AB662: Bill Text

1997 Assembly BILL 662

December 18, 1997 - Introduced by Representatives Musser, Robson, Gronemus, Hebl, Goetsch, Plouff, Porter, Meyer, Baumgart, Otte, Hanson, La Fave, Travis, Hasenohrl, Ryba and Hutchison, cosponsored by Senators Moen, Roessler, Adelman, Plache and Clausing. Referred to Committee on Small Business and Economic Development.

AB662,1,9 An Act to repeal 13.94 (1) (p), 15.07 (1) (b) 21., 15.165 (5), 20.515 (2) (title), 20.515 (2) (a), 20.515 (2) (g) and subchapter X of chapter 40 [precedes 40.98]; to amend 40.02 (26) (intro.), 40.02 (26) (intro.), 40.02 (28) and 40.02 (28); and to create 13.94 (1) (p), 15.07 (1) (b) 21., 15.165 (5), 20.515 (2) (title), 20.515 (2) (a), 20.515 (2) (g) and subchapter X of chapter 40 [precedes 40.98] of the statutes; relating to: requiring the department of employe trust funds to establish a health care coverage plan for employers in the private sector, creating a private employer health care coverage board and making an appropriation.

Analysis by the Legislative Reference Bureau

This bill requires the department of employe trust funds (DETF) to design, establish and administer a health care coverage plan for employers in the private sector that provides coverage beginning not later than January 1, 2000. The bill also creates a private employer health care coverage board (PEHCCB) that is responsible for approving the health care coverage plan before DETF may implement the plan. The membership of the PEHCCB consists of the secretary of employe trust funds and the secretary of health and family services, a member who represents health maintenance organizations, a member who represents hospitals, a member who represents insurance agents, a member who represents insurers, 2 employes who are eligible to receive health care coverage under the plan and whose employer employs not more than 50 employes, 2 members who represent employers that employ not more than 50 employes and who are eligible to offer health care coverage under the plan, one member who is a physician and 2 members who represent the public interest.

The key features of the private employer health care coverage plan are as follows:

1. Any employer in the private sector that employs 2 or more employes is eligible to participate in the plan.

2. Any employer that participates in the plan must offer health care coverage to all of its permanent employes who have a normal work week of 30 or more hours and may offer coverage under the plan to any of its other employes.

3. Any employer that participates in the plan must provide health care coverage to at least 50% of its permanent employes who have a normal work week of 30 or more hours and who do not otherwise receive health care coverage as a dependent under any other plan that is not offered by the employer. The employer is also required to pay for each employe insured under the plan at least 50% of the lowest premium rate that would be available to the employer for the employe's coverage under the plan.

4. Any employer that provides coverage under the plan and that voluntarily terminates coverage under the plan is not eligible to participate in the plan for at least 3 years from the date that coverage is terminated.

5. Any insurer that submits a bid to offer health care coverage for state employes is required to submit a bid to offer health care coverage under the plan in those counties in which the insurer bids to provide health care coverage to state employes.

6. Any insurer that offers the plan must provide coverage under the plan to any employer that applies for coverage, without regard to the health condition or claims experience of any individual who would have coverage, as long as the employer pays the premium and agrees to comply with plan requirements.

7. The health care coverage plan is subject to all provisions of the state insurance code to the same extent as any other group health benefit plan that is offered in the private sector.

8. The plan may only be sold by licensed insurance agents in this state, but an insurance agent may not sell coverage under the plan on behalf of an insurer unless he or she is employed by the insurer or has a contract with the insurer to sell the coverage on behalf of the insurer.

9. DETF is prohibited from selling any health care coverage under the plan or enrolling any employe under the plan, but DETF may publicize the availability of the health care coverage plan for employers.

10. DETF is authorized to contract with any person to provide services relating to the administration of the health care coverage plan.

11. The commission rate at which an insurer must compensate insurance agents for the sale of the plan is set by the PEHCCB.

12. DETF is required to charge employers who participate in the plan a fee to cover the costs of designing, establishing and administering the plan.

13. The plan is sunset on January 1, 2007.

Under the bill, the PEHCCB is required to report annually to the governor and the legislature on the operation of the plan. In addition, no later than August 1, 2005, the PEHCCB must submit a report to the governor and the legislature that offers recommendations as to whether DETF should continue to administer the plan, whether a different state agency should administer the plan or whether the plan should be administered by a private nonprofit organization. If the PEHCCB recommends that a different state agency administer the health care coverage plan or that the health care coverage plan be administered by a private nonprofit organization, the PEHCCB shall submit proposed legislation relating to the recommendation at the time that the PEHCCB submits its report.

For further information see the state fiscal estimate, which will be printed as an appendix to this bill.

The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:

AB662, s. 1 Section 1. 13.94 (1) (p) of the statutes is created to read:

AB662,3,5 13.94 (1) (p) No later than January 1, 2004, prepare a program evaluation audit of the private employer health care coverage plan established under subch. X of ch. 40. The legislative audit bureau shall file a copy of the audit report under this paragraph with the distributees specified in par. (b).

