HOUSE BILL 32

49th legislature - STATE OF NEW MEXICO - second session, 2010

INTRODUCED BY

Danice Picraux

FOR THE LEGISLATIVE HEALTH AND HUMAN SERVICES COMMITTEE

AN ACT

RELATING TO HEALTH INSURANCE; AMENDING A SECTION OF THE SMALL GROUP RATE AND RENEWABILITY ACT TO DEFINE A "SMALL EMPLOYER" AS EMPLOYING NO FEWER THAN ONE AND NO MORE THAN FIFTY ELIGIBLE EMPLOYEES.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

     Section 1. Section 59A-23C-3 NMSA 1978 (being Laws 1991, Chapter 153, Section 3, as amended) is amended to read:

     "59A-23C-3. DEFINITIONS.--As used in the Small Group Rate and Renewability Act:

          A. "actuarial certification" means a written statement by a member of the American academy of actuaries or another individual acceptable to the superintendent that a small employer carrier is in compliance with the provisions of Section 59A-23C-5 NMSA 1978, based upon the person's examination, including a review of the appropriate records and of the actuarial assumptions and methods used by the carrier in establishing premium rates for applicable health benefit plans;

          B. "base premium rate" means, for each class of business as to a rating period, the lowest premium rate charged under a rating system for that class of business by the small employer carrier to small employers with similar case characteristics for health benefit plans with the same or similar coverage;

          C. "carrier" means any person who provides health insurance in this state. For the purposes of the Small Group Rate and Renewability Act, "carrier" or "insurer" includes a licensed insurance company, a licensed fraternal benefit society, a prepaid hospital or medical service plan, a health maintenance organization, a nonprofit health care organization, a multiple employer welfare arrangement or any other person providing a plan of health insurance subject to state insurance regulation;

          D. "case characteristics" means demographic or other relevant characteristics of a small employer, as determined by a small employer carrier, that are considered by the carrier in the determination of premium rates for the small employer, but "case characteristics" does not include claim experience, health status and duration of coverage since issue;

          E. "class of business" means all small employers as shown on the records of the small employer carrier. A separate class of business may be established by the small employer carrier on the basis that the applicable health benefit plans have been acquired from another small employer carrier as a distinct grouping of plans;

          F. "creditable coverage" means, with respect to an individual, coverage of the individual pursuant to:

                (1) a group health plan;

                (2) health insurance coverage;

                (3) Part A or Part B of Title 18 of the federal Social Security Act;

                (4) Title 19 of the Social Security Act except coverage consisting solely of benefits pursuant to Section 1928 of that title;

                (5) 10 USCA Chapter 55;

                (6) a medical care program of the Indian health service or of an Indian nation, tribe or pueblo;

                (7) the Comprehensive Health Insurance Pool Act;

                (8) a health plan offered pursuant to 5 USCA Chapter 89;

                (9) a public health plan as defined in federal regulations; or

                (10) a health benefit plan offered pursuant to Section 5(e) of the federal Peace Corps Act;

          G. "department" means the department of insurance;

          H. "group health plan" means an employee welfare benefit plan as defined Section 3(1) of the federal Employee Retirement Income Security Act of 1974 to the extent that the plan provides medical care and including items and services paid for as medical care to employees or their dependents as defined under the terms of the plan directly or through insurance, reimbursement or otherwise;

          I. "health benefit plan" or "plan" means any hospital or medical expense-incurred policy or certificate, hospital or medical service plan contract or health maintenance organization subscriber contract. "Health benefit plan" does not include accident-only, credit, dental or disability income insurance, medicare supplement coverage, coverage issued as a supplement to liability insurance, workers' compensation or similar insurance or automobile medical-payment insurance;

          J. "index rate" means, for each class of business for small employers with similar case characteristics, the arithmetic average of the applicable base premium rate and the corresponding highest premium rate;

          K. "late enrollee" means, with respect to coverage under a group health plan, a participant or beneficiary who enrolls under the plan other than during:

                (1) the first period in which the individual is eligible to enroll under the plan; or

                (2) a special enrollment period pursuant to Sections [8 and 9 of the Health Insurance Portability Act] 59A-23E-8 and 59A-23E-9 NMSA 1978;

          L. "new business premium rate" means, for each class of business as to a rating period, the premium rate charged or offered by the small employer carrier to small employers with similar case characteristics for newly issued health benefit plans with the same or similar coverage;

          M. "rating period" means the calendar period for which premium rates established by a small employer carrier are assumed to be in effect, as determined by the small employer carrier;

          N. "small employer" means any person, firm, corporation, partnership or association actively engaged in business who, on at least fifty percent of its working days during either of the two preceding years, employed no [less] fewer than [two] one and no more than fifty eligible employees; provided that:

                (1) in determining the number of eligible employees, the spouse or dependent of an employee may, at the employer's discretion, be counted as a separate employee;                 (2) companies that are affiliated companies or that are eligible to file a combined tax return for purposes of state income taxation shall be considered one employer; and

                (3) in the case of an employer that was not in existence throughout a preceding calendar year, the determination of whether the employer is a small or large employer shall be based on the average number of employees that it is reasonably expected to employ on working days in the current calendar year;

          O. "small employer carrier" means any insurer that offers health benefit plans covering the employees of a small employer; and

          P. "superintendent" means the superintendent of insurance."

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