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April 22, 2021
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Minutes for HB2058 - Committee on Insurance

Short Title

Updating definitions relating to small employer health plans and association health plans.

Minutes Content for Wed, Jan 30, 2019

Chairperson Vickrey opened the hearing for HB 2058.

Assistant Revisor Eileen Ma briefed the members on HB 2058. She said the president issued an executive order in October 2017 to facilitate across state lines, high-quality affordable health care. He tasked the Secretary of Labor to provide guidelines under ERISA that would increase the ability of associations to join together and, therefore, leverage the cost to members of the groups. The bill was one of several proposed bills that would bring state rules regarding certain association welfare and health plans in line with federal rules. The bill at hand updated definitions in the state statutes pertaining to small employer health plans. It also amended K.S.A. 40-22096b by creating a named act, the Small Employer Health Insurance Availability Act. The bill would be effective April 1, 2019, in line with the date of application for the new federal rules on self-insured association health plans (Attachment 1)

Revisor Ma answered the members' questions regarding: how many states had passed similar laws, the federal vetting process, definition of terms and the need to bring state rules into compliance with federal rules. Assistant Director for Research Melissa Renick said she was compiling a comparative summary of similar actions taken by other states and would provide the report to the members when completed. 

Chairperson Vickrey asked if there were any proponents.

Sunee Mickle testified in support of the bill. She said for several years Blue Cross and Blue Shield offered fully-insured association health plans and served as third-party administrator for self-funded association plans in the state. Since the Affordable Care Act, sole-proprietors had not been able to purchase employer-based health plans and were forced to purchase individual market coverage which had higher premiums. With the Association Health Plan (AHP), sole proprietors and businesses with less than 51 employees were able to band together to purchase health plan coverage using a large employer group health plan benefit design and rating requirements. In addition, all the members in an association plan could participate regardless of their employee's pre-existing health conditions (Attachment 2).

Mark Dugan testified in support of the bill. He said his previous testimony at a prior meeting on related bills stood (Attachment 3).

Scott Schneider testified in support of the bill. He said the Kansas restaurant industry employed over 137,000 persons, and nearly one-half of every dollar spent on food in the state was through one of their member businesses. He said if the committee wanted to do one thing this session that would impact the bottom line of restaurateurs, it would be to pass the bill and the related AHP bills. He said allowing members to access their national association's plan would be a major benefit to their employees. Mr. Schneider also provided a correction to his written testimony: the ACA compliant plan was currently offered in 24 states instead of the 34 reported (Attachment 4).

Kristi Brown testified they were in support of the bill and the related group of bills (Attachment 5).

Jason P. Watkins submitted written testimony in support of the bill. He said the legislation would make great strides toward addressing a major and significant concern that their Chamber members, as well as other Kansans, share: the availability and and affordability of health insurance. (Attachment 6).

Ken White provided written testimony in support of the bill. He said in every discussion of the state economy, the importance of small businesses was mentioned. Allowing small business to play on an equal footing with large corporations in providing health insurance to employees could only enhance the small business environment in the state (Attachment 7).

Chairperson Vickrey asked there were any other proponents. There were none. He asked if anyone wished to make a statement. Tom Palace, Kansas Petroleum Marketers and Convenience Store Association, commented that their association had spent much time and money becoming a bona fide association and had an exemption from the small employer group. They have 50 groups, with about 680 people, most 1-3 person operations. He wanted to make sure that taking out line 22 of the bill did not hinder his exemption. He said he is not for or against the program but wanted to be on record that they did not want to lose their exemption.

Revisor Ma responded that the bill was not meant to supersede or alter. Simply, the federal administration asked the Department of Labor to provide an additional way that a health plan could be formed. Qualified plans would remain qualified.

Having no other proponents, Chairperson Vickrey asked if there were any opponents to the bill.

Jordan Feuerborn provided written testimony in opposition of the bill. She said they had opposed previous federal initiatives to encourage the growth of AHPs because these plans promoted the growth of products that did not provide comprehensive coverage, could damage the non-AHP individual and small group markets, and inadequately addressed issues of plan solvency and regulatory oversight (Attachment 8).

Having no other opponents, the chairperson asked if there was any neutral testimony.

Lee Modesitt provided earlier written testimony that the Insurance Department was neutral regarding to Self-Funded AHPs as neither the Commissioner nor the Department intended to weigh in on policy decisions. He also provided a comparison of plans (Attachment 9) (Attachment 9.2)

Will Larson provided earlier written testimony that their association was neutral on the bill in that they had not had the opportunity to review the AHP bills to determine a position (Attachment 10).

Having no more conferees, the Chairperson opened discussion on the bill. Questions were asked and answered regarding: bill terminology, denial for pre-existing conditions, ADA rules, the differences between large and small groups, how risk was spread across the group and other states' rules on Association Health Plans.

There being no other questions, Chairperson Vickrey closed the hearing on HB 2058