AB662, s. 2 Section 2. 13.94 (1) (p) of the statutes, as created by 1997 Wisconsin Act .... (this act), is repealed.

AB662, s. 3 Section 3. 15.07 (1) (b) 21. of the statutes is created to read:

AB662,3,9 15.07 (1) (b) 21. Private employer health care coverage board.

AB662, s. 4 Section 4. 15.07 (1) (b) 21. of the statutes, as created by 1997 Wisconsin Act .... (this act), is repealed.

AB662, s. 5 Section 5. 15.165 (5) of the statutes is created to read:

AB662,4,5 15.165 (5) Private employer health care coverage board. (a) There is created in the department of employe trust funds a private employer health care coverage board consisting of the secretary of employe trust funds or his or her designee, the secretary of health and family services or his or her designee and the following members appointed for 3-year terms:

AB662,4,6 1. One member who represents health maintenance organizations.

AB662,4,7 2. One member who represents hospitals.

AB662,4,8 3. One member who represents insurance agents, as defined in s. 628.02 (4).

AB662,4,10 4. Two members who are employes eligible to receive health care coverage under subch. X of ch. 40 and whose employer employs not more than 50 employes.

AB662,4,11 5. One member who represents insurers.

AB662,4,14 6. Two members who are, or who represent, employers that employ not more than 50 employes and who are eligible to offer health care coverage under subch. X of ch. 40.

AB662,4,15 7. One member who is a physician, as defined in s. 448.01 (5).

AB662,4,16 8. Two members who represent the public interest.

AB662,4,18 (b) The secretary of employe trust funds or his or her designee and the secretary of health and family services or his or her designee shall be nonvoting members.

AB662, s. 6 Section 6. 15.165 (5) of the statutes, as created by 1997 Wisconsin Act .... (this act), is repealed.

AB662, s. 7 Section 7. 20.005 (3) (schedule) of the statutes: at the appropriate place, insert the following amounts for the purposes indicated: - See PDF for table

AB662, s. 8 Section 8. 20.515 (2) (title) of the statutes is created to read:

AB662,5,2 20.515 (2) (title) Private employer health care coverage plan.

AB662, s. 9 Section 9. 20.515 (2) (title) of the statutes, as created by 1997 Wisconsin Act .... (this act), is repealed.

AB662, s. 10 Section 10. 20.515 (2) (a) of the statutes is created to read:

AB662,5,9 20.515 (2) (a) Private employer health care coverage plan; start-up costs. The amounts in the schedule for the start-up costs for designing, establishing and administering the private employer health care coverage plan under subch. X of ch. 40.

AB662, s. 11 Section 11. 20.515 (2) (a) of the statutes, as created by 1997 Wisconsin Act .... (this act), is repealed.

AB662, s. 12 Section 12. 20.515 (2) (g) of the statutes is created to read:

AB662,5,16 20.515 (2) (g) Private employer health care coverage plan. All moneys received under subch. X of ch. 40 from employers who elect to participate in the private employer health care coverage plan under subch. X of ch. 40, for the costs of designing, establishing and administering the plan.

AB662, s. 13 Section 13. 20.515 (2) (g) of the statutes, as created by 1997 Wisconsin Act .... (this act), is repealed.

AB662, s. 14 Section 14 . 40.02 (26) (intro.) of the statutes is amended to read:

AB662,6,8 40.02 (26) (intro.) "Employe" means any person who receives earnings as payment for personal services rendered for the benefit of any employer including officers of the employer, except as provided in subch. X. An employe is deemed to have separated from the service of an employer at the end of the day on which the employe last performed services for the employer, or, if later, the day on which the employe-employer relationship is terminated because of the expiration or termination of leave without pay, sick leave, vacation or other leave of absence. A person shall not be considered an employe if a person:

AB662, s. 15 Section 15. 40.02 (26) (intro.) of the statutes, as affected by 1997 Wisconsin Act .... (this act), is amended to read:

AB662,6,18 40.02 (26) (intro.) "Employe" means any person who receives earnings as payment for personal services rendered for the benefit of any employer including officers of the employer, except as provided in subch. X. An employe is deemed to have separated from the service of an employer at the end of the day on which the employe last performed services for the employer, or, if later, the day on which the employe-employer relationship is terminated because of the expiration or termination of leave without pay, sick leave, vacation or other leave of absence. A person shall not be considered an employe if a person:

AB662, s. 16 Section 16 . 40.02 (28) of the statutes is amended to read:

AB662,7,3 40.02 (28) "Employer" means the state, including each state agency, any county, city, village, town, school district, other governmental unit or instrumentality of 2 or more units of government now existing or hereafter created within the state and, any federated public library system established under s. 43.19 whose territory lies within a single county with a population of 500,000 or more and a local exposition district created under subch. II of ch. 229, except as provided under ss. 40.51 (7) and 40.61 (3), or a local exposition district created under subch. II of ch. 229 and subch. X. Each employer shall be a separate legal jurisdiction for OASDHI purposes.

