2019 -- S 0683

========

LC002193

========

     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2019

____________

A N   A C T

RELATING TO INSURANCE HEALTH CARE MARKET STABILITY

     

     Introduced By: Senators Miller, Conley, Goldin, and DiPalma

     Date Introduced: March 21, 2019

     Referred To: Senate Health & Human Services

     It is enacted by the General Assembly as follows:

1

     SECTION 1. Section 27-18.5-2 of the General Laws in Chapter 27-18.5 entitled

2

"Individual Health Insurance Coverage" is hereby amended to read as follows:

3

     27-18.5-2. Definitions.

4

     The following words and phrases as used in this chapter have the following meanings

5

unless a different meaning is required by the context:

6

     (1) "Bona fide association" means, with respect to health insurance coverage offered in

7

this state, an association which:

8

     (i) Has been actively in existence for at least five (5) years;

9

     (ii) Has been formed and maintained in good faith for purposes other than obtaining

10

insurance;

11

     (iii) Does not condition membership in the association on any health status-related factor

12

relating to an individual (including an employee of an employer or a dependent of an employee);

13

     (iv) Makes health insurance coverage offered through the association available to all

14

members regardless of any health status-related factor relating to the members (or individuals

15

eligible for coverage through a member);

16

     (v) Does not make health insurance coverage offered through the association available

17

other than in connection with a member of the association;

18

     (vi) Is composed of persons having a common interest or calling;

19

     (vii) Has a constitution and bylaws; and

 

1

     (viii) Meets any additional requirements that the director may prescribe by regulation;

2

     (2) "COBRA continuation provision" means any of the following:

3

     (i) Section 4980(B) of the Internal Revenue Code of 1986, 26 U.S.C. § 4980B, other than

4

subsection (f)(1) of that section insofar as it relates to pediatric vaccines;

5

     (ii) Part 6 of subtitle B of Title I of the Employee Retirement Income Security Act of

6

1974, 29 U.S.C. § 1161 et seq., other than Section 609 of that act, 29 U.S.C. § 1169; or

7

     (iii) Title XXII of the United States Public Health Service Act, 42 U.S.C. § 300bb-1 et

8

seq.;

9

     (3) "Creditable coverage" has the same meaning as defined in the United States Public

10

Health Service Act, Section 2701(c), 42 U.S.C. § 300gg(c), as added by P.L. 104-191;

11

     (4) "Director" means the director of the department of business regulation;

12

     (5) "Eligible individual" means an individual:

13

     (i) For whom, as of the date on which the individual seeks coverage under this chapter,

14

the aggregate of the periods of creditable coverage is eighteen (18) or more months and whose

15

most recent prior creditable coverage was under a group health plan, a governmental plan

16

established or maintained for its employees by the government of the United States or by any of

17

its agencies or instrumentalities, or church plan (as defined by the Employee Retirement Income

18

Security Act of 1974, 29 U.S.C. § 1001 et seq.);

19

     (ii) Who is not eligible for coverage under a group health plan, part A or part B of title

20

XVIII of the Social Security Act, 42 U.S.C. § 1395c et seq. or 42 U.S.C. § 1395j et seq., or any

21

state plan under title XIX of the Social Security Act, 42 U.S.C. § 1396 et seq. (or any successor

22

program), and does not have other health insurance coverage;

23

     (iii) With respect to whom the most recent coverage within the coverage period was not

24

terminated based on a factor described in § 27-18.5-4(b)(relating to nonpayment of premiums or

25

fraud);

26

     (iv) If the individual had been offered the option of continuation coverage under a

27

COBRA continuation provision, or under chapter 19.1 of this title or under a similar state

28

program of this state or any other state, who elected the coverage; and

29

     (v) Who, if the individual elected COBRA continuation coverage, has exhausted the

30

continuation coverage under the provision or program;

31

     (6) "Group health plan" means an employee welfare benefit plan as defined in section

32

3(1) of the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1002(1), to the extent

33

that the plan provides medical care and including items and services paid for as medical care to

34

employees or their dependents as defined under the terms of the plan directly or through

 

LC002193 - Page 2 of 17

1

insurance, reimbursement or otherwise;

