HB-6600, As Passed House, November 13, 2008
November 6, 2008, Introduced by Rep. Condino and referred to the Committee on Labor.
A bill to amend 1956 PA 218, entitled
"The insurance code of 1956,"
by amending section 3701 (MCL 500.3701), as added by 2003 PA 88.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 3701. As used in this chapter:
(a) "Actuarial certification" means a written statement by a
member of the American academy of actuaries or another individual
acceptable to the commissioner that a small employer carrier is in
compliance with the provisions of section 3705, based upon the
person's examination, including a review of the appropriate records
and the actuarial assumptions and methods used by the carrier in
establishing premiums for applicable health benefit plans.
(b) "Affiliation period" means a period of time required by a
small employer carrier that must expire before health coverage
becomes effective.
(c) "Base premium" means the lowest premium charged for a
rating period under a rating system by a small employer carrier to
small employers for a health benefit plan in a geographic area.
(d) "Carrier" means a person that provides health benefits,
coverage, or insurance in this state. For the purposes of this
chapter, carrier includes a health insurance company authorized to
do business in this state, a nonprofit health care corporation, a
health maintenance organization, a multiple employer welfare
arrangement, or any other person providing a plan of health
benefits, coverage, or insurance subject to state insurance
regulation.
(e) "COBRA" means the consolidated omnibus budget
reconciliation
act of 1985, Public Law 99-272. , 100 Stat. 82.
(f) "Commercial carrier" means a small employer carrier other
than a nonprofit health care corporation or health maintenance
organization.
(g) "Creditable coverage" means, with respect to an
individual, health benefits, coverage, or insurance provided under
any of the following:
(i) A group health plan.
(ii) A health benefit plan.
(iii) Part A or part B of title XVIII of the social security
act,
chapter 531, 49 Stat. 620, 42 U.S.C. USC 1395c to 1395i and
1395i-2
to 1395i-5, and 42 U.S.C. USC 1395j
to 1395t, 1395u to
1395w,
and 1395w-2 to 1395w-4.
(iv) Title XIX of the social security act, chapter 531, 49
Stat.
620, 42 U.S.C. USC 1396 to 1396r-6 and 1396r-8 to 1396v,
other than coverage consisting solely of benefits under section
1929
of title XIX of the social security act, 42 U.S.C. USC 1396t.
(v) Chapter 55 of title 10 of the United States Code, 10
U.S.C.
USC 1071 to 1110. For purposes of chapter 55 of title 10
of
the
United States Code, 10 U.S.C. USC
1071 to 1110, "uniformed
services" means the armed forces and the commissioned corps of the
national oceanic and atmospheric administration and of the public
health service.
(vi) A medical care program of the Indian health service or of
a tribal organization.
(vii) A state health benefits risk pool.
(viii) A health plan offered under the employees health benefits
program,
chapter 89 of title 5 of the United States Code, 5 U.S.C.
USC 8901 to 8914.
(ix) A public health plan, which for purposes of this chapter
means a plan established or maintained by a state, county, or other
political subdivision of a state that provides health insurance
coverage to individuals enrolled in the plan.
(x) A health benefit plan under section 5(e) of title I of the
peace
corps act, Public Law 87-293, 22 U.S.C. USC 2504.
(h) "Eligible employee" means an employee who works on a full-
time basis with a normal workweek of 30 or more hours. Eligible
employee includes an employee who works on a full-time basis with a
normal workweek of 17.5 to 30 hours, if an employer so chooses and
if this eligibility criterion is applied uniformly among all of the
employer's employees and without regard to health status-related
factors.
(i) "Geographic area" means an area in this state that
includes not less than 1 entire county, established by a carrier
pursuant to section 3705 and used for adjusting premiums for a
health benefit plan subject to this chapter. In addition, if the
geographic area includes 1 entire county and additional counties or
portions of counties, the counties or portions of counties must be
contiguous with at least 1 other county or portion of another
county in that geographic area.
(j) "Group health plan" means an employee welfare benefit plan
as defined in section 3(1) of subtitle A of title I of the employee
retirement income security act of 1974, Public Law 93-406, 29
U.S.C.
