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COMMITTEE REPORT
April 30, 2008
S. 1129
S. Printed 4/30/08--S.
Read the first time February 20, 2008.
To whom was referred a Bill (S. 1129) to amend the Code of Laws of South Carolina, 1976, by adding Chapter 60 to Title 38 so as to enact the "South Carolina Healthnet Program"; to provide for the creation, etc., respectfully
That they have duly and carefully considered the same and recommend that the same do pass with amendment:
Amend the bill, as and if amended, by striking all after the enacting words and inserting:
/ SECTION 1. Title 38 of the 1976 Code is amended by adding:
Section 38-60-10. This chapter may be cited as the 'South Carolina HealthNet Program'.
Section 38-60-20. The purpose and intent of this chapter is to establish under the regulatory jurisdiction of the Department of Insurance a program designed to:
(1) promote the availability of health insurance coverage to employees of small employers;
(2) expand fair access to health plans; and
(3) improve the overall fairness and efficiency of the small group health insurance market.
Section 38-60-30. As used in this chapter:
(1) 'Actuarial oversight committee" means the committee composed of the three insurance industry representatives that serve on the board.
(2) 'Board' means the board of directors of the South Carolina HealthNet Program.
(3) 'Dependent' means a dependent as defined in Section 38-71-1330(5).
(4) 'Director or his designee' means the director as defined in Section 38-1-20(16).
(5) 'Eligible employee' means an eligible employee as defined in Sections 38-71-1330(6) and 38-60-110.
(7) 'Health group cooperative' means a health group cooperative formed pursuant to Section 38-71-1345.
(8) 'Health insurance coverage' means health insurance coverage as defined in Section 38-71-670(6), but for purposes of this chapter excludes coverage provided by Medicaid Managed Care Organizations that only offer coverage to eligible individuals through programs established by the Department of Health and Human Services and coverage provided by self-insured groups.
(9) 'Insurer' means an insurer as defined in Section 38-71-1330(10), but for purposes of this chapter excludes Medicaid Managed Care Organizations that only offer coverage to eligible individuals through programs established by the Department of Health and Human Services and organizations that only provide third party administrator services for self-insured groups.
(10) 'Plan of operation' means the plan of operation for the program established pursuant to this chapter and includes the initial South Carolina HealthNet plan approved by the director or his designee.
(11) 'Program' means the South Carolina HealthNet Program.
(12) 'Resident' means an individual who is a legal resident of the State of South Carolina as that term is defined by law.
(13) 'Small employer' means small employer as defined in Section 38-71-1330(17).
(14) 'Small employer insurer' means small employer insurer as defined in Section 38-71-1330(18).
(15) 'South Carolina HealthNet Plan' means a plan of insurance coverage that has been approved by the director or his designee for participation in the program.
Section 38-60-40. The provisions of this chapter apply only to small employer insurers and health group cooperatives. The provisions of this chapter do not apply to individual health insurance policies that are subject to policy form and premium rate approval as may be provided in this title.
Section 38-60-50. (A) The board of directors consists of fifteen voting members. The director or his designee shall serve as a member of the board in an ex officio capacity for the duration of the pilot project. The consumer advocate shall serve as a member of the board for the duration of the pilot project. The other members of the board must be selected as follows:
(1) the chairman must be appointed by the Governor for a three-year term;
(2) the director shall appoint:
(a) two representatives from the hospital community from a list of nominees submitted by the South Carolina Hospital Association. One must be appointed for a two-year term and the other for a three-year term. Subsequent terms are for three years;
(b) one representative appointed from a list of nominees submitted by the South Carolina Association of Health Underwriters appointed to a one-year term. Subsequent terms are for three years;
(c) three representatives from the insurance industry. One must be a domestic insurer representative appointed from a list of nominees submitted by the South Carolina Alliance of Health Plans appointed to a three-year term. One must be a foreign insurer representative appointed from a list of nominees submitted by the South Carolina Alliance of Health Plans appointed to a two-year term. One must be an at-large insurer representative appointed by the director to a two-year term. Subsequent terms are for three years;
(d) two representatives appointed from a list of nominees provided by the South Carolina Medical Association. One must be appointed for a two-year term and one for a three-year term. Subsequent terms are for three years;
(e) one representative appointed from a list of nominees provided by the South Carolina Department of Health and Human Services appointed to a three-year term. Subsequent terms are for three years; and
(f) one representative appointed from a list of nominees provided by the South Carolina Pharmacy Association to be appointed to a two-year term. Subsequent terms are for three years; and
(3) three consumer representatives. One must be an employer appointed by the President Pro Tempore of the Senate from a list of three nominees provided by the South Carolina Chamber of Commerce, one must be an employer appointed by the Speaker of the House of Representatives from a list of three nominees provided by the South Carolina Small Business Chamber, and one must be appointed by the Consumer Advocate from a list of nominees provided by consumer groups. These consumer representatives must be members of the general public and must not be employed by or affiliated with an insurance company or plan, group hospital, or other health care provider. The consumer representatives are appointed to a two-year term. Subsequent terms are for three years.
