SB698: Bill Text

Analysis by the Legislative Reference Bureau

This bill creates a health care coverage plan called the Wisconsin Health Care Plan (WHCP) and creates the Wisconsin health care plan board (board), which must develop and administer WHCP. The board, which is attached to the Office of the Commissioner of Insurance (OCI), is composed of the commissioner of insurance, who is the nonvoting chairperson of the board, five persons who represent employers and who are nominated by Wisconsin Manufacturers and Commerce, and five persons who represent employees and who are nominated by the Wisconsin State AFL-CIO. In addition, the governor may appoint nonvoting members who represent hospitals, physicians, or state agencies or organizations with a connection to health care.

WHCP provides mandatory health care coverage for all persons not eligible for Medicare, regardless of where they reside, who are employed by private or public employers in this state, or who are unemployed but were employed in this state within the preceding two months, and for all dependents of those two categories of persons. Any resident of this state who is under 65 years of age and who is not automatically covered, including self-employed persons, may purchase coverage under WHCP, for himself or herself and his or her dependents, at a cost determined by the board that reflects the actual cost of their coverage. The bill defines a dependent as a spouse, an unmarried child or stepchild under the age of 19 years or, if the unmarried child or stepchild is a full-time student and financially dependent on the parent, under the age of 21 years, or an unmarried child or stepchild of any age who is disabled and dependent on the parent.

WHCP covers all reasonable medical services and prescription drugs necessary to maintain health, enable diagnosis, or provide treatment or rehabilitation for an injury, condition, disability, or disease. Specifically excluded from coverage, however, unless determined to be medically necessary under criteria specified by the board by rule, are dental and vision care, long-term care, and reconstructive or cosmetic surgery. An employer may provide employee health care benefits that are not covered under WHCP.

WHCP costs are partly paid through enrollee cost sharing and premiums paid by persons who are not automatically covered and who purchase their coverage. During the first year of WHCP's operation: 1) the total cost-sharing amount may not exceed $300 for a single individual or $600 for a family, excluding prescription drug copayments, health care services copayments, and premiums paid by persons purchasing coverage; 2) copayments for prescription drugs may not exceed $15 per prescription for a generic drug or $20 per prescription for a brand name drug; and 3) each time a covered person receives services, he or she must pay a health care services copayment in the amount of $15 if the services are provided by the primary care physician that he or she selects to coordinate his or her health care or by another health care provider to which he or she has been referred or in the amount of 25 percent of the cost of the services if the services are provided by a specialist provider to whom he or she has not been referred. After the first year of WHCP's operation, the board may annually increase the specified cost-sharing amounts by not more than a percentage equal to medical inflation. An employer may pay any or all of the cost sharing on behalf of the employer's employees.

All employers in the state pay part of the costs of WHCP through a monthly assessment based on a flat rate for each employee that an employer has. The board must determine the basis for calculating the assessments and must set the flat rate for each employee at a level that is sufficient to cover WHCP's costs not covered by enrollee payments. If an employer has fewer than ten employees and the average annual gross income of all of the employer's employees is not more than $20,000, however, the employer's monthly assessment is reduced by 50 percent.

In addition to the responsibilities of the board that have been mentioned, the board must negotiate, or contract with a third party to negotiate, with drug manufacturers and distributors for discounts on prescription drug prices for WHCP enrollees; may seek to extend to other health care programs covering state residents, such as Medical Assistance (MA), the Badger Care health care program (Badger Care), and Worker's Compensation, any agreements negotiated for prescription drug discounts for WHCP enrollees; must establish provider payment rates for services and articles covered under WHCP; must seek federal funds for payment of WHCP costs related to covered persons who would otherwise be eligible for coverage under MA, Badger Care, or any other health care program other than Medicare that is financed at least in part with federal funds; and must select one or more administrators of WHCP using a competitive bidding process.

The bill provides that WHCP is to be considered a group health insurance policy and is subject to all requirements in current law that apply to group health insurance policies, such as the requirements known as the health insurance mandates that require health insurance policies to cover certain persons, certain conditions, or the services of certain types of providers.

Finally, under the bill, OCI is required to request waivers from federal law to allow persons who are eligible for MA, Badger Care, or any other health care program other than Medicare funded at least in part with federal funds to be covered under WHCP; to allow the use of federal financial participation to fund benefits provided under WHCP to persons who are eligible for MA, Badger Care, or any other health care program other than Medicare funded at least in part with federal funds; and to allow persons with coverage under MA or Badger Care to purchase prescription drugs under a purchasing program negotiated for WHCP participants.

