HB0584

HOUSE BILL 584

50th legislature - STATE OF NEW MEXICO - first session, 2011

INTRODUCED BY

Terry H. McMillan

AN ACT

RELATING TO HEALTH INSURANCE; ENACTING THE NEW MEXICO HEALTH BENEFIT EXCHANGE ACT; ESTABLISHING A NEW MEXICO HEALTH BENEFIT EXCHANGE; PROVIDING FOR A BOARD OF DIRECTORS OF THE EXCHANGE; PROVIDING FOR POWERS AND DUTIES OF THE EXCHANGE; PROVIDING FOR QUALIFIED HEALTH PLAN CERTIFICATION; PROVIDING FOR DISPUTE RESOLUTION; PROVIDING FOR TRANSPARENCY OF EXCHANGE FUNDING AND OPERATIONS; REQUIRING THE HUMAN SERVICES AND CORRECTIONS DEPARTMENTS TO STUDY THE FEASIBILITY OF COVERING INDIVIDUALS THROUGH THE EXCHANGE; AMENDING AND ENACTING SECTIONS OF THE NMSA 1978; RECONCILING MULTIPLE AMENDMENTS TO THE SAME SECTION OF LAW IN LAWS 2009; DECLARING AN EMERGENCY.

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

SECTION 1. [NEW MATERIAL] SHORT TITLE.--Sections 1 through 12 of this act may be cited as the "New Mexico Health Benefit Exchange Act".

SECTION 2. [NEW MATERIAL] DEFINITIONS.--As used in the New Mexico Health Benefit Exchange Act:

A. "board" means the board of directors of the exchange;

B. "carrier" means a person that is subject to licensure by the superintendent or subject to the provisions of the New Mexico Insurance Code and that provides one or more health benefit or insurance plans in the state;

C. "child" means an individual who is related to a principal insured by birth or adoption;

D. "dependent" means the spouse of a principal insured or a child who is under the age of twenty-six;

E. "exchange" means the New Mexico health benefit exchange created pursuant to the New Mexico Health Benefit Exchange Act offering qualified health plans to qualified individuals in the individual market and the small group market;

F. "health care facility" means an institution that provides health care services, including a hospital or other licensed inpatient center; an ambulatory surgical or treatment center; a skilled nursing center; a residential treatment center; a home health agency; a diagnostic, laboratory or imaging center; and a rehabilitation or other organized therapeutic health setting;

G. "health care provider" means an individual who is licensed, certified or otherwise authorized or permitted by law pursuant to Chapter 61 NMSA 1978 to provide health care in the ordinary course of business or practice of a profession;

H. "health care services finance or coverage sector" includes carriers and other health insurance issuers; health maintenance or managed care organizations; nonprofit health plans; self-insured group health plans; trade associations of carriers; producers; and health care facilities;

I. "individual market" means the market for health insurance coverage offered to individuals other than in connection with a group health plan;

J. "Native American" means:

(1) an individual who is a member of any federally recognized Indian nation, tribe or pueblo; or

(2) an individual who has been deemed eligible for services and programs provided to Native Americans by the United States public health service, the bureau of Indian affairs or other federal program;

K. "premium" means the consideration for insurance, by whatever name the consideration is called. Any "assessment", "membership", "policy", "survey", "inspection", "service" or similar fee or other charge in consideration for an insurance contract is part of the premium;

L. "producer" means a person that is licensed in the state to sell, solicit or negotiate insurance;

M. "qualified employer" means:

(1) prior to January 1, 2017 or the granting of prior permission pursuant to federal law to permit both large and small employers to purchase qualified health plans on the exchange, a small employer that elects to make its full-time employees, and, at the option of the employer, some or all of its part-time employees, eligible for one or more qualified health plans offered in the exchange, provided that the small employer:

(a) has its principal place of business in the state and elects to provide coverage through the exchange to all of its eligible employees, wherever employed; or

(b) elects to provide coverage through the exchange to all of its eligible employees who are principally employed in the state; and