USC 1002, to the extent that the plan provides medical
care,
including items and services paid for as medical care to employees
or their dependents as defined under the terms of the plan directly
or through insurance, reimbursement, or otherwise. As used in this
chapter, all of the following apply to the term group health plan:
(i) Any plan, fund, or program that would not be, but for
section 2721(e) of subpart 4 of part A of title XXVII of the public
health
service act, chapter 373, 110 Stat. 1967, 42 U.S.C. USC
300gg-21, an employee welfare benefit plan and that is established
or maintained by a partnership, to the extent that the plan, fund,
or program provides medical care, including items and services paid
for as medical care, to present or former partners in the
partnership, or to their dependents, as defined under the terms of
the plan, fund, or program, directly or through insurance,
reimbursement or otherwise, shall be treated, subject to
subparagraph (ii), as an employee welfare benefit plan that is a
group health plan.
(ii) The term "employer" also includes the partnership in
relation to any partner.
(iii) The term "participant" also includes an individual who is,
or may become, eligible to receive a benefit under the plan, or the
individual's beneficiary who is, or may become, eligible to receive
a benefit under the plan. For a group health plan maintained by a
partnership, the individual is a partner in relation to the
partnership and for a group health plan maintained by a self-
employed individual, under which 1 or more employees are
participants, the individual is the self-employed individual.
(k) "Health benefit plan" or "plan" means an expense-incurred
hospital, medical, or surgical policy or certificate, nonprofit
health care corporation certificate, or health maintenance
organization contract. Health benefit plan does not include
accident-only, credit, dental, or disability income insurance;
long-term care insurance; coverage issued as a supplement to
liability insurance; coverage only for a specified disease or
illness; worker's compensation or similar insurance; or automobile
medical-payment insurance.
(l) "Index rate" means the arithmetic average during a rating
period of the base premium and the highest premium charged per
employee for each health benefit plan offered by each small
employer carrier to small employers and sole proprietors in a
geographic area.
(m) "Nonprofit health care corporation" means a nonprofit
health care corporation operating pursuant to the nonprofit health
care corporation reform act, 1980 PA 350, MCL 550.1101 to 550.1704.
(n) "Premium" means all money paid by a small employer, a sole
proprietor, eligible employees, or eligible persons as a condition
of receiving coverage from a small employer carrier, including any
fees or other contributions associated with the health benefit
plan.
(o) "Rating period" means the calendar period for which
premiums established by a small employer carrier are assumed to be
in effect, as determined by the small employer carrier.
(p) "Small employer" means any person, firm, corporation,
partnership, professional employer organization, limited liability
company, or association actively engaged in business who, on at
least 50% of its working days during the preceding and current
calendar years, employed at least 2 but not more than 50 eligible
employees. In determining the number of eligible employees,
companies
both of the following apply:
(i) Companies that are affiliated companies or that are
eligible to file a combined tax return for state taxation purposes
shall be considered 1 employer.
(ii) A professional employer organization shall be considered
the employer of all of its covered employees, and all covered
employees of 1 or more clients participating in a health benefit
plan sponsored by a single professional employer organization shall
be considered employees of the professional employer organization.
As used in this subdivision, "client", "covered employee", and
"professional employer organization" mean those terms as defined in
the Michigan professional employer agreement regulatory act.
(q) "Small employer carrier" means either of the following:
(i) A carrier that offers health benefit plans covering the
employees of a small employer.
(ii) A carrier under section 3703(3).
(r) "Sole proprietor" means an individual who is a sole
proprietor or sole shareholder in a trade or business through which
he or she earns at least 50% of his or her taxable income as
defined in section 30 of the income tax act of 1967, 1967 PA 281,
MCL 206.30, excluding investment income, and for which he or she
has filed the appropriate internal revenue service form 1040,
schedule C or F, for the previous taxable year; who is a resident
of this state; and who is actively employed in the operation of the
business, working at least 30 hours per week in at least 40 weeks
out of the calendar year.
(s) "Waiting period" means, with respect to a health benefit
plan and an individual who is a potential enrollee in the plan, the
period that must pass with respect to the individual before the
individual is eligible to be covered for benefits under the terms
of the plan. For purposes of calculating periods of creditable
coverage under this chapter, a waiting period shall not be
considered a gap in coverage.
Enacting section 1. This amendatory act does not take effect
unless Senate Bill No.____ or House Bill No. 6601(request no.
07735'08) of the 94th Legislature is enacted into law.