2

     (7) "Health insurance carrier" or "carrier" means any entity subject to the insurance laws

3

and regulations of this state, or subject to the jurisdiction of the director, that contracts or offers to

4

contract to provide, deliver, arrange for, pay for, or reimburse any of the costs of health care

5

services, including, without limitation, an insurance company offering accident and sickness

6

insurance, a health maintenance organization, a nonprofit hospital, medical or dental service

7

corporation, or any other entity providing a plan of health insurance or health benefits by which

8

health care services are paid or financed for an eligible individual or his or her dependents by

9

such entity on the basis of a periodic premium, paid directly or through an association, trust, or

10

other intermediary, and issued, renewed, or delivered within or without Rhode Island to cover a

11

natural person who is a resident of this state, including a certificate issued to a natural person

12

which evidences coverage under a policy or contract issued to a trust or association;

13

     (8)(i) "Health insurance coverage" means a policy, contract, certificate, or agreement

14

offered by a health insurance carrier to provide, deliver, arrange for, pay for or reimburse any of

15

the costs of health care services. Health insurance coverage includes short-term limited duration

16

policies and any policy that pays on a cost-incurred basis, except as otherwise specifically

17

exempted by subsections (8)(ii), (8)(iii), (8)(iv), or (8)(v) of this section.

18

     (ii) "Health insurance coverage" does not include one or more, or any combination of, the

19

following:

20

     (A) Coverage only for accident, or disability income insurance, or any combination of

21

those;

22

     (B) Coverage issued as a supplement to liability insurance;

23

     (C) Liability insurance, including general liability insurance and automobile liability

24

insurance;

25

     (D) Workers' compensation or similar insurance;

26

     (E) Automobile medical payment insurance;

27

     (F) Credit-only insurance;

28

     (G) Coverage for on-site medical clinics; and

29

     (H) Other similar insurance coverage, specified in federal regulations issued pursuant to

30

P.L. 104-191, under which benefits for medical care are secondary or incidental to other

31

insurance benefits; and.

32

     (I) Short term limited duration insurance;

33

     (iii) "Health insurance coverage" does not include the following benefits if they are

34

provided under a separate policy, certificate, or contract of insurance or are not an integral part of

 

LC002193 - Page 3 of 17

1

the coverage:

2

     (A) Limited scope dental or vision benefits;

3

     (B) Benefits for long-term care, nursing home care, home health care, community-based

4

care, or any combination of these;

5

     (C) Any other similar, limited benefits that are specified in federal regulation issued

6

pursuant to P.L. 104-191;

7

     (iv) "Health insurance coverage" does not include the following benefits if the benefits

8

are provided under a separate policy, certificate, or contract of insurance, there is no coordination

9

between the provision of the benefits and any exclusion of benefits under any group health plan

10

maintained by the same plan sponsor, and the benefits are paid with respect to an event without

11

regard to whether benefits are provided with respect to the event under any group health plan

12

maintained by the same plan sponsor:

13

     (A) Coverage only for a specified disease or illness; or

14

     (B) Hospital indemnity or other fixed indemnity insurance; and

15

     (v) "Health insurance coverage" does not include the following if it is offered as a

16

separate policy, certificate, or contract of insurance:

17

     (A) Medicare supplemental health insurance as defined under section 1882(g)(1) of the

18

Social Security Act, 42 U.S.C. § 1395ss(g)(1);

19

     (B) Coverage supplemental to the coverage provided under 10 U.S.C. § 1071 et seq.; and

20

     (C) Similar supplemental coverage provided to coverage under a group health plan;

21

     (9) "Health status-related factor" means any of the following factors:

22

     (i) Health status;

23

     (ii) Medical condition, including both physical and mental illnesses;

24

     (iii) Claims experience;

25

     (iv) Receipt of health care;

26

     (v) Medical history;

27

     (vi) Genetic information;

28

     (vii) Evidence of insurability, including conditions arising out of acts of domestic

29

violence; and

30

     (viii) Disability;

31

     (10) "Individual market" means the market for health insurance coverage offered to

32

individuals other than in connection with a group health plan;