For further information see the state and local 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:

SB698, s. 1 Section 1. 15.07 (2) (i) of the statutes is created to read:

SB698,4,3 15.07 (2) (i) The commissioner of insurance shall serve as nonvoting chairperson of the Wisconsin health care plan board.

SB698, s. 2 Section 2. 15.735 of the statutes is created to read:

SB698,4,7 15.735 Same; attached boards. (1) Wisconsin health care plan board. (a) There is created a Wisconsin health care plan board, attached to the office of the commissioner of insurance under s. 15.03, consisting of the following members:

SB698,4,10 1. Five persons who represent employers, including at least one person who represents small employers, and who are nominated by Wisconsin Manufacturers and Commerce.

SB698,4,12 2. Five persons who represent employees and who are nominated by the Wisconsin State AFL-CIO.

SB698,4,13 3. The commissioner of insurance, who shall serve as nonvoting chairperson.

SB698,4,16 (b) Notwithstanding par. (a), the governor may appoint to the board nonvoting members who represent hospitals, physicians, and other state agencies or organizations with a connection to health care.

SB698,4,18 (c) The members of the board under par. (a) 1. and 2. shall be appointed for 3-year terms and may be reappointed.

SB698,4,20 (d) Notwithstanding s. 15.07 (4), 8 votes are required for approval of any matter within the jurisdiction of the board.

SB698, s. 3 Section 3. 20.005 (3) (schedule) of the statutes: at the appropriate place, insert the following amounts for the purposes indicated: - See PDF for table

SB698, s. 4 Section 4. 20.145 (6) of the statutes is created to read:

SB698,5,6 20.145 (6) Wisconsin Health Care Plan. (a) Development and administration. The amounts in the schedule for the expenses of the Wisconsin health care plan board in the development and administration of the Wisconsin Health Care Plan.

SB698,5,10 (d) Employer assessments received from the state; general purpose revenue. A sum sufficient to pay employer assessments for state employees whose salaries are paid from general purpose revenue for the operating costs of the Wisconsin Health Care Plan.

SB698,5,13 (g) Operating costs. All moneys received from employer assessments and from premiums paid by individuals covered under the Wisconsin Health Care Plan for the operating costs of the Wisconsin Health Care Plan.

SB698,5,18 (gm) Employer assessments received from the state; program revenue. From the appropriate program revenue and program revenue-service accounts, a sum sufficient to pay employer assessments for state employees whose salaries are paid from program revenue or program revenue-service accounts for the operating costs of the Wisconsin Health Care Plan.

SB698,5,20 (h) Gifts and grants. All moneys received from gifts, grants, and bequests to carry out the purposes for which made.

SB698,6,3 (m) Federal funds; state operations. All moneys received from the federal government, as authorized by the governor under s. 16.54, for the purposes for which made and received.

SB698,6,7 (s) Employer assessments received from the state; segregated revenue. From the appropriate segregated funds, a sum sufficient to pay employer assessments for state employees whose salaries are paid from segregated funds for the operating costs of the Wisconsin Health Care Plan.

SB698, s. 5 Section 5. 40.05 (4) (ag) of the statutes is repealed.

SB698, s. 6 Section 6. 40.05 (4) (ar) of the statutes is repealed.

SB698, s. 7 Section 7. 40.51 (2) of the statutes is amended to read:

SB698,7,2 40.51 (2) Except as provided in subs. (10), (10m), (11) and (16), any eligible employee may become covered by group health insurance benefits under this subchapter by electing coverage within 30 days of being hired, to be effective as of the first day of the month which begins on or after the date the application is received by the employer, or by electing coverage prior to becoming eligible for any employer contribution towards the premium cost as provided in s. 40.05 (4) (a) to be effective upon becoming eligible for employer contributions. An eligible employee who is not insured, but who is eligible for an employer contribution under s. 40.05 (4) (ag) 1., may elect coverage prior to becoming eligible for an employer contribution under s. 40.05 (4) (ag) 2., with the coverage to be effective upon becoming eligible for the increase in the employer contribution. Any employee who does not so elect at one of these times, or who subsequently cancels the insurance, shall not thereafter become insured unless the employee furnishes evidence of insurability satisfactory to the insurer, at the employee's own expense or obtains coverage subject to contractual waiting periods. The method to be used shall be specified in the health insurance contract.