(B) The director shall appoint an actuarial oversight committee, composed of the three representatives of the insurance industry pursuant to Section 38-60-50(A)(2)(c), to develop the rates and rates schedules for South Carolina HealthNet plans offered through the program.
(C) An individual board member may not serve more than two consecutive terms. The board shall conduct its business and meetings in accordance with the requirements of Chapter 23, Title 1 (the South Carolina Freedom of Information Act).
(D) If there is a tie vote of the board on any matter, the issue must be presented to the director or his designee for his approval or disapproval.
(E) The director or his designee shall give notice of the date, time, and place for the initial organizational meeting.
(F) The director, within thirty days of the effective date of this chapter, shall notify all nominating organizations designated in this section to provide nominations for board membership. Upon receipt of notification, the nominating organizations have thirty days to submit a list of nominees.
Section 38-60-60. (A) The board shall submit to the director or his designee a plan of operation for the program and any amendments necessary or suitable to assure the fair, reasonable, and equitable administration of the program. The director or his designee shall approve the plan of operation provided it is determined to be suitable to assure the fair, reasonable, and equitable administration of the program.
(B) If the board fails to submit a suitable plan of operation within one hundred twenty days after the initial organizational meeting, or at any time after that fails to submit suitable amendments to the plan, the department may develop the plan of operation or operating rules necessary to effectuate the provisions of this chapter. The department shall promulgate by regulation the approved plan of operation. The plan of operation or operating rules continue in force until modified by the department or superseded by a plan submitted by the board and approved by the director or his designee.
(C) The plan of operation must:
(1) establish procedures for the handling and accounting of assets and monies of the program;
(2) establish procedures for filling vacancies on the board of directors;
(3) develop and implement a public awareness program to promote the existence of the plan;
(4) establish procedures for the board review of the health insurance plans;
(5) require producers to market the plan and the commissions, if any, to be paid at a reduced rate that must be no more than sixty percent of the commission rate that the agent normally receives for an otherwise identical group from the same insurer;
(6) establish a procedure to determine compliance with the program;
(7) authorize the board to appeal denials or disapprovals of plan amendments to the Administrative Law Court; and
(8) provide the means to obtain funding necessary to support the board and its activities subject to the requirements in subsection (D).
(D) The program through its board has the following general powers including, but not limited to, the specific authority to:
(1) enter into contracts necessary to carry out the provisions of this chapter, including the authority, with the approval of the director or his designee, to enter into contracts with similar programs or nonprofit entities of other states or the federal government, such as Medicaid, for the joint performance of common administrative functions, or with persons or other organizations for the performance of administrative functions;
(2) sue or be sued, including taking legal actions necessary or proper for recovery of funds for the program; however, in no situation may any legal action be taken against any individual member of the board as a result of their service on the board and a member of the board may not be liable for an independent action of an insurer under the program;
(3) take legal action as necessary to protect the interests and assets of the program;
(4) appoint from among board members committees as necessary to facilitate the operation of the program;
(5) apply for and accept grants, monetary and other donations, or other funding to cover the costs of administering the program;
(6) develop forms, level of coverage, benefits and plan design;
(7) cause to be audited on an independent basis each year the finances of the program and submit the report of audit to the department who shall submit it to the chairman of the Senate Finance Committee and the chairman of the House Ways and Means Committee with recommendations on the operations of the program; and
(8) hire the staff necessary for the effective administration of the program.