(2) as of January 1, 2017 or the granting of prior permission pursuant to federal law that permits both large and small employers to purchase qualified health plans on the exchange, a large or small employer that elects to make its full-time employees, and, at the option of the employer, some or all of its part-time employees, eligible for one or more qualified health plans offered in the exchange, provided that the employer meets the criteria set forth in Subparagraphs (a) and (b) of Paragraph (1) of this subsection;

N. "qualified health plan" means health insurance coverage or a group health plan that the board has certified as meeting the requirements in state and federal law for coverage to be offered through the exchange;

O. "qualified individual" means an individual who:

(1) seeks to enroll or who participates in a qualified health plan offered through the exchange and who meets one of the following residency requirements:

(a) the individual is a resident of the state and is, and continues to be, legally domiciled and physically residing on a full-time basis in a place of habitation in the state that remains the person's principal residence and from which the person is absent only for a temporary or transitory purpose;

(b) the individual is a full-time student attending an educational institution outside of the state but, prior to attending the educational institution, met the requirements of Subparagraph (a) of this paragraph;

(d) the individual, whether a resident or not, is a dependent; or

(e) the individual, whether a resident or not, is an employee of a qualified employer;

(2) is not incarcerated at the time of enrollment, other than incarceration pending the disposition of charges; and

(3) is a citizen or national of the United States or an alien lawfully present in the United States, or who is reasonably expected to be a citizen or national of the United States or an alien lawfully present in the United States during the entire period for which enrollment in the exchange is sought;

P. "small employer" means a person that is actively engaged in business that employed an average of at least one but not more than fifty full-time-equivalent employees on business days during the preceding calendar year and that employs at least one employee in the first day of the plan year; provided that:

(1) the small employer elects to make all full-time employees eligible for one or more qualified health plans offered in the small group market through the exchange;

(2) persons that are affiliated persons or that are eligible to file a combined tax return for purposes of state income taxation shall be considered one small employer;

(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 employer shall be based on the average number of employees that the employer is reasonably expected to employ on working days in the current calendar year; and

(4) the person is not a self-insured entity;

Q. "small group market" means the small business health options program under which employees obtain health insurance coverage, directly or through any arrangement, on behalf of the employees and their dependents through a qualified health plan maintained by a qualified employer; and

R. "superintendent" means the superintendent of insurance of the insurance division of the public regulation commission or its successor agency.

SECTION 3. [NEW MATERIAL] NEW MEXICO HEALTH BENEFIT EXCHANGE CREATED--CORPORATE FORM.--The "New Mexico health benefit exchange" is created as a nonprofit public corporation, separate and apart from the state, to provide increased access for qualified individuals and qualified employers to health insurance in the state. The exchange shall operate subject to the supervision and approval of the board. The exchange is a governmental entity for purposes of the Tort Claims Act.

SECTION 4. [NEW MATERIAL] BOARD OF DIRECTORS.--

A. The exchange shall be governed by a board of directors. The board is a governmental entity for purposes of the Tort Claims Act, but neither the board nor the exchange shall be considered a governmental entity for any other purpose.

B. Each member of the board shall be entitled to one vote in person or by proxy at each meeting.

C. The board shall consist of eleven voting members and two nonvoting members. The governor and the New Mexico legislative council each shall appoint five voting members of the exchange. The superintendent shall be an ex-officio eleventh voting member. The administrative head of the entity charged with administering the state's medicaid program shall be a nonvoting, ex-officio member. In addition, the governor shall appoint as a nonvoting, ex-officio member the administrative head of a state entity charged with health care planning and administration.

D. The board shall draft bylaws to govern the expiration of members' terms and the removal of board members for cause, provided that two members' terms shall expire on June 30 of each year.

E. Within ninety days of the effective date of the New Mexico Health Benefit Exchange Act, the superintendent shall convene the organizational meeting of the board, during which the board shall elect a chair and vice chair from among its members.

F. While serving on the board, appointed members shall not have any affiliation with or any income derived from:

(1) current or active employment as, a contract with or consultation for a health care provider; or

(2) current or active employment in, a contract with or consultation for the health care services finance or coverage sector.

