See other bills
under the
same topic
PRINTER'S NO. 1995
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No.
3
Session of
2019
INTRODUCED BY CUTLER, DERMODY, PICKETT, DeLUCA, WHEELAND,
SCHMITT, ROTHMAN, MOUL, MILLARD, BIZZARRO, BOYLE, BRADFORD,
BRIGGS, BULLOCK, BURGOS, BURNS, CALTAGIRONE, CARROLL, CEPHAS,
CIRESI, COMITTA, CONKLIN, DALEY, DAVIDSON, A. DAVIS,
T. DAVIS, DEASY, DELLOSO, DONATUCCI, FLYNN, FRANKEL, FREEMAN,
GAINEY, GALLOWAY, GOODMAN, HANBIDGE, HARKINS, HARRIS, HILL-
EVANS, HOWARD, INNAMORATO, ISAACSON, JOHNSON-HARRELL, KIM,
KINSEY, KIRKLAND, KORTZ, KOSIEROWSKI, KRUEGER, KULIK,
LONGIETTI, MALAGARI, MARKOSEK, MATZIE, McCARTER, McCLINTON,
McNEILL, MERSKI, MULLERY, MULLINS, NEILSON, O'MARA,
PASHINSKI, RAVENSTAHL, READSHAW, ROEBUCK, ROZZI, SAINATO,
SANCHEZ, SCHLOSSBERG, SHUSTERMAN, SIMS, SNYDER, SOLOMON,
STURLA, WARREN, WEBSTER, WHEATLEY, ZABEL, FITZGERALD, ULLMAN,
VITALI AND WILLIAMS, JUNE 4, 2019
REFERRED TO COMMITTEE ON INSURANCE, JUNE 4, 2019
AN ACT
Amending Title 40 (Insurance) of the Pennsylvania Consolidated
Statutes, providing for health insurance markets oversight;
and establishing the Pennsylvania Health Insurance Exchange
Fund.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Title 40 of the Pennsylvania Consolidated
Statutes is amended by adding a part to read:
PART V
HEALTH INSURANCE MARKETS OVERSIGHT
Chapter
91. Preliminary Provisions
93. State-based Exchange
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95. Reinsurance Program
97. Miscellaneous Provisions
CHAPTER 91
PRELIMINARY PROVISIONS
Sec.
9101. Scope of part.
9102. Purpose and intent.
9103. Definitions.
§ 9101. Scope of part.
This part relates to health insurance markets oversight.
§ 9102. Purpose and intent.
The General Assembly finds and declares as follows:
(1) The Commonwealth intends to maintain the
Commonwealth's sovereignty over the regulation of health
insurance in this Commonwealth.
(2) The health insurance marketplace in this
Commonwealth is unique and unlike the marketplace in any
other state.
(3) It is necessary to maintain the Commonwealth's
sovereignty over the regulation of health insurance in this
Commonwealth as permitted by Federal law, including the
Federal acts. The provisions of this part are intended to
meet these requirements while retaining the Commonwealth's
authority to regulate health insurance in this Commonwealth.
§ 9103. Definitions.
Subject to additional definitions contained in subsequent
provisions of this part which are applicable to specific
provisions of this part, the following words and phrases when
used in this part shall have the meanings given to them in this
section unless the context clearly indicates otherwise:
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"Affordable Care Act." The Patient Protection and Affordable
Care Act (Public Law 111-148, 124 Stat. 119), as amended by the
Health Care and Education Reconciliation Act of 2010 (Public Law
111-152, 124 Stat. 1029).
"Attachment point." The threshold amount for claims costs
incurred by an eligible insurer for an enrolled individual's
covered benefits in a benefit year, above which the claims costs
for benefits are eligible for reinsurance payments under this
part.
"Benefit year." The calendar year during which an eligible
insurer provides coverage through a health care plan.
"Board." The governing body of the exchange authority.
"Children's Health Insurance Program." The children's health
insurance program under Article XXIII-A of the act of May 17,
1921 (P.L.682, No.284), known as The Insurance Company Law of
1921.
"Coinsurance rate." The percentage rate at which the
reinsurance program will reimburse an eligible insurer for
claims incurred for an enrollee's covered benefits in a benefit
year above the attachment point and below the reinsurance cap.
"Commissioner." The Insurance Commissioner of the
Commonwealth.
"Department." The Insurance Department of the Commonwealth.
"Eligible insurer." An insurer offering reinsurance-eligible
health insurance plans to consumers in this Commonwealth.
"Enrollee." A policyholder, certificate holder, subscriber,
covered person or other individual who is enrolled to receive
health care services pursuant to a health insurance policy.
"Exchange." A health insurance exchange as contemplated by
section 1321(b) of the Affordable Care Act, established or
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operating in this Commonwealth, that facilitates or assists in
facilitating enrollment in qualified plans.
"Exchange assister." The term has the meaning given to it in
section 2 of the act of June 19, 2015 (P.L.25, No.7), known as
the Navigator and Exchange Assister Accessibility and Regulation
Act.
"Exchange authority." The Pennsylvania Health Insurance
Exchange Authority established under section 9302(a) (relating
to Pennsylvania Health Insurance Exchange Authority).
"Exchange fund." The Pennsylvania Health Insurance Exchange
Fund established under section 9312 (relating to exchange fund).
"Federal acts." The Affordable Care Act and any amendments
thereto, and related provisions of the Public Health Service Act
(58 Stat. 682, 42 U.S.C. § 201 et seq.).