(E) All professional assistance required by the board must be provided by independent, appropriately licensed or professionally designated resources who are under the contract with the board. All accounting determinations must be rendered by an independent certified public accountant, all actuarial assessments must be rendered by an independent Member of the American Academy of Actuaries (MAAA) and all legal determinations must be rendered by an independent member of the South Carolina Bar.
(F) Nothing prohibits the board from entering public-private partnerships with Medicaid or other government-sponsored programs as a means of providing insurance coverage to the most people possible.
(G) The members of the board shall receive mileage and per diem authorized by law for members of state boards, committees, and commissions.
Section 38-60-70. (A) The actuarial oversight committee, in consultation with an independent actuary, shall develop the rates and rate schedules for the plan benefits and design developed by the board. The actuarial committee and the independent actuary shall present the proposed rates and rate schedules to the board for its review and to the director for his approval.
(B) The rating methodology for South Carolina HealthNet plans under the program must be consistent with the small group rating requirements as described in Article 13, Chapter 71.
Section 38-60-80. (A) An insurer shall file with the director or his designee, in the form and manner prescribed by the director or his designee, South Carolina HealthNet plans authorized under this chapter.
(B) The director or his designee, at any time after providing notice and an opportunity for a hearing to the insurer, may disapprove the continued use by an insurer or health group cooperative of a South Carolina HealthNet plan on the grounds that the plan does not meet the requirements of this chapter.
(C) A policy, contract, certificate, or other evidence of coverage issued under this chapter must conspicuously display 'South Carolina HealthNet' on the declarations page of the policy.
(D) All plans authorized under this chapter shall provide, in enrollment materials, plain-language information on policy benefit coverage, benefit limits, cost sharing requirements, and exclusions and a clear representation of what is not covered in the plan.
(E) An insurer shall use the same underwriting and administration requirements for groups covered by the program as it uses for other equivalent groups in the small employer insurance market.
(F) All plans authorized under this chapter and approved by the director or his designee are exempt from all insurance mandates of the State.
(G) Except for being exempt from mandates as outlined in subsection (E) or as otherwise specified in this chapter, all plans authorized by this chapter must be consistent with the statutory and regulatory requirements for small group health insurance products in this State.
(H) An insurer that requires an employer to maintain a certain employee participation percentage for its group health insurance plan shall include the HealthNet Program coverage in the required participation percentage requirement.
(I) A plan authorized under this chapter may not be offered for sale in this State until it has been reviewed and approved by the director or his designee.
Section 38-60-90. A provider participating in a contract with the program and furnishing health care services to an individual insured by a South Carolina HealthNet plan may not bill that individual or otherwise hold that individual financially responsible for services rendered.
Section 38-60-100. Each small employer insurer writing group health insurance coverage in this State and any health group cooperative formed in accordance with Section 38-71-1345 shall participate in the program by offering and actively marketing South Carolina HealthNet plans. At the option of the employer, the South Carolina HealthNet plan must be offered to eligible employees of the small employer group either as an optional benefit plan to any other plan offered by the same insurer to that employer or as the sole benefit plan for that employer.
Section 38-60-110. (A) The eligible employees, and the employee's dependents, of a small employer in this State who provides health insurance coverage to its employees are eligible for coverage under the program, provided the eligible employee, and the employee's dependents, are citizens of the United States and have been legal residents of this State for a minimum of six months.
(B) An employee who cancels health insurance coverage under an employer group policy is not eligible for coverage in the program for a period of twelve months from the date of cancellation under the employer group plan. However, if an employee's group participation is cancelled due to termination of employment, the employee is eligible to participate in the South Carolina HealthNet plan, if any, offered by a subsequent employer.
