SB0278

SENATE BILL 278

50th legislature - STATE OF NEW MEXICO - second session, 2012

INTRODUCED BY

George K. Munoz

AN ACT

RELATING TO HEALTH INSURANCE; ENACTING THE NEW MEXICO HEALTH INSURANCE EXCHANGE ACT; CREATING THE NEW MEXICO HEALTH INSURANCE EXCHANGE; PROVIDING FOR THE APPOINTMENT, POWERS AND DUTIES OF A BOARD OF DIRECTORS FOR THE EXCHANGE; PROVIDING THE SUPERINTENDENT OF INSURANCE OF THE PUBLIC REGULATION COMMISSION WITH RULEMAKING POWERS RELATING TO THE EXCHANGE; PROVIDING FOR POWERS AND DUTIES OF THE EXCHANGE; PROVIDING FOR TRANSPARENCY OF EXCHANGE FUNDING AND OPERATIONS; AMENDING THE TORT CLAIMS ACT TO ADD EXCHANGE STAFF AND BOARD MEMBERS UNDER PUBLIC EMPLOYEE PROTECTIONS; AMENDING AND ENACTING SECTIONS OF THE NMSA 1978; RECONCILING MULTIPLE AMENDMENTS TO THE SAME SECTION OF LAW IN LAWS 2009; MAKING AN APPROPRIATION.

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

SECTION 1. [NEW MATERIAL] SHORT TITLE.--Sections 1 through 9 of this act may be cited as the "New Mexico Health Insurance Exchange Act".

SECTION 2. [NEW MATERIAL] DEFINITIONS.--As used in the New Mexico Health Insurance 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 benefits or insurance plans in the state;

C. "dependent" means "dependent" as defined in Section 152 of the federal Internal Revenue Code of 1986;

D. "employee" means an individual hired by another individual or entity for a wage or fixed payment in exchange for personal services and who does not provide the services as part of an independent business;

E. "exchange" means the New Mexico health insurance exchange;

F. "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;

G. "member" means a person appointed to the board of directors of the exchange;

H. "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 or the bureau of Indian affairs;

I. "qualified employer" means 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 small group market through the exchange; provided that the employer:

(1) 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

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

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

K. "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;

L. "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; and

M. "superintendent" means the superintendent of insurance of the insurance division of the public regulation commission or the division's successor in interest.

SECTION 3. [NEW MATERIAL] NEW MEXICO HEALTH INSURANCE EXCHANGE CREATED--BOARD CREATED.--

A. The "New Mexico health insurance exchange" is created as a nonprofit public corporation to provide qualified individuals and qualified employers with increased access to health insurance in the state and shall be governed by a board of directors constituted pursuant to the provisions of the New Mexico Health Insurance Exchange Act. The exchange is a governmental entity for purposes of the Tort Claims Act, and neither the exchange nor the board shall be considered a governmental entity for any other purpose.

B. The "board of directors of the New Mexico health insurance exchange" is created. The board consists of twelve members: ten voting members and two nonvoting, ex-officio members. One nonvoting ex-officio member is the secretary of human services or the secretary's designee. One nonvoting ex-officio member is the superintendent or the superintendent's designee.

C. A member shall not be appointed if that member's participation in the decisions of the board could benefit that member's own financial interests or the financial interests of an entity that member represents. A board member who develops a conflict of interest shall resign or be removed from the board.

D. Each board member and employee of the exchange shall have a fiduciary duty to the exchange.

E. The board shall be composed, as a whole, to assure representation of the state's Native American population, ethnic diversity, cultural diversity and geographic diversity. Board members shall have demonstrated knowledge or experience in at least one of the following areas:

(1) purchasing coverage in the individual market;

(2) purchasing coverage in the small employer market;

(3) health care finance;

(4) health care economics;

(5) health care policy;

(6) the enrollment of underserved residents in health care coverage; or

(7) administering private or public health care insurance.

