SB0221PAS

SENATE PUBLIC AFFAIRS COMMITTEE SUBSTITUTE FOR

SENATE BILL 221

51st legislature - STATE OF NEW MEXICO - first session, 2013

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 WITH RULEMAKING POWERS RELATING TO THE EXCHANGE; ENACTING A TEMPORARY PROVISION TO PROVIDE FOR TRANSFER OF NEW MEXICO HEALTH INSURANCE ALLIANCE PERSONNEL, PERSONAL PROPERTY, CONTRACTS AND REFERENCES IN LAW TO THE NEW MEXICO HEALTH INSURANCE EXCHANGE; PROVIDING FOR THE DELAYED REPEAL OF THE NEW MEXICO HEALTH INSURANCE ALLIANCE ACT; AMENDING A SECTION OF THE TORT CLAIMS ACT TO PROVIDE FOR COVERAGE OF THE EXCHANGE STAFF AND BOARD UNDER THE NEW MEXICO HEALTH INSURANCE EXCHANGE ACT; AMENDING A SECTION OF THE NEW MEXICO HEALTH INSURANCE ALLIANCE ACT TO PROVIDE FOR OPERATION OF THE ALLIANCE BY THE EXCHANGE BOARD OF DIRECTORS; AMENDING, REPEALING 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 10 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. "agent" means a person appointed by a carrier authorized to transact business in this state to act as its representative in any given locality;

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

C. "broker" means a person licensed as a broker pursuant to the New Mexico Insurance Code;

D. "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;

E. "child" means an individual who is less than twenty-six years of age;

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

G. "director" means an individual who serves on the board;

H. "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;

I. "exchange" means a health insurance exchange entity established pursuant to federal law to provide qualified health plans to qualified individuals and qualified employers on the individual, small group or large group health insurance market, that uses an internet web site through which applicants may obtain standardized comparative information about qualified health plans and that offers enrollment assistance through navigators and a toll-free telephone hotline;

J. "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;

K. "health care services, finance or coverage sector" means a business sector that 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; persons licensed or otherwise authorized to provide health care in the regular course of business; and health care facilities;

L. "Native American" means:

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

M. "navigator" means an entity that, in a manner culturally and linguistically appropriate to the state's diverse populations, conducts public education, distributes tax credit and qualified health plan enrollment information, facilitates enrollment in qualified health plans and public health coverage programs or provides referrals to consumer assistance or ombudsman services. "Navigator" does not mean a carrier or a person that receives any consideration, directly or indirectly, from any carrier in connection with the enrollment of a qualified individual in a qualified health plan or any other health coverage; provided that a broker may be a navigator if the broker receives no consideration, directly or indirectly, from any carrier in connection with the enrollment of a qualified individual or qualified employer in a qualified health plan, an approved health plan or any other health coverage;

N. "producer" means an agent or broker licensed pursuant to the applicable provisions of the New Mexico Insurance Code;

O. "qualified dental plan" means a stand-alone dental plan that includes the essential pediatric dental benefits prescribed pursuant to federal law, or any other dental benefits that the board has determined meets the requirement in federal law for a qualified dental plan to be offered through the exchange;

P. "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 elects to provide coverage through the exchange to all of its eligible employees who are principally employed in the state;

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

R. "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;

S. "small employer" means a person that is actively engaged in a business that employs at least one employee on the first day of a plan year and that:

(1) employs on at least fifty percent of its working days during the preceding calendar year:

(a) at least one and not more than fifty full-time employees before January 1, 2016; and

(b) at least one and not more than one hundred full-time employees after December 31, 2015;

(2) shall be considered to be a small employer in the case of an employer that was not in existence throughout a preceding calendar year if the number of employees that the employer is reasonably expected to employ on working days in the current calendar year is:

(a) at least one and not more than fifty full-time employees before January 1, 2016; and

(b) at least one and not more than one hundred full-time employees after December 31, 2015;

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

(4) shall be counted as one small employer if the employer constitutes a group of affiliated persons that are eligible to file a combined tax return for the purposes of state income taxation; and

(5) is not a self-insured entity; and

T. "superintendent" means the superintendent of insurance.

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.