G. Each member appointed to the board shall have demonstrated and acknowledged expertise in at least two of the following areas:

(1) health care coverage in the individual market;

(2) health care coverage in the small group market;

(3) health care coverage plan administration;

(4) health care finance;

(5) administration of a public or private health care delivery system; or

(6) the purchase of health care coverage.

H. 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.

I. Members of the board may be reimbursed by the board as provided in the Per Diem and Mileage Act for nonsalaried public officers but shall receive no other compensation, perquisite or allowance from the board.

J. The board shall hire an executive director for the exchange, who shall be a full-time employee of the exchange and shall organize and administer all of the exchange's activities and contracts. The executive director shall serve at the pleasure of the board.

SECTION 5. [NEW MATERIAL] PLAN OF OPERATION.--

A. The board shall submit a written plan of operation to the superintendent with any provisions necessary to ensure the fair, reasonable, equitable and self-sustaining administration of the exchange.

B. The plan of operation shall provide for the pooling of risk among the individual and small employer markets.

C. The plan of operation shall include measures to establish the exchange as a plan administrator for qualified employers, including meeting the obligations of a plan administrator under federal law.

D. The plan of operation shall establish a "premium aggregator" as a means by which the exchange will accept premium payments for qualified individuals from multiple sources, including:

(1) government assistance programs;

(2) contributions from a cafeteria plan established pursuant to Section 125 of the federal Internal Revenue Code of 1986, a health reimbursement arrangement or other qualified mechanisms for pretax payments established by an employer; and

(3) contributions from private sources of premium assistance.

E. The board shall operate consistent with provisions of the Governmental Conduct Act, the Inspection of Public Records Act, the Financial Disclosure Act and the Open Meetings Act and shall not be subject to the Procurement Code or the Personnel Act.

F. A majority of the members of the board constitutes a quorum. The board may allow members to attend meetings by telephone or other electronic media. A decision by the board requires a quorum and a majority of members in attendance voting in favor of the decision.

G. The board shall meet at the call of the chair and no less often than once per calendar quarter. There shall be at least seven days' notice given to members prior to any meeting. There shall be sufficient notice provided to the public prior to meetings consistent with the Open Meetings Act.

H. The board shall create, make appointments to and duly consider recommendations of an advisory committee or committees made up of stakeholders, including carriers, health care consumers, health care providers, health care practitioners, brokers, qualified employer representatives and advocates for low-income or underserved residents.

I. The secretary of human services shall, after notice and hearing, approve the plan of operation; provided that it is determined to ensure fair, reasonable and equitable administration of the exchange.

J. The plan of operation shall:

(1) establish procedures to implement the provisions of the New Mexico Health Benefit Exchange Act, consistent with state and federal law, including determination of which qualified health plans will be offered through the exchange;

(2) establish procedures for handling and accounting for the exchange's assets and money;

(3) establish regular times and meeting places for meetings of the board;

(4) establish a program to publicize the existence of the exchange, the qualified health plans, the eligibility requirements and procedures for enrollment in an approved health plan and to maintain public awareness of the exchange;

(5) establish consumer complaint and grievance procedures for issues raised with the exchange;

(6) establish procedures for alternative dispute resolution between the exchange and contractors or carriers;

(7) establish conflict of interest policies and procedures; and

(8) contain additional provisions necessary and proper for the execution of the powers and duties of the board.

SECTION 6. [NEW MATERIAL] BOARD DUTIES--REPORTING.--The board shall:

A. coordinate with the human services department to receive any federal planning and implementation grants for the establishment and operation of the exchange. The board may also on behalf of the exchange seek and directly receive grant funding from federal, state or local governments or private philanthropic organizations to defray the costs of operating the exchange; provided that the board avoid any conflict of interest that receipt of these funds may present;

B. coordinate with the superintendent to review the establishment and operation of the internet portal that the United States department of health and human services has established pursuant to the federal Patient Protection and Affordable Care Act to determine whether the federal internet portal meets the needs of the state in providing an electronic clearinghouse of health benefit coverage for the individual and small employer markets. If the board and the superintendent determine that the federal internet portal does not meet the state's requirements for an electronic clearinghouse, the insurance division of the public regulation commission and the board shall jointly develop and maintain an electronic clearinghouse of health benefit coverage for the individual and small employer markets in the state;

