TWENTY-EIGHTH LEGISLATURE, 2016
STATE OF HAWAII
A BILL FOR AN ACT
RELATING TO HEALTH INSURANCE.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. Findings and purpose. The significant benefits of Hawaii's Prepaid Health Care Act, enacted in 1974, are evident in Hawaii's high rate of insured residents, which is among the highest in the nation. Similarly, one of the key purposes of the federal Patient Protection and Affordable Care Act, as amended, (Affordable Care Act) is to lower the uninsured rate by expanding public and private insurance coverage.
The Affordable Care Act required the establishment of health insurance exchanges where individuals and small businesses can compare and purchase private insurance plans. The viability of state-based health insurance exchanges, however, has been a challenge across the country, particularly in small states with low numbers of uninsured residents.
Due to the small number of uninsured residents in Hawaii, Hawaii has not been able to maintain a financially self-sustaining health insurance exchange. Consequently, the Centers for Medicare and Medicaid Services (CMS) found that Hawaii's exchange, the Hawaii Health Connector (HHC), was not financially self-sustainable by January 1, 2015, as required by the Affordable Care Act.
Hawaii was faced with losing some of the federal funds for programs under the U.S. Department of Health and Human Services because the HHC was not compliant with several provisions of the Affordable Care Act. The non-compliance included unresolved information technology issues, a non-integrated eligibility enrollment system, and lack of financial sustainability. To prevent the loss of these funds, CMS initiated discussions with Governor Ige to transition Hawaii from a state-based marketplace to a state-based marketplace that utilizes the federal platform (SBM-FP) for eligibility and enrollment of individuals and families, and a State-maintained small business health options program (SHOP).
The purpose of this Act is to preserve the benefits of the Prepaid Health Care Act for Hawaii residents and to ensure a smooth transition from a state-based marketplace to a state-based marketplace using the federal platform for individuals and families, and to develop a system to allow small businesses to continue to take advantage of tax credits afforded by the Affordable Care Act.
SECTION 2. Section 346-14, Hawaii Revised Statutes, is amended to read as follows:
"§346-14 Duties generally. Except as otherwise provided by law, the department of human services shall:
(1) Establish and administer programs and standards, and adopt rules as deemed necessary for all public assistance programs;
(2) Establish, extend, and strengthen services for the protection and care of abused or neglected children and children in danger of becoming delinquent to make paramount the safety and health of children who have been harmed or are in life circumstances that threaten harm;
(3) Establish and administer programs, and adopt rules as deemed necessary, for the prevention of domestic and sexual violence and the protection and treatment of victims of domestic and sexual violence;
(4) Assist in preventing family breakdown;
(5) Place, or cooperate in placing, abused or neglected children in suitable private homes or institutions and place, or cooperate in placing, children in suitable adoptive homes;
(6) Have authority to establish, maintain, and operate receiving homes for the temporary care and custody of abused or neglected children until suitable plans are made for their care; and accept from the police and other agencies, for temporary care and custody, any abused or neglected child until satisfactory plans are made for the child;
(7) Administer the medical assistance programs for eligible public welfare and other medically needy individuals by establishing standards, eligibility, and health care participation rules, payment methodologies, reimbursement allowances, systems to monitor recipient and provider compliance, and assuring compliance with federal requirements to maximize federal financial participation;
(8) Cooperate with the federal government in carrying out the purposes of the Social Security Act and in other matters of mutual concern pertaining to public welfare, public assistance, and child welfare services, including the making of reports, the adoption of methods of administration, and the making of rules as are found by the federal government, or any properly constituted authority thereunder, to be necessary or desirable for the efficient operation of the plans for public welfare, assistance, and child welfare services or as may be necessary or desirable for the receipt of financial assistance from the federal government;
(9) Carry on research and compile statistics relative to public and private welfare activities throughout the State, including those dealing with dependence, defectiveness, delinquency, and related problems;
(10) Develop plans in cooperation with other public and private agencies for the prevention and treatment of conditions giving rise to public welfare problems;
(11) Adopt rules governing the procedure in hearings, investigations, recording, registration, determination of allowances, and accounting and conduct other activities as may be necessary or proper to carry out this chapter;
(12) Supervise or administer any other activities authorized or required by this chapter, including the development of the staff of the department through in-service training and educational leave to attend schools and other appropriate measures, and any other activities placed under the jurisdiction of the department by any other law;
(13) Make, prescribe, and enforce policies and rules governing the activities provided for in section 346-31 it deems advisable, including the allocation of moneys available for assistance to persons assigned to work projects among the several counties or to particular projects where the apportionment has not been made pursuant to other provisions of law, if any, governing expenditures of the funds;
(14) Determine the appropriate level for the Hawaii security net, by developing a tracking and monitoring system to determine what segments of the population are not able to afford the basic necessities of life, and advise the legislature annually regarding the resources required to maintain the security net at the appropriate level;
(15) Subject to the appropriation of state funds and availability of federal matching assistance, expand optional health care to low-income persons as follows:
(A) Pregnant women and infants under one year of age living in families with incomes up to one hundred eighty-five per cent of the federal poverty level and without any asset restrictions;
(B) Children under six years of age living in families with incomes up to one hundred thirty-three per cent of the federal poverty level and without any asset restrictions;
(C) Older children to the extent permitted under optional federal medicaid rules;
(D) Elder persons;
(F) The homeless; and
(G) Other handicapped and medically needy
(16) Subject to the appropriation of state funds and
availability of federal matching assistance, establish the income eligibility
level for the medically needy program at one hundred thirty-three per cent of
the assistance allowance[
(17) Subject to the appropriation of state funds and the availability of federal funds, develop and administer outreach as required by the Patient Protection and Affordable Care Act of 2010, P.L. 111-148, as amended."
