SB707, s. 45 18Section 45. 230.90 (1) (c) of the statutes is amended to read:
SB707,22,219 230.90 (1) (c) "Governmental unit" means any association, authority, board,
20commission, department, independent agency, institution, office, society or other
21body in state government created or authorized to be created by the constitution or
22any law, including the legislature, the office of the governor and the courts.
23"Governmental unit" does not mean the University of Wisconsin Hospitals and
24Clinics Authority, the Health Insurance Risk-Sharing Plan Authority, the Small
25Business Health Options Program Authority,
or any political subdivision of the state

1or body within one or more political subdivisions which is created by law or by action
2of one or more political subdivisions.
SB707, s. 46 3Section 46. Subchapter I (title) of chapter 635 [precedes 635.01] of the statutes
4is created to read:
SB707,22,55 CHAPTER 635
SB707,22,76 Subchapter i
7 General Provisions
SB707, s. 47 8Section 47. 635.02 (1) of the statutes is renumbered 635.02 (1g).
SB707, s. 48 9Section 48. 635.02 (1c) of the statutes is created to read:
SB707,22,1110 635.02 (1c) "Authority" means the Small Business Health Options Program
11Authority.
SB707, s. 49 12Section 49. 635.02 (1o) of the statutes is created to read:
SB707,22,1313 635.02 (1o) "Board" means the board of directors of the authority.
SB707, s. 50 14Section 50. 635.18 (1) of the statutes is amended to read:
SB707,22,1615 635.18 (1) Every Any small employer insurer shall may actively market health
16benefit plan coverage to small employers in the state.
SB707, s. 51 17Section 51. Subchapter II of chapter 635 [precedes 635.30] of the statutes is
18created to read:
SB707,22,1919 CHAPTER 635
SB707,22,2120 Subchapter II
21 HEALTH BENEFIT PLAN exchange
SB707,22,25 22635.30 Establishment of exchange; plans. (1) Subject to s. 635.45 (4), the
23authority shall establish and, by January 1, 2011, begin operating a health benefit
24plan exchange under which the authority shall enroll eligible groups and individuals
25in health benefit plans offered through the exchange.
SB707,23,6
1(2) (a) The commissioner shall determine the initial plan designs, including
2minimum benefit levels, for the health benefit plans that may be offered through the
3exchange. Thereafter, the authority may modify the plan designs as it determines
4necessary or appropriate. Both the commissioner and the authority, in specifying
5plan designs under this subsection, shall attempt to limit the degree of variation
6among plans and the number of different plan choices for exchange participants.
SB707,23,117 (b) Only health benefit plans that satisfy the requirements under par. (a) and
8that are approved by the authority may be offered by insurers through the exchange.
9Each plan offered through the exchange shall contain a detailed description of the
10benefits provided, including any maximum or minimum amounts, limitations, or
11exclusions.
SB707,23,14 12(3) The authority shall rank the health benefit plans that are offered through
13the exchange according to the benefits provided and place each one into one of the
14following 3 tiers:
SB707,23,1515 (a) A plan with full benefits shall be designated as a "gold" plan.
SB707,23,1716 (b) A plan providing 75 percent of the actuarial value of a "gold" plan shall be
17designated as a "silver" plan.
SB707,23,1918 (c) A plan providing 60 percent of the actuarial value of a "gold" plan shall be
19designated as a "bronze" plan.
SB707,23,21 20(4) The authority may eliminate a plan from the exchange only after notice to
21the insurer offering the plan.
SB707,23,23 22635.35 Participation in exchange. (1) All of the following shall be eligible
23to purchase coverage under a health benefit plan offered through the exchange:
SB707,23,2424 (a) A small employer.
SB707,24,2
1(b) A state employee who is a limited term employee and who is not eligible for
2coverage under a health care coverage plan under subch. IV of ch. 40.
SB707,24,53 (c) An individual who contracts with this state for the performance of services
4for the state and who is not eligible for coverage under a health care coverage plan
5under subch. IV of ch. 40.
SB707,24,12 6(2) The authority shall accept for enrollment through the exchange any small
7employer under sub. (1) (a) and any individual under sub. (1) (b) or (c) who applies
8for enrollment. An individual under sub. (1) (b) or (c) and an employee of a small
9employer under sub. (1) (a) may select coverage under any health benefit plan offered
10through the exchange, except that all employees of a single small employer must
11select coverage under health benefit plans that have been placed in the same tier
12under s. 635.30 (3) (a), (b), or (c).
SB707,24,16 13(3) The authority shall collect initial premiums for coverage under each health
14benefit plan from enrollees in the plan and disburse the initial premium collected to
15the insurer offering the plan, along with enrollment information about each
16individual or employee enrolled in the plan.
