Bill Text: HI HB2527 | 2014 | Regular Session | Amended

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Bill Title: Insurers; Hawaii Health Connector; Sustainability Fee

Spectrum: Partisan Bill (Democrat 6-0)

Status: (Introduced - Dead) 2014-02-12 - The committee(s) on CPC recommend(s) that the measure be deferred. [HB2527 Detail]

Download: Hawaii-2014-HB2527-Amended.html

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HOUSE OF REPRESENTATIVES	H.B. NO.	2527
TWENTY-SEVENTH LEGISLATURE, 2014		H.D. 1
STATE OF HAWAII

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 Patient Protection and Affordable Care Act mandates health insurance exchanges to be self-sustaining beginning in January 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 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 July 1, 2014.

     The legislature notes that the additional connector fee applies only to issuers that sell products through the connector.  The federal 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 fee.

     The legislature finds 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.

The legislature further finds that this situation is contrary to the intent of the federal act, which is to create a competitive marketplace through which the uninsured may receive health care coverage.

     The legislature believes 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 among the competitors.  The legislature finds that the insurance commissioner is best situated to strike the proper balance among promoting competition, facilitating a self-sustaining health insurance exchange market, and maintaining reasonable health insurance rates.

     The purpose of this Act is to authorize the insurance commissioner to assess a fee on all issuers selling plans, both inside and outside of the health insurance exchange, to sustain the connector while ensuring more competition at reasonable costs.

     SECTION 2.  Chapter 435H, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

     "§435H-     Hawaii health connector universal federally mandated sustainability fee; special subaccount established.  (a)  There is established within the compliance resolution fund a special subaccount to be designated as the Hawaii health connector sustainability special subaccount.  The subaccount fund balances are to be expended by the commissioner only as provided by this subsection.  All moneys from the Hawaii health connector universal federally mandated sustainability fee under subsection (c) shall be deposited into the subaccount.  Moneys from the subaccount shall be transferred to the connector, pursuant to procedures established by the commissioner, and may only be used to support the administration, operations, and prudent cash management of the connector.

     (b)  By April 1 of each year, the board of directors of the connector shall inform the commissioner of the amount of funding required to finance the operations and cash reserve of the connector for each ensuing fiscal year beginning on July 1; provided that the balance of the cash reserve does not exceed the value of the cost of three months of administering and operating the connector.

     (c)  Any other provision notwithstanding, beginning on July 1, 2015, and on each July 1 thereafter, the commissioner shall assess a fee upon each insurer, on a pro rata basis, based upon the number of individuals covered by each insurer on the preceding December 31, excluding individuals covered under a medicaid plan pursuant to Title XIX of the Social Security Act, 42 U.S.C. section 1396 et seq.  At the discretion of the commissioner, the fee assessed upon each dental insurer subject to chapter 432G may be set at a level up to     per cent of the fee assessed upon all other insurers in this subsection.  The total of all revenues collected from the fee shall not exceed the amount of funding required to finance the operations and cash reserve of the connector as specified in subsection (b).  This fee shall be known as the Hawaii health connector universal federally mandated sustainability fee."

     SECTION 3.  Section 26-9, Hawaii Revised Statutes, is amended by amending subsection (o) to read as follows:

     "(o)  Every person licensed under any chapter within the jurisdiction of the department of commerce and consumer affairs and every person licensed subject to chapter 485A or registered under chapter 467B shall pay upon issuance of a license, permit, certificate, or registration a fee and a subsequent annual fee to be determined by the director and adjusted from time to time to ensure that the proceeds, together with all other fines, income, and penalties collected under this section, do not surpass the annual operating costs of conducting compliance resolution activities required under this section.  The fees may be collected biennially or pursuant to rules adopted under chapter 91, and shall be deposited into the special fund established under this subsection.  Every filing pursuant to chapter 514E or section 485A-202(a)(26) shall be assessed, upon initial filing and at each renewal period in which a renewal is required, a fee that shall be prescribed by rules adopted under chapter 91, and that shall be deposited into the special fund established under this subsection.  Any unpaid fee shall be paid by the licensed person, upon application for renewal, restoration, reactivation, or reinstatement of a license, and by the person responsible for the renewal, restoration, reactivation, or reinstatement of a license, upon the application for renewal, restoration, reactivation, or reinstatement of the license.  If the fees are not paid, the director may deny renewal, restoration, reactivation, or reinstatement of the license.  The director may establish, increase, decrease, or repeal the fees when necessary pursuant to rules adopted under chapter 91.  The director may also increase or decrease the fees pursuant to section 92-28.

