House committee substitute makes the following changes to the 1st edition.

Deletes all the provisions of the 1st edition and replaces it with the following.

Section 1

Establishes that no small employer carrier will be required to issue the basic or standard health benefit plan as described in GS 58-50-125(a). Provides that any basic or standard health benefit plans that are described in GS 58-50-125(a) that are not "grandfathered health plans," as that term is used in the Affordable Care Act (ACA), will be terminated on the next anniversary date on or after January 1, 2014. After that the small employer carrier must offer the employer replacement coverage from available small group health benefit plans, in accordance with applicable state and federal laws. Requires a 90-day notice before termination. Sets out other requirements for plans that are issued to self-employed individuals.

Effective when the act becomes law.

Section 2

Repeals the following statutes:

GS 58-50-126, Alternative coverage permitted.

GS 58-50-127, Small employer carrier plan elections.

GS 58-50-135, Elections by carriers.

GS 58-50-155, Standard and basic health care plan coverages.

GS 58-50-156, Coverage of certain prescribed drugs for cancer treatment.

Amends GS 58-50-110, Definitions, adding and defining grandfathered health plan to the definitions for the section. Amends GS 58-50-110(22), the definition for small employer, providing that, effective January 1, 2014, the definition applies only to grandfathered group health plans subject to this act. Provides that the term small employer includes self-employed individuals for the purposes of this subsection (was, for the purposes of this act). Enacts new GS 58-50-110(22a), defining small employer as it only applies to non-grandfathered group health plans, providing that it refers to "an employer that employed an average of at least one but not more than 50 employees  on business days during the preceding calendar year and that employs at least one employee on the first day of the plan year."

Amends GS 58-50-115, Health benefit plans subject to Act, making conforming changes, deleting references to "self-employed individuals" from the section.

Amends GS 58-50-125(d), deleting provisions of the subsection that relate to basic and standard small group plans, in conformance with the ACA.

Repeals sections (a) and (a1) of GS 58-50-125, Health care plans; formation; approval; offerings, effective January 1, 2015.

Amends subsection (b) of GS 58-50-130, Required health care plan provisions, making conforming changes, specifically making this section applicable to small employer health benefit plans that are grandfathered health benefit plans.

Creates new subsection GS 58-50-130(b1), which sets out provisions concerning small employer health benefit plans that are not grandfathered health benefit plans. Establishes that the premium rates are subject to the specified provisions.

Creates new subsection GS 58-50-130(i), providing that a small employer carrier cannot modify the premium rate charged to a small group non-grandfathered health benefit plan or a small employer group member, including changes in rates related to the increasing age of a group, for 12 months starting from the initial issue or renewal date.

Except as otherwise provided, Section 2 becomes effective January 1, 2014, applying to all insurance contracts and policies issued, renewed, or amended on or after that date.

Section 3

Amends GS 58-50-110, deleting (22a), the definition for small employer as it applies to non-grandfathered group health plans, and creating GS 58-50-110(22b), to define small employer, in connection with a non-grandfathered group health plan with respect to a calendar year and a plan year, as an employer that employed an average of at least one but not more than 100 employees on business days during the preceding calendar year and that employed at least one employee on the first day of the plan year.

Effective January 1, 2016.

Section 4

Directs the Department of Insurance to adopt rules to implement this act.