B. The "board of directors of the New Mexico health insurance exchange" is created. The exchange shall operate subject to the supervision and approval of the board. The board shall be composed of:

(1) eleven voting members appointed pursuant to the provisions of Subsection F of this section;

(2) the secretary of human services or the secretary's designee, who shall be a voting, ex-officio member; and

(3) the superintendent or the superintendent's designee, who shall be a nonvoting ex-officio member, except when the superintendent's vote is necessary to break a tie.

C. Managerial and full-time employees of the exchange and appointed directors, while serving on the board, shall not have any affiliation with, any income derived from current or active employment in, a contract with or consultation for the health care services, finance or coverage sectors; provided that the directors' administration and offering of approved health plans in accordance with the directors' duties pursuant to the Health Insurance Alliance Act shall not be considered to violate the provisions of this section.

D. 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. Members shall have demonstrated knowledge or experience in at least one of the following areas:

(1) purchasing health coverage in the individual market;

(2) purchasing health 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.

E. A maximum of one director whom the governor appoints and one director whom the New Mexico legislative council appoints may be exempt from the qualifications provided in Paragraphs (1) through (7) of Subsection D of this section.

F. Eleven members of the board shall be appointed as follows and shall include:

(1) six directors, who shall be qualified individuals or members, owners, officers, general partners or proprietors of small employers, one director of which shall represent a nonprofit corporation. These directors shall be appointed as follows:

(a) three shall be appointed by the governor, including the member representing a nonprofit corporation;

(b) one shall be appointed by the president pro tempore of the senate;

(d) one shall be appointed by the New Mexico legislative council;

(2) four directors, who shall be employees of small employers. These directors shall be appointed as follows:

(a) two shall be appointed by the governor;

(b) one shall be appointed by the minority floor leader of the senate; and

(3) one director, appointed by the governor, who shall be a consumer advocate.

G. The governor shall appoint no more than four directors who belong to the same political party.

H. The superintendent shall serve as chair of the board unless the superintendent declines, in which event the superintendent shall appoint the chair.

I. The directors appointed by legislators 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. 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 appointed for terms of three years. A director whose term has expired shall continue to serve until a successor is appointed and qualified.

J. Whenever a vacancy on the board occurs, the appointing authority of the position that is vacant shall fill the vacancy by appointing an individual to serve the balance of the unexpired term. The individual appointed to fill a vacancy shall meet the requirements for initial appointment to that position.

K. A director may be removed from the board by a majority vote of two-thirds of the directors. The board shall set standards for attendance and may remove a director for lack of attendance, neglect of duty or malfeasance in office. A director 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.

L. The exchange, including the board, is a governmental entity for purposes of the Tort Claims Act and shall operate consistently with the 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 Personnel Act.

M. 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.

SECTION 4. [NEW MATERIAL] NEW MEXICO HEALTH INSURANCE EXCHANGE--BOARD DUTIES--BOARD POWERS.--

A. The board shall:

(1) ensure that the exchange:

(a) beginning October 1, 2013, or in accordance with a schedule approved or provided by the federal center for consumer information and insurance oversight, accepts applications from qualified individuals and qualified employers to purchase qualified health plans on the exchange;

(b) beginning October 1, 2013, or in accordance with a schedule approved or provided by the federal center for consumer information and insurance oversight, makes available navigator services for persons applying for medicaid or to purchase qualified health plans through the exchange; and

(c) beginning January 1, 2014, or in accordance with a schedule approved or provided by the federal center for consumer information and insurance oversight, offers qualified health plans for purchase by qualified individuals and qualified employers;

(2) by October 1, 2013, or in accordance with a schedule approved or provided by the federal center for consumer information and insurance oversight, in accordance with rules that the superintendent has promulgated, shall establish a dispute resolution process for applicants that have been denied:

(a) qualified health plan status;

(b) qualified individual status;

(d) a premium tax credit subsidy;