AB662, s. 17 Section 17. 40.02 (28) of the statutes, as affected by 1997 Wisconsin Act .... (this act), is amended to read:

AB662,7,13 40.02 (28) "Employer" means the state, including each state agency, any county, city, village, town, school district, other governmental unit or instrumentality of 2 or more units of government now existing or hereafter created within the state, any federated public library system established under s. 43.19 whose territory lies within a single county with a population of 500,000 or more and a local exposition district created under subch. II of ch. 229, except as provided under ss. 40.51 (7) and 40.61 (3) and subch. X. Each employer shall be a separate legal jurisdiction for OASDHI purposes.

AB662, s. 18 Section 18. Subchapter X of chapter 40 [precedes 40.98] of the statutes is created to read:

AB662,7,16 Chapter 40

AB662,7,19 Subchapter X Private employer health Care coverage

AB662,7,20 40.98 Health care coverage. (1) In this subchapter:

AB662,7,21 (a) "Board" means the private employer health care coverage board.

AB662,7,25 (b) "Dependent" means a spouse, an unmarried child under the age of 19 years, an unmarried child who is a full-time student under the age of 21 years and who is financially dependent upon the parent, or an unmarried child of any age who is medically certified as disabled and who is dependent upon the parent.

AB662,8,8 (c) "Employe" means any person who receives earnings as payment for personal services rendered for the benefit of any employer including officers of the employer. An employe is considered to have separated from the service of an employer at the end of the day on which the employe last performed services for the employer, or, if later, the day on which the employe-employer relationship is terminated because of the expiration or termination of leave without pay, sick leave, vacation or other leave of absence. A person shall not be considered an employe if any of the following applies:

AB662,8,10 1. The person is employed under a contract involving the furnishing of more than personal services.

AB662,8,14 2. The person is customarily engaged in an independently established trade, business or profession providing the same type of services to more than one employer and the person's services to an employer are not compensated for on a payroll of that employer.

AB662,8,16 3. The person is a patient or inmate of a hospital, home or institution and performs services in the hospital, home or institution.

AB662,8,19 (d) "Employer" means any person who is doing business or operating an organization in this state and who employs at least 2 employes, but who is not an employer, as defined in s. 40.02 (28).

AB662,8,21 (e) "Health care coverage plan" means the health care coverage plan established under sub. (2) (a).

AB662,8,22 (f) "Insurer" has the meaning given in s. 600.03 (27).

AB662,9,6 (2) (a) The department shall design, establish and administer a health care coverage plan for employers that provides coverage beginning not later than January 1, 2000. In establishing the health care coverage plan, the department shall solicit and accept bids and enter into contracts with insurers who are to provide health care coverage under the health care coverage plan. The health care coverage plan is subject to the provisions of chs. 600 to 646 that apply to group health benefit plans, as defined in s. 632.745 (9), to the same extent as any other group health benefit plan, as defined in s. 632.745 (9). Before the health care coverage plan may be implemented, the board must approve the plan.

AB662,9,10 (b) The health care coverage plan shall require that all insurance rates under the plan be published annually in a single publication that is made available to employers and employes. The rates shall be listed by county and by any other factor that the department considers appropriate.

AB662,9,13 (c) The health care coverage plan shall have an enrollment period that is identical to that provided to state employes who receive health care coverage under s. 40.51 (6).

AB662,9,17 (d) The department shall charge employers who participate in the health care coverage plan a fee to cover the department's cost in designing, establishing and administering the health care coverage plan. All moneys received under this paragraph shall be credited to the appropriation account under s. 20.515 (2) (g).

AB662,9,20 (e) The department may not sell any health care coverage plan to an employer or enroll any employe in the health care coverage plan, but the department may publicize the availability of the health care coverage plan for employers.

AB662,9,22 (f) The department may enter into a contract with any person to provide services relating to the administration of the health care coverage plan.

AB662,9,24 (3) Any employer who participates in the health care coverage plan shall do all of the following:

AB662,10,3 (a) Offer health care coverage under the plan to all of its permanent employes who have a normal work week of 30 or more hours and may offer health care coverage under the plan to any of its other employes.

AB662,10,7 (b) Provide health care coverage under the plan to at least 50% of its permanent employes who have a normal work week of 30 or more hours and who do not otherwise receive health care coverage as a dependent under any other plan that is not offered by the employer.

AB662,10,10 (c) Pay for each employe at least 50% of the lowest premium rate that would be available to the employer for that employe's coverage under the health care coverage plan.

AB662,10,12 (d) Make premium payments for the health care coverage of its employes directly to the insurer providing the health care coverage.

AB662,10,15 (4) Any employer that provides health care coverage for its employes under the plan and that voluntarily terminates coverage under the plan is not eligible to participate in the plan for at least 3 years from the date that coverage is terminated.