Section 38-60-120. Plan coverage under the program ceases:
(1) upon a termination or nonrenewal of health insurance coverage by the insurer, provided the termination or nonrenewal complies with Section 38-71-870;
(2) on the date an employee or employer requests coverage to end; or
(3) at the time a person ceases to meet the eligibility requirements of this section.
Section 38-69-130. (A) An insurer participating in the program shall report claims data to the program in the manner prescribed by the board. The department may specify, by bulletin, the requirements for reporting claims data and other required information to the department.
(B) The board shall submit a report to the Governor, the President Pro Tempore of the Senate, and the Speaker of the House of Representatives no later than July 2015 regarding the effectiveness of the program, including any recommendations relating to the successful implementation and administration of the program.
Section 38-60-140. The Department of Insurance shall promulgate regulations necessary for implementation of this chapter."
SECTION 2. This act takes effect upon approval by the Governor. The program takes effect no earlier than January 1, 2009, but not later than July 1, 2010. This program terminates five years from the date of its first date of operation unless extended by action of the General Assembly. /
Renumber sections to conform.
Amend title to conform.
DAVID L. THOMAS for Committee.
EXPLANATION OF IMPACT:
Department of Insurance
The Department of Insurance indicates that this bill would require recurring additional General Funds of the State totaling $77,700. Funds would be used to cover salary and fringe benefits for a Program Manager I ($75,000) to serve as department liaison to the board of the South Carolina Healthnet Program and operating expenses of $2,700. This liaison would provide input into design and implementation of insurance programs to include review of rates, plans and selection of acceptable vendors. One time funding of $5,050 would be needed for computers, telephone and furnishings. Therefore, first year total costs are estimated at $82,750. The department did not indicate there would be any cost to the State for the operations of the HealthNet program and no cost estimates for the operation of this program are contained in this impact.
Department of Health and Human Services
The Department of Health and Human Services reports this bill, as written, will have no impact on the General Fund of the State or federal and/or other funds.
SPECIAL NOTES:
The General Assembly may wish to clarify if the HealthNet program and its operations are to receive state funds for any aspect the administration of this program including functions of the Board of Directors.
Approved By:
Harry Bell
Office of State Budget
TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING CHAPTER 60 TO TITLE 38 SO AS TO ENACT THE "SOUTH CAROLINA HEALTHNET PROGRAM"; TO PROVIDE FOR THE CREATION OF A FIVE-YEAR PILOT PROGRAM TO PROMOTE THE AVAILABILITY OF HEALTH INSURANCE COVERAGE TO EMPLOYEES REGARDLESS OF HEALTH STATUS OR CLAIMS EXPERIENCE, PREVENT ABUSIVE RATING PRACTICES AND REQUIRE DISCLOSURE OF RATING PRACTICES TO PURCHASERS, ESTABLISH RULES REGARDING RENEWAL OF COVERAGE, LIMITATIONS ON THE USE OF PREEXISTING CONDITIONS EXCLUSIONS, ASSURE FAIR ACCESS TO HEALTH PLANS AND IMPROVE OVERALL FAIRNESS AND EFFICIENCY OF THE GROUP HEALTH INSURANCE MARKET; TO PROVIDE FOR DEFINITIONS; TO PROVIDE FOR THE COMPOSITION AND AUTHORITY OF THE BOARD OF DIRECTORS; TO PROVIDE FAIR MARKETING STANDARDS; TO PROVIDE FOR THE ESTABLISHMENT OF CRITERIA FOR PLAN ADMINISTRATION IN THE PLAN OF OPERATION; TO PROVIDE FOR RATES; TO PROVIDE FOR PROVIDER PARTICIPATION; TO PROVIDE FOR THE APPLICABILITY AND SCOPE OF THE CHAPTER; TO PROVIDE THAT HEALTH INSURERS SHALL OFFER AND MARKET PLANS DEVELOPED BY THE SOUTH CAROLINA HEALTHNET PROGRAM WHO ARE ELIGIBLE; TO PROVIDE FOR HEALTH BENEFIT PLAN STANDARDS AND PROVIDE AN EXCEPTION; TO PROVIDE FOR ELIGIBILITY STANDARDS; TO PROVIDE FOR TERMINATION AND NONRENEWAL OF COVERAGE; TO PROVIDE FOR LOSS DATA TO BE REPORTED TO THE PROGRAM; AND TO AUTHORIZE THE DIRECTOR OF THE STATE DEPARTMENT OF INSURANCE TO PROMULGATE REGULATIONS TO IMPLEMENT THE PROVISIONS OF CHAPTER 60, TITLE 38 ADDED BY THIS ACT.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. Title 38 of the 1976 Code is amended by adding:
Section 38-60-10. This chapter may be cited as the 'South Carolina HealthNet Program'.