F. Each of the ten appointed voting members shall be a resident of the state. Selection of the ten appointed voting members shall be as follows:

(1) the governor shall appoint two members as follows:

(a) one member shall be an officer, general partner or proprietor of a qualified employer; and

(b) one member shall be at large;

(2) the president pro tempore of the senate shall appoint two members as follows:

(a) one member shall be a representative of consumers in the individual insurance market; and

(b) one member shall be at large;

(3) the senate minority floor leader shall appoint two members as follows:

(a) one member shall be an employee of a small business; and

(b) one member shall be at large;

(4) the speaker of the house of representatives shall appoint two members as follows:

(a) one member shall be a consumer in the individual insurance market; and

(b) one member shall be at large; and

(5) the minority floor leader of the house of representatives shall appoint two members as follows:

(a) one member shall be an employee of a small business; and

(b) one member shall be at large.

G. Voting members shall have initial terms chosen by lot as follows: five shall serve four-year terms and five shall serve three-year terms. Thereafter, members shall serve three-year terms.

H. A member shall serve until the member's successor is appointed by the respective appointing authority.

I. The exchange and 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.

J. A majority of members 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.

K. Within sixty days of the effective date of the New Mexico Health Insurance 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. Thereafter, every three years the board shall elect in an open meeting a chair and vice chair from among its members. The chair and vice chair shall serve no more than two consecutive three-year terms as chair and vice chair.

L. A vacancy on the board shall be filled by appointment by the original appointing authority for the remainder of the member's unexpired term.

M. A member may be removed from the board by a majority vote of the members. The board shall set standards for attendance and may remove a member for conflict of interest pursuant to Subsection C of this section, lack of attendance, neglect of duty or malfeasance in office. A member shall not be removed without proceedings consisting of at least one ten-day notice of hearing and an opportunity to be heard. Removal proceedings shall be before the board and in accordance with procedures adopted by the board.

N. Appointed members may receive per diem and mileage in accordance with the Per Diem and Mileage Act, subject to the travel policy set by the board. Appointed members shall receive no other compensation, perquisite or allowance.

O. 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.

P. 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.

Q. The board shall create an advisory committee made up of Native Americans, some of whom live on a reservation and some of whom do not live on a reservation, to guide the implementation of the Native-American-specific provisions of the federal Patient Protection and Affordable Care Act of 2010 and the federal Indian Health Care Improvement Act.

SECTION 4. [NEW MATERIAL] BOARD OF DIRECTORS--POWERS.--The board may:

A. seek and receive grant funding from federal, state or local governments or private philanthropic organizations to defray the costs of operating the exchange;

B. generate funding, including but not limited to charging assessments or fees, to support its operations in accordance with provisions of the New Mexico Health Insurance Exchange Act;

C. create ad hoc advisory councils;

D. request assistance from other boards, commissions, departments, agencies and organizations as necessary to provide appropriate expertise to accomplish the exchange's duties;

E. enter into contracts with persons or other organizations as necessary or proper to carry out the provisions and purposes of the New Mexico Health Insurance Exchange Act, including the authority to contract or employ staff for the performance of administrative, legal, actuarial, accounting and other functions, provided that no contractor shall be a carrier;

F. enter into contracts with similar exchanges of other states for the joint performance of common administrative functions;

G. 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;

H. sue or be sued or otherwise take any necessary or proper legal action in the execution of its duties and powers;

I. appoint board committees, which may include non-board members, to provide technical assistance in the operation of the exchange and any other function within the authority of the exchange; and

J. conduct periodic audits to assure the general accuracy of the financial data submitted to the exchange.

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

A. The board shall create a plan of operation containing provisions to ensure the fair, reasonable and equitable administration of the exchange.

B. The board shall provide for public notice and hearing prior to approving the plan of operation. C. The plan of operation shall:

(1) establish procedures to implement the provisions of the New Mexico Health Insurance Exchange Act consistent with state law, approved waiver of federal law, the federal Patient Protection and Affordable Care Act of 2010 and other federal law, including:

(a) determination of which qualified health plans will be offered through the exchange;

(b) eligibility determination for the exchange and related public programs;

(d) administration of assessments and fees;

(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 a qualified health plan, medicaid or other public health coverage program 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. consult with representatives of New Mexico Indian nations, tribes and pueblos and develop and implement policies that:

(1) promote effective communication and collaboration between the exchange and Indian nations, tribes and pueblos, including communicating and collaborating on those nations', tribes' and pueblos' plans for creating or participating in health insurance exchanges; and

