the employer has chosen to establish different
categories of employees in a manner that does not relate to the
actual or expected health status of such employees or their
dependents. The categories must be based on bona fide
employment-based classifications that are consistent with the
employer's usual business practice. Except as provided in ORS
743.736 (10):
  (a) When a small employer carrier offers coverage to a small
employer with no more than 25 eligible employees, the small
employer carrier shall offer coverage to all eligible employees
of the small employer, without regard to the actual or expected
health status of any eligible employee.
  (b) When a small employer carrier offers coverage to a small
employer with at least 26 but not more than 50 eligible
employees, the small employer carrier may limit coverage to the
categories of employees that the small employer has established
as eligible for coverage, provided that the categories are based
on bona fide employment-based classifications that are consistent
with the employer's usual business practice.
  (c) If the small employer elects to offer coverage to
dependents of eligible employees, the small employer carrier
shall offer coverage to all dependents of eligible employees,
without regard to the actual or expected health status of any
eligible dependent.
  (7) A health benefit plan issued to a small employer group
through an association health plan is exempt from subsection (1)
of this section. For purposes of this subsection, an association
health plan is group health insurance described in ORS 743.522
(2) or a health benefit plan that:
  (a) Is delivered or issued for delivery to:
  (A) An association or trust established in this state, that
meets applicable requirements of ORS 743.524 or 743.526, or to a
multiple employer welfare arrangement located inside this state,
subject to ORS 750.301 to 750.341; or
  (B) An association or trust established in another state, that
is approved by the Director  { + of the Department of Consumer
and Business Services + } under ORS 731.486 (7), or a multiple
employer welfare arrangement located in another state that
complies with ORS 750.311; and
  (b) Satisfies all of the following:
  (A) The initial premium rate for the association health plan
does not vary by more than 50 percent across the groups of small
employers under the plan.
  (B) The association policyholder does not discriminate in
membership requirements based on actual or expected health status
of individual enrollees or prospective enrollees, in accordance
with ORS 743.752 (5).
  (C) Small employer groups that have two or more eligible
employees and that meet the membership requirements for the
association are not excluded from the association health plan.

  (D) Except as provided in subsection (8) of this section, the
association health plan maintains a 95 percent retention rate.
  (8)(a) The 95 percent retention rate in subsection (7) of this
section does not include employer groups that:
  (A) Go out of business, whether through merger, acquisition or
any other reason;
  (B) No longer meet eligibility requirements for membership in
the association { + , including failure to pay association
dues + };
  (C) No longer meet participation requirements for employers
that are set forth in the plan documents; or
  (D) Fail to pay premiums.
  (b) An association health plan that fails to maintain the 95
percent retention rate during any year may have 12 months to
correct the retention level before losing the exemption under
subsection (7) of this section.
   { +  (c) The director may exempt an association health plan
from the 95 percent retention rate requirement in subsection (7)
of this section according to criteria prescribed by the director
by rule. + }
  SECTION 2. ORS 743.734, as amended by section 9, chapter 752,
Oregon Laws 2007, is amended to read:
  743.734. (1) Every group health benefit plan shall be subject
to the provisions of ORS 743.733 to 743.737, if the plan provides
health benefits covering one or more employees of a small
employer and if any one of the following conditions is met:
  (a) Any portion of the premium or benefits is paid by a small
employer or any eligible employee is reimbursed, whether through
wage adjustments or otherwise, by a small employer for any
portion of the health benefit plan premium; or
  (b) The health benefit plan is treated by the employer or any
of the eligible employees as part of a plan or program for the
purposes of section 106, section 125 or section 162 of the
Internal Revenue Code of 1986, as amended.
  (2) Except as provided in ORS 743.733 to 743.737, no law
requiring the coverage or the offer of coverage of a health care
service or benefit applies to the basic health benefit plans
offered or delivered to a small employer.
  (3) Except as otherwise provided by law or ORS 743.733 to
743.737, no health benefit plan offered to a small employer
shall:
  (a) Inhibit a small employer carrier from contracting with
providers or groups of providers with respect to health care
services or benefits; or
  (b) Impose any restriction on the ability of a small employer
carrier to negotiate with providers regarding the level or method
of reimbursing care or services provided under health benefit
plans.
  (4) Except to determine the application of a preexisting
conditions provision for a late enrollee, a small employer
carrier shall not use health statements when offering small
employer health benefit plans and shall not use any other method
to determine the actual or expected health status of eligible
enrollees. Nothing in this subsection shall prevent a carrier
from using health statements or other information after
enrollment for the purpose of providing services or arranging for
the provision of services under a health benefit plan.