Section 38-60-20. The purpose and intent of this chapter is to establish under the regulatory jurisdiction of the State Department of Insurance project designed to:
(1) promote the availability of health insurance coverage to employees regardless of their health status or claims experience;
(2) prevent abusive rating practices and require disclosure of rating practices to purchasers;
(3) establish rules regarding the renewal of coverage and establish limitations on the use of preexisting condition exclusions;
(4) assure fair access to health plans; and
(5) improve the overall fairness and efficiency of the group health insurance market.
Section 38-60-30. As used in this chapter, unless the context otherwise requires:
(1) 'Board' means the board of directors of the South Carolina HealthNet Program.
(2) 'Insurer' means an entity that provides health insurance in this State. For the purposes of this chapter, insurer includes an insurance company, a health maintenance organization, and any other entity providing a plan of health insurance or health benefits subject to state insurance regulation, including multiple employer self-insured health plans licensed pursuant to Chapter 41 of this title.
(3) 'Covered person' means sole proprietor or eligible employee and his dependents who meet the requirements for eligibility to participate in South Carolina HealthNet as specified in Section 38-60-120.
(4) 'Dependent' means an individual who is the:
(a) legal spouse or unmarried child under the age of twenty-five and who is financially dependent upon the employee;
(b) a child under the age of eighteen for whom the employee is required to pay child support; or
(c) a child, parent, grandparent, brother, or sister of any age who is dependent upon the employee as defined by the Internal Revenue Service guidelines.
(5) 'Director or his designee' means the director of State Department of Insurance or the person designated to act on his behalf.
(6) 'Eligible employee' means an employee as defined in Section 38-71-710(1) or Section 38-71-840 who works on a full-time basis and has a normal workweek of thirty or more hours.
(7) 'Eligibility' means that a person meets the criteria provided in Section 38-60-120.
(8) 'Health insurance coverage' means benefits consisting of medical care provided directly, through insurance or reimbursement, or otherwise and including items and services paid for as medical care under any hospital or medical service policy or certificate, hospital or medical service plan contract, or health maintenance organization contract offered by a health insurance issuer, except:
(a) coverage only for accident or disability income insurance or any combination of these;
(b) coverage issued as a supplement to liability insurance;
(c) liability insurance, including general liability insurance and automobile liability insurance;
(d) workers' compensation or similar insurance;
(e) automobile medical payment insurance;
(f) credit only insurance;
(g) coverage for on-site medical clinics;
(h) other similar insurance coverage, specified in regulations, under which benefits for medical care are secondary or incidental to other insurance benefits;
(i) if offered separately:
(i) limited scope dental or vision benefits;
(ii) benefits for long-term care, nursing home care, home health care, community-based care, or any combination of these; and
(iii) other similar, limited benefits as are specified in regulations;
(j) if offered as independent, noncoordinated benefits:
(i) coverage only for a specified disease or illness; and
(ii) hospital indemnity or other fixed indemnity insurance;
(k) if offered as a separate insurance policy:
(i) Medicare supplemental health insurance, as defined under Section 1882(g)(1) of the Social Security Act;
(ii) coverage supplemental to the coverage provided under Chapter 55, Title 10 of the United States Code; and
(iii) similar supplemental coverage under a group health plan.
