AB1016: Bill Text

LRB-5316/1

RAC/PJK:kmg/mkd:kat

1995 - 1996 LEGISLATURE

1995 Assembly BILL 1016

March 13, 1996 - Introduced by Representatives Robson, Kunicki, Wilder, Ryba, Wirch, R. Young, Baldwin, Dueholm, Boyle, Plache, Kreuser, Gronemus, Hasenohrl, Plombon, Notestein, Springer, Morris-Tatum, La Fave, Carpenter, L. Young, R. Potter, Schneider, Bell, Williams, Baumgart, Hubler, Cullen, Riley, Reynolds, Murat, Hanson, Krug, Coggs, Black and Travis, cosponsored by Senators Clausing, Moen, Chvala, Wineke and Burke. Referred to Committee on Insurance, Securities and Corporate Policy.

AB1016,1,7 An Act to amend 15.07 (4), 40.02 (26) (intro.), 40.02 (28), 40.03 (2) (ig), 628.36 (4) (b) 1., 628.36 (4) (b) 2. and 628.36 (4) (b) 3.; and to create 15.07 (1) (b) 22., 15.165 (5), 40.03 (6) (k) and subchapter XI of chapter 40 [precedes 40.98] of the statutes; relating to: the purchase of health care coverage by private employers through a program offered by the group insurance board, creating a private employer health care coverage board and granting rule-making authority.

Analysis by the Legislative Reference Bureau

Under current law, the group insurance board (GIB), attached to the department of employe trust funds (DETF), is required to contract on behalf of the state for the purpose of providing health care coverage to state employes. Many other public employers may also participate in programs offered by GIB to provide health care coverage for their employes.

This bill authorizes GIB to enter into contracts on behalf of private employers for the purpose of providing health care coverage to their employes through a program offered by GIB. In order to participate in this program, a private employer must provide health care coverage under the program to all of its employes who have a normal work week of 30 or more hours. The bill also creates a private employer health care coverage board (PEHCCB), attached to DETF. Under the bill, PEHCCB is required to advise GIB on the design of the health care coverage plan for private employers and GIB may not promulgate any rule relating to the plan unless 4 members of PEHCCB approve the rule.

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:

AB1016, s. 1 Section 1. 15.07 (1) (b) 22. of the statutes is created to read:

AB1016,2,2 15.07 (1) (b) 22. Private employer health care coverage board.

AB1016, s. 2 Section 2. 15.07 (4) of the statutes is amended to read:

AB1016,2,10 15.07 (4) Quorum. A majority of the membership of a board constitutes a quorum to do business and, unless a more restrictive provision is adopted by the board, a majority of a quorum may act in any matter within the jurisdiction of the board. This subsection does not apply to actions of the ethics board or the school district boundary appeal board as provided in ss. 19.47 (4) and 117.05 (2) (a). This subsection does not apply to actions of the private employer health care coverage board as provided in s. 40.98 (6r).

AB1016, s. 3 Section 3. 15.165 (5) of the statutes is created to read:

AB1016,2,15 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 following members nominated by the governor, and with the advice and consent of the senate appointed, for 3-year terms:

AB1016,2,18 1. Three members who are employes who receive health care coverage under subch. XI of ch. 40, but at least one employe shall be employed by an employer who employs 25 or fewer employes.

AB1016,2,20 2. Three members who are employers that offer health care coverage under subch. XI of ch. 40, but at least one employer shall employ 25 or fewer employes.

AB1016,3,2 3. One member who is an actuary, but who is not an insurer or an employe of an insurer.

AB1016,3,3 (b) The actuary appointed under par. (a) shall be a nonvoting member.

AB1016, s. 4 Section 4. 40.02 (26) (intro.) of the statutes is amended to read:

AB1016,3,12 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. XI. 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:

AB1016, s. 5 Section 5. 40.02 (28) of the statutes is amended to read:

AB1016,3,21 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, except as provided under ss. 40.51 (7) and 40.61 (3) and subch. XI, or a local exposition district created under subch. II of ch. 229. Each employer shall be a separate legal jurisdiction for OASDHI purposes.