SECTION 3. There is created a Hawaii Health Insurance Programs in the Department of Labor and Industrial Relations to conform Hawaii law with the federal Patient Protection and Affordable Care Act, P.L. 111-148, as amended.
SECTION 4. Definitions.
"Commissioner" means the insurance commissioner.
"Department" means the department of labor and industrial relations.
"Director" means the director of labor and industrial relations.
"Federal act" means the federal Patient Protection and Affordable Care Act, P.L. 111-148, as amended, or regulations or guidance issued under that Act.
"Insurer" means any person or entity that issues a policy of accident and health or sickness insurance subject to article 1 of chapter 431, mutual benefit societies under article 1 of chapter 432, health maintenance organizations under chapter 432D, and dental carriers under chapter 432G, and any other entity offering or providing providing accident and health or sickness insurance in this State, except an insurer licensed to offer accident and health or sickness insurance under article 431:10A-102.5.
SECTION 5. Hawaii health insurance programs; purpose. (a) There is established in the department a state health insurance exchange, named the Hawaii health insurance programs (HHIP), pursuant to the federal act. The purpose of the Hawaii health insurance programs is to enable the provision of health insurance to comply with the federal act.
(b) The department is authorized to take any action necessary to operate a small business health options program pursuant to the federal act to assist qualified employers and to facilitate enrollment of qualified employees into qualified health plans.
(c) The commissioner shall determine qualifications for the inclusion of insurers and plans in the exchange; provided that all health plans and dental plans that are qualified by the commissioner and certified by the director shall be included in the state exchange.
(d) Eligibility appeals under the small business health options program shall comply with the requirements of the federal act and shall not be subject to chapter 91. Decisions shall not be subject to judicial review.
(e) The department shall be exempt from chapter 103D for purposes of this Act.
SECTION 6. Issuer Fees. (a) The department shall collect fees up to the amount allowed by the federal act, without the necessity of a rule, from each qualified health and dental plan certified by the director and participating in the state exchange pursuant to this Act from January 1, 2016 to January 1, 2018.
SECTION 7. Affordable Care Act legislative oversight committee. (a) There is established the Affordable Care Act legislative oversight committee.
(b) The oversight committee shall consist of seven members who shall include:
(1) The chair of the house standing committee on consumer protection and commerce;
(2) The chair of the house standing committee on health;
(3) The chair of the house standing committee on finance;
(4) The chair of the senate standing committee on commerce, consumer protection and health;
(5) The chair of the senate standing committee on ways and means;
(6) One member of the minority party of the house, to be selected by the minority party leader; and
(7) One member of the minority party of the senate, to be selected by the minority party leader.
(c) The chairs of the house committee on consumer protection and commerce and the senate committee on commerce, consumer protection and health shall serve as the co-chairs of the committee.
(d) The committee shall meet at least annually as agreed upon by the co-chairs.
(e) The committee shall make recommendations as needed to the house committee on finance and the senate committee on ways and means.
SECTION 8. Oversight; rate regulation. (a) The commissioner shall retain full regulatory jurisdiction pursuant to the authority granted to the commissioner by part II of article 2 of chapter 431 over all insurers and qualified plans and qualified dental plans included in the state health insurance exchange.
(b) Rate regulation for qualified plans and qualified dental plans included in the state health insurance exchange shall be pursuant to applicable state and federal law.
SECTION 9. Effect on the Prepaid Health Care Act. Nothing in this Act shall in any manner diminish or limit the protections contained in or alter the provisions of chapter 393.