"Government program." A program of government sponsored or
subsidized health care coverage, including:
(1) A premium tax credit or cost-sharing subsidy under
the Federal acts.
(2) Coverage under Medicare Parts A and B or Medicare
Advantage Part C under Title XVIII of the Social Security Act
(49 Stat. 620, 42 U.S.C. § 1395 et seq.).
(3) A TRICARE or other health care plan provided through
the Civilian Health and Medical Program of the Uniformed
Services (CHAMPUS) as defined under 10 U.S.C. § 1072
(relating to definitions).
(4) A health care plan provided through the Federal
Employees Health Benefits Program established under 5 U.S.C.
Ch. 89 (relating to health insurance).
(5) The Commonwealth's medical assistance program
established under the act of June 13, 1967 (P.L.31, No.21),
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known as the Human Services Code.
(6) The Children's Health Insurance Program.
(7) Health care coverage provided by the Commonwealth, a
county, a city, or other State or local governmental entity
or an agency, subdivision or department of a governmental
entity, including:
(i) a corporation or other arrangement organized by
the entity for the provision of health care coverage and
subject to control by the entity or an instrumentality of
one or more of them;
(ii) the Pennsylvania Employee Benefit Trust Fund
for active and retired employees; and
(iii) benefit programs administered by the
Department of Corrections.
"Grandfathered health care plan." Individual or group health
insurance coverage in which an individual was enrolled prior to
the date of enactment of the Affordable Care Act, or as
otherwise specified in section 1251 of the Affordable Care Act
(42 U.S.C. § 18011).
"Health care plan." A package of coverage benefits with a
particular cost-sharing structure, network and service area that
is purchased through a health insurance policy.
"Health insurance policy." A policy, subscriber contract,
certificate or plan issued by an insurer that provides hospital
or medical/surgical health care coverage. The term does not
include any of the following:
(1) An accident only policy.
(2) A credit only policy.
(3) A long-term care or disability income policy.
(4) A specified disease policy.
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(5) A Medicare supplement policy.
(6) A fixed indemnity policy.
(7) An adult-only dental only policy.
(8) A vision only policy.
(9) A workers' compensation policy.
(10) An automobile medical payment policy.
(11) A policy under which benefits are provided by the
Federal Government to active or former military personnel and
their dependents.
(12) Any other similar policies providing for limited
benefits.
"Hospital plan corporation." An entity organized and
operating under Chapter 61 (relating to hospital plan
corporations).
"Individual market." The market for health insurance
coverage offered to individuals other than in connection with a
group.
"Innovation waiver." A waiver applied for pursuant to
section 1332 of the Affordable Care Act (42 U.S.C. §18052).
"Insurance producer." The term has the meaning given to it
in section 601-A of the act of May 17, 1921 (P.L.789, No.285),
known as The Insurance Department Act of 1921.
"Insurer." An entity that offers, issues or renews an
individual or group health, accident or sickness insurance
policy, contract or plan, and that is governed under any of the
following:
(1) Chapter 61.
(2) Chapter 63 (relating to professional health services
plan corporations).
(3) The Insurance Company Law of 1921, including section
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630 and Article XXIV.
(4) The act of December 29, 1972 (P.L.1701, No.364),
known as the Health Maintenance Organization Act.
"Medical assistance program." The Commonwealth's medical
assistance program established under the Human Services Code.
"Professional health services plan corporation." An entity
organized and operating under Chapter 63.
"Qualified enrollee." A qualified employee or qualified
individual, as defined in section 1312(f) of the Affordable Care
Act and regulations promulgated under that act.
"Qualified plan." A plan as defined in section 1301(a) of
the Affordable Care Act that provides health care or dental care
coverage that has been certified by the department as meeting
the criteria set forth in this part and any regulations issued
pursuant to this part.
"Reinsurance cap." The upper limit amount for claims costs
incurred by an eligible insurer for an enrolled individual's
covered benefits in a benefit year, over which the claims costs
for benefits are no longer eligible for reinsurance payments
under the reinsurance program.
"Reinsurance-eligible enrollee." An enrollee who is insured
in a reinsurance-eligible health care plan under this part.
"Reinsurance-eligible health care plan." A health care plan
that is not a grandfathered health care plan.
"Reinsurance payment." An amount paid by the reinsurance
program to an eligible insurer under the program.
"Reinsurance program." The Commonwealth Health Insurance
Reinsurance Program established under section 9502(b) (relating
to implementation of waiver and establishment of reinsurance
program).
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"Small group market." The market for health insurance for
coverage offered through a group health insurance policy for a
group of least two individuals and up to 50 individuals,
exclusive of dependents.
CHAPTER 93
STATE-BASED EXCHANGE
Sec.
9301. Scope of chapter.
9302. Pennsylvania Health Insurance Exchange Authority.
9303. Advisory council.
9304. Meetings and operation.
9305. Powers and duties of exchange authority.
9306. Limitations.
9307. Confidentiality and disclosure.
9308. Not an entitlement.
9309. Nonliability.
9310. Audits.
9311. Reports.
9312. Exchange fund.
9313. Federal guidance.
9314. Expiration.
§ 9301. Scope of chapter.
This chapter relates to the Pennsylvania Health Insurance
Exchange Authority.
§ 9302. Pennsylvania Health Insurance Exchange Authority.
(a) Establishment.--The Pennsylvania Health Insurance
Exchange Authority is established as a State-affiliated entity.