  (5) Except in the case of a late enrollee and as otherwise
provided in this section, a small employer carrier shall not
impose different terms or conditions on the coverage, premiums or
contributions of any eligible employee in a small employer group
that are based on the actual or expected health status of any
eligible employee.
  (6) A small employer carrier may provide different health
benefit plans to different categories of employees of a small
employer when the employer has chosen to establish different
categories of employees in a manner that does not relate to the
actual or expected health status of such employees or their
dependents. The categories must be based on bona fide
employment-based classifications that are consistent with the
employer's usual business practice. Except as provided in ORS
743.736 (10):
  (a) When a small employer carrier offers coverage to a small
employer with no more than 25 eligible employees, the small
employer carrier shall offer coverage to all eligible employees
of the small employer, without regard to the actual or expected
health status of any eligible employee.
  (b) When a small employer carrier offers coverage to a small
employer with at least 26 but not more than 50 eligible
employees, the small employer carrier may limit coverage to the
categories of employees that the small employer has established
as eligible for coverage, provided that the categories are based
on bona fide employment-based classifications that are consistent
with the employer's usual business practice.
  (c) If the small employer elects to offer coverage to
dependents of eligible employees, the small employer carrier
shall offer coverage to all dependents of eligible employees,
without regard to the actual or expected health status of any
eligible dependent.
   { +  (7) A health benefit plan issued to a small employer
group through an association health plan is exempt from
subsection (1) of this section. For purposes of this subsection,
an association health plan is group health insurance described in
ORS 743.522 (2) or a health benefit plan that:
  (a) Is delivered or issued for delivery to:
  (A) An association or trust established in this state, that
meets applicable requirements of ORS 743.524 or 743.526, or to a
multiple employer welfare arrangement located inside this state,
subject to ORS 750.301 to 750.341; or
  (B) An association or trust established in another state, that
is approved by the Director of the Department of Consumer and
Business Services under ORS 731.486 (7), or a multiple employer
welfare arrangement located in another state that complies with
ORS 750.311; and
  (b) Satisfies all of the following:
  (A) The initial premium rate for the association health plan
does not vary by more than 50 percent across the groups of small
employers under the plan.
  (B) The association policyholder does not discriminate in
membership requirements based on actual or expected health status
of individual enrollees or prospective enrollees, in accordance
with ORS 743.752 (5).
  (C) Small employer groups that have two or more eligible
employees and that meet the membership requirements for the
association are not excluded from the association health plan.
  (D) Except as provided in subsection (8) of this section, the
association health plan maintains a 95 percent retention rate.
  (8)(a) The 95 percent retention rate in subsection (7) of this
section does not include employer groups that:
  (A) Go out of business, whether through merger, acquisition or
any other reason;
  (B) No longer meet eligibility requirements for membership in
the association, including failure to pay association dues;
  (C) No longer meet participation requirements for employers
that are set forth in the plan documents; or
  (D) Fail to pay premiums.
  (b) An association health plan that fails to maintain the 95
percent retention rate during any year may have 12 months to
correct the retention level before losing the exemption under
subsection (7) of this section.
  (c) The director may exempt an association health plan from the
95 percent retention rate requirement in subsection (7) of this
section according to criteria prescribed by the director by
rule. + }
  SECTION 3. ORS 743.734, as amended by section 9, chapter 752,
Oregon Laws 2007, and section 2 of this 2010 Act, is amended to
read:
  743.734. (1) Every group health benefit plan shall be subject
to the provisions of ORS 743.733 to 743.737, if the plan provides
health benefits covering one or more employees of a small
employer and if any one of the following conditions is met:
  (a) Any portion of the premium or benefits is paid by a small
employer or any eligible employee is reimbursed, whether through
wage adjustments or otherwise, by a small employer for any
portion of the health benefit plan premium; or
  (b) The health benefit plan is treated by the employer or any
of the eligible employees as part of a plan or program for the
purposes of section 106, section 125 or section 162 of the
Internal Revenue Code of 1986, as amended.
  (2) Except as provided in ORS 743.733 to 743.737, no law
requiring the coverage or the offer of coverage of a health care
service or benefit applies to the basic health benefit plans
offered or delivered to a small employer.
  (3) Except as otherwise provided by law or ORS 743.733 to
743.737, no health benefit plan offered to a small employer
shall:
  (a) Inhibit a small employer carrier from contracting with
providers or groups of providers with respect to health care
services or benefits; or
  (b) Impose any restriction on the ability of a small employer
carrier to negotiate with providers regarding the level or method
of reimbursing care or services provided under health benefit
plans.