(e) a cost-sharing subsidy for a qualified health plan; or

(f) exemption from the federal requirement to purchase health insurance;

(3) establish at least one walk-in customer service center where persons may apply for any status, credit or exemption listed in Paragraph (2) of this subsection and, if eligible, enroll in qualified health plans or public coverage programs;

(4) establish a navigator program;

(5) cooperate with the medical assistance division of the human services department to share information and facilitate transitions in enrollment between the exchange and medicaid;

(6) between October 1, 2013 and January 1, 2015, provide quarterly reports to the legislature, the governor and the superintendent on the implementation of the exchange and report annually and upon request thereafter;

(7) 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;

(8) 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 advise the board on the implementation of the provisions of the New Mexico Health Insurance Exchange Act and to guide the implementation of the Native American-specific provisions of the federal Patient Protection and Affordable Care Act and the federal Indian Health Care Improvement Act;

(9) designate a Native American liaison, who shall assist the board 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;

(10) be subject to and responsible for examination by the superintendent. No later than March 1 of each year, the board shall submit to the superintendent an audited financial report for the preceding calendar year in a form approved by the superintendent;

(11) consider the unique needs of rural New Mexicans as they pertain to access, affordability and choice in purchasing health insurance;

(12) consider the affordability and cost in the context of quality care and increased access to purchasing health insurance;

(13) select an executive director, who shall be responsible for the operation of the exchange, including the hiring of staff and such other duties as the board may delegate. The board shall select the executive director based on criteria established by the board that shall include:

(a) proven ability to administer health insurance programs; and

(b) ability to administer the exchange in a cost-efficient manner;

(14) negotiate with carriers to determine which affordable, qualified health plans shall be offered through the exchange in accordance with the New Mexico Health Insurance Exchange Act. The exchange shall offer these qualified health plans to qualified individuals and qualified employers for purchase through the exchange;

(15) assign a rating to each qualified health plan offered through the exchange on the basis of relative quality, price and actuarial value in accordance with criteria established by the federal secretary of health and human services in consultation with the superintendent. On the basis of that rating, and if offering the qualified health plan through the exchange is in the interest of the qualified individuals and qualified employers in the state, the exchange shall determine which qualified health plans that have been certified by the superintendent will be offered through the exchange;

(16) establish and make available by electronic means a calculator to determine the actual cost of health coverage for a qualified individual after applying any premium tax credit and cost-sharing reductions for which the qualified individual is eligible;

(17) provide language interpretation services;

(18) consult with representatives of New Mexico Indian nations, tribes and pueblos and develop and implement policies that:

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

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

(19) by January 1, 2015, present findings to the governor, the superintendent, the legislative health and human services committee and the legislative finance committee about whether adverse selection is happening in the exchange and make recommendations on how to minimize adverse selection;

(20) by January 1, 2015, report to the legislative health and human services committee, the legislative finance committee and the governor on how to ensure that the plans offered through the exchange are of high quality and value to New Mexicans, with a particular emphasis on providing health care to low-income New Mexicans; and

(21) by January 1, 2015, report findings to the governor, the superintendent, the legislative health and human services committee and the legislative finance committee about whether individuals with incomes below two hundred percent of the federal poverty level are experiencing barriers to enrollment in qualified health plans due to the affordability of qualified health plans, including whether these individuals are disproportionately enrolling in bronze level coverage. The board shall make recommendations regarding:

(a) whether the state would benefit from the establishment of a basic health program pursuant to federal law to cover low-income individuals who are not eligible for medicaid; and

(b) other potential affordability solutions for this population.