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

B. designate a Native American 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 New Mexico Indian nations, tribes and pueblos and shall ensure that training is provided to the staff of the exchange;

C. between July 1, 2012 and January 1, 2014 provide quarterly reports to the legislature, the governor and the superintendent on the implementation of the exchange and report annually and upon request thereafter;

D. by July 1, 2013:

(1) report findings and submit recommendations to the legislative health and human services committee, the legislative finance committee and the superintendent on how to avoid adverse selection and how to assess and improve the quality and affordability of qualified health plans that will be offered on the exchange; and

(2) 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 "small employer" from fifty to one hundred before January 1, 2016. The board shall recommend a transition plan for the exchange and carriers to follow when changing the definition of "small employer", whether the change occurs prior to or on January 1, 2016;

E. by July 1, 2013 provide recommendations to the legislative finance committee and other appropriate interim legislative committees on mechanisms for funding the operations of the exchange and a plan for achieving self-sufficiency, including the use of any assessments or fees;

F. by July 1, 2016, provide legislative recommendations to the legislative health and human services committee and the legislative finance committee on whether to:

(1) continue limiting qualified employer status to small employers and, if qualified employer status is extended to large employers, whether to combine the large employer risk pool with the small group market;

(2) combine the individual, small group and the large employer markets into a single risk pool; and

(3) enter into an exchange with other states or share resources or responsibilities to enhance the affordability of operating the exchange;

G. keep an accurate accounting of all of the activities, receipts and expenditures of the exchange and submit this information annually to the superintendent and as required by federal law to the federal secretary of health and human services;

H. 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;

I. cooperate with the medical assistance division of the human services department to share information and facilitate transitions in enrollment between the exchange and medicaid, the state children's health insurance program or any other state public health coverage program;

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

K. discharge those duties required to implement and operate the exchange in accordance with the provisions of the New Mexico Health Insurance Exchange Act consistent with state and federal law.

SECTION 7. [NEW MATERIAL] RULES--DISPUTE RESOLUTION.--

A. The superintendent shall promulgate rules necessary to implement and carry out the provisions of the New Mexico Health Insurance Exchange Act.

B. 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 Insurance Exchange Act, including with respect to:

(1) the eligibility of an individual, employer or carrier to participate in the exchange;

(2) receiving an exemption from any state or federal individual requirement to retain minimum essential coverage; and

(3) 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 8. [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 9. [NEW MATERIAL] FUNDING.--

A. To fund the planning, implementation and operation of the exchange, the board shall contract with the human services department or any other state agency that receives federal funds allocated, appropriated or granted to the state for purposes of funding the planning, implementation or operation of a health insurance exchange.

B. The human services department or any other state agency that receives federal funds allocated, appropriated or granted to the state for purposes of funding the planning, implementation or operation of a health insurance exchange shall contract with the board to provide those funds to the exchange in consideration for its planning, implementation or operation.

SECTION 10. [NEW MATERIAL] COOPERATION WITH THE NEW MEXICO HEALTH INSURANCE EXCHANGE.--The medical assistance division of the human services department, or its successor in interest, shall cooperate with the New Mexico health insurance exchange to share information and facilitate transitions in enrollment between the exchange and medicaid, the state children's health insurance program or any other state public health coverage program.

SECTION 11. A new section of the New Mexico Insurance Code is enacted to read:

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

SECTION 12. 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 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) and (17) 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 a licensed health care provider, who has no medical liability insurance, providing voluntary services as defined in Paragraph (16) 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 New Mexico mortgage finance authority;

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

(15) members of the board of directors of the small business investment corporation;

(16) 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) 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; and

(18) the staff and members of the board of directors of the New Mexico health insurance exchange;

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 13. SEVERABILITY.--If any part or application of this act is held invalid, the remainder or its application to other situations or persons shall not be affected.

SECTION 14. APPROPRIATION.--One hundred thousand dollars ($100,000) is appropriated from the general fund to the board of directors of the New Mexico health insurance exchange for expenditure in fiscal year 2013 to establish and operate a health insurance exchange pursuant to the provisions of the New Mexico Health Insurance Exchange Act. Any unexpended or unencumbered balance remaining at the end of fiscal year 2013 shall revert to the general fund.

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