The powers and duties of the exchange authority shall be vested
in and exercised by a board, which shall have the sole power
under section 9305 (relating to powers and duties of exchange
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authority) to employ staff, including an executive director.
Individuals employed by the exchange authority shall be
employees of the Commonwealth. The exchange authority may
contract with persons or entities, including legal counsel,
consultants or service providers, as deemed necessary in the
exchange authority's discretion.
(b) Purpose.--The purpose of the exchange authority shall be
to create, manage and maintain in this Commonwealth the
Pennsylvania Health Insurance Exchange to do all of the
following:
(1) Benefit the Pennsylvania health insurance market and
persons enrolling in health insurance policies.
(2) Facilitate or assist in facilitating the purchase of
on-exchange qualified plans by qualified enrollees in the
individual market or the individual and small group markets.
(c) Composition.--The board shall consist of the following
members:
(1) Three voting members who shall be the following
heads of agencies or a designee who shall be an employee of
the agency designated in writing by the head of the agency
prior to service:
(i) The commissioner, ex-officio.
(ii) The Secretary of Human Services, ex-officio.
(iii) The Secretary of Health, ex-officio.
(2) Four voting members appointed by the Governor:
(i) One member from among the insurers that offer
health insurance policies through the exchange that are a
hospital plan corporation, a professional health services
plan corporation or a parent, affiliate, subsidiary or
other associated entity or successor of a hospital plan
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corporation or a professional health services plan.
(ii) One member from among the insurers that offer
health insurance policies through the exchange that are
not a hospital plan corporation, a professional health
services plan corporation or a parent, affiliate,
subsidiary or other associated entity or successor of a
hospital plan corporation or a professional health
services plan.
(iii) One member with experience in health care
public education and consumer assistance activities who
does not have a conflict of interest as described in
subsection (k).
(iv) One member who is a consumer representative.
(3) Four voting members appointed by the General
Assembly each with relevant experience in health benefits
administration, health care finance, health care plan
purchasing, health care delivery system administration,
public health or health policy related to the individual and
small group markets and the uninsured:
(i) One member appointed by the President pro
tempore of the Senate.
(ii) One member appointed by the Minority Leader of
the Senate.
(iii) One member appointed by the Speaker of the
House of Representatives.
(iv) One member appointed by the Minority Leader of
the House of Representatives.
(4) The executive director shall attend meetings of the
board but shall not be a member, may not vote and may not be
counted for purposes of establishing a quorum.
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(d) Chairperson.--The commissioner or a designee shall serve
as chairperson.
(e) Compensation.--Board members shall not be entitled to
any compensation for their services as members, except that,
subject to the availability of funds, board members shall be
entitled to reimbursement for actual and necessary travel
expenses. The expenses shall be paid for by the exchange fund.
(f) Terms.--The terms of the board members shall be as
follows:
(1) A board member appointed under subsection (c)(2)
who:
(i) Is a member of the General Assembly shall serve
a term concurrent with their holding of public office.
(ii) Is not a member of the General Assembly shall
serve a term concurrent with their appointing official's
holding of public office.
(2) A board member appointed under subsection (c)(3)
shall serve a term of four years, not to exceed more than two
full consecutive four-year terms, except that the following
shall apply:
(i) Initial appointments shall be so staggered that
less than 50% of the membership shall expire each year.
(ii) A member's term shall continue until the
member's replacement is appointed.
(g) Vacancies.--Vacancies in appointed positions shall be
filled in the same manner as the original appointment. Members
shall serve until their successors are appointed and qualified.
(h) Formation.--The exchange authority shall be formed
within 60 days of the effective date of this section. Prior to
formation of the exchange authority, the commissioner may take
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action necessary to effect a timely transition from a federally
administered exchange to the Pennsylvania Health Insurance
Exchange.
(i) Quorum.--A majority of the appointed members of the
board shall constitute a quorum. Action may be taken by the
board at a meeting upon a vote of a quorum of its members
present in person or through electronic means. If a tie vote
occurs at any meeting, it shall be the duty of the chairperson
of the board to cast a second and deciding vote.
(j) Meetings.--The board shall meet at the call of the
chairperson or as may be provided in the bylaws of the board.
The board shall hold meetings at least quarterly, which shall be
subject to the requirements of 65 Pa.C.S. Ch. 7 (relating to
open meetings).
(k) Experience and interests.--For purposes of this chapter,
the board shall assure that it complies with section 1321 of the
Affordable Care Act (42 U.S.C. § 18041) and regulations
promulgated under the Affordable Care Act regarding conflicts of
interest and relevant experience.
(l) Conflict of interest.--The following apply:
(i) Except as provided under subparagraph (ii), a non-
State employee board member shall not be subject to 65
Pa.C.S. Ch. 11 (relating to ethics standards and financial
disclosure), including the requirements for filing statements
of financial interests.
(ii) A non-State employee board member may not engage in
conduct that, if that member were a State employee, would
constitute a conflict of interest under 65 Pa.C.S. Ch. 11.
(iii) A majority of the voting members of the board may
not have a conflict of interest as set forth in section 1321
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of the Affordable Care Act and regulations promulgated under
the Affordable Care Act.
§ 9303. Advisory council.
(a) Establishment.--An advisory council is created to advise
the exchange authority under section 9304(g) (relating to
meetings and operation).
(b) Composition.--The advisory council shall consist of the
following members, who may not be in the employ of the
Commonwealth:
(1) Four consumer representatives which include two
representatives appointed by the Governor at least one of
whom shall be a registered insurance exchange navigator or
assister, one appointed by the President pro tempore of the
Senate and one appointed by the Speaker of the House of
Representatives.