(9) 'Plan of operation' means the plan of operation for the program established pursuant to this chapter and includes the operating rules of the program as well as the underwriting and rating guidelines that are adopted by the board and approved by the director or his designee.
(10) 'Plan' means the plan or plans or insurance coverages developed and approved by the South Carolina HealthNet Program.
(11) 'Program' means the South Carolina HealthNet Program.
(12) 'Resident' means an individual who is a legal resident of the State of South Carolina as that term is defined by state law.
(13) 'Premium' means all monies paid by the covered person or his employer as a condition of receiving coverage from the program, including any fees or other contributions associated with obtaining health insurance coverage.
Section 38-60-40. (A) The director or his designee shall give notice of the date, time, and place for the initial organizational meeting.
(B) The board of directors consists of eleven voting members. The director or his designee shall serve in an ex officio capacity for the duration of the pilot project. The consumer advocate also serves as member of the board for the duration of the pilot project. The other members of the board must be selected as follows:
(1) the chairman must be appointed by the Governor for a three-year term.
(2) the director shall appoint:
(a) two representatives from the hospital community from a list of nominees submitted by the South Carolina Hospital Association. One must be appointed for a two-year term and the other for a three-year term. Subsequent terms are for three years.
(b) three representatives from the insurance industry. One appointee must be from the South Carolina Association of Health Underwriters appointed to a one-year term, one from a domestic insurer authorized to write health insurance coverage appointed to a two-year term, and one must be from a 'foreign' insurer authorized to write health insurance coverage to a three-year term. Subsequent terms are for three years.
(c) two members of the medical community from a list of nominees provided by the South Carolina Medical Association. One must be appointed for a two-year term and one for a three-year term. Subsequent terms are for three years.
(3) one consumer representative must be appointed by the President Pro Tempore of the Senate and one consumer representative must be appointed by the Speaker of the House of Representatives. These consumer representatives must be members of the general public who are not employed by or affiliated with an insurance company or plan, group hospital, or other health care provider. One appointee must be an individual consumer appointed to a one-year term and the other must be an employer appointed to a two-year term. Subsequent terms are for three years.
(C) A board member may not serve more than two consecutive terms. The board shall conduct its business and meetings in accordance with the requirements of Chapter 23, Title 1 (the South Carolina Freedom of Information Act).
(D) If there is a tie vote of the board on any matter, the issue must be presented to the director or his designee for his approval or disapproval.
(E) If, within sixty days of the organizational meeting the board is not selected, the director shall appoint the initial board.
(F) The board shall submit to the director or his designee a plan of operation for the program and any amendments necessary or suitable to assure the fair, reasonable, and equitable administration of the program. The director or his designee shall approve the plan of operation provided it is determined to be suitable to assure the fair, reasonable, and equitable administration of the program and provides for the sharing of program gains or losses on an equitable basis. The plan of operation is effective upon approval in writing by the director or his designee consistent with the date on which the coverage under this chapter must be made available. If the board fails to submit a suitable plan of operation within one hundred twenty days after the appointment of the board of directors, or at any time after that fails to submit suitable amendments to the plan, the department may develop the plan of operation or operating rules necessary to effectuate the provisions of this chapter. The plan of operation or operating rules continue in force until modified by the department or superseded by a plan submitted by the board and approved by the director or his designee.
(G) The plan of operation must:
(1) establish procedures for the handling and accounting of assets and monies of the program;
(2) establish procedures for filling vacancies on the board of directors;
(3) develop and implement a program to publicize the existence of the plan, the eligibility requirements and procedures for enrollment, plans to maintain public awareness of the plan;
(4) develop underwriting and rating guidelines as well as guidelines for provider networks;
(5) develop the health plans which may include basic, standard, full catastrophic, limited catastrophic, and a plan compatible with a medical savings account; and
(6) require producers to market the plan and the commissions, if any, to be paid.
