The small business health options program authority, health benefit plan exchange for small employers and certain individuals, and granting rule-making authority

suing and being sued in its own name; and executing contracts. The bill establishes a process that the authority must use when it contracts for professional services.

Under the bill, the authority is subject to civil liability for its acts or omissions except that the maximum amount recoverable in a civil action against the authority is $100,000. However, a member of the authority's board of directors, the authority's executive director, or an authority employee is exempt from civil liability unless the member, director, or employee acted with willful misconduct or in intentional violation of the law.

Health benefit plan exchange Under the bill, the authority must establish and, by January 1, 2011, begin operating a health benefit plan exchange (exchange), except that the authority must seek federal grant moneys for the exchange and the exchange may not begin operating unless federal grant moneys are received for that purpose. The commissioner must determine the initial health benefit plan designs, including the minimum benefit levels, and the authority must approve the plans that may be offered through the exchange. The authority must rank the plans offered through the exchange and place each one into one of three tiers. Plans that offer full benefits are to be designated as "gold" plans; plans that provide 75 percent of the actuarial value of a "gold" plan are to be designated as "silver" plans; and plans that provide 60 percent of the actuarial value of a "gold" plan are to be designated as "bronze" plans.

Any small employer, defined generally as an employer with at least two but not more than 50 employees, any limited term state employee, and any individual who contracts with the state to perform services for the state are eligible to purchase coverage under a health benefit plan offered through the exchange. Individuals and employees may select coverage under any of the plans offered through the exchange.

Although the employees of the same small employer may select coverage under different plans, all employees of the same small employer must select coverage under plans in the same tier.

Any insurer authorized to do business in this state in one or more lines of insurance that includes health insurance may offer coverage through the exchange, and no insurer may offer or issue coverage to a small employer except through the exchange. An insurer that offers coverage through the exchange may offer only the health benefit plans that have been approved for the exchange by the authority and must offer at least one health benefit plan in each tier. An insurer may not impose any annual or lifetime limits on coverage; premiums for coverage through the exchange may be based only on age, sex, geographic location, whether coverage is single or family, and plan design; and all individuals covered under all plans issued by an insurer must be considered one pool. An insurer must pay a commission to an insurance intermediary who enrolls an individual or employees of a small employer in a plan offered by the insurer through the exchange. To pay administrative expenses of the exchange, the authority may impose a surcharge on each insurer offering plans through the exchange.

With regard to administering the exchange, the authority enrolls individuals and employer groups in plans, collects the initial premiums, and remits the premiums and enrollment information to the appropriate insurers. The commissioner must develop a standard application form that all prospective enrollees must use. The authority must establish an independent and binding appeals process for resolving disputes over eligibility and other determinations made by the authority, must establish and operate a service center for providing information about the exchange, may establish risk-adjustment mechanisms, and may audit and require reports from insurers offering coverage through the exchange.