(2) One representative selected by the Hospital and
Healthsystem Association of Pennsylvania.
(3) One representative selected by the Pennsylvania
Medical Society.
(4) One representative selected by the Pennsylvania
Chamber of Business and Industry from a small group employer.
(5) One representative selected by the Pennsylvania
Association of Health Underwriters.
§ 9304. Meetings and operation.
(a) Chairperson.--The members of the advisory council shall
annually elect a chairperson from among its membership.
(b) Terms of members.--Each member's term shall be four
years, not to exceed more than two full consecutive four-year
terms, except that:
(1) Initial appointments shall be staggered to ensure
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less than 50% of the membership expire each year.
(2) A member's term shall continue until the member's
successor is appointed.
(c) Meetings.--All meetings of the advisory council shall be
conducted in accordance with 65 Pa.C.S. Ch. 7 (relating to open
meetings), except as provided in this section. Meetings must be
held in accordance with the following:
(1) The advisory council shall meet at least twice per
year, with each meeting held prior to a meeting of the board.
Additional meetings may be held upon reasonable notice at
times and locations selected by the board. The council shall
meet at the call of the chairperson or upon written request
of three members of the council.
(2) The executive director of the exchange authority, or
a designee, shall attend each meeting of the advisory
council.
(3) Meeting dates shall be set by a majority vote of
members of the advisory council or by call of the chairperson
upon seven days' notice to all members.
(4) The advisory council shall post notice of the
council's meetings on the exchange authority's publicly
accessible Internet website at least five days prior to each
meeting. The notice must specify the date, time and place of
the meeting and shall state that the council's meetings are
open to the general public.
(5) All action taken by the advisory council shall be
taken in open public session and may not be taken except upon
a majority vote of the members present at a meeting at which
a quorum is present.
(d) Compensation.--The members of the advisory council shall
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not be entitled to any compensation for their services as
members, except that, subject to the availability of money, the
members of the advisory council shall be entitled to
reimbursement for actual and necessary travel expenses. The
expenses shall be paid for by the exchange fund.
(e) Vacancies.--Vacancies in appointed positions shall be
filled in the same manner as the original appointment. Members
shall serve until their successors are appointed and qualified.
(f) Quorum.--A majority of the advisory council members
shall constitute a quorum and a quorum may act for the advisory
council in all matters.
(g) Duties.--Upon request by the exchange authority, the
advisory council shall advise the exchange authority on the
following administrative and operational decisions:
(1) Initial operational decisions.
(2) Ongoing financing decisions.
(3) Other decisions as the exchange authority may deem
appropriate.
§ 9305. Powers and duties of exchange authority.
(a) Corporate operations.--The exchange authority shall
exercise all powers and duties necessary and appropriate to
carry out its purpose, including the following:
(1) Adopt bylaws.
(2) Employ staff.
(3) Make, execute and deliver contracts.
(4) Apply for, solicit and receive money from any source
consistent with the purpose of this chapter.
(5) Establish priorities for, allocate and disburse
money received.
(6) Submit annually to the Appropriations Committee of
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the Senate and the Appropriations Committee of the House of
Representatives, at the same time the exchange authority
submits its budget to the Governor, a copy of its budget
request and all subsequently revised budget requests for the
ensuing fiscal year. The budget shall include the amounts to
be appropriated out of the fund established under section
9312 (relating to exchange fund) necessary to administer the
provisions of this chapter and the conveyance of money to the
Reinsurance Fund established under section 9510 (relating to
Reinsurance Fund).
(7) Establish travel reimbursement policies for the
exchange authority, its board, and its advisory council.
(8) Coordinate with the appropriate Federal and State
agencies to seek waivers from statutory or regulatory
requirements as necessary to carry out the purposes of this
chapter.
(9) Enter into other arrangements, including without
limitation, interagency agreements with Federal agencies and
Commonwealth agencies or other states' agencies, as may be
necessary or appropriate to carry out the duties of the
exchange authority.
(10) Give reasonable public notice of any policies and
procedures the exchange authority may implement to accomplish
the operation of the exchange authority.
(11) Perform other operational activities necessary or
appropriate to further the purposes of this chapter.
(12) The board shall consider the advice of the advisory
council provided under section 9304(g) (relating to meetings
and operation).
(b) Programmatic duties.--The exchange authority shall
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perform all duties necessary or appropriate to advance its
purpose, including the following:
(1) Educate consumers, including through outreach, a
navigator program and postenrollment support.
(2) Assist individuals to access income-based assistance
for which they may be eligible, including premium tax
credits, cost-sharing reductions and government programs.
(3) Take into consideration the need for consumer choice
in rural, urban and suburban areas across the Commonwealth.
(4) Assess and collect fees from on-exchange insurers to
support the operation of the exchange under this chapter and
the reinsurance program established under section 9502(b)
(relating to implementation of waiver and establishment of
reinsurance program), except that the exchange authority may
not assess or collect any form of obligation other than an
exchange user fee on total monthly premiums for on-exchange
policies and unless approved by unanimous consent of the
board, the fee may not exceed 3% of total monthly premiums
for on-exchange policies.
(5) Disburse receipted fees, including to benefit the
reinsurance program established under section 9502(b).
