SB2434 HD3.DOC

SECTION 1. Chapter 435H, Hawaii Revised Statutes, is amended by adding five new sections to be appropriately designated and to read as follows:

"§435H-A Risk pools; assessment. Before establishing a program to serve the individual and the small group markets, the connector shall conduct an assessment to determine the quality of basic health plans offered and the financial impact upon consumers if the risk pools for the individual and the small group markets are separated or combined; provided further that a report on the findings of the assessment shall be made publicly available pursuant to section 435H-C. For the purpose of effectuating this section, the connector may hire an actuary in good standing with the American Academy of Actuaries.

§435H-B Navigator program. (a) The board shall establish a navigator program that is consistent with section 1311(i) of the Federal Act.

(b) The connector may award grants to entities that are selected by the board to serve as navigators; provided that recipients of navigator grants shall:

(1) Be nonprofit entities organized under chapter 414D;

(2) Meet the requirements for navigators specified in section 1311(i) of the Federal Act; and

(3) Meet any additional requirements established by the board; or

(4) Notwithstanding paragraph (1), (2), or (3) to the contrary, comply with all provisions that are otherwise required by federal law;

provided further that an insurance producer or insurance broker shall not serve as a navigator.

§435H-C Open meetings; board of directors; notices; agenda. (a) Every meeting of the board shall be open to the public and all persons shall be permitted to attend any meeting, unless the meeting is closed or as otherwise provided by law; provided that any person or persons who wilfully disrupt a meeting to prevent and impede the conduct of the meeting may be removed.

(b) The board shall afford all interested persons an opportunity to submit data, views, or arguments as testimony via the board's website on any item listed on the agenda. The board shall also afford all interested persons an opportunity to present oral testimony on any agenda item; provided that the board may adopt rules to allow for the reasonable administration of oral testimony.

(c) At least six calendar days before a meeting, the board shall file a physical and electronic copy of the notice for public inspection in the office of the lieutenant governor and in the board's office. The notice shall include an agenda that lists all of the items to be considered at the meeting and the date, time, and location of the meeting.

(d) The board shall maintain a list of names and addresses of persons who request notification of meetings and shall mail or transmit an electronic copy of the notice to such persons no later than the time the agenda is filed under this subsection. Whenever feasible, notice of the meeting shall also be posted at the site of the meeting.

(e) The board shall keep written minutes of all meetings. Unless otherwise required by law, neither a full transcript nor a recording of the meeting shall be required, but the written minutes shall give a true reflection of the matters discussed at the meeting and the views of the participants. The minutes shall include, at a minimum:

(1) The date, time, and location of the meeting;

(2) The members of the board recorded as either present or absent;

(3) The substance of all matters proposed, discussed, or decided;

(4) A record, by individual member, of any votes taken; and

(5) Any other information that any member of the board requests to be included or reflected in the minutes.

The minutes shall be public records and shall be made available online within thirty days after the meeting, or six days prior to the next meeting, whichever comes first.

§435H-D Hawaii health insurance exchange plans; commissioner; approval authority. (a) The commissioner shall approve all qualified health plans in compliance with the following transparency provisions:

(1) All meetings regarding the planning and decision making of the Hawaii health insurance exchange health plans shall be open to the public; and

(2) At least six calendar days before the meeting, the commissioner shall file a physical and electronic copy of the meeting's notice for public inspection in the office of the lieutenant governor. The notice shall include an agenda that lists all of the items to be considered at the meeting and the date, time, and location of the meeting.

(b) The commissioner shall keep written minutes of all meetings. Unless otherwise required by law, neither a full transcript nor a recording of the meeting shall be required, but the written minutes shall give a true reflection of the matters discussed at the meeting and the views of the participants. The minutes shall include, at a minimum:

(1) The date, time, and location of the meeting;

(2) The substance of all matters proposed, discussed, or decided; and

(3) A record of decision making.

The minutes shall be public records and shall be made available online within thirty days after the meeting, or six days prior to the next meeting, whichever comes first.

§435H-E Annual report. The connector shall report the status of the exchange, upcoming federal deadline requirements, and its fulfillment of federal deadline requirements, to the legislature no later than twenty days prior to the convening of each regular session."

SECTION 2. Section 435H-1, Hawaii Revised Statutes, is amended by adding six new definitions to be appropriately inserted and to read:

""Health benefit plan" means a policy, contract, certificate, or agreement offered, delivered, issued for delivery, renewed, amended, or continued in the State by an insurer to provide, deliver, arrange, pay for, or reimburse any of the costs of health care services. "Health benefit plan" shall not include:

(1) Coverage for only accident or disability income insurance, or any combination thereof;

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

(3) Liability insurance, including general liability insurance and motor vehicle liability insurance;

(4) Workers' compensation or similar insurance;

(5) Motor vehicle personal injury protection insurance;

(6) Credit-only insurance;

(7) Coverage for on-site medical clinics;

(8) Other insurance coverage under which benefits for health care services are secondary or incidental to other insurance benefits;

(9) The following benefits if the benefits are provided under a separate policy, certificate, or contract of insurance or are otherwise not an integral part of the plan:

(A) Limited scope dental or vision benefits; and

(B) Benefits for long-term care, nursing home care, home health care, community-based care, or any combination thereof;

(10) The following benefits, if the benefits are provided under a separate policy, certificate, or contract of insurance; there is no coordination between the provision of the benefits and any exclusion of benefits under any group health plan maintained by the same plan sponsor; and the benefits are paid with respect to an event without regard to whether benefits are provided with respect to the event under any group health plan maintained by the same insurer:

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

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

(11) The following, if offered as a separate policy, certificate, or contract of insurance:

(A) Medicare supplemental health insurance, as defined under section 1882(g)(1) of the Social Security Act;

(B) Coverage supplemental to the coverage provided under chapter 55 of title 10, United States Code, as amended; and

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

"Provider" means any person or entity licensed, certified, or otherwise authorized to provide direct or indirect health care services, or has contracts or subcontractors who provide or could provide services to an enrollee or potential enrollee of health insurance coverage. This designation shall apply to the person, corporation, facility, or institution in its entirety and any contracted entities or partnerships.