B. The board may:

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

(2) create ad hoc advisory councils;

(3) request assistance from other boards, commissions, departments, agencies and organizations as necessary to provide appropriate expertise to accomplish the board's duties with respect to the exchange;

(4) 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 any contractor shall be subject to the conflict-of-interest provisions set forth in Subsection C of Section 3 of the New Mexico Health Insurance Exchange Act;

(5) enter into contracts with similar exchanges of other states for the joint performance of common administrative functions;

(6) 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;

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

(8) 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;

(9) conduct periodic audits to assure the general accuracy of the financial data submitted to the exchange; and

(10) charge assessments or user fees to carriers, qualified employers or producers or otherwise generate funding necessary to support exchange operations; provided that assessments shall be limited solely to the reasonable administration costs of the exchange; provided that no assessment or user fee shall be imposed upon a carrier that exclusively offers policies, plans or contracts intended to supplement major medical coverage such as medicare supplement, long-term care, disability income, specified disease, accident-only, hospital indemnity or any other limited-benefit health insurance policy.

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

A. Within thirty days of the effective date of the New Mexico Health Insurance Exchange Act, the board shall submit a plan of operation to the superintendent and any amendments to the plan necessary or suitable to assure the fair, reasonable and equitable administration of the exchange.

B. The superintendent shall, after notice and hearing, approve the plan of operation if it is determined to assure the fair, reasonable and equitable administration of the exchange. The plan of operation shall become effective upon written approval of the superintendent consistent with the date on which health insurance coverage through the exchange pursuant to the provisions of the New Mexico Health Insurance Exchange Act is made available. A plan of operation adopted by the superintendent shall continue in force until modified by the superintendent or superseded by a subsequent plan of operation submitted by the board and approved by the superintendent.

C. The plan of operation shall:

(1) establish procedures for the handling and accounting of assets of the exchange;

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

(3) establish procedures for records to be kept of all financial transactions and for annual fiscal reporting to the superintendent;

(4) establish the amount of and the method for collecting assessments pursuant to the New Mexico Health Insurance Exchange Act;

(5) establish penalties for nonpayment of assessments by carriers;

(6) establish procedures for alternative dispute resolution of disputes between carriers and insureds;

(7) contain additional provisions necessary and proper for the execution of the powers and duties of the exchange;

(8) provide for the following events:

(a) by October 1, 2013, or in accordance with a schedule approved or provided by the federal center for consumer information and insurance oversight, the acceptance of applications from qualified individuals and qualified employers to purchase qualified health plans on the exchange;

(b) by October 1, 2013, or in accordance with a schedule approved or provided by the federal center for consumer information and insurance oversight, the availability of navigator services for persons applying for medicaid or to purchase qualified health plans through the exchange; and

(c) by January 1, 2014, or in accordance with a schedule approved or provided by the federal center for consumer information and insurance oversight, the sale of qualified health plans to qualified individuals and qualified employers;

(9) establish procedures to implement the provisions of the New Mexico Health Insurance Exchange Act consistent with state law and federal law, including:

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

(b) eligibility determination for purchasing qualified health plans on the exchange, for federal cost-sharing subsidies, tax credits, medicaid, exemption from the federal requirement for certain individuals to have health coverage and eligibility for related public programs as provided by rules adopted by the superintendent; and

(10) establish a program to publicize the existence of the exchange and qualified health plans offered by the exchange and the eligibility requirements and procedures for enrollment in a qualified health plan, premium assistance subsidies, tax credits or other public health coverage programs and to maintain public awareness of the exchange; and

(11) establish conflict-of-interest policies and procedures.

SECTION 6. [NEW MATERIAL] SUPERINTENDENT OF INSURANCE--RULEMAKING.--The superintendent shall:

A. adopt and promulgate rules that provide for disclosure by carriers of the availability of qualified health plans; and

B. adopt rules to carry out the provisions of the New Mexico Health Insurance Exchange Act.

SECTION 7. [NEW MATERIAL] QUALIFIED HEALTH PLANS.--

A. A qualified health plan shall conform to federal and state law governing qualified health plans and the exchange's qualified health plan design criteria. A carrier offering a qualified health plan shall:

(1) be licensed and in good standing to offer health insurance in the state;

(2) offer through the exchange at least one qualified health plan in the silver level of coverage and at least one plan in the gold level of coverage, pursuant to the levels of coverage as described in rules the superintendent has promulgated pursuant to federal law;

(3) charge the same premium for each qualified health plan within each level of coverage without regard to whether the plan is offered through the exchange directly from the carrier or through an agent or broker; and

(4) comply with the regulations that the federal secretary of health and human services has promulgated and any other requirement that the board or the superintendent has established.