C. consult with representatives of New Mexico Native American nations, tribes or pueblos and develop and implement policies that:

(1) promote effective communication and collaboration between the exchange and Native American nations, tribes or pueblos, including those nations', tribes' or pueblos' plans for creating or participating in health benefit exchanges;

(2) promote cultural competency in providing effective services to Native Americans; and

(3) designate a tribal liaison, who shall assist the executive director of the exchange in developing and ensuring implementation of communication and collaboration between the exchange and Native Americans in the state. The tribal liaison shall serve as a contact person between the exchange and Native American nations, tribes and pueblos and shall ensure that training is provided to the staff of the exchange;

D. provide reports quarterly or upon request on the implementation of the exchange between July 1, 2011 and January 1, 2014 and report annually and upon request thereafter to the governor, the legislative health and human services committee and the legislative finance committee;

E. keep an accurate accounting of all of the activities, receipts and expenditures of the exchange and submit this information no later than September 1 of each year to the federal secretary of health and human services and the superintendent;

F. by or before January 1, 2012:

(1) report findings and submit recommendations on how to avoid adverse selection to the governor, the legislative health and human services committee, the legislative finance committee and the superintendent; and

(2) make recommendations on whether the state should enter into an exchange with other states or share resources or responsibilities to enhance the affordability and effectiveness of the exchange;

G. by or before January 1, 2013, report to the legislative health and human services committee and the legislative finance committee its recommendations on:

(1) how to implement the participation of large employers on the exchange when federal law permits their participation; and

(2) whether to combine the large group market, the small group market and the individual market into a single risk pool;

H. by or before January 1, 2014, provide legislative recommendations to the legislative health and human services committee and the legislative finance committee on whether to change the number of full-time-equivalent employees in the definition of a "small employer" from fifty to one hundred before January 1, 2017. The board shall recommend a transition plan for the exchange and carriers to follow when changing the number of full-time-equivalent employees to one hundred whether the change occurs prior to or on January 1, 2017;

I. beginning with the first year of operation in which access to health insurance coverage is provided, obtain an annual audit of the exchange's operations from an independent certified public accountant; and

J. publish the administrative costs of the exchange as required by state or federal law.

SECTION 7. [NEW MATERIAL] NEW MEXICO HEALTH BENEFIT EXCHANGE--DUTIES AND POWERS.--

A. The exchange shall:

(1) in accordance with the provisions of the New Mexico Health Benefit Exchange Act, create an implementation plan to demonstrate that the exchange will be fully implemented by January 1, 2013;

(2) certify and make qualified health plans available to qualified individuals and qualified employers beginning on or before January 1, 2014; and

(3) implement the procedures established in the plan of operation created pursuant to Section 5 of the New Mexico Health Benefit Exchange Act.

B. The exchange may:

(1) contract with an eligible entity or a producer for any of the functions described in its plan of operation. For the purposes of this subsection, an eligible entity means the human services department or any state agency that operates medicaid programs, the children's health insurance program or any applicable state or local public health coverage program; and

(2) enter into information-sharing agreements with federal and state agencies and other state exchanges to carry out its responsibilities; provided that these agreements include adequate protections of the confidentiality of the information to be shared and comply with all state and federal laws and regulations.

SECTION 8. [NEW MATERIAL] CERTIFICATION OF QUALIFIED HEALTH PLANS--BOARD POWERS.--

A. The board shall certify, recertify and decertify plans as qualified health plans.

B. The board may withdraw certification of a qualified health plan only after it provides sixty days' notice to the carrier and an opportunity for hearing before the public regulation commission pursuant to Section 8-8-14 NMSA 1978 and commission rules. The board may decline to renew the certification of any carrier at the end of a certification term.