(c) Enforcement and State sovereignty.--The exchange
authority shall ensure that the exchange complies with the
Federal acts and rules and regulations that may be imposed by
the Federal Government pursuant to the Federal acts in a manner
that maintains State sovereignty over the health insurance
market in this Commonwealth. Enforcement responsibilities shall
be delegated to the appropriate State agency and shall be
sufficient to prevent a determination by the United States
Secretary of Health and Human Services that the Commonwealth has
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failed to substantially enforce any provision of the Federal
acts.
§ 9306. Limitations.
Except as expressly provided in this chapter, nothing in this
chapter shall be construed to limit or supersede the exchange
authority vested in a Commonwealth agency, including:
(1) The Insurance Department, including the department's
authority to regulate the business of insurance within this
Commonwealth, including health insurance policies whether
offered on or off the exchange.
(2) The Department of Human Services, including with
respect to the medical assistance program or the Children's
Health Insurance Program.
(3) The Department of Health.
(4) The Office of Attorney General.
§ 9307. Confidentiality and disclosure.
(a) General rule.--Except as provided in this chapter, all
working papers, recorded information, documents and copies of
working papers, recorded information and documents produced by,
obtained by or disclosed to the exchange authority or any other
person in the course of the exercise of the exchange authority's
powers and duties under this chapter:
(1) shall be confidential;
(2) shall not be subject to subpoena;
(3) shall not be subject to the act of February 14, 2008
(P.L.6, No.3), known as the Right-to-Know Law;
(4) shall not be subject to discovery or admissible in
evidence in any private civil action; and
(5) may not be made public by the exchange authority or
any other person.
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(b) Personal health and financial information.--The exchange
authority shall protect personally identifiable health and
financial information in accordance with all applicable Federal
and State laws and regulations, including the Health Insurance
Portability and Accountability Act of 1996 (Public Law 104-191,
110 Stat. 1936), the Health Information Technology for Economic
and Clinical Health Act (Public Law 111-5, 123 Stat. 226-279 and
467-496) and implementing regulations.
(c) Information disclosure.--Subject to the confidentiality
provisions of this section:
(1) Information shall be shared, as appropriate, for the
purpose of determining and coordinating the eligibility of
individuals for the exchange or any government program,
including the Children's Health Insurance Program and medical
assistance program, or for compliance with Federal law:
(i) Among the exchange authority and departments,
including:
(A) The department.
(B) The Department of Aging.
(C) The Department of Drug and Alcohol Programs.
(D) The Department of Health.
(E) The Department of Human Services.
(F) The Department of Labor and Industry.
(G) The Department of Revenue.
(ii) Between the exchange authority and Federal
agencies, including:
(A) The Centers for Medicare and Medicaid
Services.
(B) The Treasury Department.
(2) Information may be disclosed:
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(i) As necessary to comply with the audit
requirements of section 9310 (relating to audits) and the
reporting requirements of section 9311 (relating to
reports), only in an aggregated and de-identified form.
(ii) In any circumstance, other than those described
in paragraph (1) or subparagraph (i), only if the prior
written consent of the company or person to which the
information pertains has been obtained.
(d) Construction.--Nothing in this section shall be
construed to prohibit the exchange authority from accessing the
information necessary to carry out its responsibilities in
accordance with law.
§ 9308. Not an entitlement.
Nothing in this chapter shall constitute an entitlement
derived from the Commonwealth or a claim on any money of the
Commonwealth.
§ 9309. Nonliability.
(a) General rule.--Except as provided under subsection (b),
there shall be no liability on the part of and no cause of
action of any nature may arise against the exchange authority,
board or advisory council or members thereof, the commissioner,
the department, an insurer, insurance producer or an exchange
assister or an authorized representative, agent or employee
thereof, for the use of information furnished pertaining to:
(1) An application for, inquiry concerning, or
enrollment or disenrollment in a health insurance policy or
government program, including an inquiry regarding
eligibility for enrollment or eligibility for a government
program, relevant to health insurance available through an
exchange or health care coverage or other benefits through a
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government program.
(2) A charge, assessment or fee imposed on or received
from a person or entity relevant to the exchange.
(b) Limitation.--Subsection (a) shall apply only insofar as
the person or entity is acting within the scope of the person's
or entity's duties and responsibilities under this chapter.
§ 9310. Audits.
(a) Annual audit.--The accounts and books of the exchange
authority shall be examined and audited annually by an
independent certified public accounting firm. The audit shall at
a minimum:
(1) Assess compliance with the requirements of this
chapter.
(2) Identify any material weaknesses or significant
deficiencies and identify ways to correct the material
weaknesses or deficiencies.
(b) Sharing of audit.--By December 31 of each year, the
exchange authority shall electronically share the audit of the
preceding fiscal year required under subsection (a) and related
documents by:
(1) Posting the following on the exchange authority's
publicly accessible Internet website:
(i) The audit.
(ii) A summary of the audit, including any material
weakness or significant deficiency identified and how the
exchange authority intends to correct the material
weakness or significant deficiency.
(2) Providing an electronic link to the posted audit
under paragraph (1)(i) to the Secretary of the Senate and the
Chief Clerk of the House of Representatives.
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(3) Providing an electronic link to the posted audit
under paragraph (1)(i) to the department.
(c) Payment.--The cost of the annual audit required under
subsection (a) shall be paid for from money in the exchange
fund.
§ 9311. Reports.
(a) Report.--The exchange authority shall prepare an annual
report on the activities of the exchange authority for the year
and:
(1) Electronically transmit the report to:
(i) The Governor.
(ii) The President pro tempore of the Senate.
(iii) The Minority Leader of the Senate.