33

     (11) "Network plan" means health insurance coverage offered by a health insurance

34

carrier under which the financing and delivery of medical care including items and services paid

 

LC002193 - Page 4 of 17

1

for as medical care are provided, in whole or in part, through a defined set of providers under

2

contract with the carrier;

3

     (12) "Preexisting condition" means, with respect to health insurance coverage, a

4

condition (whether physical or mental), regardless of the cause of the condition, that was present

5

before the date of enrollment for the coverage, for which medical advice, diagnosis, care, or

6

treatment was recommended or received within the six (6) month period ending on the enrollment

7

date. Genetic information shall not be treated as a preexisting condition in the absence of a

8

diagnosis of the condition related to that information; and

9

     (13) "High-risk individuals" means those individuals who do not pass medical

10

underwriting standards, due to high health care needs or risks;

11

     (14) "Wellness health benefit plan" means that health benefit plan offered in the

12

individual market pursuant to § 27-18.5-8; and

13

     (15) "Commissioner" means the health insurance commissioner.

14

     SECTION 2. Section 35-4-27 of the General Laws in Chapter 35-4 entitled "State Funds"

15

is hereby amended to read as follows:

16

     35-4-27. Indirect cost recoveries on restricted receipt accounts.

17

     Indirect cost recoveries of ten percent (10%) of cash receipts shall be transferred from all

18

restricted-receipt accounts, to be recorded as general revenues in the general fund. However, there

19

shall be no transfer from cash receipts with restrictions received exclusively: (1) From

20

contributions from non-profit charitable organizations; (2) From the assessment of indirect cost-

21

recovery rates on federal grant funds; or (3) Through transfers from state agencies to the

22

department of administration for the payment of debt service. These indirect cost recoveries shall

23

be applied to all accounts, unless prohibited by federal law or regulation, court order, or court

24

settlement. The following restricted receipt accounts shall not be subject to the provisions of this

25

section:

26

     Executive Office of Health and Human Services

27

     Organ Transplant Fund

28

     HIV Care Grant Drug Rebates

29

     Department of Human Services

30

     Veterans' home -- Restricted account

31

     Veterans' home -- Resident benefits

32

     Pharmaceutical Rebates Account

33

     Demand Side Management Grants

34

     Veteran's Cemetery Memorial Fund

 

LC002193 - Page 5 of 17

1

     Donations -- New Veterans' Home Construction

2

     Department of Health

3

     Pandemic medications and equipment account

4

     Miscellaneous Donations/Grants from Non-Profits

5

     State Loan Repayment Match

6

     Department of Behavioral Healthcare, Developmental Disabilities and Hospitals

7

     Eleanor Slater non-Medicaid third-party payor account

8

     Hospital Medicare Part D Receipts

9

     RICLAS Group Home Operations

10

     Commission on the Deaf and Hard of Hearing

11

     Emergency and public communication access account

12

     Department of Environmental Management

13

     National heritage revolving fund

14

     Environmental response fund II

15

     Underground storage tanks registration fees

16

     Rhode Island Historical Preservation and Heritage Commission

17

     Historic preservation revolving loan fund

18

     Historic Preservation loan fund -- Interest revenue

19

     Department of Public Safety

20

     Forfeited property -- Retained

21

     Forfeitures -- Federal

22

     Forfeited property -- Gambling

23

     Donation -- Polygraph and Law Enforcement Training

24

     Rhode Island State Firefighter's League Training Account

25

     Fire Academy Training Fees Account

26

     Attorney General

27

     Forfeiture of property

28

     Federal forfeitures

29

     Attorney General multi-state account

30

     Forfeited property -- Gambling

31

     Department of Administration

32

     OER Reconciliation Funding

33

     Health Insurance Market Integrity Fund

34

     RI Health Benefits Exchange

 