SECTION 9. [NEW MATERIAL] DISPUTE RESOLUTION.--The superintendent shall promulgate rules for resolving disputes arising from the operation of the exchange in accordance with the provisions of the New Mexico Health Benefit Exchange Act, including disputes with respect to:

A. the eligibility of an individual, employer or carrier to participate in the exchange;

B. receiving an exemption from the individual responsibility to retain minimum essential coverage mandated pursuant to Section 1501 of the federal Patient Protection and Affordable Care Act; and

C. the exchange's collection and transmission to the applicable qualified health plans any applications for enrollment and all premium payments or contributions made by or on behalf of qualified individuals or qualified employers participating in the exchange.

SECTION 10. [NEW MATERIAL] FUNDING--PUBLICATION OF COSTS.--The exchange:

A. may charge assessments or user fees to carriers, qualified employers, qualified individuals and producers or otherwise generate funding necessary to support its operations provided pursuant to the New Mexico Health Benefit Exchange Act;

B. shall publish the average costs of licensing fees and any other payments required by the exchange, and administrative costs of the exchange, on an internet web site to educate consumers on such costs. This information shall include information on money lost to waste, fraud and abuse; and

C. shall be the designated entity for the state to receive any federal funds allocated, appropriated or granted to the state for purposes of funding the planning, implementation or operation of a health benefit exchange.

SECTION 11. [NEW MATERIAL] COOPERATION WITH THE HUMAN SERVICES DEPARTMENT.--The board shall cooperate with the human services department, or its successor in interest, to share information and facilitate transitions between the exchange, medicaid, the children's health insurance program or any other state public health coverage program.

SECTION 12. [NEW MATERIAL] EXEMPTION.--The exchange is exempt from payment of all fees and all taxes levied by this state or any of its political subdivisions.

SECTION 13. [NEW MATERIAL] HUMAN SERVICES DEPARTMENT--COOPERATION WITH THE NEW MEXICO HEALTH BENEFIT EXCHANGE.--The human services department, or its successor in interest, shall cooperate with the New Mexico health benefit exchange to provide funding the department receives from the federal government or from other sources for the planning and establishment of the exchange and to share information and facilitate transitions between the exchange, medicaid, the children's health insurance program or any other state public health coverage program.

SECTION 14. [NEW MATERIAL] INSURANCE DIVISION--COOPERATION WITH THE NEW MEXICO HEALTH BENEFIT EXCHANGE.--The insurance division of the public regulation commission, or its successor in interest, shall cooperate with the New Mexico health benefit exchange to share information and assist in the implementation of the functions of the exchange.

SECTION 15. Section 41-4-3 NMSA 1978 (being Laws 1976, Chapter 58, Section 3, as amended by Laws 2009, Chapter 8, Section 2 and by Laws 2009, Chapter 129, Section 2 and also by Laws 2009, Chapter 249, Section 2) is amended to read:

"41-4-3. DEFINITIONS.--As used in the Tort Claims Act:

A. "board" means the risk management advisory board;

B. "governmental entity" means the state or any local public body as defined in Subsections C and H of this section;

C. "local public body" means all political subdivisions of the state and their agencies, instrumentalities and institutions and all water and natural gas associations organized pursuant to Chapter 3, Article 28 NMSA 1978;

D. "law enforcement officer" means a full-time salaried public employee of a governmental entity, or a certified part-time salaried police officer employed by a governmental entity, whose principal duties under law are to hold in custody any person accused of a criminal offense, to maintain public order or to make arrests for crimes, or members of the national guard of New Mexico when called to active duty by the governor;

E. "maintenance" does not include:

(1) conduct involved in the issuance of a permit, driver's license or other official authorization to use the roads or highways of the state in a particular manner; or

(2) an activity or event relating to a public building or public housing project that was not foreseeable;

F. "public employee" means an officer, employee or servant of a governmental entity, excluding independent contractors except for individuals defined in Paragraphs (7), (8), (10), [(14)] (15) and [(17)] (18) of this subsection, or of a corporation organized pursuant to the Educational Assistance Act, the Small Business Investment Act, [or] the Mortgage Finance Authority Act or the New Mexico Health Benefit Exchange Act or a licensed health care provider, who has no medical liability insurance, providing voluntary services as defined in Paragraph [(16)] (17) of this subsection and including:

(1) elected or appointed officials;

(2) law enforcement officers;

(3) persons acting on behalf or in service of a governmental entity in any official capacity, whether with or without compensation;

(4) licensed foster parents providing care for children in the custody of the human services department, corrections department or department of health, but not including foster parents certified by a licensed child placement agency;

(5) members of state or local selection panels established pursuant to the Adult Community Corrections Act;

(6) members of state or local selection panels established pursuant to the Juvenile Community Corrections Act;

(7) licensed medical, psychological or dental arts practitioners providing services to the corrections department pursuant to contract;

(8) members of the board of directors of the New Mexico medical insurance pool;

(9) individuals who are members of medical review boards, committees or panels established by the educational retirement board or the retirement board of the public employees retirement association;

(10) licensed medical, psychological or dental arts practitioners providing services to the children, youth and families department pursuant to contract;

(11) members of the board of directors of the New Mexico educational assistance foundation;

(12) members of the board of directors of the New Mexico student loan guarantee corporation;

(13) members of the board of directors and staff of the New Mexico health benefit exchange;

[(13)] (14) members of the New Mexico mortgage finance authority;

[(14)] (15) volunteers, employees and board members of court-appointed special advocate programs;

[(15)] (16) members of the board of directors of the New Mexico small business investment corporation;

[(16)] (17) health care providers licensed in New Mexico who render voluntary health care services without compensation in accordance with rules promulgated by the secretary of health. The rules shall include requirements for the types of locations at which the services are rendered, the allowed scope of practice and measures to ensure quality of care; and

[(17)] (18) an individual while participating in the state's adaptive driving program and only while using a special-use state vehicle for evaluation and training purposes in that program;

G. "scope of duty" means performing any duties that a public employee is requested, required or authorized to perform by the governmental entity, regardless of the time and place of performance; and

H. "state" or "state agency" means the state of New Mexico or any of its branches, agencies, departments, boards, instrumentalities or institutions."

SECTION 16. TEMPORARY PROVISION--NEW MEXICO HEALTH BENEFIT EXCHANGE--NEW MEXICO MEDICAL INSURANCE POOL--NEW MEXICO HEALTH INSURANCE ALLIANCE.--

A. The board of directors of the New Mexico health benefit exchange shall meet with the board of directors of the New Mexico health insurance alliance and the New Mexico medical insurance pool by October 1, 2011 and at least quarterly through October 1, 2013 to:

(1) provide portability of coverage for individuals covered through the New Mexico medical insurance pool to the extent possible through the New Mexico health benefit exchange;

(2) provide for the transition of other functions of the New Mexico health insurance alliance to the New Mexico health benefit exchange as permitted by law; and

(3) prepare a report to the first session of the fifty-first legislature on the transition of functions of the New Mexico health insurance alliance and the New Mexico medical insurance pool to the New Mexico health benefit exchange and on any recommendations to the legislature for continued and expanded health coverage of the state's residents.

B. Until the date is reached upon which federal law requires it to be self-sustaining, resources for the New Mexico health benefit exchange may be provided to the New Mexico health benefit exchange by the New Mexico health insurance alliance or the New Mexico medical insurance pool through a cooperative agreement between the New Mexico health benefit exchange and the respective board. The New Mexico health insurance alliance and the New Mexico medical insurance pool may fund reasonably required staff and other operating expenses for the New Mexico health benefit exchange through their respective existing funding mechanisms. To the extent federal funding is available to the New Mexico health benefit exchange, the New Mexico health benefit exchange shall reimburse the New Mexico health insurance alliance and the New Mexico medical insurance pool, respectively, for such resources as each may provide.

SECTION 17. SEVERABILITY.--If any part or application of the New Mexico Health Benefit Exchange Act is held invalid, the remainder or its application to other situations or persons shall not be affected.

SECTION 18. EMERGENCY.--It is necessary for the public peace, health and safety that this act take effect immediately.