(iv) The Speaker of the House of Representatives.
(v) The Minority Leader of the House of
Representatives.
(vi) The chair and minority chair of:
(A) The Appropriations Committee of the Senate.
(B) The Appropriations Committee of the House of
Representatives.
(C) The Banking and Insurance Committee of the
Senate.
(D) The Insurance Committee of the House of
Representatives.
(E) The Health and Human Services Committee of
the Senate.
(F) The Health Committee of the House of
Representatives.
(2) Post the report on the exchange authority's publicly
accessibility Internet website.
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(b) Federal compliance.--The exchange authority shall comply
with applicable Federal reporting requirements.
(c) Department notification.--The exchange authority shall
provide a copy of or electronic link to the report provided
under subsection (a) or (b) to the department.
§ 9312. Exchange fund.
(a) Establishment.--The Pennsylvania Health Insurance
Exchange Fund is established as a special fund within the State
Treasury. The exchange fund shall be administered by the
exchange authority for the purposes set forth in this chapter,
including the deposit of money that may be received pursuant to
and disbursements permitted by this chapter.
(b) Deposit and use of money.--The following apply:
(1) Money deposited into the exchange fund shall be held
for the purposes set forth in this chapter and may not be
considered a part of the General Fund.
(2) Money in the exchange fund may only be used to
effectuate the purposes of this chapter as determined by the
exchange authority.
(3) All interest earned from the investment or deposit
of money in the exchange fund shall be deposited into the
exchange fund.
(4) All accrued and future earnings from money invested
by the exchange authority and other accrued and future
earnings from nonappropriated money, including, but not
limited to, money obtained from the Federal Government and
fees, shall be available to the exchange authority and shall
be deposited into the State Treasury and may be utilized at
the discretion of the board for carrying out any of the
corporate purposes of the exchange authority.
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(5) Placement of money by the State Treasurer in
depositories or investments shall be consistent with
guidelines approved by the board.
(6) For the purpose of administration, the exchange
authority shall be subject to sections 610, 613 and 614 of
act of April 9, 1929 (P.L.177, No.175), known as The
Administrative Code of 1929.
(c) Nonlapsing and revolving fund.--The exchange fund shall
be a nonlapsing fund. All money in the exchange fund and
interest accrued are appropriated to the exchange authority for
expenditure consistent with this chapter.
§ 9313. Federal guidance.
Until the exchange authority promulgates regulations, the
exchange authority shall operate the exchange pursuant to:
(1) any applicable Federal rules, regulations or
guidance; or
(2) interim State guidelines consistent with this
chapter.
§ 9314. Expiration.
Upon publication of the notice under section 9703(b)
(relating to action by commissioner), the exchange authority
shall initiate steps to cease operations of the exchange
authority and shall cease operations not later than 15 months
after publication of the notice.
CHAPTER 95
REINSURANCE PROGRAM
Sec.
9501. Application.
9502. Implementation of waiver and establishment of reinsurance
program.
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9503. Administration and operation of reinsurance program.
9504. Reinsurance parameters.
9505. Insurer eligibility and duties.
9506. Payment of coverage and administrative costs.
9507. Not an entitlement.
9508. Annual audit.
9509. Annual report of operations.
9510. Reinsurance Fund.
9511. Procurements within one year.
9512. Access to information and records.
9513. Confidentiality and information disclosure.
9514. Immunity.
9515. Regulation of insurers.
9516. Expiration.
§ 9501. Application.
(a) Application.--The department is authorized to apply to
the United States Secretary of Health and Human Services under
section 1332 of the Affordable Care Act for a state innovation
waiver to:
(1) Waive any applicable provisions of the Affordable
Care Act with respect to health insurance coverage in this
Commonwealth.
(2) Establish a reinsurance program in accordance with
an approved waiver.
(3) Maximize Federal funding for the reinsurance program
for plan years beginning on or after implementation of the
program.
(b) Public review.--On or before 180 days after the
effective date of this section, the department shall make a
draft application available for a 30-day public review and
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comment period. The department shall consider any comments in
its final submitted application.
(c) Amendment.--The department may amend the waiver
application as necessary to carry out the provisions of this
chapter.
(d) Notification.--The department shall notify the chair and
minority chair of the Appropriations Committee of the Senate,
the chair and minority chair of the Appropriations Committee of
the House of Representatives, the chair and minority chair of
the Banking and Insurance Committee of the Senate and the chair
and minority chair of the Insurance Committee of the House of
Representatives promptly of any amendment to the waiver
application and of any Federal actions regarding the waiver
application.
§ 9502. Implementation of waiver and establishment of
reinsurance program.
(a) Implementation.--Upon approval of the department's
application for an innovation waiver by the United States
Department of Health and Human Services, the department shall
implement a reinsurance program.
(b) Establishment.--Contingent upon Federal approval, the
Commonwealth Health Insurance Reinsurance Program is established
in the department for the purposes of stabilizing the rates and
premiums for health insurance policies in the individual market
and providing greater financial certainty to consumers of health
insurance in this Commonwealth. The reinsurance program shall be
considered a reinsurance entity to carry out a reinsurance
program under the Federal acts.
(c) Operation.--Operation of a reinsurance program shall be
contingent on Federal approval of the waiver application
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submitted pursuant to section 9501 (relating to application).
§ 9503. Administration and operation of reinsurance program.
(a) General rule.--The department shall take all actions
necessary to administer the approved reinsurance program in a
manner consistent with applicable Federal and State law.