"Qualified employer" means a small employer that elects to make, at a minimum, all of its full-time employees eligible for one or more qualified plans in the small group market offered through the connector.

"Small employer" means an employer who employed an average of at least one and not more than fifty employees on business days during the preceding calendar year and who employs at least one employee on the first day of the plan year. Beginning on January 1, 2016, "small employer" means an employer who employed an average of at least one and not more than one hundred employees on business days during the preceding calendar year and who employs at least one employee on the first day of the plan year.

"Small group market" means the health insurance market under which individuals obtain health insurance coverage on behalf of themselves and their dependents through a group health plan maintained by a small employer."

SECTION 3. Section 435H-4, Hawaii Revised Statutes, is amended to read as follows:

"[[]§435H-4[]] Board of directors; composition; operation. (a) The Hawaii health connector shall be a nonprofit entity governed by a board of directors that shall comprise [~~fifteen~~] seventeen members appointed by the governor and with the advice and consent of the senate pursuant to section 26‑34; provided that the governor shall submit nominations to the senate for advice and consent no later than February 1, 2012[;], and no later than February 1 in any year thereafter in which nominations are made; and provided further that the senate shall timely advise and consent to nominations for terms to begin July 1, 2012[.], and no later than July 1 in any year thereafter in which nominations are made. Members of the interim board shall be eligible for appointment to the board.

(b) The membership of the board shall reflect geographic diversity and the diverse interests of stakeholders, including consumers, employers, insurers, and [~~dental benefit~~] providers[.]; provided that:

(1) Effective July 1, 2012, there shall be five consumers on the membership of the board; and

(2) Upon the expiration of the initial terms of each of the first two providers whose terms expire, the first provider position to expire shall become an additional consumer position and the second provider position to expire shall become an additional employer position,

whereupon the composition of the membership of the seventeen-member board shall be as follows: six consumers, two employers, three insurers, two providers, the director of commerce and consumer affairs or the director's designee, the director of health or the director's designee, the director of human services or the director's designee, and the director of labor and industrial relations or the director's designee. The insurers and providers on the board may serve only in an advisory capacity and shall not be voting members. The director of commerce and consumer affairs or the director's designee, the director of health or the director's designee, the director of human services or the director's designee, and the director of labor and industrial relations or the director's designee shall be ex-officio, voting members of the board.

(c) Board members shall serve staggered terms [~~and the interim board shall recommend an appropriate schedule for staggered terms; provided that this~~] and shall be appointed to terms of four years; provided that of the initial appointees, five shall be appointed to a two-year term, and five shall be appointed to a three-year term. Each member shall hold office until the member's successor is appointed and qualified. This subsection shall not apply to ex-officio members, who shall serve during their entire term of office.

(d) The board shall adopt policies prohibiting conflicts of interest and procedures for recusal of a member in the case of an actual or potential conflict of interest, including policies prohibiting a member from taking part in official action on any matter in which the member had any financial involvement or interest prior to the commencement of service on the board. Members of the board may retain private counsel for matters relating to service on the board according to rules recommended by the board.

(e) The board shall manage the budget of the connector according to generally accepted accounting principles and a plan for financial organization adopted by the legislature based on recommendations of the interim board.

(f) The board shall maintain transparency of board actions, including public disclosure and posting of board minutes on the connector's website [~~according to~~] in accordance with the requirements of section 435H-C and other provisions adopted by the legislature based on recommendations of the interim board."

SECTION 4. Section 435H-7, Hawaii Revised Statutes, is amended to read as follows:

"[[]§435H-7[]] Eligibility determination for applicants in medicaid adult and children's health insurance program. The department of human services shall be the agency to determine qualifications and eligibility of individuals to participate in medicaid [~~adult~~] or children's health insurance programs. [The agency's determination of eligibility shall enable qualified individuals and authorized adults on behalf of qualified children to purchase qualified plans and qualified dental plans from the connector. The department of human services shall verify for the connector individuals and children able to participate in subsidized plans purchased through the connector.] The agency shall make a determination of eligibility for each individual who applies through the connector unless the applicant declines an eligibility determination."

SECTION 5. The changes to the composition of the Hawaii health connector board of directors made to subsection (b) of section 435H-4, Hawaii Revised Statutes, in section 3 of this Act are not intended to replace any member of the board prior to the end of that member's term.

SECTION 6. If any provision of this Act, or the application thereof to any person or circumstance, is held invalid, the invalidity does not affect other provisions or applications of the Act that can be given effect without the invalid provision or application, and to this end the provisions of this Act are severable.

SECTION 7. In codifying the new sections added by section 1 of this Act, the revisor of statutes shall substitute appropriate section numbers for the letters used in designating the new section in this Act.

SECTION 8. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 9. This Act shall take effect upon its approval.

THE SENATE	S.B. NO.	2434
TWENTY-SIXTH LEGISLATURE, 2012		S.D. 1
STATE OF HAWAII		H.D. 3