AB1016, s. 6 Section 6. 40.03 (2) (ig) of the statutes is amended to read:

AB1016,3,25 40.03 (2) (ig) Shall promulgate, with the approval of the group insurance board, all rules required for the administration of the group health, long-term care, income continuation or life insurance plans established under subchs. IV to VI and XI.

AB1016, s. 7 Section 7. 40.03 (6) (k) of the statutes is created to read:

AB1016,4,5 40.03 (6) (k) May, on behalf of any employer specified under subch. XI, negotiate a contract or contracts with one or more insurers authorized to transact insurance business in this state for the purpose of providing the health care coverage plans provided under subch. XI.

AB1016, s. 8 Section 8. Subchapter XI of chapter 40 [precedes 40.98] of the statutes is created to read:

AB1016,4,8 Chapter 40

AB1016,4,11 Subchapter XI Private employer health Care coverage

AB1016,4,12 40.98 Health care coverage. (1) In this subchapter:

AB1016,4,19 (a) "Community rate" means a uniform rate charged by an insurer that is determined in such a manner that all insured individuals with the same level of coverage and plan design in the same community, as that term is defined by the department by rule under sub. (5m), pay the same rate for that coverage without regard to claims experience, health condition, duration of coverage or such demographic, actuarially based characteristics as age, gender, occupation or geographic area within the insured individual's community.

AB1016,5,2 (am) "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 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:

AB1016,5,4 1. Is employed under a contract involving the furnishing of more than personal services.

AB1016,5,7 2. Is customarily engaged in an independently established trade, business or profession providing the same type of services to more than one employer and whose services to an employer are not compensated for on a payroll of that employer.

AB1016,5,9 3. Is a patient or inmate of a hospital, home or institution and performs services in the hospital, home or institution.

AB1016,5,13 (b) "Employer" means any person doing business or operating an organization in this state other than the state, including each state agency, and any county, city, village, town, school district, other governmental unit or instrumentality of 2 or more units of government.

AB1016,5,16 (c) "Federal metropolitan statistical area" means an area defined by the federal office of management and budget under 44 USC 3504 (d) (3) as a metropolitan statistical area or a primary metropolitan statistical area.

AB1016,5,23 (2) (a) Subject to pars. (b) and (c), any employer may offer to all of its employes a health care coverage plan through a program offered by the group insurance board. The department may, by rule, establish eligibility standards or contribution requirements for such employes and employers and may, by rule, limit the category of employers allowed to be included in any program available under this subchapter. The department may not require an employer to contribute more than 50% of the cost of an employe's health care coverage offered under this subchapter.

AB1016,6,2 (b) An employer who participates in a program offered by the group insurance board under par. (a) shall offer health care coverage under that program to all of its employes who have a normal work week of 30 or more hours, but may offer that coverage to its employes who have a normal work week of fewer than 30 hours.

AB1016,6,5 (c) An employer who participates in a program offered by the group insurance board under par. (a) shall make any premium payments for the health care coverage of the employer's employes directly to the insurer providing the coverage.

AB1016,6,9 (3) The department shall make available to employers who participate in a health care coverage plan under sub. (2) information that describes any grievance procedure that may be available to any employe who receives health care coverage under sub. (2).

AB1016,6,13 (4) The private employer health care coverage board shall advise the group insurance board on health care issues affecting private employers and shall recommend to the group insurance board the design for a uniform benefit structure for the health care coverage plans under sub. (2).

AB1016,6,17 (5m) The department shall, by rule, define "community" for purposes of the definition of "community rate" under sub. (1) (a). The department may not define "community" as a geographical area that includes less than an entire federal metropolitan statistical area or an entire county, whichever is larger.

AB1016,6,20 (5r) (a) Except as provided in par. (b), an insurer who participates in a program under this subchapter shall charge a community rate for coverage under a health care coverage plan under this subchapter.

AB1016,6,22 (b) The department may, by rule, modify the community rate under par. (a) by taking into account any of the following factors:

AB1016,6,23 1. The insured's age.