SB698, s. 8 Section 8. 40.51 (6) of the statutes is renumbered 40.51 (6) (a) and amended to read:

SB698,7,13 40.51 (6) (a) This state shall offer to all of its eligible employees described in subs. (10), (10m), and (16) at least 2 insured or uninsured health care coverage plans providing substantially equivalent hospital and medical benefits, including a health maintenance organization or a preferred provider plan, if those health care plans are determined by the group insurance board to be available in the area of the place of employment and are approved by the group insurance board. The group insurance board shall place each of the plans into one of 3 tiers established in accordance with standards adopted by the group insurance board. The tiers shall be separated according to the employee's share of premium costs.

SB698, s. 9 Section 9. 40.51 (6) (b) of the statutes is created to read:

SB698,7,17 40.51 (6) (b) The state may offer to its employees coverage for health care benefits not provided to the employees under the Wisconsin Health Care Plan under ch. 634.

SB698, s. 10 Section 10. 40.51 (7) of the statutes is amended to read:

SB698,8,2 40.51 (7) Any employer, other than the state, may offer to all of its employees a health care coverage plan coverage for health care benefits not provided to the employees under the Wisconsin Health Care Plan under ch. 634 through a program offered by the group insurance board. Notwithstanding sub. (2) and ss. 40.05 (4) and 40.52 (1), the department may by rule establish different eligibility standards or contribution requirements for such employees and employers and may by rule limit the categories of employers, other than the state, which may be included as participating employers under this subchapter.

SB698, s. 11 Section 11. 40.51 (8) of the statutes, as affected by 2005 Wisconsin Act 194, is amended to read:

SB698,8,8 40.51 (8) Every health care coverage plan offered by the state under sub. (6) (a) shall comply with ss. 631.89, 631.90, 631.93 (2), 631.95, 632.72 (2), 632.746 (1) to (8) and (10), 632.747, 632.748, 632.83, 632.835, 632.85, 632.853, 632.855, 632.87 (3) to (6), 632.895 (5m) and (8) to (14), and 632.896.

SB698, s. 12 Section 12. 40.51 (8m) of the statutes is amended to read:

SB698,8,13 40.51 (8m) Every health care coverage plan offered by the group insurance board under sub. subs. (6) (b) and (7) shall comply with ss. 631.89, 631.90, 631.93 (2), 631.95, 632.72 (2), 632.746 (1) to (8) and (10), 632.747, 632.748, 632.83, 632.835, 632.85, 632.853, 632.855, and 632.895 (11) to (14) 632.87 (3) to (6).

SB698, s. 13 Section 13. 40.52 (1) (intro.) of the statutes is amended to read:

SB698,8,18 40.52 (1) (intro.) The group insurance board shall establish by contract a standard health insurance plan in which all insured employees shall participate except as otherwise provided in this chapter. The Except as provided in sub. (1m), the standard plan shall provide:

SB698, s. 14 Section 14. 40.52 (1m) of the statutes is created to read:

SB698,8,22 40.52 (1m) The standard health insurance plan described under sub. (1) shall not provide employees any health care coverage that the employees receive under the Wisconsin Health Care Plan under ch. 634.

SB698, s. 15 Section 15. 40.52 (2) of the statutes is amended to read:

SB698,9,13 40.52 (2) Health insurance benefits under this subchapter shall be integrated, with exceptions determined appropriate by the group insurance board, with benefits under federal plans for hospital and health care for the aged and disabled and with benefits provided under the Wisconsin Health Care Plan under ch. 634. Exclusions and limitations with respect to benefits and different rates may be established for persons eligible under federal plans for hospital and health care for the aged and disabled in recognition of the utilization by persons within the age limits eligible under the federal program and for employees who receive benefits under the Wisconsin Health Care Plan under ch. 634. The plan may include special provisions for spouses and other dependents covered under a plan established under this subchapter where one spouse is eligible under federal plans for hospital and health care for the aged or under the Wisconsin Health Care Plan under ch. 634 but the others are not eligible because of age or other reasons. As part of the integration, the department may, out of premiums collected under s. 40.05 (4), pay premiums for the federal health insurance.

SB698, s. 16 Section 16. 49.473 (2) (c) of the statutes is amended to read:

SB698,9,18 49.473 (2) (c) The woman is not covered under the Wisconsin Health Care Plan under ch. 634 and is not eligible for any other health care coverage that qualifies as creditable coverage in 42 USC 300gg (c), excluding the coverage specified in 42 USC 300gg (c) (1) (F).

SB698, s. 17 Section 17. 49.474 of the statutes is created to read:

SB698,9,25 49.474 Eligibility for Wisconsin Health Care Plan. Notwithstanding ss. 49.46, 49.465, 49.47, and 49.472, if a waiver under 2005 Wisconsin Act .... (this act), section 57 (2) (a ) 2., is granted and in effect, a person who is covered under the Wisconsin Health Care Plan under s. 634.10 (2) (a) is eligible for medical assistance only with respect to health care benefits not provided under the Wisconsin Health Care Plan.

