AB662: Bill Text

LRB-4297/1

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1997 - 1998 LEGISLATURE

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.