SB707,24,25 17635.37 Insurer requirements. (1) (a) Any insurer that is authorized to do
18business in this state, in one or more lines of insurance that includes health
19insurance, may offer coverage through the exchange. No insurer may offer or issue
20a health benefit plan to a small employer except through the exchange. An insurer
21that offers coverage through the exchange may offer only health benefit plans that
22satisfy the requirements under s. 635.30 (2) (a) and that are approved for the
23exchange by the authority. An insurer that offers coverage through the exchange
24must offer at least one health benefit plan in each tier under s. 635.30 (3) (a), (b), and
25(c).
SB707,25,3
1(b) Notwithstanding ss. 631.36 (4) and 632.749 (1) and (2), a health benefit plan
2issued to a small employer that is in effect on the day that the exchange begins
3operating may remain in effect until the end of its term but may not be renewed.
SB707,25,8 4(2) Premiums for coverage through the exchange may be based only on age, sex,
5geographic location, whether coverage is single or family, and plan design. For the
6purpose of determining premiums, an insurer shall pool together all individuals and
7employees who have coverage under all of the plans issued by the insurer through
8the exchange.
SB707,25,16 9(3) An insurer may not impose any annual or lifetime limits or any preexisting
10condition exclusions under any plan offered through the exchange. An insurer
11offering coverage through the exchange shall accept for enrollment any individual
12under s. 635.35 (1) (b) or (c) and any employee of a small employer under s. 635.35
13(1) (a) who applies for enrollment in a health benefit plan offered by the insurer
14through the exchange. Section 632.7495 applies to the renewability of an
15individual's or employee's coverage under a health benefit plan offered through the
16exchange.
SB707,25,20 17(4) An insurer that offers health benefit plans through the exchange shall
18establish a toll-free hotline for providing information to enrollees and other
19individuals and shall furnish such reasonable reports as the authority determines
20necessary for the administration of the exchange.
SB707,25,24 21(5) The authority may audit any insurer that provides coverage under a health
22benefit plan through the exchange for the purpose of ensuring that the insurer is
23providing covered individuals with the benefits provided for under this subchapter
24in a manner that does all of the following:
SB707,25,2525 (a) Complies with the provisions of this chapter.
SB707,26,1
1(b) Promotes positive health outcomes.
SB707,26,22 (c) Advances value-based and evidence-based medical practices.
SB707,26,53 (d) Avoids unnecessary operating and capital costs arising from inappropriate
4utilization or inefficient delivery of health care services, unwarranted duplication of
5services and infrastructure, or creation of excess care delivery capacity.
SB707,26,66 (e) Holds down the growth of health care costs.
SB707,26,15 7635.40 Intermediaries. An insurance intermediary that enrolls an
8individual under s. 635.35 (1) (b) or (c) in a health benefit plan through the exchange
9shall be paid a commission by the insurer offering the health benefit plan. An
10insurance intermediary that enrolls the employees of a small employer under s.
11635.35 (1) (a) in one or more health benefit plans through the exchange shall be paid
12a commission by each insurer offering a health benefit plan selected by an employee
13of the small employer. The authority shall determine the commission amounts that
14must be paid to intermediaries under this section after considering information
15provided to the commissioner under s. 628.81 with respect to health insurance.
SB707,26,19 16635.45 Administration; rules. (1) For payment of administrative expenses,
17the authority may impose a surcharge on each insurer offering health benefit plans
18through the exchange. The surcharge shall be based on an insurer's total premium
19collected through the exchange.
SB707,26,20 20(2) For administering the exchange the authority shall do all of the following:
SB707,26,2421 (a) In consultation with the commissioner, establish procedures for approving
22plans that may be offered through the exchange, for ranking plans into the tiers
23under s. 635.30 (3), and for determining whether a plan should continue to be offered
24or should be eliminated from the exchange.
SB707,27,2
1(b) Establish quality improvement standards for plans offered through the
2exchange.
SB707,27,43 (c) Establish a system for enrolling eligible groups and individuals, using a
4standard application form developed by the commissioner under sub. (5) (a).
SB707,27,65 (d) Establish procedures for collecting premiums and remitting premium
6payments and providing enrollment information to insurers.
SB707,27,97 (e) Establish, in consultation with the commissioner, the method for
8determining the amount of the surcharge under sub. (1) and establish the procedure
9for imposing and collecting the surcharge.
SB707,27,1110 (f) Establish a plan for publicizing the exchange and the eligibility
11requirements and enrollment procedures.
SB707,27,1312 (g) Establish and operate a service center to provide information to small
13employers, individuals, enrollees, and insurance intermediaries about the exchange.
SB707,27,1514 (h) Establish a mechanism for regular communication and cooperation with
15insurance intermediaries.
SB707,27,1716 (i) Establish an independent and binding appeals process for resolving disputes
17over eligibility and other determinations made by the authority.
SB707,27,18 18(3) The authority may do all of the following:
SB707,27,2019 (a) Contract with a 3rd-party administrator for the provision of services on
20behalf of the exchange.
SB707,27,2121 (b) Establish risk adjustment mechanisms for the exchange.
SB707,27,2222 (c) Enter into agreements with or establish sub-exchanges.