SB698, s. 18 Section 18. 49.665 (4) (e) of the statutes is created to read:

SB698,10,6 49.665 (4) (e) Notwithstanding pars. (a) to (ap), if a waiver under 2005 Wisconsin Act .... (this act), section 57 (2) (a ) 2., is granted and in effect, a person who is covered under the Wisconsin Health Care Plan under s. 634.10 (2) (a) is eligible for health care coverage under this section only with respect to health care benefits not provided under the Wisconsin Health Care Plan.

SB698, s. 19 Section 19. 49.68 (3) (d) 1. of the statutes is amended to read:

SB698,10,22 49.68 (3) (d) 1. No aid may be granted under this subsection unless if the recipient has no other form of aid available from the federal medicare Medicare program, from private health, accident, sickness, medical, and or hospital insurance coverage, from the Wisconsin Health Care Plan under ch. 634, or from other health care coverage specified by rule under s. 49.687 (1m). If insufficient aid is available from other sources and if the recipient has paid an amount equal to the annual medicare Medicare deductible amount specified in subd. 2., the state shall pay the difference in cost to a qualified recipient. If at any time sufficient federal or private insurance aid or other health care coverage becomes available during the treatment period, state aid under this subsection shall be terminated or appropriately reduced. Any patient who is eligible for the federal medicare Medicare program shall register and pay the premium for medicare Medicare medical insurance coverage where permitted, and shall pay an amount equal to the annual medicare Medicare deductible amounts required under 42 USC 1395e and 1395L (b), prior to becoming eligible for state aid under this subsection.

SB698, s. 20 Section 20. 49.683 (3) of the statutes is amended to read:

SB698,11,3 49.683 (3) No payment shall be made under this section for any portion of medical care costs that are payable under any state, federal, or other health care coverage program, including the Wisconsin Health Care Plan under ch. 634 or a health care coverage program specified by rule under s. 49.687 (1m), or under any grant, contract, or other contractual arrangement.

SB698, s. 21 Section 21. 49.685 (6) (b) of the statutes is amended to read:

SB698,11,12 49.685 (6) (b) Reimbursement shall not be made under this section for any blood products or supplies that are not purchased from or provided by a comprehensive hemophilia treatment center, or a source approved by the treatment center. Reimbursement shall not be made under this section for any portion of the costs of blood products or supplies that are payable under any other state, federal, or other health care coverage program, including the Wisconsin Health Care Plan under ch. 634 or a health care coverage program specified by rule under s. 49.687 (1m), or under any grant, contract, or other contractual arrangement.

SB698, s. 22 Section 22. 59.52 (11) (c) of the statutes is amended to read:

SB698,12,2 59.52 (11) (c) Employee insurance. Provide for individual or group hospital, surgical and life insurance for county officers and employees and for payment of premiums for county officers and employees. A county may elect to provide health care benefits not provided under the Wisconsin Health Care Plan under ch. 634 to its officers and employees and a county with at least 100 employees may elect to provide health care benefits not provided under the Wisconsin Health Care Plan under ch. 634 on a self-insured basis to its officers and employees. A county and one or more cities, villages, towns, or other counties that together have at least 100 employees may jointly provide health care benefits not provided under the Wisconsin Health Care Plan under ch. 634 to their officers and employees on a self-insured basis. Counties that elect to provide health care benefits not provided under the Wisconsin Health Care Plan under ch. 634 on a self-insured basis to their officers and employees shall be subject to the requirements set forth under s. 120.13 (2) (c) to (e) and (g).

SB698, s. 23 Section 23. 60.23 (25) of the statutes is amended to read:

SB698,12,6 60.23 (25) Self-insured health plans. Provide health care benefits not provided under the Wisconsin Health Care Plan under ch. 634 to its officers and employees on a self-insured basis, subject to s. 66.0137 (4).

SB698, s. 24 Section 24. 62.61 of the statutes is renumbered 62.61 (1) (intro.) and amended to read:

SB698,12,10 62.61 (1) (intro.) The common council of a 1st class city may, by ordinance or resolution, provide do any of the following:

SB698,12,14 (a) Provide for, including the payment of premiums of, general hospital, surgical and group insurance for both active and retired city officers and city employees and their respective dependents in private companies, or may, by ordinance or resolution, elect.

SB698,12,18 (c) Elect to offer to all of its employees a health care coverage plan through a program offered by the group insurance board under ch. 40. Municipalities which that elect to participate under s. 40.51 (7) are subject to the applicable sections of ch. 40 instead of this section.

SB698,13,2 (2) Contracts for insurance under this section may be entered into for active officers and employees separately from contracts for retired officers and employees. Appropriations may be made for the purpose of financing insurance under this section. Moneys accruing to a fund to finance insurance under this section, by investment or otherwise, may not be diverted for any other purpose than those for which the fund was set up or to defray management expenses of the fund or to partially pay premiums to reduce costs to the city or to persons covered by the insurance, or both.

SB698, s. 25 Section 25. 62.61 (1) (b) of the statutes is created to read:

SB698,13,6 62.61 (1) (b) Subject to s. 634.40, provide for, including the payment of premiums of, group health insurance for active city officers and city employees and their respective dependents.

SB698, s. 26 Section 26. 66.0137 (4) of the statutes, as affected by 2005 Wisconsin Act 194, is amended to read:

SB698,13,16 66.0137 (4) Self-insured health plans. If a city, including a 1st class city, or a village provides health care benefits not provided under the Wisconsin Health Care Plan under ch. 634 under its home rule power, or if a town provides health care benefits not provided under the Wisconsin Health Care Plan under ch. 634, to its officers and employees on a self-insured basis, the self-insured plan shall comply with ss. 49.493 (3) (d), 631.89, 631.90, 631.93 (2), 632.746 (10) (a) 2. and (b) 2., 632.747 (3), 632.85, 632.853, 632.855, 632.87 (4), (5), and (6), 632.895 (9) to (14), 632.896, and 767.25 (4m) (d).

SB698, s. 27 Section 27. 66.0137 (4m) (b) of the statutes is amended to read:

SB698,13,21 66.0137 (4m) (b) A political subdivision and one or more other political subdivisions, that together have at least 100 employees, may jointly provide health care benefits not provided under the Wisconsin Health Care Plan under ch. 634 to their officers and employees on a self insured self-insured basis.

SB698, s. 28 Section 28. 66.0137 (5) of the statutes is amended to read:

SB698,14,7 66.0137 (5) Hospital, accident, and life insurance. The Subject to s. 634.40, the state or a local governmental unit may provide for the payment of premiums for hospital, surgical and other health and accident insurance and life insurance for employees and officers and their spouses and dependent children. A local governmental unit may also provide for the payment of premiums for hospital and surgical care for its retired employees. In addition, a local governmental unit may, by ordinance or resolution, elect to offer to all of its employees a health care coverage plan through a program offered by the group insurance board under ch. 40. A local governmental unit that elects to participate under s. 40.51 (7) is subject to the applicable sections of ch. 40 instead of this subsection.

SB698, s. 29 Section 29. 109.075 (9) of the statutes is created to read:

SB698,14,11 109.075 (9) This section does not apply to an employer that ceases providing health care benefits to its employees because the employees are covered under the Wisconsin Health Care Plan under ch. 634.

SB698, s. 30 Section 30. 111.70 (1) (dm) of the statutes is amended to read:

SB698,15,2 111.70 (1) (dm) "Economic issue" means salaries, overtime pay, sick leave, payments in lieu of sick leave usage, vacations, clothing allowances in excess of the actual cost of clothing, length-of-service credit, continuing education credit, shift premium pay, longevity pay, extra duty pay, performance bonuses, health insurance coverage of benefits not provided under the Wisconsin Health Care Plan under ch. 634, life insurance, dental insurance, disability insurance, vision insurance, long-term care insurance, worker's compensation and unemployment insurance, social security benefits, vacation pay, holiday pay, lead worker pay, temporary assignment pay, retirement contributions, supplemental retirement benefits, severance or other separation pay, hazardous duty pay, certification or license payment, limitations on layoffs that create a new or increased financial liability on the employer and contracting or subcontracting of work that would otherwise be performed by municipal employees in the collective bargaining unit with which there is a labor dispute.

SB698, s. 31 Section 31. 111.91 (2) (pm) of the statutes is created to read:

SB698,15,5 111.91 (2) (pm) Health care coverage of employees under the Wisconsin Health Care Plan under ch. 634.

SB698, s. 32 Section 32. 120.12 (24) of the statutes is amended to read:

SB698,15,11 120.12 (24) Health care benefits. Prior to the selection for school district professional employees, as defined in s. 111.70 (1) (ne), of any provider of group health care benefits provider for school district professional employees, as defined in s. 111.70 (1) (ne) not provided under the Wisconsin Health Care Plan under ch. 634, solicit sealed bids for the provision of such benefits.