     There is created in the state treasury a special fund to be known as the compliance resolution fund to be expended by the director's designated representatives as provided by this subsection.  Notwithstanding any law to the contrary, all revenues, fees, and fines collected by the department shall be deposited into the compliance resolution fund.  Unencumbered balances existing on June 30, 1999, in the cable television fund under chapter 440G, the division of consumer advocacy fund under chapter 269, the financial institution examiners' revolving fund, section 412:2-109, the special handling fund, section 414‑13, and unencumbered balances existing on June 30, 2002, in the insurance regulation fund, section 431:2-215, shall be deposited into the compliance resolution fund.  This provision shall not apply to the drivers education fund underwriters fee, sections 431:10C-115 and 431:10G-107, insurance premium taxes and revenues, revenues of the workers' compensation special compensation fund, section 386-151, the captive insurance administrative fund, section 431:19-101.8, the insurance commissioner's education and training fund, section 431:2-214, the medical malpractice patients' compensation fund as administered under section 5 of Act 232, Session Laws of Hawaii 1984, and fees collected for deposit in the office of consumer protection restitution fund, section 487-14, the real estate appraisers fund, section 466K-1, the real estate recovery fund, section 467-16, the real estate education fund, section 467-19, the contractors recovery fund, section 444-26, the contractors education fund, section 444-29, the condominium education trust fund, section 514B-71, and the mortgage foreclosure dispute resolution special fund, section 667-86.  Any law to the contrary notwithstanding, the director may use the moneys in the fund to employ, without regard to chapter 76, hearings officers and attorneys.  All other employees may be employed in accordance with chapter 76.  Any law to the contrary notwithstanding, the moneys in the fund shall be used to fund the operations of the department.  The moneys in the fund may be used to train personnel as the director deems necessary and for any other activity related to compliance resolution.

     A separate special subaccount of the compliance resolution fund, to be known as the post-secondary education authorization special subaccount, shall be established for fees collected by the department of commerce and consumer affairs pursuant to chapter 305J.  The special subaccount shall be governed by section 305J-19.

     A separate special subaccount of the compliance resolution fund, to be known as the Hawaii health connector sustainability special subaccount, shall be established for fees collected by the department of commerce and consumer affairs pursuant to section 435H-   .  The special subaccount shall be governed by section 435H-   .

     As used in this subsection, unless otherwise required by the context, "compliance resolution" means a determination of whether:

     (1)  Any licensee or applicant under any chapter subject to the jurisdiction of the department of commerce and consumer affairs has complied with that chapter;

     (2)  Any person subject to chapter 485A has complied with that chapter;

     (3)  Any person submitting any filing required by chapter 514E or section 485A-202(a)(26) has complied with chapter 514E or section 485A-202(a)(26);

     (4)  Any person has complied with the prohibitions against unfair and deceptive acts or practices in trade or commerce; or

     (5)  Any person subject to chapter 467B has complied with that chapter;

and includes work involved in or supporting the above functions, licensing, or registration of individuals or companies regulated by the department, consumer protection, and other activities of the department.

     The director shall prepare and submit an annual report to the governor and the legislature on the use of the compliance resolution fund.  The report shall describe expenditures made from the fund including non-payroll operating expenses."

     SECTION 4.  Section 435H-1, Hawaii Revised Statutes, is amended by amending the definition of "insurer" to read as follows:

     ""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 any dental insurer subject to chapter 432G."

     SECTION 5.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 6.  This Act shall take effect on July 1, 2050.

 

 

 

Report Title:

Insurers; Hawaii Health Connector; Sustainability Fee

 

Description:

Establishes a sustainability fee for the Hawaii health connector.  Deposits the fee into a special subaccount of the compliance resolution fund.  Effective 07/01/2050.  (HD1)

 

 

 

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.