AB683: Bill Text

LRB-3605/1

PJK:nwn:ph

2009 - 2010 LEGISLATURE

2009 Assembly BILL 683

January 22, 2010 - Introduced by Representatives Richards, Vruwink, Benedict, Turner, Brooks, Pope-Roberts, Ripp, Tauchen and Smith, cosponsored by Senators Erpenbach, Hansen, Wirch, Vinehout, Taylor, Kreitlow, Risser and Cowles. Referred to Committee on Health and Healthcare Reform.

AB683,1,7 An Act to repeal 185.981 (4t), 185.981 (6) and 185.982 (3); and to amend 71.26 (1) (a), 71.45 (1) (a), 71.45 (5), 146.81 (1) (k), 146.997 (1) (d) 17., 155.01 (7), 185.09, 185.981 (title), 185.981 (1), 185.981 (2), 185.981 (3), 185.981 (4), 185.981 (5), 185.981 (7), 185.981 (8), 185.981 (9), 185.982 (1), 185.982 (2), 185.983 (1) (intro.), 185.983 (1) (a), 185.983 (1m), 185.983 (2), 185.985, 252.14 (1) (ar) 12., 254.11 (13), 632.86 (1) (a) and 655.002 (1) (f) of the statutes; relating to: health care plans operated by cooperative associations.

Analysis by the Legislative Reference Bureau

Under current law, associations may be organized on a cooperative nonprofit basis (cooperative associations) to establish and operate sickness care plans for their members through contracts with providers. This bill makes various changes to those provisions, including the following:

1. The bill changes the name of the plans that cooperative associations may establish and operate from "sickness care plans" to "health care plans."

2. The bill specifies that establishing and maintaining these plans may be the primary, as opposed to exclusive, purpose of the cooperative association.

3. Current law provides that cooperative associations may enter into contracts for services with physicians and surgeons, optometrists, chiropractors, and dentists. The bill allows contracts with other providers, too.

4. The bill adds that nothing in the provisions pertaining to the purpose of the cooperative association as being primarily to establish and operate a health care plan precludes a cooperative association from owning an interest in other entities for improving member services or for investment.

5. Under current law, a cooperative association may not spend more than 5 percent of capital stock or membership fees on promotional expenses. The bill provides that this limit does not apply to a cooperative association operating a health care plan.

6. Current law prohibits a contract by or on behalf of a cooperative association from providing for the payment of cash or other material benefit to a subscriber or the subscriber's estate on account of death, illness, or injury. The bill eliminates this provision.

7. Under current law, a cooperative association may stipulate in a plan that it will pay a nonparticipating physician and surgeon, optometrist, chiropractor, or dentist outside of the cooperative association's normal territory for care rendered to a member or a member's covered dependent who needs the care when he or she is outside the cooperative association's territory in which the plan benefits are normally available. Under the bill, a cooperative association may stipulate in its plans that it will pay a nonparticipating physician and surgeon, optometrist, chiropractor, dentist, or other provider for health care rendered to a covered person, without limitation to being outside the association's normal territory.

8. Current law provides that a cooperative association may provide benefits only to its members. The bill allows a cooperative association to offer its services to nonmembers, too.

9. Finally, the bill makes various technical changes, such as conforming the language to current statutory drafting practice and eliminating redundant provisions.

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

AB683, s. 1 Section 1. 71.26 (1) (a) of the statutes is amended to read:

AB683,3,20 71.26 (1) (a) Certain corporations. Income of corporations organized under ch. 185, except income of a cooperative sickness health care association organized under s. 185.981, or of a service insurance corporation organized under ch. 613, that is derived from a health maintenance organization as defined in s. 609.01 (2) or a limited service health organization as defined in s. 609.01 (3), or operating under subch. I of ch. 616 which are bona fide cooperatives operated without pecuniary profit to any shareholder or member, or operated on a cooperative plan pursuant to which they determine and distribute their proceeds in substantial compliance with s. 185.45, and the income, except the unrelated business taxable income as defined in section 512 of the internal revenue code and except income that is derived from a health maintenance organization as defined in s. 609.01 (2) or a limited service health organization as defined in s. 609.01 (3), of all religious, scientific, educational, benevolent or other corporations or associations of individuals not organized or conducted for pecuniary profit. This paragraph does not apply to the income of savings banks, mutual loan corporations or savings and loan associations. This paragraph does not apply to income that is realized from the sale of or purchase and subsequent sale or redemption of lottery prizes if the winning tickets were originally bought in this state. This paragraph applies to the income of credit unions except to the income of any credit union that is derived from public deposits for any taxable year in which the credit union is approved as a public depository under ch. 34 and acts as a depository of state or local funds under s. 186.113 (20). For purposes of this paragraph, the income of a credit union that is derived from public deposits is the product of the credit union's gross annual income for the taxable year multiplied by a fraction, the numerator of which is the average monthly balance of public deposits in the credit union during the taxable year, and the denominator of which is the average monthly balance of all deposits in the credit union during the taxable year.

AB683, s. 2 Section 2. 71.45 (1) (a) of the statutes is amended to read:

AB683,4,14 71.45 (1) (a) Income of insurers exempt from federal income taxation pursuant to section 501 (c) (15) of the internal revenue code, town mutuals organized under or subject to ch. 612, foreign insurers, and domestic insurers engaged exclusively in life insurance business, domestic insurers insuring against financial loss by reason of nonpayment of principal, interest and other sums agreed to be paid under the terms of any note or bond or other evidence of indebtedness secured by a mortgage, deed of trust or other instrument constituting a lien or charge on real estate and corporations organized under ch. 185, but not including income of cooperative sickness health care associations organized under s. 185.981, or of a service insurance corporation organized under ch. 613, that is derived from a health maintenance organization as defined in s. 609.01 (2) or a limited service health organization as defined in s. 609.01 (3), or operating under subch. I of ch. 616 which are bona fide cooperatives operated without pecuniary profit to any shareholder or member, or operated on a cooperative plan pursuant to which they determine and distribute their proceeds in substantial compliance with s. 185.45. This paragraph does not apply to income that is realized from the sale of or purchase and subsequent sale or redemption of lottery prizes if the winning tickets were originally bought in this state.

AB683, s. 3 Section 3. 71.45 (5) of the statutes is amended to read:

AB683,4,22 71.45 (5) Exceptions. The net income of a cooperative sickness health care association organized under s. 185.981, or of a service insurance corporation organized under ch. 613, that is derived from a health maintenance organization, as defined in s. 609.01 (2), or a limited service health organization, as defined in s. 609.01 (3), is the net income that would be determined if the cooperative sickness health care association or service insurance corporation were subject to federal income taxation and as if that income were that of an insurance company.

AB683, s. 4 Section 4. 146.81 (1) (k) of the statutes is amended to read:

AB683,5,3 146.81 (1) (k) An operational A cooperative sickness health care plan association organized under ss. s. 185.981 to 185.985 that directly provides services through salaried employees in its own facility.

AB683, s. 5 Section 5. 146.997 (1) (d) 17. of the statutes is amended to read:

AB683,5,7 146.997 (1) (d) 17. An operational A cooperative sickness health care plan association organized under ss. s. 185.981 to 185.985 that directly provides services through salaried employees in its own facility.

AB683, s. 6 Section 6. 155.01 (7) of the statutes is amended to read:

AB683,5,19 155.01 (7) "Health care provider" means a nurse licensed or permitted under ch. 441, a chiropractor licensed under ch. 446, a dentist licensed under ch. 447, a physician, physician assistant, perfusionist, podiatrist, physical therapist, physical therapist assistant, occupational therapist, or occupational therapy assistant licensed under ch. 448, a person practicing Christian Science treatment, an optometrist licensed under ch. 449, a psychologist licensed under ch. 455, a partnership thereof, a corporation or limited liability company thereof that provides health care services, an operational a cooperative sickness health care plan association organized under ss. s. 185.981 to 185.985 that directly provides services through salaried employees in its own facility, or a home health agency, as defined in s. 50.49 (1) (a).

AB683, s. 7 Section 7. 185.09 of the statutes is amended to read:

AB683,5,24 185.09 Promotion expense; limitation. No cooperative funds may be used, nor any stock issued, in payment of any promotion expenses in excess of 5 per cent of the paid-up capital stock or membership fees. This section does not apply to a cooperative association organized under s. 185.981.