(H) The program through its board has the general powers granted under the laws of this State to insurance companies licensed to transact accident and health insurance including, but not limited to, the specific authority to:
(1) enter into contracts necessary to carry out the provisions of this chapter, including the authority, with the approval of the director or his designee, to enter into contracts with similar programs or nonprofit entities of other states or the federal government, such as Medicaid, for the joint performance of common administrative functions, or with persons or other organizations for the performance of administrative functions;
(2) sue or be sued, including taking legal actions necessary or proper for recovery of funds for the program;
(3) take legal action as necessary to protect the interests and assets of the program;
(4) establish appropriate rates, rate schedules, rate adjustments, expense allowances, claim reserve formulas, and other actuarial function appropriate to the operation of the program;
(5) issue policies of insurance subject to the approval of the director or his designee and in accordance with the requirements of this chapter;
(6) appoint from among members appropriate legal, actuarial, and other committees as necessary to provide technical assistance in the operation of the program, policy, and other contract design, and any other function within the authority of the program;
(7) apply for and accept grants, monetary and other donations, or other funding to cover the costs of administering the program;
(8) borrow money to effectuate the purposes of this chapter. Notes or other evidence of indebtedness of the program not in default are legal investments for domestic insurers and may be carried as admitted assets. The program may not borrow money unless there is a net loss of the operation of the program which exhausts the assessments of the program for that year. Money may not be borrowed in excess of the loss after assessments have been exhausted. No more than three million dollars may be borrowed in any one year, and the total amount borrowed at any one time may not exceed five million dollars; and
(9) cause to be audited on an independent basis every two years the finances of the program and submit the report of audit to the department who shall submit it to the chairman of the Senate Finance Committee and the chairman of the House Ways and Means Committee with recommendations on the operations of the program.
(I) In addition to its general powers, the board may take measures to contain insurance costs subject to the approval of the director or his designee including, but not limited to:
(1) provide for and employ cost containment measures and requirements including, but not limited to, preadmission screening, second surgical opinion, concurrent utilization review, and individual case management for the purpose of making the benefit plan more cost effective;
(2) design, utilize, contract, or otherwise arrange for delivery of cost-effective health care services, including establishing or contracting with preferred provider organizations, health maintenance organizations, or other limited network provider arrangements including pharmacy benefit management services; or
(3) hire the staff necessary for the effective administration of the program.
(J) Nothing in this plan prohibits the board from entering public-private partnerships with Medicaid or other government-sponsored programs as a means of providing insurance coverage to the most people possible.
Section 38-60-50. (A) Except as provided in subsection (B), the provisions of this chapter apply to an insurer which provides group accident and health insurance coverage to groups of two or more.
(B) The provisions of this chapter do not apply to individual health insurance policies which are subject to policy form and premium rate approval as may be provided in this title.
(C) A sole proprietor and a small employer group that contains fewer than two eligible employees may participate in the program to the extent they meet the eligibility requirements provided in Section 38-60-120. A sole proprietor is subject to the medical underwriting requirements and policies of the program.
Section 38-60-60. (A) An insurer writing group health insurance coverage in this State shall offer and actively market the plans developed by the program to covered persons who meet the eligibility requirements for the program. An insurer shall file with the director or his designee, in the form and manner prescribed by the director or his designee, the plans and rates established by the board and approved by the department. A plan and the rate filed pursuant to this subsection may be used by an insurer beginning thirty days after it is filed.
(B) The director or his designee, at any time after providing notice and an opportunity for a hearing to the insurer, may disapprove the continued use by an insurer of a plan or rate authorized by the program on the grounds that neither the plan nor the rate meet the requirements of this chapter.
(C) A policy, contract, certificate, or other evidence of coverage issued through this program conspicuously must display 'South Carolina HealthNet' on the declarations page of the policy.
Section 38-60-70. The board of directors of the program, with the approval of the director or his designee, shall develop the form and level of coverage for the plans or insurance coverages offered through the program. Benefits and plan design must be determined by the board and submitted to the director or his designee for review and approval before they may be offered for sale in this State. A plan authorized under this chapter and approved by the director or his designee are exempt from insurance mandates of this State. Except coverage issued to a sole proprietor, a policy is guaranteed issue and must be issued without regard to the applicant's physical, mental condition, or medical history.