SECTION 10. The departments of commerce and consumer affairs, labor and industrial relations, and human services may adopt rules pursuant to chapter 91 to effectuate the purposes of this Act, provided that the departments may adopt interim rules, which shall be exempt from chapters 91 and 201M, to effectuate the purposes of this Act. The interim rules shall remain in effect until January 1, 2018, or until rules are adopted pursuant to chapter 91, whichever occurs sooner.
SECTION 11. Chapter 435H, Hawaii Revised Statutes, is repealed.
SECTION 12. All records, equipment, machines, files, supplies, books, papers, documents, maps, and other personal property heretofore made, used, acquired, or held by the Hawaii health connector shall be transferred to the department of labor and industrial relations to the extent that such records, equipment, machines, files, supplies, books, papers, documents, maps and other personal property heretofore made, used, acquired, or held were purchased with federal or state funds and to the extent permitted by federal law.
SECTION 13. There shall be no cause of action, claim for damages or relief, charge, or any other liability of any kind whatsoever created against the State, or any of its agencies, agents, or employees, which relates to or arises out of the Hawaii health connector's performance of or failure to perform its duties during its existence as the Hawaii health insurance exchange. Furthermore, there shall be no cause of action, claim for damages or relief, charge, or any other liability of any kind whatsoever created against the State, or any of its agencies, agents, or employees, which relates to the State's assumption, retention, and reporting of any information, or the accuracy thereof, collected or created by the Hawaii health connector, or that the Hawaii health connector did not collect, create, retain, or report, during its existence as the Hawaii health insurance exchange.
SECTION 14. If any provision of this Act, or the application thereof to any person or circumstance, is held invalid, the invalidity does not affect other provisions or applications of the Act that can be given effect without the invalid provision or application, and to this end the provisions of this Act are severable.
SECTION 15. If any part of this Act is found to be in conflict with federal requirements that are a prescribed condition for the allocation of federal funds to the State, the conflicting part of this Act is inoperative solely to the extent of the conflict and with respect to the agencies directly affected, and this finding does not affect the operation of the remainder of this Act in its application to the agencies concerned. The governor may modify the strict provisions of this Act, to the extent, and only to the extent, necessary to effectuate the intent of this Act.
SECTION 16. This Act shall not be applied so as to impair any contract existing as of the effective date of this Act in a manner violative of either the Hawaii Constitution or Article 1, section 10, of the United States Constitution.
SECTION 17. This Act shall be liberally construed to effectuate its purpose.
SECTION 18. The director of labor and industrial relations may establish six additional temporary positions in the office of community service, without regard to chapters 76 and 89, Hawaii Revised Statutes, to carry out the purposes of this Act. The positions may include an accountant V, two program specialist IV, a secretary V, program manager, information technology specialist VII, and any other position the director deems necessary for the purposes of this Act.
SECTION 19. The director of human services may establish nine additional permanent positions in the Med-QUEST Division, without regard to chapters 76 and 89, Hawaii Revised Statutes, to carry out the purposes of this Act. The positions may include a premium assistance clerk, purchasing specialist III, communications specialist, outreach manager, four outreach coordinators, outreach clerical staff, and any other position the director deems necessary for the purposes of this Act.
SECTION 20. The director of labor and industrial relations shall submit a report to the legislature on the status of the Hawaii health insurance programs including revenues, how many policies were subject to the issuer fees, expenditures, and program results pursuant to section 3 of this Act not less than twenty days prior to the 2018 session.
SECTION 21. There is appropriated out of the general revenues of the State of Hawaii the sum of $1,165,000 or so much thereof as may be necessary for operating expenses, including the hiring of staff, for fiscal year 2016-2017 to carry out the purpose of this Act.
The sum appropriated shall be expended by the department of labor and industrial relations.
SECTION 22. There is appropriated out of the general revenues of the State of Hawaii the sum of $2,918,788 or so much thereof as may be necessary for operating expenses, including the hiring of staff, for fiscal year 2016-2017 to carry out the purpose of this Act.
The sum appropriated shall be expended by the department of human services.
SECTION 23. This Act, upon its approval, shall take effect on July 1, 2016, provided that section 3 of this Act is repealed on January 1, 2018.
Hawaii Health Insurance Programs; Department of Labor and Industrial Relations, Department of Human Services
Establishes the Hawaii State Health Insurance Programs, and a State Health Insurance Exchange for the purpose of the State effectuating the Patient Protection and Affordable Care Act and the Prepaid Health Care Act; Repeals the Hawaii Health Connector Law; provides appropriations to the Department of Labor and Industrial Relations and the Department of Human Services.
The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.