(b) Functions.--The department shall perform all functions
necessary and appropriate to carry out the operation of the
reinsurance program and to effectuate the purposes for which the
reinsurance program is organized, in accordance with the
approved waiver. The functions include:
(1) Establishing procedures for and performing
administrative and accounting operations of the reinsurance
program.
(2) Seeking and receiving funding for the reinsurance
program and to maximize Federal funding for the reinsurance
program, including from:
(i) The exchange authority.
(ii) Federal funding that is or becomes available to
states to support administration and implementation of
state-based reinsurance programs.
(iii) Other available sources.
(3) Collecting data submissions and reinsurance payment
requests by eligible insurers.
(4) Making reinsurance payments to eligible insurers.
(5) Resolving disputes related to the amount of
reinsurance payments.
(6) Suing or being sued, including taking any legal
action necessary or proper for the recovery of money for
reinsurance payments.
(7) Submitting invoices or other requests for money as
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may be necessary and appropriate under the innovation waiver.
(c) Delegation.--Except as prohibited by applicable Federal
law and regulation, and as may be necessary or appropriate to
carry out department duties, the department may administer the
reinsurance program directly or through:
(1) Other Federal agencies, Commonwealth agencies or
other states' agencies.
(2) Contracted persons or entities, including with
legal, actuarial, economic, third-party administrator or
other persons or entities, as the department deems
appropriate, to provide consultation services and technical
assistance in operating the reinsurance program. Contracted
persons or entities shall submit regular reports to the
department regarding the person's or entity's performance,
the frequency, content and form of which shall be determined
by the department.
(d) Coordination with exchange authority.--The department
shall coordinate with the exchange authority as may be necessary
to fund and operate the reinsurance program.
§ 9504. Reinsurance parameters.
(a) Adoption of reinsurance terms.--The department shall,
after consultation with all insurers then currently
participating in the exchange, and not less than 60 days before
final rates for health insurance policies are required to be
submitted each year, determine and adopt the attachment point,
reinsurance cap and coinsurance rate applicable to the
reinsurance program for the following year.
(b) Parameters.--In determining the attachment point,
reinsurance cap and coinsurance rate applicable to the
reinsurance program for the following year, the department shall
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seek to:
(1) Manage the program within the amount of total
program funding available to the department.
(2) With respect to the individual market:
(i) Mitigate the impact of high-cost claims on
premium rates.
(ii) Stabilize or reduce premium rates.
(iii) Increase participation.
(c) Publication and notice.--The department shall transmit
notice of the adopted attachment point, reinsurance cap and
coinsurance rate to the Legislative Reference Bureau for
publication in the Pennsylvania Bulletin and shall:
(1) Post notice on the department's publicly accessible
Internet website.
(2) Electronically send notice to the chair and minority
chair of the Banking and Insurance Committee of the Senate
and the chair and minority chair of the Insurance Committee
of the House of Representatives.
(3) Electronically send notice to each participating
insurer via a contact person or electronic mailing address,
as identified by the insurer.
(d) Limitation.--After the department adopts the attachment
point, reinsurance cap and coinsurance rate for the next year,
the department may not, before or during that benefit year,
change the attachment point, reinsurance cap or coinsurance rate
in a manner less favorable to the insurers participating in the
exchange at the time of adoption.
§ 9505. Insurer eligibility and duties.
(a) Eligibility for payment.--An insurer shall be eligible
for a reinsurance payment if:
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(1) The claims costs for a reinsurance-eligible
enrollee's covered benefits in a benefit year exceed the
attachment point.
(2) The eligible insurer has implemented and documented
reasonable care management practices for enrollees who are
the subject of reinsurance claims through the reinsurance
program.
(3) The eligible insurer makes its requests for
reinsurance payments in accordance with any requirements
established by the department including requirements related
to the format, structure and timing for submission of claims
for reinsurance payments.
(b) Reporting requirement.--An insurer that seeks
reinsurance payments under this chapter must report to the
department, in the form and manner prescribed by the department,
information about reinsurance-eligible enrollees insured by the
insurer as necessary for the department to calculate reinsurance
payments.
(c) Confidentiality.--Reinsurance claims submitted under
this section are confidential and are not subject to public
disclosure, except as provided under section 9514 (relating to
immunity).
(d) Consideration for rate filings.--In a rate filing for a
health insurance policy to be offered through the exchange, the
impact of reinsurance payments under this chapter shall be
identified.
(e) Limitation.--The calculation of reinsurance payments due
to an eligible insurer shall be net of all other available
insurance payments applicable to a claim, including insurance
accessible through subrogation or coordination of benefits.
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§ 9506. Payment of coverage and administrative costs.
(a) General rule.--Consistent with Federal requirements, the
department shall pay the following from the Reinsurance Fund:
(1) Administrative expenses of the reinsurance program,
including the annual audit required under section 9508
(relating to annual audit).
(2) Reinsurance payments for coverage of reinsurance-
eligible enrollees.
(b) Operations.--The department may promulgate regulations
necessary and appropriate to establish processes for the
settlement of reinsurance coverage claims and disbursement of
reinsurance money.
(c) Request for review.--An insurer that is aggrieved by a
determination of the department relating to the amount of
reinsurance payments due to the insurer may file a request for
administrative review of the decision. The procedures and
requirements of 2 Pa.C.S. Ch. 5 Subch. A (relating to practice
and procedure of Commonwealth agencies) shall apply to requests
for review filed under this section. Notwithstanding otherwise
applicable time limitations, in order to permit timely
finalization of rates for the open enrollment period for the
exchange, a challenge to the department's determination of the
attachment point, reinsurance cap and coinsurance rate published
in the Pennsylvania Bulletin under section 9504(c) (relating to
reinsurance parameters) must be made within 10 business days of
the date of publication.
