HB1169:

Health insurance; association health plans.

Bill Summary:

Health insurance; association health plans. Provides
that a licensed insurer may issue a policy of group accident and sickness
insurance to an association, which association shall be deemed the
policyholder, and that such association health plan is not considered to be
insurance and is not subject to the existing requirements for insurance if
certain requirements are met. The bill requires that (i) all members of the
association be eligible for coverage and membership, including employer members
with at least one employee that is domiciled in the Commonwealth or
self-employed individuals; (ii) membership in the association not be
conditioned on any health status–related factor; (iii) the coverage offered
through the association be available to all members regardless of any health
status–related factor; (iv) the association not make health insurance coverage
offered through the association available other than in connection with a member
of the association; and (v) premiums for the policy be paid from funds
contributed by the association or associations, or by employer members, or by
both, or from funds contributed by the covered persons or from both the covered
persons and the association, associations, or employer members. The bill also
requires the association (a) has at the outset a minimum of 100 members; (b)
has been organized and maintained in good faith for purposes other than that of
obtaining insurance; (c) has been in active existence for at least five years;
and (d) has a constitution and bylaws that provide that the association hold
regular meetings not less than annually to further purposes of the members,
that the association collects dues or solicits contributions from members, and
that the members have voting privileges and representation on the governing
board and committees.

The bill provides that any such policy shall (1) be considered
a large group market plan subject to all coverage mandates applicable to a
large group market plan, (2) be subject to the group health plan coverage
requirements under the federal Patient Protection and Affordable Care Act, (3)
be prohibited from denying coverage under the policy on the basis of a
pre-existing condition, (4) shall be guaranteed issue and guaranteed renewable,
(5) provide essential health benefits and cost-sharing requirements, and (6)
offer a minimum level of coverage designed to provide benefits that are
actuarially equivalent to 60 percent of the full actuarial value of the benefits
provided under the plan.

The bill requires an insurer issuing such policy to an
association to (A) treat all of the members and employees of employer members
who are enrolled in coverage under the policy as a single risk pool; (B) set
premiums on the basis of the collective group experience of the members and
employees of employer members who are enrolled in coverage under the policy;
(C) not vary premiums by age, except that the rate shall not vary by more than
four to one for adults; (D) not vary premiums on the basis of gender; (E) not
vary premiums on the basis of the health status of an individual employee of an
employer member or a self-employed individual member; and (F) not establish
discriminatory rules based on the health status of an employer member, an
individual employee of an employer member, or a self-employed individual for
eligibility or contribution.

Finally, the bill provides that the State Corporation
Commission retains its regulatory authority over any such association health
plan and may impose insurance requirements, as it deems appropriate.