SB707,28,2 23(4) The authority shall seek grants or other funding from the federal or state
24government for which it may be eligible and from private foundations. The authority

1may begin operating the exchange only if it receives federal grant moneys or other
2funds for that purpose.
SB707,28,4 3(5) (a) The commissioner shall develop a standard application form for use in
4the exchange.
SB707,28,65 (b) The commissioner may promulgate rules, with the approval of the authority,
6for the administration of this subchapter.
SB707, s. 52 7Section 52. Subchapter III of chapter 635 [precedes 635.70] of the statutes is
8created to read:
SB707,28,99 CHAPTER 635
SB707,28,1210 Subchapter III
11 Small Business Health
12 Options Program authority
SB707,28,22 13635.70 Creation and organization of authority. (1) There is created a
14public body corporate and politic to be known as the "Small Business Health Options
15Program Authority." The board of directors of the authority shall consist of the
16commissioner, or his or her designee; the secretary of employee trust funds, or his or
17her designee; the person who is appointed by the secretary of health services to be
18the director of the Medical Assistance program, or his or her designee; the executive
19director of the Health Insurance Risk-Sharing Plan Authority, or his or her designee;
20and all of the following members, who shall be nominated by the governor, and with
21the advice and consent of the senate appointed for 3-year terms, and none of whom
22shall be an employee of an insurer that is authorized to do business in the state:
SB707,28,2323 (a) A member in good standing of the American Academy of Actuaries.
SB707,28,2424 (b) A health economist.
SB707,28,2525 (c) An employee benefits specialist.
SB707,29,1
1(d) A representative of small employers.
SB707,29,22 (e) A representative of an organization that represents consumer interests.
SB707,29,33 (f) A representative of organized labor.
SB707,29,5 4(2) A vacancy on the board shall be filled in the same manner as the original
5appointment to the board for the remainder of the unexpired term, if any.
SB707,29,8 6(3) A member of the board shall receive no compensation for services under this
7chapter but shall be reimbursed for actual and necessary expenses, including travel
8expenses, incurred in the discharge of the member's duties under this chapter.
SB707,29,13 9(4) The commissioner or the commissioner's designee shall be the chairperson
10of the board. Five members of the board constitute a quorum for the purpose of
11conducting the business and exercising the powers of the authority, notwithstanding
12the existence of any vacancy. The board may take action upon a vote of a majority
13of the members present, unless the bylaws of the authority require a larger number.
SB707,29,25 14(5) The chairperson shall appoint an executive director who shall not be a
15member of the board and who shall serve at the pleasure of the board. The executive
16director shall receive compensation commensurate with the duties of the office, as
17determined by the board. The executive director shall serve as secretary of the
18authority and shall keep a record of the proceedings of the authority and shall be
19custodian of all books, documents, and papers filed with the authority, the minute
20book or journal of the authority, and its official seal. The executive director or other
21person may cause copies to be made of all minutes and other records and documents
22of the authority and may give certificates under the official seal of the authority to
23the effect that such copies are true copies, and all persons dealing with the authority
24may rely upon such certificates. The executive director shall have all of the following
25duties:
SB707,30,2
1(a) Supervising the administrative affairs and the general management and
2operation of the authority.
SB707,30,43 (b) Planning, directing, coordinating, and executing administrative functions
4in conformity with the policies and directives of the board.
SB707,30,55 (c) Employing professional and clerical staff, as necessary.
SB707,30,76 (d) Reporting to the board on all operations under his or her control and
7supervision.
SB707,30,98 (e) Preparing an annual budget and managing the administrative expenses of
9the authority.
SB707,30,1110 (f) Undertaking any activities necessary to implement the powers and duties
11set forth in this chapter.
SB707,30,13 12635.72 Duties. In addition to all other duties imposed under this chapter, the
13authority shall do all of the following:
SB707,30,14 14(1) Establish its annual budget and monitor its fiscal management.
SB707,30,18 15(2) No later than two years after the exchange under subch. II begins operation,
16and annually thereafter, submit a report to the legislature under s. 13.172 (2) and
17to the governor on the operation of the exchange under subch. II, including a review
18of all of the following:
SB707,30,1919 (a) Progress toward the goals of the exchange.
SB707,30,2020 (b) The operations and administration of the exchange.
SB707,30,2221 (c) The types of health insurance plans available to eligible individuals and
22groups and the percentage of the total exchange enrollees served by each plan.
SB707,30,2523 (d) Surveys and reports on the insurers' experiences with different plans,
24including aggregated data on enrollees, claims, statistics, complaint data, and
25enrollee satisfaction data.
SB707,31,2
1(e) Significant observations regarding utilization and adoption of the
2exchange.
SB707,31,4 3(3) Annually submit to the governor and the legislative audit bureau a
4statement of its activities and financial condition.
SB707,31,6 5(4) Approve the use of any trademarks, seals, or logos by participating insurers
6and small employers.
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