B. If a qualified health plan design approved by the board is not offered by any carrier already offering a qualified health plan, but a carrier offers a substantially similar plan design outside the exchange, the board may request the carrier to offer that plan design as a qualified health plan through the exchange.

C. A carrier offering a qualified health plan may withdraw the plan after the date notice of future withdrawal is given to the board.

D. The following items and services, as defined by federal and state law and rules the superintendent has promulgated, are essential benefits that shall be included in any health insurance certified as a qualified health plan:

(1) ambulatory patient services;

(2) emergency services;

(3) hospitalization;

(4) maternity and newborn care;

(5) mental health and substance abuse disorder services, including behavioral health treatment;

(6) prescription drugs;

(7) rehabilitative and habilitative services and devices;

(8) laboratory services;

(9) preventive and wellness services and chronic disease management; and

(10) pediatric services, including oral and vision care.

E. A qualified health plan shall not be required to offer the essential pediatric dental benefit specified in Paragraph (10) of Subsection D of this section, so long as the exchange offers at least one qualified dental plan meeting the standards set forth in federal and state law and rules that the superintendent has promulgated for benefits to be offered on the health insurance exchange.

SECTION 8. [NEW MATERIAL] ENROLLMENT--QUALIFIED HEALTH PLANS.--

A. An individual is eligible for a qualified health plan if on the effective date of coverage or renewal the individual meets the definition of a qualified individual under Subsection R of Section 2 of the New Mexico Health Insurance Exchange Act. An employer is eligible for a qualified health plan if on the effective date of coverage or renewal the employer meets the definition of a qualified employer under Subsection P of Section 2 of the New Mexico Health Insurance Exchange Act.

B. If a child's coverage ended or did not begin for the reasons set forth in this section, a qualified health plan shall provide the child an opportunity to enroll in a qualified health plan for which coverage continues for at least sixty days and shall provide written notice of the opportunity to enroll no later than the first day of the plan year. A written notice of the opportunity for special enrollment provided pursuant to this section shall include a statement that a child whose coverage ended, who was denied coverage or who was not eligible for coverage because dependent coverage of children was unavailable before the child reached twenty-six years of age is eligible to enroll in a qualified health plan or other health coverage. This notice may be provided to a principal insured on behalf of the principal insured's child. For an individual who enrolls in a qualified health plan, the coverage shall take effect not later than the first day of the first plan or policy year.

C. For qualified health plans offered on the exchange, the exchange shall provide for an initial open enrollment period from October 1, 2013 through February 28, 2014, or in accordance with a schedule approved or provided by the federal center for consumer information and insurance oversight. Thereafter, the exchange shall provide for annual open enrollment periods for qualified health plans, as provided in federal law and by rules that the superintendent has promulgated. Except as provided pursuant to Subsections B and E of this section, new employees and their dependents may enroll in their qualified employer's qualified health plan within thirty-one days of completion of their employer's eligibility period. If application for enrollment is not made during this period, the new employee and the new employee's dependents may be required to submit evidence of eligibility for a special enrollment period pursuant to Section 9801 of the federal Internal Revenue Code of 1986.

D. An insured shall notify the exchange at least thirty-one days before the insured's yearly anniversary date of the qualified health plan of the insured's intent to switch coverage to another qualified health plan.

E. The exchange shall provide a monthly opportunity to enroll or switch enrollment between qualified health plans to any individual who is a Native American.

SECTION 9. [NEW MATERIAL] ELIGIBILITY--GUARANTEED ISSUE--PROHIBITION OF PREEXISTING CONDITION EXCLUSIONS.--

B. A qualified health plan shall provide in substance that attainment of the limiting age by a child or dependent individual does not operate to terminate coverage when the individual continues to be incapable of self-sustaining employment by reason of developmental disability or physical handicap and the individual is primarily dependent for support and maintenance upon the employee. Proof of incapacity and dependency shall be furnished to the exchange and the carrier that offered the qualified health plan within one hundred twenty days of attainment of the limiting age. The board may require subsequent proof annually after a two-year period following attainment of the limiting age.

