AN ACT
RELATING TO INSURANCE; PROVIDING FOR NONPROFIT REPRESENTATION ON THE BOARD OF DIRECTORS OF THE HEALTH INSURANCE ALLIANCE; CHANGING THE HEALTH PLAN PREMIUM RATE STRUCTURE; PROVIDING FOR OUTREACH ACTIVITIES RELATED TO INSURANCE COVERAGE.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
Section 1. Section 59A-56-4 NMSA 1978 (being Laws 1994, Chapter 75, Section 4, as amended) is amended to read:
"59A-56-4. ALLIANCE CREATED--BOARD CREATED.--
A. The "New Mexico health insurance alliance" is created as a nonprofit public corporation for the purpose of providing increased access to health insurance in the state. All insurance companies authorized to transact health insurance business in this state, nonprofit health care plans, health maintenance organizations and self-insurers not subject to federal preemption shall organize and be members of the alliance as a condition of their authority to offer health insurance in this state, except for an insurance company that is licensed under the Prepaid Dental Plan Law or a company that is solely engaged in the sale of dental insurance and is licensed under a provision of the Insurance Code.
B. The alliance shall be governed by a board of directors constituted pursuant to the provisions of this section. The board is a governmental entity for purposes of the Tort Claims Act, but neither the board nor the alliance shall be considered a governmental entity for any other purpose.
C. Each member shall be entitled to one vote in person or by proxy at each meeting.
D. The alliance shall operate subject to the supervision and approval of the board. The board shall consist of:
(1) five directors, elected by the members, who shall be officers or employees of members and shall consist of two representatives of health maintenance organizations and three representatives of other types of members;
(2) five directors, appointed by the governor, who shall be officers, general partners or proprietors of small employers, one director of which shall represent nonprofit corporations;
(3) four directors, appointed by the governor, who shall be employees of small employers; and
(4) the superintendent or the superintendent's designee, who shall be a nonvoting member, except when the superintendent's vote is necessary to break a tie.
E. The superintendent shall serve as chairman of the board unless the superintendent declines, in which event the superintendent shall appoint the chairman.
F. The directors elected by the members shall be elected for initial terms of three years or less, staggered so that the term of at least one director expires on June 30 of each year. The directors appointed by the governor shall be appointed for initial terms of three years or less, staggered so that the term of at least one director expires on June 30 of each year. Following the initial terms, directors shall be elected or appointed for terms of three years. A director whose term has expired shall continue to serve until a successor is elected or appointed and qualified.
G. Whenever a vacancy on the board occurs, the electing or appointing authority of the position that is vacant shall fill the vacancy by electing or appointing an individual to serve the balance of the unexpired term; provided, when a vacancy occurs in one of the director's positions elected by the members, the superintendent is authorized to appoint a temporary replacement director until the next scheduled election of directors elected by the members is held. The individual elected or appointed to fill a vacancy shall meet the requirements for initial election or appointment to that position.
H. Directors may be reimbursed by the alliance as provided in the Per Diem and Mileage Act for nonsalaried public officers, but shall receive no other compensation, perquisite or allowance from the alliance."
Section 2. Section 59A-56-8 NMSA 1978 (being Laws 1994, Chapter 75, Section 8, as amended) is amended to read:
"59A-56-8. APPROVED HEALTH PLAN.--
A. An approved health plan shall conform to the alliance's approved health plan design criteria. The board may allow more than one plan design for approved health plans. A member may provide one approved health plan for each plan design approved by the board.
B. The board shall designate plan designs for approved health plans. The board may designate plan designs for an approved health plan that provides catastrophic coverage or other benefit plan designs.
C. Each approved health plan shall offer a premium that is no greater than the average of the standard rate index for plans with the same characteristics.
D. Any member that provides or offers to renew a group health insurance contract providing health insurance benefits to employees of the state, a county, a municipality or a school district for which public funds are contributed shall offer at least one approved health plan to small employers and eligible individuals; provided, however, if a member does not offer anywhere in the United States a plan that meets substantially the design criteria of an approved health plan, the member shall not be required to offer an approved health plan.
E. If a plan design approved by the board is not offered by any member already offering an approved health plan, but a member offers a substantially similar plan design outside the alliance, the board may require the member to offer that plan design as an approved health plan through the alliance.
F. A member required to offer, and offering, an approved health plan pursuant to the requirement of Subsection D of this section shall continue to offer that plan for five consecutive years after the date the member was last required to offer the plan. A member offering an approved health plan but not required to offer it pursuant to the cited subsection may withdraw the plan but shall continue to offer it for five consecutive years after the date notice of future withdrawal is given to the board unless:
(1) the member substitutes another approved health plan for the plan withdrawn; or
(2) the board allows the plan to be withdrawn because it imposes a serious hardship upon the member.
G. No member shall be required to offer an approved health plan if the member notifies the superintendent in writing that it will no longer offer health insurance, life insurance or annuities in the state, except for renewal of existing contracts, provided that:
(1) the member does not offer or provide health insurance, life insurance or annuities for a period of five years from the date of notification to the superintendent to any person in the state who is not covered by the member through a health insurance policy in effect on the date of the notification; and
(2) with respect to health or life insurance policies or annuities in effect on the date of notification to the superintendent, the member continues to comply with all applicable laws and regulations governing the provision of insurance in this state, including the payment of applicable taxes, fees and assessments."
Section 3. Section 59A-56-23 NMSA 1978 (being Laws 1994, Chapter 75, Section 23, as amended) is amended to read:
"59A-56-23. RATES--STANDARD RISK RATE--EXPERIENCE RATING PROHIBITED.--
A. The alliance shall determine a standard risk rate index by actuarially calculating the average index rates that the insurer has filed under the requirements of the Small Group Rate and Renewability Act with the benefits similar to the alliance's standard approved health plan. A standard risk rate based on age and other appropriate demographic characteristics may be used. In determining the standard risk rate, the alliance shall consider the benefits provided by the approved health plan.
B. Experience rating is not allowed other than for reinsurance purposes.
C. All rates and rate schedules shall be submitted to the superintendent for approval prior to use."
Section 4. Section 59A-56-25 NMSA 1978 (being Laws 1994, Chapter 75, Section 25) is amended to read:
"59A-56-25. EXPANDED SERVICE DEVELOPMENT.--The insurance division of the commission, in cooperation with the alliance, shall develop a plan to provide health insurance coverage for uninsured children, individuals and other employers, including outreach and technical assistance activities conducted by the alliance to increase employer, employee and public awareness of available health insurance coverage options and to assist employers in securing or retaining health insurance coverage for employees and their dependents."
Section 5. EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2005.
HB 394
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