  (4) Except to determine the application of a preexisting
conditions provision for a late enrollee, a small employer
carrier shall not use health statements when offering small
employer health benefit plans and shall not use any other method
to determine the actual or expected health status of eligible
enrollees. Nothing in this subsection shall prevent a carrier
from using health statements or other information after
enrollment for the purpose of providing services or arranging for
the provision of services under a health benefit plan.
  (5) Except in the case of a late enrollee and as otherwise
provided in this section, a small employer carrier shall not
impose different terms or conditions on the coverage, premiums or
contributions of any eligible employee in a small employer group
that are based on the actual or expected health status of any
eligible employee.
  (6) A small employer carrier may provide different health
benefit plans to different categories of employees of a small
employer when the employer has chosen to establish different
categories of employees in a manner that does not relate to the
actual or expected health status of such employees or their
dependents. The categories must be based on bona fide
employment-based classifications that are consistent with the
employer's usual business practice. Except as provided in ORS
743.736 (10):
  (a) When a small employer carrier offers coverage to a small
employer with no more than 25 eligible employees, the small
employer carrier shall offer coverage to all eligible employees
of the small employer, without regard to the actual or expected
health status of any eligible employee.
  (b) When a small employer carrier offers coverage to a small
employer with at least 26 but not more than 50 eligible
employees, the small employer carrier may limit coverage to the
categories of employees that the small employer has established
as eligible for coverage, provided that the categories are based

on bona fide employment-based classifications that are consistent
with the employer's usual business practice.
  (c) If the small employer elects to offer coverage to
dependents of eligible employees, the small employer carrier
shall offer coverage to all dependents of eligible employees,
without regard to the actual or expected health status of any
eligible dependent.
    { - (7) A health benefit plan issued to a small employer
group through an association health plan is exempt from
subsection (1) of this section. For purposes of this subsection,
an association health plan is group health insurance described in
ORS 743.522 (2) or a health benefit plan that: - }
    { - (a) Is delivered or issued for delivery to: - }
    { - (A) An association or trust established in this state,
that meets applicable requirements of ORS 743.524 or 743.526, or
to a multiple employer welfare arrangement located inside this
state, subject to ORS 750.301 to 750.341; or - }
    { - (B) An association or trust established in another state,
that is approved by the Director of the Department of Consumer
and Business Services under ORS 731.486 (7), or a multiple
employer welfare arrangement located in another state that
complies with ORS 750.311; and - }
    { - (b) Satisfies all of the following: - }
    { - (A) The initial premium rate for the association health
plan does not vary by more than 50 percent across the groups of
small employers under the plan. - }
    { - (B) The association policyholder does not discriminate in
membership requirements based on actual or expected health status
of individual enrollees or prospective enrollees, in accordance
with ORS 743.752 (5). - }
    { - (C) Small employer groups that have two or more eligible
employees and that meet the membership requirements for the
association are not excluded from the association health
plan. - }
    { - (D) Except as provided in subsection (8) of this section,
the association health plan maintains a 95 percent retention
rate. - }
    { - (8)(a) The 95 percent retention rate in subsection (7) of
this section does not include employer groups that: - }
    { - (A) Go out of business, whether through merger,
acquisition or any other reason; - }
    { - (B) No longer meet eligibility requirements for
membership in the association, including failure to pay
association dues; - }
    { - (C) No longer meet participation requirements for
employers that are set forth in the plan documents; or - }
    { - (D) Fail to pay premiums. - }
    { - (b) An association health plan that fails to maintain the
95 percent retention rate during any year may have 12 months to
correct the retention level before losing the exemption under
subsection (7) of this section. - }
    { - (c) The director may exempt an association health plan
from the 95 percent retention rate requirement in subsection (7)
of this section according to criteria prescribed by the director
by rule. - }
  SECTION 4. Section 13, chapter 752, Oregon Laws 2007, is
amended to read:
   { +  Sec. 13. + } The amendments to ORS 731.146, 731.484,
731.486, 743.734 and 743.748 by sections 6 to   { - 10 of this
2007 Act - }  { +  8 and 10, chapter 752, Oregon Laws 2007, and
section 3 of this 2010 Act + } become operative on January 2,
2014.
  SECTION 5.  { + This 2010 Act being necessary for the immediate
preservation of the public peace, health and safety, an emergency
is declared to exist, and this 2010 Act takes effect on its
passage. + }
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