C. A qualified health plan shall provide that the health insurance benefits applicable for eligible children are payable with respect to a newly born child of the family member or the individual in whose name the contract is issued from the moment of birth, including the necessary care and treatment of medically diagnosed congenital defects and birth abnormalities. If payment of a specific premium is required to provide coverage for the child, the contract may require that notification of the birth of a child and payment of the required premium shall be furnished to the carrier within thirty-one days after the date of birth in order to have the coverage from birth. A qualified health plan shall provide that the health insurance benefits applicable for eligible children are payable for an adopted child in accordance with the provisions of Section 59A-22-34.1 NMSA 1978.

D. A qualified health plan issued to a qualified individual shall not contain any preexisting condition exclusion.

E. As used in this section, "preexisting condition exclusion" means a limitation or exclusion of benefits relating to a condition based on the fact that the condition was present before the date of enrollment for coverage for the benefits whether or not any medical advice, diagnosis, care or treatment was recommended or received before that date, but genetic information is not included as a preexisting condition for the purposes of limiting or excluding benefits in the absence of a diagnosis of the condition related to the genetic information.

SECTION 10. [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 11. A new section of the New Mexico Insurance Code is enacted to read:

"[NEW MATERIAL] OFFICE OF SUPERINTENDENT OF INSURANCE--COOPERATION WITH NEW MEXICO HEALTH INSURANCE EXCHANGE.--The office of superintendent of insurance 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 established pursuant to the New Mexico Health Insurance Exchange Act;

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. 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] the board of directors of the New Mexico health insurance exchange appointed pursuant to the New Mexico Health Insurance Exchange Act."

SECTION 14. TEMPORARY PROVISION--NEW MEXICO HEALTH INSURANCE ALLIANCE--NEW MEXICO HEALTH INSURANCE EXCHANGE--TRANSFER OF PERSONNEL, FUNDS AND PERSONAL PROPERTY--REFERENCES IN LAW--CONTRACTS.--

A. On June 15, 2013:

(1) all personnel, appropriations, money, records, equipment, supplies and other personal property of the New Mexico health insurance alliance shall transfer to the New Mexico health insurance exchange;

(2) all contracts of the New Mexico health insurance alliance shall be binding and effective on the New Mexico health insurance exchange; and

(3) all references in law to the New Mexico health insurance alliance shall be deemed to be references to the New Mexico health insurance exchange.

B. As used in this section:

(1) "personal property" means property other than real property; and

(2) "real property" means an estate or interest in, over or under land and other things or interests, including minerals, water, structures and fixtures that by custom, usage or law pass with a transfer of land even if the estate or interest is not described or mentioned in the contract of sale or instrument of conveyance and, if appropriate to the context, the land in which the estate or interest is claimed.

SECTION 15. TEMPORARY PROVISION.--On the effective date of this act, the board of directors of the New Mexico health insurance alliance, appointed pursuant to the Health Insurance Alliance Act prior to the effective date of the New Mexico Health Insurance Exchange Act, shall cease to exist and the New Mexico health insurance alliance shall be governed pursuant to the Health Insurance Alliance Act by the board of directors of the New Mexico health insurance exchange appointed pursuant to the New Mexico Health Insurance Exchange Act. In exercising its duties, the board of directors of the New Mexico health insurance exchange shall neither apply any provisions of the Health Insurance Alliance Act to the New Mexico health insurance exchange nor apply any provisions of the New Mexico Health Insurance Exchange Act to the New Mexico health insurance alliance.

SECTION 16. DELAYED REPEAL.--On January 1, 2015, Sections 59A-56-1 through 59A-56-25 NMSA 1978 (being Laws 1994, Chapter 75, Sections 1 through 25, as amended) are repealed.

SECTION 17. 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 18. EMERGENCY.--It is necessary for the public peace, health and safety that this act take effect immediately.

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