§ 9507. Not an entitlement.
(a) No entitlement.--The provision of reinsurance program
money or benefits accrued through the Reinsurance Fund may not
constitute an entitlement derived from the Commonwealth or a
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claim on any other money of the Commonwealth.
(b) Contingency with respect to Federal money.--
Notwithstanding any provision of this chapter, the department
shall have no responsibility to pay reinsurance amounts that
would be payable out of Federal money if the Federal Government
does not transmit sufficient money for the Reinsurance Fund to
fully recompense those actions.
§ 9508. Annual audit.
(a) Annual audit.--The reinsurance program shall be examined
and audited annually by an independent certified public
accounting firm. The audit shall, at a minimum:
(1) Assess compliance with the requirements of this
chapter.
(2) Identify any material weaknesses or significant
deficiencies and identify and implement solutions to correct
the the material weaknesses or deficiencies.
(b) Sharing of audit.--By December 31 of each year, the
department shall electronically share the audit of the preceding
fiscal year required under subsection (a) and related documents
by:
(1) Posting the following on the department's publicly
accessible Internet website:
(i) The audit.
(ii) A summary of the audit, including any material
weakness or significant deficiency identified and how the
department intends to correct the material weakness or
significant deficiency.
(2) Providing an electronic link to the posted audit
under paragraph (1)(i) to the Secretary of the Senate and the
Chief Clerk of the House of Representatives.
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(c) Payment.--The cost of the annual audit required under
subsection (a) shall be paid for from money in the Reinsurance
Fund.
§ 9509. Annual report of operations.
(a) Report.--No later than November 1 of the year following
the applicable benefit year or 60 calendar days following the
final disbursement of reinsurance payments for the applicable
benefit year, whichever is later, the department shall prepare a
financial report for the applicable benefit year. The report
must include, at a minimum, the following information for the
benefit year that is the subject of the report:
(1) Money deposited into the Reinsurance Fund.
(2) Requests for reinsurance payments received from
eligible insurers.
(3) Reinsurance payments made to eligible insurers.
(4) Administrative and operational expenses incurred for
the reinsurance program.
(b) Distribution of report.--The department shall:
(1) Electronically transmit the report under subsection
(a) to:
(i) The President pro tempore of the Senate.
(ii) The Minority Leader of the Senate.
(iii) The Speaker of the House of Representatives.
(iv) The Minority Leader of the House of
Representatives.
(v) The chair and minority chair of the
Appropriations Committee of the Senate and the chair and
minority chair of the Appropriations Committee of the
House of Representatives.
(vi) The chair and minority chair of the Banking and
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Insurance Committee of the Senate and the chair and
minority chair of the Insurance Committee of the House of
Representatives.
(2) Post the report under subsection (a) on the
department's publicly accessible Internet website.
§ 9510. Reinsurance Fund.
(a) Establishment and administration of Reinsurance Fund.--
The Reinsurance Fund is established as a special fund within the
State Treasury. The Reinsurance Fund shall be administered by
the department for the purposes set forth in this chapter,
including the deposit of Federal money and all other money
received pursuant to and disbursements permitted by this
chapter.
(b) Exclusive purpose.--The Reinsurance Fund shall be
dedicated exclusively for the reinsurance program established
under section 9502(b) (relating to implementation of waiver and
establishment of reinsurance program).
(c) Use.--The following apply:
(1) Expenditures from the Reinsurance Fund shall be used
to:
(i) Implement and operate the reinsurance program.
(ii) Make reinsurance payments to eligible insurers
under the reinsurance program. Payments to insurers shall
be calculated and made on a pro rata basis.
(2) In making expenditures from the Reinsurance Fund,
available Federal money must be expended first.
(3) Pending disbursement, money in the Reinsurance Fund
shall be invested or reinvested in the same manner as money
in the custody of the State Treasurer. All earnings received
from the investment or reinvestment of money shall be
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credited to the Reinsurance Fund.
(d) Expenses.--All costs and expenses of the reinsurance
program shall be paid from the Reinsurance Fund, including
compensation of employees and any independent contractors or
consultants hired by the department.
(e) Nonlapsing and revolving fund.--The following apply:
(1) The Reinsurance Fund shall be a nonlapsing fund. All
money placed in the Reinsurance Fund and interest accrued are
appropriated to the department for expenditure consistent
with the provisions of this chapter.
(2) Nothing in this section shall prevent money in the
Reinsurance Fund from being used as a revolving fund to cover
necessary expenditures if Federal money is requested and
committed but not yet received or if other money is committed
but not yet received.
(f) Limitations.--The following limitations apply:
(1) In each fiscal year, the total amount of annual
expenditures from the Reinsurance Fund, including
administrative and consulting expenses, may not exceed the
amount of expected Federal and other money budgeted for
deposit in the Reinsurance Fund in that fiscal year.
(2) Notwithstanding any general or specific powers
granted to the department under this chapter, whether express
or implied, the department may not pledge, in favor of the
reinsurance program, the credit or taxing power of the
Commonwealth or any political subdivision.
§ 9511. Procurements within one year.
Notwithstanding any other provision of law and for the
limited purpose of fulfilling the requirements under this
chapter, procurement of contracts and agreements for the
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