LC002193 - Page 6 of 17

1

     Information Technology Investment Fund

2

     Restore and replacement -- Insurance coverage

3

     Convention Center Authority rental payments

4

     Investment Receipts -- TANS

5

     OPEB System Restricted Receipt Account

6

     Car Rental Tax/Surcharge-Warwick Share

7

     Executive Office of Commerce

8

     Housing Resources Commission Restricted Account

9

     Department of Revenue

10

     DMV Modernization Project

11

     Jobs Tax Credit Redemption Fund

12

     Legislature

13

     Audit of federal assisted programs

14

     Department of Children, Youth and Families

15

     Children's Trust Accounts -- SSI

16

     Military Staff

17

     RI Military Family Relief Fund

18

     RI National Guard Counterdrug Program

19

     Treasury

20

     Admin. Expenses -- State Retirement System

21

     Retirement -- Treasury Investment Options

22

     Defined Contribution -- Administration - RR

23

     Violent Crimes Compensation -- Refunds

24

     Treasury Research Fellowship

25

     Business Regulation

26

     Banking Division Reimbursement Account

27

     Office of the Health Insurance Commissioner Reimbursement Account

28

     Securities Division Reimbursement Account

29

     Commercial Licensing and Racing and Athletics Division Reimbursement Account

30

     Insurance Division Reimbursement Account

31

     Historic Preservation Tax Credit Account

32

     Judiciary

33

     Arbitration Fund Restricted Receipt Account

34

     Third-Party Grants

 

LC002193 - Page 7 of 17

1

     RI Judiciary Technology Surcharge Account

2

     Department of Elementary and Secondary Education

3

     Statewide Student Transportation Services Account

4

     School for the Deaf Fee-for-Service Account

5

     School for the Deaf -- School Breakfast and Lunch Program

6

     Davies Career and Technical School Local Education Aid Account

7

     Davies -- National School Breakfast & Lunch Program

8

     School Construction Services

9

     Office of the Postsecondary Commissioner

10

     Higher Education and Industry Center

11

     Department of Labor and Training

12

     Job Development Fund

13

     SECTION 3. Chapter 44-30 of the General Laws entitled "Personal Income Tax" is

14

hereby amended by adding thereto the following sections:

15

     44-30-101. Requirements concerning qualifying health insurance coverage.

16

     (a) Definitions. For purposes of this section:

17

     (1) "Applicable individual" has the same meaning as set forth in 26 U.S.C. § 5000A(d).

18

     (2) "Minimum essential coverage" has the same meaning as set forth in 26 U.S.C. §

19

5000A(f).

20

     (3) "Shared responsibility payment penalty" means the penalty imposed pursuant to

21

subsection (c) of this section.

22

     (4) "Taxpayer" means any resident individual, as defined in § 44-30-5.

23

     (b) Requirement to maintain minimum essential coverage. Every applicable individual

24

must maintain minimum essential coverage for each month beginning after December 31, 2019.

25

     (c) Shared responsibility payment penalty imposed for failing to maintain minimum

26

essential coverage. As of January 1, 2020, every applicable individual required to file a personal

27

income tax return pursuant to § 44-30-51, shall indicate on the return, in a manner to be

28

prescribed by the tax administrator, whether and for what period of time during the relevant tax

29

year the individual and his or her spouse and dependents who are applicable individuals were

30

covered by minimum essential coverage. If a return submitted pursuant to this subsection fails to

31

indicate that such coverage was in force or indicates that any applicable individuals did not have

32

such coverage in force, a shared responsibility payment penalty shall hereby be assessed as a tax

33

on the return.

34

     (d) Shared responsibility payment penalty calculation. Except as provided in subsection

 

LC002193 - Page 8 of 17

1

(e) of this section, the shared responsibility payment penalty imposed shall be equal to a

2

taxpayer's federal shared responsibility payment for the taxable year under section 5000A of the

3

Internal Revenue Code of 1986, as amended, and as in effect on December 15, 2017.

4

     (e) Exceptions.

5

     (1) Penalty cap. The amount of the shared responsibility payment penalty imposed under

6

this section shall be determined, if applicable, using the statewide average premium for bronze-

7

level plans offered through the Rhode Island health benefits exchange rather than the national

8

average premium for bronze-level plans.

9

     (2) Hardship exemption determinations. Determinations as to hardship exemptions shall

10

be made by the exchange under § 42-157-11.

11

     (3) Religious conscience exemption determinations. Determinations as to religious

12

conscience exemptions shall be made by the exchange under § 42-157-11.

13

     (4) Taxpayers with gross income below state filing threshold. No penalty shall be

14

imposed under this section with respect to any applicable individual for any month during a

15

calendar year if the taxpayer's household income for the taxable year as described in 42 U.S.C. §

16

18082(b)(1)(B) of the Patient Protection and Affordable Care Act is less than the amount of gross

17

income requiring the taxpayer to file a return as set forth in § 44-30-51.

18

     (5) Out of State Residents. No penalty shall be imposed by this section with respect to

19

any applicable individual for any month during which the individual is a bona fide resident of

20

another state.

21

     (f) Health insurance market integrity fund. The tax administrator is authorized to

22

withhold from any state tax refund due to the taxpayer an amount equal to the calculated shared

23

responsibility payment penalty and shall place such amounts in the health insurance market

24

integrity fund created pursuant to § 42-157.1-5.

25

     (g) Deficiency. If, upon examination of a taxpayer's return, the tax administrator

26

determines there is a deficiency because any refund due to the taxpayer is insufficient to satisfy

27

the shared responsibility penalty or because there was no refund due, the tax administrator may

28

notify the taxpayer of such deficiency in accordance with § 44-30-81 and interest shall accrue on

29

such deficiency as set forth in § 44-30-84. All monies collected on said deficiency shall be placed

30

in the health insurance market integrity fund created pursuant to § 42-157.1-5.

31

     (h) Data Sharing.

32

     (1) The tax administrator, upon written request from the exchange pursuant to § 42-157-

33

13, shall disclose to officers, employees, and contractors of the exchange, the name, age, mailing

34

address, income and penalty amount of any such applicable individual who, for the applicable

 

LC002193 - Page 9 of 17

1

year, did not have the minimum essential coverage required by § 44-30-101(b).

2

     (2) Definition of applicable year. For purposes of this subsection, the term "applicable

3

year" means the most recent taxable year for which information is available in the Rhode Island

4

department of revenue's taxpayer data information systems, or, if there is no return filed for such

5

taxpayer for such year, the prior taxable year.

6

     (3) Restriction on use of disclosed information. Taxpayer information disclosed under

7

this subsection may be used only for the purposes authorized by § 42-157-13.

8

     (4) Privacy and security. The exchange and the tax administrator shall develop a detailed

9

set of data privacy and data security safeguards to govern the conveyance of data between their

10

agencies under this section. With respect to information disclosed by the tax administrator to the

11

exchange pursuant to this subsection, the exchange its officers, employees and contractors shall

12

be subject to § 44-30-95(c).

13

     (i) Application of federal law. The shared responsibility payment penalty shall be

14

assessed and collected as set forth in this chapter and, where applicable, consistent with

15

regulations promulgated by the federal government, the exchange and the tax administrator. Any

16

federal regulation implementing section 5000A of the Internal Revenue Code of 1986, as

17

amended, and in effect on December 15, 2017, shall apply as though incorporated into the Rhode

18

Island code of regulations. Federal guidance interpreting these federal regulations shall similarly

19

apply. Except as provided in subsections (j) and (k) of this section, all references to federal law

20

shall be construed as references to federal law as in effect on December 15, 2017, including

21

applicable regulations and administrative guidance that were in effect as of that date.

22

     (j) Unavailability of federal premium tax credits. For any taxable year in which federal

23

premium tax credits available pursuant to 26 U.S.C. § 36B become unavailable due to the federal

24

government repealing that section or failing to fund the premium tax credits, the shared

25

responsibility payment penalty under this section shall not be enforced.

26

     (k) Imposition of federal shared responsibility payment. For any taxable year in which a

27

federal penalty under section 5000A of the Internal Revenue Code of 1986 is imposed on a

28

taxpayer in an amount comparable to the shared responsibility payment penalty assessed under

29

this section, the state penalty shall not be enforced.

30

     (m) Agency coordination. Where applicable, the tax administrator shall implement this

31

section in consultation with the office of the health insurance commissioner, the office of

32

management and budget, the executive office of health and human services, and the Rhode Island

33

health benefits exchange.

34

     44-30-102. Reporting Requirement for Applicable Entities providing Minimum

 

LC002193 - Page 10 of 17

1

Essential Coverage.

2

     (a) Findings.

3

     (1) Ensuring the health of insurance markets is a responsibility reserved for states under

4

the McCarran-Ferguson Act and other federal law.

5

     (2) There is substantial evidence that being uninsured causes health problems and

6

unnecessary deaths.

7

     (3) The shared responsibility payment penalty imposed by § 44-30-101(c) is necessary to

8

protect the health and welfare of the state's residents.

9

     (4) The reporting requirement provided for in this section is necessary for the successful

10

implementation of the shared responsibility payment penalty imposed by § 44-30-101(c). This

11

requirement provides the only widespread source of third-party reporting to help taxpayers and

12

the tax administrator verify whether an applicable individual maintains minimum essential

13

coverage. There is compelling evidence that third-party reporting is crucial for ensuring

14

compliance with tax provisions.

15

     (5) The shared responsibility payment penalty imposed by § 44-30-101(c), and therefore

16

the reporting requirement in this section, is necessary to ensure a stable and well-functioning

17

health insurance market. There is compelling evidence that, without an effective shared

18

responsibility payment penalty in place for those who go without coverage, there would be

19

substantial instability in health insurance markets, including higher prices and the possibility of

20

areas without any insurance available.

21

     (6) The shared responsibility payment penalty imposed by § 44-30-101(c), and therefore

22

the reporting requirement in this section, is also necessary to foster economic stability and growth

23

in the state.

24

     (7) The reporting requirement in this section has been narrowly tailored to support

25

compliance with the shared responsibility payment penalty imposed by § 44-30-101(c), while

26

imposing only an incidental burden on reporting entities. In particular, the information that must

27

be reported is limited to the information that must already be reported under a similar federal

28

reporting requirement under section 6055 of the Internal Revenue Code of 1986. In addition, this

29

section provides that its reporting requirement may be satisfied by providing the same

30

information that is currently reported under such federal requirement.

31

     (b) Definitions. For purposes of this section:

32

     (1) "Applicable entity" means:

33

     (i) An employer or other sponsor of an employment-based health plan that offers

34

employment-based minimum essential coverage to any resident of Rhode Island.

 

LC002193 - Page 11 of 17

1

     (ii) The Rhode Island Medicaid single state agency providing Medicaid or Children's

2

Health Insurance Program (CHIP) coverage.

3

     (iii) Carriers licensed or otherwise authorized by the Rhode Island office of the health

4

insurance commissioner to offer health coverage providing coverage that is not described in

5

sections (b)(1)(i) or (ii) of this section.

6

     (2) "Minimum essential coverage" has the meaning given such term by § 44-30-

7

101(a)(2).

8

     (c) For purposes of administering the shared responsibility payment penalty to

9

individuals who do not maintain minimum essential coverage under § 44-30-101(b), every

10

applicable entity that provides minimum essential coverage to an individual during a calendar

11

year shall, at such time as the tax administrator may prescribe, file a form in a manner prescribed

12

by the tax administrator.

13

     (d) Form and manner of return.

14

     (1) A return, in such form as the tax administrator may prescribe, contains the following

15

information:

16

     (i) The name, address and Taxpayer Identification Number or "TIN" of the primary

17

insured and the name and TIN of each other individual obtaining coverage under the policy;

18

     (ii) The dates during which such individual was covered under minimum essential

19

coverage during the calendar year, and

20

     (iii) Such other information as the tax administrator may require.

21

     (2) Sufficiency of information submitted for federal reporting. Notwithstanding the

22

requirements of subsection (d)(1) of this section, a return shall not fail to be a return described in

23

this section if it includes the information contained in a return described in section 6055 of the

24

Internal Revenue Code of 1986, as that section is in effect and interpreted on December 15, 2017.

25

     (e) Statements to be furnished to individuals with respect to whom information is

26

reported.

27

     (1) Any applicable entity providing a return under the requirements of this section shall

28

also provide to each individual whose name is included in such return a written statement

29

containing the name, address and contact information of the person required to provide the return

30

to the tax administrator and the information included in the return with respect to the individuals

31

listed thereupon. Such written statement must be provided on or before January 31 of the year

32

following the calendar year for which the return was required to be made or by such date as may

33

be determined by the tax administrator.

34

     (2) Sufficiency of federal statement. Notwithstanding the requirements of subsection

 

LC002193 - Page 12 of 17

1

(e)(1) of this section, the requirements of this subsection (e) of this section may be satisfied by a

2

written statement provided to an individual under section 6055 of the Internal Revenue Code of

3

1986, as that section is in effect and interpreted on December 15, 2017.

4

     (f) Reporting responsibility.

5

     (1) Coverage provided by governmental units. In the case of coverage provided by an

6

applicable entity that is any governmental unit or any agency or instrumentality thereof, the

7

officer or employee who enters into the agreement to provide such coverage (or the person

8

appropriately designated for purposes of this section) shall be responsible for the returns and

9

statements required by this section.

10

     (2) Delegation. An applicable entity may contract with third-party service providers,

11

including insurance carriers, to provide the returns and statements required by this section.

12

     SECTION 4. Chapter 42-157 of the General Laws entitled "Rhode Island Health Benefit

13

Exchange" is hereby amended by adding thereto the following sections:

14

     42-157-11. Exemptions from the shared responsibility payment penalty.

15

     (a) Establishment of program. The exchange shall establish a program for determining

16

whether to grant a certification that an individual is entitled to an exemption from the shared

17

responsibility payment penalty set forth in § 44-30-101(c) by reason of religious conscience or

18

hardship.

19

     (b) Eligibility determinations. The exchange shall make determinations as to whether to

20

grant a certification described in subsection (a) of this section. The exchange shall notify the

21

individual and the tax administrator for the department of revenue of any such determination in

22

such a time and manner as the exchange, in consultation with the tax administrator, shall

23

prescribe. In notifying the tax administrator, the exchange shall adhere to the data privacy and

24

data security standards adopted in accordance with § 44-30-101(i)(4) and 45 C.F.R. 155.260. The

25

exchange shall only be required to notify the tax administrator to the extent that the exchange

26

determines such disclosure is permitted under 45 C.F.R. 155.260.

27

     (c) Appeals. Any person aggrieved by the exchange's determination of eligibility for an

28

exemption under this section has the right to an appeal in accordance with the procedures

29

contained within chapter 35 of title 42.

30

     42-157-12. Special enrollment period for qualified individuals assessed a shared

31

responsibility payment penalty.

32

     (a) Definitions. The following definition shall apply for purposes of this section:

33

     (1) "Special enrollment period" means a period during which a qualified individual who

34

is assessed a penalty in accordance with § 44-30-101 may enroll in a qualified health plan through

 

LC002193 - Page 13 of 17

1

the exchange outside of the annual open enrollment period.

2

     (b) In the case of a qualified individual who is assessed a shared responsibility payment

3

in accordance with § 44-30-101 and who is not enrolled in a qualified health plan, the exchange

4

must provide a special enrollment period consistent with this section and the Federal Patient

5

Protection and Affordable Care Act (Pub. L. 111-148), as amended by the Federal Care and

6

Reconciliation Act of 2010 (Pub. L. 111-152), and any amendments to, or regulations or guidance

7

issued under, those acts.

8

     (c) Effective date. The exchange must ensure that coverage is effective for a qualified

9

individual who is eligible for a special enrollment period under this section on the first day of the

10

month after the qualified individual completes enrollment in a qualified health plan through the

11

exchange.

12

     (d) Availability and length of special enrollment period. A qualified individual has sixty

13

(60) days from the date he or she is assessed a penalty in accordance with § 44-30-101 to

14

complete enrollment in a qualified health plan through the exchange. The date of assessment shall

15

be determined in accordance with § 44-30-82.

16

     42-157-13. Outreach to Rhode Island residents and individuals assessed a shared

17

responsibility payment penalty.

18

     The exchange, in consultation with the office of the health insurance commissioner and

19

the division of taxation, is authorized to engage in coordinated outreach efforts to educate Rhode

20

Island residents about the importance of health insurance coverage, their responsibilities to

21

maintain minimum essential coverage as defined in § 44-30-101, the penalties for failure to

22

maintain such coverage, and information on the services available through the exchange.

23

     42-157-14. Regulatory authority.

24

     The exchange may promulgate regulations as necessary to carry out the purposes of this

25

chapter.

26

     SECTION 5. Sections 42-157.1-1, 42-157.1-5 and 42-157.1-7 of the General Laws in

27

Chapter 42-157.1 entitled "Rhode Island Market Stability and Reinsurance Act" are hereby

28

amended to read as follows:

29

     42-157.1-1. Short title and purpose.

30

     (a) This chapter shall be known and may be cited as the "Rhode Island Market Stability

31

and Reinsurance Act."

32

     (b) The purpose of this chapter is to authorize the director to create the Rhode Island

33

reinsurance program to stabilize health insurance rates and premiums in the individual market and

34

provide greater financial certainty to consumers of health insurance in this state.

 

LC002193 - Page 14 of 17

1

     (c) Nothing in this chapter shall be construed as obligating the state to appropriate funds

2

or make payments to carriers.

3

     42-157.1-5. Establishment of program fund.

4

     (a) A fund shall be The health insurance market integrity fund is hereby established to

5

provide funding for the operation and administration of the program in carrying out the purposes

6

of the program under this chapter.

7

     (b) The director is authorized to administer the fund.

8

     (c) The fund shall consist of:

9

     (1) Any pass-through funds received from the federal government under a waiver

10

approved under 42 U.S.C. § 18052;

11

     (2) Any funds designated by the federal government to provide reinsurance to carriers

12

that offer individual health benefit plans in the state;

13

     (3) Any funds designated by the state to provide reinsurance to carriers that offer

14

individual health benefit plans in the state; and

15

     (4) Any other money from any other source accepted for the benefit of the fund.

16

     (d) Nothing in this chapter shall be construed as obligating the state to appropriate funds

17

or make payments to carriers.

18

     A restricted receipt account shall be established for the fund which may be used for the

19

purposes set forth in this section and shall be exempt from the indirect cost recovery provisions of

20

§ 35-4-27.

21

     (e) Monies in the fund shall be used to provide reinsurance to health insurance carriers as

22

set forth in this chapter and its implementing regulations, and to support the personnel costs,

23

operating costs and capital expenditures of the exchange and the division of taxation that are

24

necessary to carry out the provisions of this chapter, §§ 44-30-101 through 44-30-102 and §§ 42-

25

157-11 through 42-157-14.

26

     (f) Any excess monies remaining in the fund, not including any monies received from the

27

federal government pursuant to subsections (c)(1) or (c)(2) of this section and after making the

28

payments required by subsection (f) of this section, may be used for preventative health care

29

programs for vulnerable populations in consultation with the executive office of health and

30

human services.

31

     42-157.1-7. Program contingent on federal waiver and appropriation of state

32

funding. Program contingent on federal waiver.

33

     If the state innovation waiver request in § 42-157.1-6 is not approved, the director shall

34

not implement the program or provide reinsurance payments to eligible carriers.

 

LC002193 - Page 15 of 17

1

     SECTION 6. This act shall take effect upon passage.

========

LC002193

========

 

LC002193 - Page 16 of 17

EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO INSURANCE HEALTH CARE MARKET STABILITY

***

1

     This act would establish a reinsurance program, in order to provide stability in the

2

individual insurance market. It would impose a shared responsibility payment penalty for

3

individuals who do not have health insurance coverage, with certain exceptions. This act would

4

mirror the federal penalty, with the exception of capping the penalty at the statewide average

5

premium for bronze level plans offered on the state's health benefits exchange. The penalty would

6

be collected by the tax administrator and would be deposited into a restricted account titled the

7

Health Insurance Market Integrity Fund. The funds would be used to provide reinsurance, or

8

payments to health insurance carriers, in order to ensure that premiums do not increase

9

drastically. Remaining funds from the penalty would be used for preventative health care

10

programs.

11

     This act would take effect upon passage.

========

LC002193

========

 

LC002193 - Page 17 of 17