Section 38-60-80. (A) An insurer or an agent may not encourage or direct an employer to:
(1) refrain from filing an application for coverage with the insurer because of the health status, claims experience, industry, occupation, or geographic location of an individual; or
(2) seek coverage from another insurer because of the health status, claims experience, industry, occupation, or geographic location of an individual.
(B) The provisions of subsection (A)(1) do not apply with respect to information provided by an insurer or an agent to an employee regarding the established geographic service area of the insurer or the restricted network provision of the insurer.
(C) An insurer, directly or indirectly, may not enter into any contract, agreement, or arrangement with an agent that provides for, or results in, the compensation paid to an agent for a sale of a plan to vary because of the health status or permitted rating characteristics of the covered person.
(D) The provisions of subsection (C) do not apply with respect to the compensation paid to an agent on the basis of percentage of premium, provided that the percentage does not vary because of the health status or other permitted rating characteristics of the individual or the individual's dependents.
(E) Denial by an insurer of an application for coverage from an individual must be in writing and must state the reason or reasons for the denial.
(F) A violation of this section by an insurer or an agent is an unfair trade practice under Chapters 55 and 57 of this title.
(G) If an insurer enters into a contract, agreement, or other arrangement with a third-party administrator to provide administrative, marketing, or other services related to the offering of these plans in this State, the third-party administrator is subject to the provisions of this section as if it were a insurer.
Section 38-60-90. The board shall set forth the criteria for plan administration in the plan of operation.
Section 38-60-100. All rates and rate schedules must be determined by the board and approved by the director or his designee. A rate must be self-sustaining and actuarially sound. A rate and rate schedule must be submitted to the director or his designee for approval. For purposes of determining compliance with Section 38-71-940, an insurer does not have to include small employers provided coverage under this program.
Section 38-60-110. A provider willing to accept the reimbursement rates developed and adopted by the board also may provide services for the program.
Section 38-60-120. The following persons are eligible for coverage through the program:
(1) an employer in this State, its eligible employees, their dependents, and a sole proprietor who has been a legal resident of this State for a minimum of six months as well as a citizen of the United States;
(2) an eligible employee who has been a legal resident of this State for a minimum of six months as well as a citizen of the United States and
(a) who is eligible for COBRA or state continuation coverage and elects plan coverage as an alternative; or
(b) who is eligible for Medicaid coverage or the Medicaid premium payment option and elects plan coverage as an alternative.
Section 38-60-130. (A) Plan coverage shall cease:
(1) on the date a person is no longer a resident of this State, except for a child who is a student under the age of twenty-five years and who is financially dependent upon the employee, a child for whom a person is obligated to pay child support, or a child of any age who is disabled and dependent upon the parent;
(2) on the date an employee or employer requests coverage to end;
(3) upon the death of the covered person, except that dependents must be offered COBRA or state continuation as required by law;
(4) on the date scheduled for termination of the pilot project;
(5) on the date that the person attains Medicare eligibility;
(6) at such time as the person ceases to meet the eligibility requirements of this section; and
(7) upon nonpayment of premium.
(B) Coverage of a person ceases on the date he no longer meets the eligibility requirements of this section. Termination or nonrenewal of health insurance coverage must comply with the requirements of the Health Insurance Portability and Accountability Act as provided in Section 38-71-870.
Section 38-60-140. An insurer participating in the program shall report loss data to the program in the manner prescribed by the board. This data must be used for the purpose of reviewing and establishing rates. The department, by bulletin, may specify the requirements for reporting loss data and other required information to the department.
Section 38-60-150. The director, by order or regulation, may promulgate the rules necessary for implementation of this chapter."
SECTION 3. Upon approval by the Governor, this act takes effect no earlier than January 1, 2009, but not later than July 1, 2010. This plan terminates five years from the date of its first date of operation unless extended by action of the General Assembly.
This web page was last updated on Monday, June 22, 2009 at 2:25 P.M.