AB683, s. 8 Section 8. 185.981 (title) of the statutes is amended to read:

AB683,6,1 185.981 (title) Cooperative sickness health care.

AB683, s. 9 Section 9. 185.981 (1) of the statutes is amended to read:

AB683,6,9 185.981 (1) Cooperative associations may be organized under this chapter without capital stock, exclusively primarily to establish and operate in the state or in any county or counties therein a in the state nonprofit plan or plans or programs for sickness health care, including hospital care, for their members and, their members' dependents, and others through contracts with physicians, medical societies, chiropractors, optometrists, dentists, dental societies, hospitals, and others.

AB683, s. 10 Section 10. 185.981 (2) of the statutes is amended to read:

AB683,7,3 185.981 (2) Such associations A cooperative association organized under this section shall operate only on a cooperative nonprofit basis and for the primary purpose of establishing, maintaining, and operating a voluntary nonprofit health, dental, or vision care plan or plans, or additional programs, or for constructing, operating, and maintaining nonprofit hospitals or other facilities whereby sickness health care, including hospital, dental, or vision care, is provided at the expense of such association, to its members or both, and to such other persons or groups of persons as shall who become subscribers to such plan, the plans, subject to s. 185.982 (2), under contracts which will entitle each such subscriber to definite that provide access to medical, surgical, chiropractic, vision, dental, or hospital care, other health care services, appliances, and supplies, by physicians and surgeons licensed and registered under ch. 448, optometrists licensed under ch. 449, chiropractors licensed under ch. 446 and, dentists licensed under ch. 447, and other health care providers in their offices, in hospitals, in other facilities, and in the home. Nothing in this subsection precludes a cooperative association organized under this section from owning an interest in other entities for enhancing or improving member services or for investment or other purposes, as long as the association's primary purpose remains as provided in this subsection.

AB683, s. 11 Section 11. 185.981 (3) of the statutes is amended to read:

AB683,7,13 185.981 (3) No cooperative association organized primarily for the purposes provided in ss. 185.981 to 185.983 shall be prevented from contracting with any hospital in this state for the rendition of such hospital care as is included within such a plan the cooperative association's plans because such the hospital participates in a plan of any other such plan cooperative association, or in a plan organized and operated under ss. 148.03 and 613.80. No hospital may discriminate against any physician and surgeon, chiropractor, or dentist with respect to the use of such the hospital's facilities by reason of his or her participation in a sickness health care plan of a cooperative.

AB683, s. 12 Section 12. 185.981 (4) of the statutes is amended to read:

AB683,8,2 185.981 (4) No contract by or on behalf of any such A cooperative association shall provide for the payment of any cash, indemnity or other material benefit by that association to the subscriber or the subscriber's estate on account of death, illness or injury, nor be in any way related to the payment of any such benefit by any other agency, but any such association may stipulate in its plan plans that it will pay any nonparticipating physician and surgeon, optometrist, chiropractor, dentist or, hospital outside of its normal territory for sickness or, or other provider for hospital or other health care rendered to any covered member or a member's covered dependent person who is in need of the a plan's benefits of such plan when he or she is outside of the territory of such association in which the benefits of such plan are normally available. Any such plan plans may prescribe monetary limitations with respect to such extraterritorial the benefits.

AB683, s. 13 Section 13. 185.981 (4t) of the statutes, as affected by 2009 Wisconsin Act 28, is repealed.

AB683, s. 14 Section 14. 185.981 (5) of the statutes is amended to read:

AB683,8,7 185.981 (5) Every such cooperative association organized under this section is a charitable and benevolent corporation.

AB683, s. 15 Section 15. 185.981 (6) of the statutes is repealed.

AB683, s. 16 Section 16. 185.981 (7) of the statutes is amended to read:

AB683,8,13 185.981 (7) Notwithstanding sub. (4) and s. ss. 185.982 (1) and 185.983 (1), a sickness health care plan that is operated by a cooperative association and that qualifies as a health maintenance organization, as defined in s. 609.01 (2), is subject to s. 609.655.

AB683, s. 17 Section 17. 185.981 (8) of the statutes is amended to read: