AN ACT TO AMEND THE CONSTITUTION OF NORTH CAROLINA TO ESTABLISH A BIPARTISAN BOARD OF ETHICS AND ELECTIONS ENFORCEMENT AND TO CLARIFY BOARD APPOINTMENTS.
Provides that it is the intent of the General Assembly to reestablish a North Carolina Health Insurance High Risk Pool if the provisions of the Patient Protection and Affordable Care Act (PL 111-148) are repealed. Adds that it is the intent of the General Assembly to appropriate funds to assist in offsetting the cost of premiums for coverage available through a North Carolina Health Insurance High Risk Pool, upon its creation, and seek any federal funding that may be available for this purpose.
Sections 2, 3, 4, and 5
Enacts new Part 8 of Article 50 of GS Chapter 58, with new GS 58-50-400 setting forth defined terms that apply to the new Part.
Enacts GS 58-50-401, establishing the NC Health Insurance High Risk Pool, subject to oversight of the Board of Directors of the Pool (Board), to consist of the Commissioner of Insurance (Commissioner) as a nonvoting member and eleven members appointed as specified in the act. Clarifies that the Pool is a nonprofit entity and not an instrumentality of the State.
Requires the Board to submit a Plan of Operation to the Commissioner within 180 days after the appointment of the Board. Specifies the content of the Plan of Operation for the Pool. Grants to the Pool the general powers and authority granted to health insurers under State laws, and grants specific authority as described, including the power to issue insurance policies in accordance with the requirements of new Part 8. Requires that the Plan be approved in writing by the Commissioner. Requires that the Executive Director operate the Pool so that the cost of providing the benefit plans during any calendar year is not anticipated to exceed the total income the Pool expects to receive from policy premiums and other revenue available to the Pool. Authorizes the Board to impose an enrollment cap or suspend enrollment if estimated costs are anticipated to exceed income, except that any enrollment cap or suspension cannot apply to federally defined eligible individuals who are eligible to enroll in the Pool pursuant to GS 58-50-415(a)(6). Provides for indemnification in performance of duties for the Pool or its agents or employees, and Executive Director, as well as the Commissioner or the Commissioner's representative. Establishes that the members of the Board are public servants under GS 138A-3(30) subject to the provisions of GS Chapter 138A.
Enacts GS 58-50-405 (Administrator). Directs the Executive Director, with the approval of the Board and through a competitive bidding process, to select one or more insurers to administer the Pool. Requires the Executive Director to evaluate bids based on criteria established by the Board, as specified. Establishes that the Administrator serves for a period specified in the contract, subject to removal for cause and any terms, conditions, and limitations of the contract. Requires the Executive Director to invite eligible entities to submit bids to serve as Administrator at least one year before the expiration of each period of service by an Administrator, and requires the selection of an Administrator for the succeeding period be made at least six month before the end of the current period. Details the duties of the Administrator. Requires the Administrator to submit regular reports to the Executive Director and the Board, with the contract specifying the frequency, content, and form of the report. Requires the Administrator to determine net written and earned premiums, the expense of administration, and the paid and incurred losses for the year and report the information to the Executive Director and the Board at the close of each calendar year. Requires the contract to address the Administrator's pay.
Enacts GS 58-50-410 (Risk Pool rates and policy forms). Requires the Pool to adopt and modify rates, rate schedules, rate adjustments, expense allowances, agent referral fees, claim reserve formulas, and any other actuarial function appropriate to operate the Pool. Provides for the adjustment of rates and schedules for specified appropriate factors, in accordance with established actuarial and underwriting practices. Requires the Pool to determine the standard risk rate by considering premium risk rates charged by other insurers offering health insurance coverage to individuals and using reasonable actuarial techniques. Requires that Pool rates be 135% to 175% of rates established as applicable for individual standard rates, to be adjusted annually, at the time of annual renewal. Authorizes the Executive Director to develop incentive programs with discounts, and provide for premium surcharges, with Board approval. Limits provider reimbursement rates under Pool coverage to rates allowed for providers under the Medicare Program for services covered by Medicare and directs the Board to establish reimbursement rates for services for which Medicare has not established an allowed rate. Requires providers rendering medical care to an insured to accept the payment amount established under this provision.
Requires the Pool to submit all premium rates and schedules and amendments to the Commissioner for approval before use. Requires that the Pool provide individuals enrolled in the Pool with at least 45 days’ notice of any change to the Pool premium rates or rate schedules. Requires the Pool to submit all policy forms, riders, endorsements, and applications for coverage to the Commissioner for approval before use. Provides that the provisions of GS Chapter 58 that apply to health benefit plans and policy forms of health insurers generally apply to the benefit plans offered and policy forms used by the Pool except for any provisions that are specifically treated otherwise under new Part 8.
Enacts GS 58-50-415 (Eligibility for Pool coverage). Provides that individuals who are NC residents are eligible for Pool coverage if evidence is provided of any of the following: (1) a notice of rejection or refusal to issue substantially similar health insurance coverage for health reasons by an insurer, but a rejection or refusal by an insurer offering only stop‑loss, excess loss, or reinsurance coverage with respect to the applicant is not sufficient evidence of eligibility; (2) an offer to issue health insurance coverage only with a conditional rider that limits coverage for the individual's high‑risk medical condition; (3) a refusal by an insurer to issue health insurance coverage except at a rate exceeding the Pool rate; (4) a diagnosis of the individual with one of the medical or health conditions listed by the Board in accordance with this statute, provided that an individual diagnosed with one or more of these conditions is eligible for Pool coverage without applying for other health insurance coverage; (5) qualification as a federally defined eligible individual, whether or not currently covered by an insurer under that qualification; (6) an individual who is legally domiciled in this State and is eligible for the credit for health insurance costs under the Trade Adjustment Assistance Reform Act of 2002, section 35 of the Internal Revenue Code of 1986, as amended, providing that each dependent of an individual who is eligible for Pool coverage under this subdivision shall also be eligible for Pool coverage; (7) the individual has current individual health insurance coverage at a rate exceeding the Pool rate; or (8) the individual is eligible for and has not exhausted current Consolidated Omnibus Budget Reconciliation Act (COBRA) continuation coverage at a rate exceeding the Pool rate and provides evidence of eligibility for Pool coverage under any of the subdivisions (1) through (4) of this subsection. Directs the Board, upon recommendation of the Executive Director, to adopt a list of medical or health conditions for which a person is eligible for Pool coverage under subdivision (4) as just described, and allows the Board to amend the list as appropriate.
Sets out that an individual is not eligible for Pool coverage if any of the six conditions apply, including that the individual is determined to be eligible for enrollment in the State Medical Assistance Plan or in Medicare, unless the Pool offers Medicare supplemental insurance coverage. Details seven circumstances that trigger coverage under the Pool to cease, including the individual failing to make the required payments. Adds that an individual who ceases to meet the eligibility requirements of the statute can be terminated at the end of the Pool policy period for which premiums have been paid.
Enacts GS 58-50-420 (Unfair referral to Pool). Establishes that it is an unfair trade practice for an employer, an insurer, an insurance producer, or a third-party administrator to refer an individual employee to the Pool or arrange for an individual employee to apply to the Pool for the purpose of separating that employee from a group medical care benefit plan provided in connection with the employee's employment. Does not prohibit an insurer or insurance producer from informing an individual of other coverage options.
Enacts GS 58-50-425 (Minimum Pool benefits). Requires the Pool to offer at least two types of benefit plans for eligible individuals and at least one choice of a health savings account. Sets out requirements of the benefits plans. Directs the Board to adopt rules regarding the lifetime limits and per-individual coinsurance and deductibles for the health insurance products offered by the Pool, with the initial rules including no less than a $1 million lifetime limit and a combined annual limit of up to $5,000 per individual on coinsurance and deductibles. Provides for the Board's adjustment of the rules. Allows the Board to establish categories of diseases that can be more seriously impacted by lifetime limits when adopting or adjusting lifetime limits.
Enacts GS 58-50-430 (Preexisting conditions). Provides for preexisting condition exclusions under Pool coverage as specified. Prohibits a preexisting condition exclusion from being applied to a federally defined eligible individual or an individual who is eligible for the Pool under GS 58-50-415(a)(6). Provides for reduction of the pre-existing condition exclusion by the aggregate of the period of creditable coverage as described.
Enacts GS 58-50-435 (Nonduplication of benefits). Establishes that the Pool is the payor of last resort of benefits whenever any other benefit or source of third-party payment is available. Further establishes that the Pool has a cause of action against an eligible person for the recovery of the amount of benefits paid that are not for covered expenses, with benefits due from the Pool permitted to be reduced or refused to setoff against any amount recoverable.
Enacts GS 58-50-440 (NC Health Insurance High Risk Pool Fund), establishing the Fund and describing the Fund's revenue. Provides for disbursements from the Fund. Requires the State Health Plan and any successor to the plan to pay an annual surcharge to the Fund of $1.50 per member per year based on enrollment of active Plan members and their dependents covered under the Plan.
Enacts GS 58-50-445 to provide for complaint procedures for applicants or participants in the Pool; GS 585-50-450 to require annual audits of the Pool; GS 58-50-455 to exempt the Pool from all State taxes; GS 58-50-460 to authorize the Board and the Commissioner to adopt rules under GS Chapter 150B to implement the new Part; and GS 58-50-465 to prohibit any collective action required by the new Part to be the basis of any legal action, penalty, or liability against the Pool or insurer.
Enacts GS 58-50-470 (Pool financing; Board reporting). Requires the Board to oversee the methods of financing the Pool and review the specified information on a regular basis. Requires the Board to annually report to the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division by March 1. Sets forth the required content of the report.
Makes conforming changes to GS 105-228.5B and GS 58-5-75(b).
Enacts new GS 58-3-277 requiring an insurer to provide a written notice of the existence of the NC Health Insurance High Risk Pool to an applicant for individual health insurance coverage upon the insurer determining the applicant eligible for Pool coverage. Requires the notice be provided within 10 business days after the insurer determines Pool eligibility.
The above provisions are effective 90 days after the repeal of section 2704 of PL 111-148 (the Patient Protection and Affordable Care Act), as amended, that prohibits preexisting condition exclusions or other discrimination based on health status. Directs the Department of Insurance to certify to the Revisor of Statutes that the repeal has occurred no more than 30 days after the repeal of section 2704 of PL 111-148. Adds that in the certification, the Department of Insurance must include the session law number of this act.
Directs the Department of Insurance (Department) to report to the Joint Legislative Commission on Governmental Operations by March 1, 2018, on recommendations and considerations regarding the Pool. Details the required contents of the report. Appropriates to the Department $50,000 for the 2017-18 fiscal year for the purposes of carrying out any research necessary to complete the report.
Sets the effective date of the act as July 1, 2017, except as otherwise provided.
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